Strategic Innovations

Question 1

Big established companies and multinationals often use a bureaucratic management system that employs a hierarchical organizational structure. The main problem with bureaucratic systems is that they constrict the power of decision making at each level of governance; and consequently confine the power to make decisions to a clique of individuals at the helm (Davila 2014). The phenomenon means that even the powerful people within the organization are likely to require some approval from their peers or superiors in order to effect any changes or new approaches. Thus, the big companies have a more complex structure with regards to decision making compared to a small company. Also, the size of the organization presents a possibility that the implications of each decision are considerably deeper. In order to understand why strategic innovations take a long time and bring poor results in established companies, there is a need to investigate the aspects of organizational culture that support strategic innovations. They include the decision making process and the scope of implementation.

Decision Making

Within most organizations that have an innovative corporate culture, the employees are encouraged to take the responsibility for their decisions and their outcomes. The aspect means that while an organization generally supports innovation, the employees also have to be willing and able to defend their decisions for the best interests of the business. In large companies, there is a tendency to consolidate the major decisions either with the very top management or the department heads. Therefore, the decisions to be made within the organization would have to go through the most powerful positions within the organization. As the organizations are large, there are many decisions that require reviewing and approval. When an employee submits a decision for approval, the decision is simply added onto a pile of existing suggestions that await approval. Thus, the employees get accustomed to the fact that they would have to wait to have the permit to implement any innovations (Davila 2014). As they wait, their work is affected in one way or another. It is understandable that after a few attempts, they give up on the innovative concept in the organization. The companies that allow the employees to make decisions and implement them, provided they can defend their ideas if needed, are the ones that genuinely encourage strategic innovations. Employees are always discouraged when they need to queue before they can get approval to act.

Implementation

A big organization has a larger operational context compared to a small organization. Thus, any innovative strategies within the large organization would have to involve a lot of people in the implementation process. One of the greatest challenges in organizational leadership is managing change. Most innovative strategies come with significant alterations that require extensive planning and support to implement successfully. When the scope of implementation is too big, the implementation process is likely to take more time and have a higher chance of failing, unless it is fully supported by the management team. A great reason for failure, consequently, is that when the changes are proposed by the employees, the management team may not be as supportive of the idea. The factor leaves the employees who are responsible for the proposed changes to take charge. For the most part, the greatest worry is that the responsibility for failure will be placed on the employees rather than on the managers, who show no support. Innovation has to be approached collectively. Then, even if the strategy does not deliver the desired outcomes, the organization is willing to learn from the experience and improve next time. Without the support of the management, the strategy becomes impossible. It is very unlikely that the employees would propose any new ideas if the responsibility for failure will be placed solely on them.

Possible Solutions

In order to become better at discovering strategic solutions, the organization should consider decentralizing the decision making process without necessarily leaving themselves vulnerable to poor decision making. Each employee should be enabled to contribute to the decisions as directly related to their area of expertise or scope of work within the organization. The decisions can be submitted for approval first but not to the top management. Each employee has a direct supervisor, who should have the authority to approve a decision based on their knowledge of the organization, its goals and objectives. A shorter processing time for the submitted decisions will generally encourage the employees to share their innovative thoughts for the company’s operations. Thus, the approach allows the company to discover more innovations.

A second potential solution is the implementation of policies that support ownership and responsibility in decision making within the organization. When employees take ownership of their efforts and decisions, they are capable of taking the right risks and thinking outside the box for the organization’s success. As a result, they would be willing to make difficult decisions that affect their work provided they can support the decisions to contribute to the goals and objectives of the organization. If the organization is willing to condone a mistake made in the name of innovation, employees will not shy away from trying out new methods.

Question 2

One of the most sought after trait in employees for the past two decades has been innovative thinking. Employers have are looking to hire innovative individuals who can think out of the box and develop new solutions to old problems. For the most part, the creative individuals join the organization with some innovative ideas, but they change eventually depending on the work environment in the respective organization. A number of factors discourage employee innovativeness over time. They include strict subordination policies that foster limited decision making capabilities, transactional leadership, and limited employee motivation (Skarzynski & Gibson 2013).

A company that has strict subordination policies generally expects the employees to follow the rules rather than searching for new ideas on how to make things better. A strict organization is likely to motivate employees to take on a robotic strategy where they are not intellectually engaged in their work roles and responsibilities. The rigid environment contributes to lower productivity as the employees are not challenged to think about what they are doing (Kaplan 2009). To deal with the aforementioned situation, the organization has to consider appreciating the employees for their skill sets and thus allowing them to take more responsibility for their work. When they have enough room to maneuver, the creative employees will be able to introduce new and interesting ideas for the organization to work better. Limiting the employee’s decision making capabilities also increases the chances of burnout and puts the company at risk of higher turnover rates. For most employees, a challenging work environment is as important as a good pay package.

Transactional leadership has been lauded for producing impressive results within some contexts. In a world where the employees increasingly understand their value to the company of employment, transactional leaderships is more of an impediment to the employee’s personal and career growth. Transactional leaders make all the decisions and the main role of the employee in question is to follow instructions to the letter. Therefore, the employees may have an easier time at work as they do not have to make any difficult choices but rather follow the guidelines. They also do not have to take responsibility for any bad outcomes that they may get in their work since they follow very clear instructions from their leaders.

Companies that practice transformational, servant leadership or any other leadership theory that focuses on the needs of the employees tend to have a better chance at the innovative corporate culture. The reason is that leadership that supports the employees and encourages them to grow stimulates independent actions within the organization. As part of the ownership and development culture, the employees will not be afraid to share their thoughts with the leadership. Moreover, the leadership in a creative company is supportive and rather open to the employees’ ideas. On the contrary, the transactional leaders would rather keep their distance and only talk about tasks and performances. Changing the leadership theory applied within an organization is not an easy task. Most leaders have a specific theory that they subscribe to, with others taking on a number of theories depending on the situation within which they are operating (Kaplan 2009). Within an organizational context, a suggested solution is to limit the transactional leadership theories to contexts where they are the best alternative. The leaders should mainly focus on leadership theories that empower their subordinates to improve their performance in the organization.

At the same time, employee motivation is a very wide subject that has been studied for many decades. Each organization has a unique workforce with particular needs and expectations that affect their motivation levels. Thus, an organization should employ the motivational strategies to meet the workforce needs. Without a doubt, a company may use its reward and motivational strategies to spur innovation among its workforce. Moreover, motivation does not necessarily mean monetary or tangible gains, but rather applying mechanisms that could see employees’ individual contributions being recognized. The approach can help build a highly productive workforce. In some contexts, the relationship between the leaders and their subordinates is a great determinant of the motivational success. Leaders, who have a good working relationship with their employees, boost the level of motivation since they understand the subordinates to know which incentives would work to increase their desire to accomplish.

Correspondingly, any employee would like to work in an environment where his or her skills and knowledge are viewed as an asset. A motivated employee is likely to work harder, to go an extra mile, and to always think outside the box as they seek to find better ways to contribute to the organizational success. To ensure that the achievement happens, the organization would have to study their employees thoroughly to establish effective motivational strategies depending on the needs and expectations that define their workforce. Some employees may need more money to be innovative, while others require the opportunity to be promoted, the chance to advance their career. Moreover, supportive work environment in terms of relationships with colleagues and bosses is a motivational factor. Also, some workers appreciate a few days of paid vacation each year. Innovation at an individual level depends on the comfort that the employee experiences in his or her work.

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