Building organizations that encourage innovation.

The forces of technology, globalization and diversity require new forms of organization and new concepts and capabilities from management. These concepts are being built around networks of talent and expertise rather than depending on individual heroes and blinding flashes of genius. Successful organizations are networks characterized by a marriage of concepts, competencies and connections.
- New concepts are important because they drive the innovations necessary for vitality and prosperity.
- Competencies are about broad know-how that incorporates technical literacy, global insight, and cultural sensitivity.
- Connections involve frequent interactions between previously isolated groups and individuals. Other prerequisites for innovation are that employees have a sense of security and a sense of possibility.

Features of creative organizations:
• Open channels of communication.
• Not run as a tight ship.
• Management has wide-ranging perspectives.
• Idea-generating units are freed from other responsibilities.
• Resources are invested in research.
• There’s a risk-taking philosophy.
• There’s a stable, secure, internal environment.

Start by creating a culture of innovation. Marines are taught that they must be prepared to improvise. One of their core maxims is: "That which is not forbidden is permitted." It’s often been said that the Army mantra is: "That which is not permitted is forbidden." If a business embraces a culture which says that whatever is not forbidden is permitted, it opens the door to innovation and allows people to improvise, change and grow. If an organization embraces a culture which says that whatever is not expressly permitted is forbidden, then the culture draws bright lines around what is acceptable and stifles creativity and innovation.

An innovative culture can be fostered in organizations which have internally inconsistent competencies, structures and cultures but share a single vision. Managing culture is generally the most neglected and highest-leverage tool for promoting innovation and change. It’s also the most difficult to diagnose and alter. Culture is a powerful way to motivate and focus behaviors in complex and changing settings. But culture can also hold a company hostage to its past. The key seems to be to create a clear vision with a limited set of core values that can, in turn, host diverse cultures within the company. Tools to shape culture include systems of participation and involvement, senior team behavior, and reward and recognition systems.