Monday, January 23, 2012

Understanding Organizational Innovation

In the last blog we defined the terms - Innovation and Cognition. In today's blog we begin looking at organizational innovation in the context of Knowledge Creation.

Innovation is a learning process by which new knowledge is created to solve the new problems that are defined. The core concept of study in all theories of Organizational Learning and knowledge creation is that of how organizations translate individual insights and knowledge into collective knowledge and organizational capability.

Such collective knowledge could be the accumulated knowledge of the organization stored in its rules, procedures, routines and shared norms which guide the problem solving activities and patterns of interaction among its members. It resembles the "collective mind" or "memory" of the organization, it could also be the hard data that is "static" or could be "flowing" in the interactions. It exists between the individuals of the organization, rather than within them. 

In some cases it could be more than the sum of the individual's knowledge and in others it could be less than the sum, it’s a matter of how the mechanisms to translate the individual knowledge to collective knowledge are designed. Both Individuals and Organizations are learning entity and it is important to understand that any learning takes place in a social context and this is what makes every learning outcome different.


  1. Sir, would you please elaborate
    "Such collective knowledge could be the accumulated knowledge of the organization stored in its rules, procedures, routines and shared norms which guide the problem solving activities and patterns of interaction among its members"

    What exactly means that the accumulated knowledge stored in the organisations rules, procedures... etc..

    It can also be learned that innovation begins by imagining the impossible to make it possible..

  2. Dear Srini,
    I see you have 2 questions here
    1. How can Processes, rules, Procedures in organization really have knowledge embedded in them?
    2. Imagining the impossible and making it possible is the beginning of all innovation?

    Let me take the 2nd one to begin with
    Innovation needed not always begin with imagination of the impossible and then moving towards materializing it. It could also be and in most cases is a reply to the challenges that are faced by the organization in course of their operation. One could go ahead and completely explore how these actually happen and link it with environmental factors, structures, etc.

    Now coming to the first question.
    Lets take the example of a start up to enhance the understanding one could get. A founder begins a firm in most cases to exploit an opportunity he has identified. When he begins the journey to exploit the opportunity, there are multiple road blocks he encounters and comes up with innovative ways to solve these.
    Over time, as the organization grows, the founder wouldn't be the only person solving these cases. He wouldn't be available to guide the people all the time as he would be involved in other aspects of business. Given this constraint he would like to have some permanent and some semi-permanent structures in place and that is when he put in procedures, rules etc that would form the boundary of operations to others in the organization.

  3. Sir, I now wish to understand how the existing rules or the procedures leads to innovation as in an organisation one has to stick to these rules for the problem solving, as innovation is comes more into existence when the thinking would be well out of box which may require to go beyond the standard rules and procedures.

  4. Dear Srini,
    Thats a good question. If I could rephrase it as this I guess it could be easier to answer
    "Innovation requires one to look beyond the existing processes , rules, procedures etc; It requires a complete a disruption in these to really be able to innovate. If this is the case then how could one think of existing rules leading to innovation"

    I could give the answer to this question using 2 specific examples - Google and 3M.
    Both these companies have evolved a rather unconventional approach to foster innovation. While google allows its employees to spend some of the hours in their daily work or weekly work on any project of their choice, 3M has been traditionally an extremely intrapreneurship oriented company. As a policy 3M has a target of achieving a significant portion of its revenues from an new businesses. That is how 3M has moved from being a mining company to sticky notes, to car care to almost anything!

    Organizations that are looking to facilitate innovation would need provide this flexibility, and this could be done through some of the directives as explained above.

    While the mind is free to think, the organizational policies etc would have to enable those thoughts to blossom into attractive businesses.

  5. Thank you sir.

    Here the policies include the policy what 3M had been following like achieving sufficient portion of target from the new business. Great one in fact. Finally It is the "flexibility" that the policies or the rules facilitate in the organisation to think beyond the traditional approaches to solve the problem thereby coming up with innovative procedures.