BUS607: Data-Driven Decision-Making

Leaders say that people and culture are the most important drivers of innovation. This article shows how leaders can create conditions for greater innovation, within and beyond their organizations, to increase development impact.

LIKE SHORT SKIRTS, innovation has traditionally swung into and out of fashion. Today, however, an organization's ability to innovate - to tap the fresh value-creating ideas of its employees and those of its partners, customers, and other parties beyond its own boundaries - is anything but faddish. In fact, innovation has become one of the most important drivers of growth and performance for not just the private sector but for the public and social sectors as well.

Development organization leaders can draw upon the experiences of their private-sector peers on successful practices that capture the full potential of innovation as well as how to battle common tensions and challenges, which aren't all that unique to the private sector. Leading strategic thinkers across sectors are moving beyond a narrow definition of innovation to pioneer innovations in not just products but also services, consumer experiences, operational processes, distribution, value chains, policies, business models, and even the functions of management and how people work.

Mohammed Yunus, founder of Grameen Bank and winner of the Nobel Peace Prize, is quoted as saying: "All people are entrepreneurs. Each of us has much more hidden inside us than we have had a chance to explore. Unless we create an environment that enables us to discover the limits of our potential, we will never know what we have inside of us". This is the role of leadership - not to be the innovator - but to create the conditions for innovation. Very rarely is the leader also the innovator as is the case with Mr. Yunus and high-profile executives such as Steve Jobs from Apple. To create the conditions and then subsequently sustain innovation to create real demi opment impact at scale is even harder.

Senior leaders almost unanimously-94 percent-say that people and corporate culture arc the most important drivers of innovation.' Our experience convinces us that a disciplined focus on three people management fundamentals may produce the building blocks of an innovative organization.

A first step is to define innovation and make it part of the strategic agenda. In this way, innovation can be not only encouraged but also managed. tracked. and measured, core element in an organization's aspirations. Second. executives make better use of existing (and often untapped) talent for innovation, without implementing disruptive change programs, by creating the conditions that allow dynamic innovation networks across organizational silos. functions and ages to emerge and flourish within and beyond the organization. We believe that all organizations have pockets of innovation that if tapped can unleash impact. Finally. taking explicit steps to foster an innovation culture based on trust among employees. In such a culture, people understand that their ideas are valued, trust that it is safe to express those ideas, and oversee risk collectively, together with their man alters. Such an environment can be more effective than monetary incentives in sustaining innovation.

This list of steps is not exhaustive. Still, given the limited time and means of development organizations pursuing innovation with anything other than existing talent and resources often isn't an option. These three fundamentals are a practical starting point to improve an organization's chances of stimulating and sustaining innovation where it matters most among an organization's people.

Source: Marla M. Capozzi, https://openknowledge.worldbank.org/handle/10986/6067
This work is licensed under a Creative Commons Attribution 3.0 IGO License.