How to Increase Innovation in Organizations

Innovation and creative thinking in organizations is not only difficult to achieve, but also potentially risky, time consuming, and expensive. Is it worth the effort? Several studies suggest that indeed, higher organizational innovation affects overall performance quite strongly and is worth pursuing.

How, then, can innovation and creative thinking be increased in an organization? One important factor seems to be a strong learning orientation within the company.

Learning orientation (as defined in this body of research) consists of the following four components:

  1. commitment to learning,
  2. shared vision,
  3. open-mindedness, and 
  4. intra-organizational knowledge sharing.

Studies have shown that learning orientation not only influences firm innovativeness directly, but that it also moderates the impacts of risk-taking, creativity, competitor benchmarking orientation, and environmental opportunities on innovativeness.

There is also a direct positive relationship between learning orientation and firm performance (as measured with market share, new product success, and overall performance).

To sum it all up, learning orientation seems to be critical for innovation and performance.

For leaders who want to foster that kind of learning culture, the four components above offer a good starting point. For example, as a “commitment to learning”, managers could encourage employees to use company time to pursue knowledge that may lie outside the immediate scope of their work.

There are many other possibilities of how each of those aspects of learning orientation could be implemented and assessed. In general, a company might want to treat “learning orientation” just like they would treat any other core strategic goal.

by Ursina Teuscher (PhD), at Teuscher Decision Coaching, Portland OR

Pesämaa, Ossi, Aviv Shoham, Joakim Wincent, and Ayalla A. Ruvio. “How a Learning Orientation Affects Drivers of Innovativeness and Performance in Service Delivery.” Journal of Engineering and Technology Management 30, no. 2 (April 2013): 169–187. doi:10.1016/j.jengtecman.2013.01.004.

Calantone, Roger J, S.Tamer Cavusgil, and Yushan Zhao. “Learning Orientation, Firm Innovation Capability, and Firm Performance.” Industrial Marketing Management 31, no. 6 (September 2002): 515–524. doi:10.1016/S0019-8501(01)00203-6.

 


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