Author: Anusha Babooa

Effective managers facilitate and promote innovation in an organization. Discuss.

Nowadays innovation is a necessity for a company or an organization to achieve success and to sustain in the ever-growing competitive environment. A manager should accomplish his key roles and should possess certain features for him to be effective. Managers and supported staff at times take an entrepreneurial role as part of their work. By being in touch with peers (interdepartmental perspective), customers and suppliers, they can spot opportunities in the business environment which will allow sustained growth. There are a number of factors through which a manager can assist, create and encourage innovation in an organization. Yet, there do have certain managerial and organizational barriers which need to be overcome for innovation to take place. Before discussing the innovative role of a manager, it is important to know the different roles played by managers in an organization.

There are different levels of management in an organization ranging from the board of directors followed by the chief executive, Middle managers to junior managers (foreman/supervisors). The job roles of each level involve a range of different responsibility, skills and duties. This may usually include setting targets, delegating tasks and controlling tasks. Workers need to be encouraged, supported, complimented (or reprimanded) in order to ensure that the target set are achieved.

Henri Fayol (1949) stated that ‘to manage means to plan, to organize, to motivate, to control, to coordinate.’

The different roles of a manager can be grouped into five key management functions which are:

1) Planning- deciding the objectives/ goals of the organization

2) Organizing – putting plans into operation which involves organizing resources such as labour force, capital and money so that production can take place.

3) Motivating- meeting the social and psychological needs of the employees. The managers use both financial and non-financial incentives to help employees achieve the objectives of the organization.

4) Controlling- managers must measure and evaluate performance to ensure that it meets the requirement of the plan. If deviation is identified, corrective measures are taken.

5) Coordinating – bringing all the groups in the organization together. It takes place in order to ensure that they are all working towards the common goals/objectives of the organization.

However, nothing was said about what managers need to know or what managers need to do in order to be able to carry out the above functions. In recent years, researchers have identified areas of knowledge and skills required to perform these functions.

The list comprises the following knowledge and skills which a manager requires in order to manage effectively.

1. Command of basic facts, for example, a marketing manager needs to know how the market operates in general, the techniques of advertising.

2. Relevant professional knowledge, for example, knowledge about the specific product, how to consume them, how to promote them

3. Problem-solving, decision-making skills4. Social skills, i.e., an awareness of social needs and a desire to help members of society-

social responsibility5. Emotional resilience, i.e., the ability to spring back(recover) quickly from any emotional

event6. Self knowledge7. Learning habits and skills8. Mental agility, i.e., the ability to judge and take quick decisions.9. Pro-activity, i.e., responding purposefully to events, showing determination to achieve

something10. Creativity, i.e., breaking down and restructuring our knowledge about a phenomenon in

order to gain new insights into its nature. In fact ‘creativity’ is one of the pre-requisites for ‘innovation’.

Managers have to adopt certain roles and behaviours, ranging from the aggressive adventurer to the people oriented enabler and ‘animateur’, in support of innovation. There are a number of roles that can elicit innovation development and create change in different business contexts:

a. The adventurer-a major risk taker whose courage and forcefulness are indispensible in making huge changes in strategy required to enter new and difficult markets.

b. The leader- gives a sense of direction and discipline by ensuring that new projects are associated with their vision for the organization.

c. The change agent- displays management and political skills in order to manage change programmes and overcome resistance to change.

d. The enabler-uses behavioural skills to encourage people to question ideas and come up with forward looking ideas through collaboration with insiders and outsiders.

e. The ‘animateur’- humanizes and enlivens the organization as a living social system. A supportive atmosphere is developed where there is trust for individual and group risk taking in pursuit of innovation.

Innovation is similar but not identical to invention. Invention is only part of the process whereby innovation is more holistic and incorporates both creation or discovery aspects and utilization aspects. Innovators are generally attentive to changes which give them clues to what opportunities may come in the future. In order to continue riding, the industry life cycle before maturity and decline, firms need to innovate continually. Innovation is the key to business survival and growth and by extension for a country’s economic growth.

People rightly associate effective managerial ventures with innovation. A successful manager brings something new to the market place, a unique product/service that adds value for customer and thereby differentiates the company from its competitors and gives it a competitive advantage. However, innovation cannot be a one-off happening if the company wants to survive and thrive in a competitive environment. Sustained innovation is only possible if the organization has the right entrepreneurial people, the flexible organization structures, the management systems in place and the innovative culture and climate that favour risk taking in psychological safety. It is then possible to consistently and sustainably create value for customers.

Creativity results in the production of new ideas, innovation ensure materialization of the idea into a business opportunity and the entrepreneur creates market value in the marketplace by exploiting the opportunity commercially. The manager is therefore instrumental in linking creativity, innovation and entrepreneurship by displaying a high propensity for both creativity and opportunity perception. This in turn leads to the success of the company.

Effective managers can enable and sustain innovation for the organization to stay aggressive and responsive to market conditions. This can be done by:

1) Preserving an innovation friendly culture For example by avoiding complacency, by being outwardly focused and not punishing failures; by welcoming new ideas and creative people, rewarding acts of creativity, avoiding bureaucracy in handling new ideas and downplaying hierarchy.

2) Establishing strategic direction For example, by establishing a vision and mission whereby strategy related boundaries will channel creative energies into areas of greatest pay-off potential as defined by company strategy.

3) Being personally involved with innovation Some of the most successful executives have been most effective when they have been rubbing elbows with bench scientists and technicians in the R&D laboratory. Examples are Bill Hewlett, David Packard and Bill gates. Leaders should therefore stay close to sources of innovation within the organization as it grows. Staying close sends a powerful signal to employees that innovation matters and keeps leaders up to date on technical and market issues.

4) Continually improving the idea- Commercialization Process Quite often, ideas produced, are conceived and subsequently developed in an informal manner. However, in order to encourage a sustained flow of ideas and innovations, a systematic innovation process needs to be adopted. Steps include a process for idea generation recognizing which ideas(s) has potential, evaluation of those ideas followed by development and commercialization. Developing and improving the innovation process is the most important task of founders and management teams.

5) Hiring people who have entrepreneurial attitudes Executives should look for potential recruits who have a good feel for technologies important to the company and who display a genuine curiosity about the stated and latent needs of customers. Those people are comfortable with change; view unmet needs as opportunities, enjoy collaborative work and think and act like entrepreneurs in a participative management spirit.

6) Effective communication of ‘new ideas/processes’ to members of staff The message should be clarified so that the receiver gets to think and do exactly as the manager wishes. The latter should be empathetic, that is, putting themselves in the place of the receiver; should encourage feedback to ensure the right meaning is conveyed; should match message to audience, for example, avoid technical language when communicating with lay people. Managers should tell the truth about the business, its performance and the factors influencing same build credibility and enhance sense of belonging. Face to face communication also reduces misunderstanding because it gives non-verbal clues and immediate feedback is possible.

7) Creating a culture of innovation Once managers/leaders have helped to establish the vision and strategy, organizations need to set up a culture of innovation. In general, innovative entrepreneurial cultures

allow divergent thinking, develops management support and tolerates failure (instead id punishing it).

a. Divergent thinkingIt focuses on broadening the context of decision making and requires three central skills: conversation, observation and reflection. Managers who promote divergent thinking start by hiring the right people with entrepreneurial characteristics. Managers develop the innovation culture by motivating people, giving them data and information required for informed decision-making, provide resources, ample time and support to achieve results, they respect people’s capabilities and allow them to develop their potential.

b. Supervisory encouragementManagers for innovation do not delegate the responsibility for innovation only to a group (e.g. Research& Development), but also to others at all levels. Their role is rather to call for, recognize and acknowledge innovation from others. ‘Middle manager entrepreneurs’ should enable innovation through assuming the career risk of supporting new ideas by providing corporate resources and overcoming resistance. Management and supervisory encouragement creates and nurtures the climate for innovation. Conversely, ‘traditional management’ may be characterized by negativity and lack of enthusiasm, which discourages creativity. Such managers rather look for reasons not to pursue the idea, e.g. highlight the risks.

c. Failure as learning opportunity‘Traditional’ management often punishes failures and this acts as a negative reinforcement. What follows is a climate of fear of risk taking and a propensity to maintain this status quo. Tolerating failures in an organization fosters a culture of innovation by telling people they have to learn the hard way- by taking the risk of making mistakes. People occasionally fail and learn from failures, for example, realizing what does not work can be as informative as knowing what works.

8) Concept of job satisfaction It assesses the amount of satisfaction a worker derives in his job and improvements introduced whenever and are closely associated with motivation. It is the management’s responsibility to be aware of their employees’ needs and to act accordingly. Differences in individual always exist and the manager should realize that individual weaknesses and strengths go hand in hand. The recent works of Maslow, Herzberg and McGregor have shown the importance of the nature of work, and its structure to motivation. The important part to be satisfied in working which acts as an individual factor to the hierarchy of needs, the hygiene conditions or the reorganization of the situation of Theory X that job satisfaction is essential and is associated to environmental conditions and inducements in pay. Thus it is important to determine the qualities needed and possessed by the employees. With the use of job evaluation and personal techniques, the manager can detect elements of monotony, boredom etc and hence adopt alternative stimulants for improvement.

9) Likert’s four management systems It involvesa. The Exploitative Authoritative System

-‘traditional’ management system whereby managers took decisions and set out standards and methods and employees were either threatened or punished if they did not meet the manager’s goal.

b. The Benevolent Authoritative System A certain amount of flexibility given to subordinates to carry out their assignments with certain limits and procedures still issued by the manager. Employees were rewarded if they met or exceeded the manager’s goal.

c. The Consultative System Subordinates are free to discuss most work related discuss with their managers who in turn trust their subordinates as far as carrying out their tasks properly.

d. The Participative Group System The goals and decisions are what are desired by the group in general. Decisions made by managers are done after incorporating the suggestions and opinions of the group members, in some cases decisions made may not be the one favoured by the manager personally.

The fourth management system is the ideal one whereby most organizations should work toward. Subordinates are motivated not only by monetary rewards. Managers try to give their subordinates a feeling of self-worthiness and importance.

Performance standards exist to permit self-appraisal by subordinates rather than provide managers with a tool of control.

10) Managers with leadership skills Since management is the process of getting things done by others, leadership skills are indispensable for managers. For instance, employees need motivation by effective leadership to increase productivity, to work overtime if necessary, or to produce quality products and services. Leadership implies: skills to lead; ability to win co-operation and loyalty; courage to accomplish an assigned task. The factors which will influence a manager’s choice of styles are as follows:1. The types of organization2. The amount of confidence and trust existing between management and employees3. The nature of the communication and decision-making process and thus the

amount of participation4. The nature of the work and motivational influences

Strategies can emerge from various levels in the organization, not only managerial. Not all managerial styles and organization systems will facilitate innovation development. Therefore, organizational barriers and resistance need to be overcome and assistance and support for interaction has to be put in place.

1. Overcoming managerial barriers to innovation Managers of corporations act as trustees of shareholders and therefore have a duty to exercise caution, stewardship and control. They also have a duty to maximize return on investment of shareholders and this is not compatible with innovation. Managerial inactivity can be overcome by striking the right balance between efficiency and effectiveness. This can be brought about by a change in attitude of managers. Toulouse, (1990) identifies the following attitudes that altogether bring the balance:a. Valuing individual or collective initiativeb. Seeing determination and perseverance as being desirablec. Striking a balance between security and riskd. Reducing the tension between stability and change

2. Overcoming organizational barriers to innovation As firms grow, growth tends to be built on a system of rules and procedures which dictate how the work will be done in future. However, business environments keep changing and such rules and procedures can quickly become obsolete, as well as structures and cultures. A solution to this is strategic planning. This process requires development of a vision, mission and objectives. It includes an analysis of the business environment to uncover strengths, weaknesses, opportunities and threats. From an analysis of these (SWOT analysis) a number of strategic options will emerge from which the firm will choose appropriate strategic directions based on its resources and capabilities. The strategic management process takes care of the changing business environment. It brings the culture change and change in mindset necessary to overcome organizational barriers to innovation.

3. Peter Drucker, 1985 considers that the essence of innovation is the development of new or different processes, products or services that utilize resources more productively than before. If the right management policies are out in place, then innovation can be a normal incidence.

a. Planning for obsolescenceMake it company policy to systematically place all activities ‘on trial’ for their lives. In this way all products and practices that are unproductive will become obsolete. For example, managers should answer critical questions on the contribution products and processes make to customer value-added.

b. Promote role modelsUse successful innovators as role models. To send a clear message that innovative behavior is appreciated, role models are called upon to present their success to peers, to show the road to success and also to highlight how to avoid pitfalls in a learning organization approach.

c. Achieve an innovation orientationChange from performance oriented to innovation oriented. This is done by recruiting appropriate people, providing management support. It also means that

organization has to retain those who are innovation oriented though they may lack managerial or organizational skills.

d. Create a flexible organization structureCreate flexible organization with a matrix structure, whereby people from different departments cooperate as a team on a project. The matrix structure combines the efficiency of the functional approach with the responsiveness of the divisional approach to organization structure.

e. Reward innovationReward innovators to motivate them and sustain innovative attitudes and behavior. The trend is towards profit sharing whereby new venture personnel are paid a percentage of profits they contribute to generate. It is not uncommon to propose equity share in new ventures or to give an opportunity to advance within the administrative or the technical hierarchy through promotion. Motivation can also take form of increased autonomy (for example, self managed teams).

In a concluding note, effective manager need to use formal sets of knowledge as well as trust their “gut feelings” as a person. On the technical side, they need to be able to problem solve, use specialty skills, and apply applicable training. On the other side, they need such skills as being able to understand others and think quickly. Many people with little or no formal training are excellent managers because they are good with people and very adaptable. Practical life experience and improving on mistakes in the past are also skill builders of management technique. Competitive organizations understand being innovative some of the time, in one or two fields just won’t work. The key to an organization’s survival is consistent innovation and this requires structures, systems and a culture to be put in place that contribute to innovation through changes that create value for their existing and potential customers.

Words: 2,954

References 1) Guide to Management of Business, P. Alphonsa Edited by N.Mahesh, SECOND EDITION

2) Cambridge International AS and A level, Business Studies, Stimpson and Farquharson

3) Business Studies now! For GCSE, BORRINGTON STIMPSON

4) SUPER GEM, ENTREPRENEURSHIP/LEADERSHIP/INNOVATION, INCORPORATING THE EPA MODULE “EMPLOYABILITY ENTREPRENEURSHIP AND SOCIAL ENTERPRISE”, STUDY GUIDE for MGT 2251Y

5) ORGANISATION AND MANAGEMENT MGT 1111, course manual