How to Manage an Innovative Environment

How to Manage an Innovative Environment

One quality has the power to ensure any company’s enduring success in a constantly changing world of business:


Why then, do business leaders routinely abdicate the responsibility for innovation to the research-and-development department?

Why is the quality of innovation so elusive? Why is the reality of profitable innovation so rare?

5 Common Fallacies to Avoid When Managing an Innovative Environment

There are many, but here we discuss only five which causes the most damage.

1. Fallacy of Common Wisdom

The “everybody believes X, so X must be true” reasoning is not only erroneous — it’s downright dangerous.

During the late 1960s, auto executives believed the common wisdom that Americans wanted big cars: “No American wants to drive around in a roller skate.”

So, the auto industry invested a ton of resources and creative energy into giving Americans big cars. The oil crisis of 1973 proved the auto industry, and the common wisdom, wrong.

2. Bold Statements do not Make Claims True

People and enterprises with the guts to make bold, loud statements usually receive more credibility than they deserve. companies justified losing money with the blaring proclamation that there were “new rules in a new game.”

But the old rules of real assets, real products, and real profits eventually prevailed — sending dot.coms crashing. Bold claims do not always speak the truth.

3. Over-Reliance on Authorities

Everyone looks to someone else for expert advice.

If Dr. Know-It-All advocates reducing inventories by increasing parking lot space, it’s easy for managers to get suckered into driving their people to start thinking hard about parking lot expansion.

But even experts sometimes say stupid things. Smart managers validate expert advice with research before acting on it.

4. Never Act on Assumptions

Rules of thumb, stereotypes and assumptions can speed up the ability to respond to routine problems.

Yet, companies also tend to make pivotal decisions about new products based on what they assume to be true, rather than observing, listening, and gathering information unbiased by preconceptions.

Innovation is woefully wasted on creating faster, bigger, smaller, flashier, and cheaper things that nobody really needs or wants.

5. Discrediting the Innovator

Sadly, innovative ideas are often dismissed on the strength of the innovator’s weaknesses.

A mechanic, Ms. X, makes a cost-saving and efficiency-boosting proposal to redesign an over-engineered product with fewer bolts and fasteners.

Related: The Democratization of Manufacturing and Innovation

The head of engineering, whose department originally designed the product, immediately opposes the change because Ms. X isn’t a real engineer.

Innovation cannot thrive unless every thoughtful recommendation is given serious consideration.

Untapped Areas of Innovation Opportunity

1. Strategy Development

Strategy is at the heart of the innovations that make any company a superior competitor.

Everyone knows that Thomas Edison invented the light bulb but not many people know that he also started the electric power industry.

Edison lost the race to dominate the industry to George Westinghouse because he chose the wrong strategy based on the technology of direct current (DC) power.

So in the end, no amount of innovation could overcome the inherent limitations of an inferior strategy.

The same is true today.

2. Process Development

Every innovative new product stands to gain from improvements in internal processes.

A project to create a high quality, low-cost lawn and garden tractor, for example, would benefit greatly from a parallel project to streamline and consolidate procurement processes.

Process development is where systems thinking really gets a chance to shine.

3. Tool and Technology Development

State-of-the art tools and technology can be critical to conceiving, producing, developing, delivering, servicing, recycling, and reselling products.

For instance, Steelcase, Inc. designed the top selling office chair in history with its Sensor line — with the real profitability coming from special tooling innovations created in-house.

4. Supplier Development

Toyota offers a quintessential model.

In its drive to become more efficient, Toyota focused on eliminating waste and smoothing work flow.

First, the company put all purchases in the hands of a limited number of carefully selected, high-quality suppliers. Then, it focused on developing closer engineering and stronger relationships with its chosen suppliers.

5. Distribution Development

From matters of sales and customer service to coordinated product development, distributors and retailers can bolster innovation and make the competitive difference.

Henry Ford is most often touted for his innovation of the assembly line. Yet Ford also deserves praise for creating a distribution system capable of matching his fast-moving production system.

Without an innovative approach to selling his cars, the automobile pioneer might only be remembered for the Edsel.

Profile of the Innovative Manager

In all the brainstorming sessions and urgent discussions about innovation, companies seldom address a critical factor: management development.

To nurture and sustain an innovative organization, managers had better possess, or work to develop, the following qualities:

1. Personal Understanding of the Process of Innovation

If people at the top lack a firm grasp of the process of innovation — what innovators do.

How they do it.

And how it contributes to the company’s success — how can they encourage and manage it throughout the organization?

2. Curiosity

People with diverse interests and a curious nature manage innovation better. To value innovation, managers must be genuinely interested in new ideas. new approaches, and exciting possibilities.

3. Openness

The innovative organization thrives on openness — to the new and novel, to criticism and suggestion, and to learning from everyone and anyone.

When managers are open to considering fresh alternatives and to hearing from others, they have an edge on fostering the same attitude in their employees.

4. Continuous Learning and Study

Managers must continually sharpen their skills and accumulate knowledge to recognize and guide innovation of real value.

5. Leadership

Innovative organizations require innovative leaders.

Managers must have a passion for progress and creative useful ideas, as well as a drive for ongoing improvement and competitive prowess.

6. Focus on Strategic Issues Rather than Operational Tasks

Managers must delegate every possible non-management task to devote full attention to the demanding business of leading innovation.


Maintaining an environment in which innovation is encouraged is often highly related with the long-term success of a company. Each of the elements explained above is crucial to the successful innovation process.

Wanted to share how you manage innovation environment in your company, do in the comments!

Leave a Reply

Your email address will not be published. Required fields are marked *