Case Study #1: Citations and important passages
1. Risk taking is acceptable to management:
a. Management must recognize the risk/reward relationship and find organizational mechanisms for handling it. And it must communicate a clear understanding that reasonable risks are acceptable, since they are the handmaidens of progress. On the innovative front, two methods are available for dealing with risk: diversification and cheap failures. They can and should be used in concert. i. Diversification- allows companies to spread risk over many rolls of the dice, as opposed to betting the company on a single roll. Because one can never know in advance which ideas will be winners and which will be losers, having a diversified “portfolio” of ideas in play makes sense. ii. Cheap Failures- project or experiment that is terminated with the least possible outlay of resources—just enough to tell managers that “This isn’t going to work.” They back promising ideas with small budgets and look for ways to test them with the least input of resources. Like card players, they quickly fold when they recognize that they have a weak hand. Conversely, they increase backing for strong ideas.
2. New ideas and new ways of doing things are welcomed
b. The worst environment for creativity is one that is unwelcoming to new ideas. “We’ve been successful over the years by doing things this way, so why should we change?” An organization with this attitude is heading for trouble. In fairness, management is compelled to shoot down good ideas when (1) those ideas lack a strategic fit with the business, or (2) the organization lacks the resources to pursue them. In these cases, how- ever, management has a responsibility to communicate its reasoning to employees. Beyond welcoming new ideas, the organization should view innovation as a normal part of business—not a special activity practiced by a handful of employees.
3. Information is free flowing
c. Information can stimulate thinking, which leads to idea generation. Many creative ideas are formed at the intersection of different lines of thought or technology. When people communicate and share information, they get ideas that haven’t been considered yet. In hierarchical firms, information is often hoarded as a source of organizational power. Information flows are controlled and channeled through the chain of command. People must demonstrate a “need to know” to have access to certain information. This control impedes the catalytic function of communication and limits opportunities for different pieces of information to intersect and combine in people’s minds. Managers can encourage the free flow of information in many ways: through e-mail, the physical co-location of team members, joint work sessions, and regular brown-bag lunches.
4. Employees have access to knowledge sources
d. Knowledge is often the raw material of creative thought. Some companies have developed elaborate knowledge management systems to capture knowledge, store it, and make it easily avail- able for reuse. These systems help ensure that what was learned by someone in Unit A doesn’t have to be learned anew by someone in Unit B. iii. Another way to help employees tap sources of internal knowledge is through the creation of communities of interest. A community of interest is an informal group whose members share an interest in some technology or application. Whatever the interest may be, newsletters and periodic meetings held by these communities provide opportunities to share knowledge and spark the imagination. iv. External knowledge is equally important as a stimulant to innovation. External knowledge invigorates and adds vitality to organizations. Employees access that knowledge when they have opportunities to attend professional and scientific meetings and to visit customers and benchmarking partners, and when outside experts are brought in to share their...
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