Comments for Build and lead effective innovation teams: balancing acts

Key insights: Prior research has mainly focused on the differences in entrepreneurial orientation between organizations or teams. This article highlights the effects of diversity in individual entrepreneurial orientation (iEO) within teams. While diversity in orientation and perspective within a team can make valuable contributions, it does not always have a positive influence on innovation and team performance. Performance is negatively affected by diversity in proactiveness (forward-looking perspective, taking initiative), creating challenges in efficient teamwork. Further, significant differences in risk-taking can lead to relationship conflicts, as risk-taking behavior may be considered as irrational and trigger relation-ship conflicts. Lastly, diversity in terms of innovativeness (adaptors/exploiters vs. explorers/innovators) positively effects team performance. Adapters want to improve existing solutions and make them more efficient, while innovators introduce new, unexpected ideas and thus do things differently.
Implications: The first implication we derived is about the composition of teams based on deep-level characteristics. When composing a team, managers tend to only look at a perfect composition of observable characteristics. Instead, he/she should spend some time evaluating especially iEO. This is possible through longer interviews going beyond superficial questions and case studies, but disclose risk-taking, proactiveness and innovativeness. Secondly, entrepreneurial teams should have a mix of “explora-tive” and “exploitative” thinkers. By having a diversity of perspectives, teams are better equipped to handle innovation challenges, as an adopter’s weakness can be compensated by an innovator’s strength and vice versa. Lastly, there are new requirements for leaders of entrepreneurial teams. For example, this implies having conflict solving mechanisms put in place and actively raise awareness about the benefits of having these diversities.
Limitations: The first limitation is related to finding innovative solutions under time pressure. Selecting team members based on their iEO may not always be possible, especially in urgent situations. In such cases, managers have to base their team composition on the availability of personnel, even if their preferences differ (e.g. COVID vaccines). Furthermore, the paper implies that a balance of explorative and exploitative thinkers increases the team performance. In our opinion, this is not applicable for organiza-tions or teams with a clear orientation towards one way of innovating. In teams with exploitative objectives, explorative thinkers might feel limited in their creativity, while exploitative thinkers might not feel able to reach radical innovation goals. This can cause intra- and interpersonal conflicts and thus hinder the innovation effectiveness. Lastly, the “War for Talent” on the employee market might hinder the manager’s availability for composing the ideal team. This can lead to a gap between availability and preferences. Managers must make a trade-off: Will they reject a person with the right expertise and experience in their team, just because his/her risk-aversion might not fit in the team?
Further References:
– Büschgens, T., Bausch, A., & Balkin, D. B. (2013). Organizational culture and innovation: A meta‐analytic review. Journal of Product Innovation Management, 30(4), 763-781.
– Nederveen Pieterse, A., Van Knippenberg, D., & Van Dierendonck, D. (2013). Cultural diversity and team performance: The role of team member goal orientation. Academy of Management Journal, 56(3), 782-804.

In the business world, creativity means much more than originality. This aspect of a business is often neglected by managers. In reality, this concept consists of 3 main components: imagination, expertise and motivation. On one side, managers tend to kill creativity by placing people based on the urgency of the situation and not on the match between the task and the employee’s abilities. On the other side, work environment and creativity are narrowly linked and 5 categories are needed to enhance creativity among employees (freedom, resources, teamwork, supervisory encouragement, and finally organizational support).
As a result, it is very important that managers consider the 3 components of the creativity definition. First, managers should stimulate employees to obtain expertise because a person is more likely to achieve creative success if he has long periods of experimentation. That avoid managers leave too big a gap between the employees’ missions and their expertise capacities. To increase the expertise capacity, managers can stimulate employees to exchange ideas by making them work together. Then, managers should also improve the employees’ creative thinking by exposing them to various approaches to problem solving. For example, when trying to solve a complex problem, employees are forced to use their creativity to find a solution. Finally, managers should really pay good attention to the intrinsic motivation of their employees. They can do it by giving their teams clear objectives depending on what the company can afford or by leaving their employees the time for exploration and incubation periods. In addition, managers should pay attention to matching people with the right teams/assignments and therefore manage to get rich and detailed information about their employees in order to assign people to the right place.
However, in this context, managers can also meet some limitations. First, even if we can observe creativity in all departments of a company, every company does not have creative people in each of its departments. For example, you will perhaps have all the creative people of your company in only one or two departments such as marketing or innovation, and so those people will not have the competencies to help other departments such as supply chain or finance. Then, in theory, it seems easy to match people and tasks that motivate them, but in practice not really. In fact, managers cannot ask all the time when they need some employees from various departments to work on a project if they are motivated or not. This would be really time consuming and slow down the growth of the company. Finally, the 5 categories needed to enhance creativity are often really difficult to develop all together. For example, people are often afraid of big changes. As a result, if an employee presents new creative ideas to a manager but that involves a too big change, the manager will be on the defensive regarding this idea. Moreover, if the idea challenges the manager’s way of operating, he will undoubtedly find it difficult to accept. Therefore, supervisory encouragement and organizational support are not always easy to obtain.

Further references

1. Burnett, C., & Cabra, J. (2017, 29 juin). References : Ingredients of Creativity : Originality and More. Taylor and Francis Online. https://www.tandfonline.com/doi/ref/10.1080/10400419.2017.1302776?scroll=top

2. Zhang, W., Jiang, Y., & Li Sun, S. (2019, 2 mai). Openness to Experience and Team Creativity : Effects of Knowledge Sharing and Transformational Leadership. Taylor & Francis. https://www.tandfonline.com/doi/abs/10.1080/10400419.2019.1577649

3. Ouedraogo, N. O. L. M. (2017, 2 février). Antecedents Of Employee Creativity And Organisational Innovation : An Empirical Study. Ideas. https://ideas.repec.org/a/wsi/ijimxx/v21y2017i07ns1363919617500608.html

Upper Echelon Theory is based on a theory that analyzes the dispositions of decision-makers within an organization to understand how companies operate and why they operate the way they do.

It has been shown that the effects of management diversity on performance depend on different moderators. Second, different aspects of diversity can lead to different performance outcomes. Finally, the relationship between diversity and TMT performance is indirect rather than direct.

Innovation Fields are defined as projects that come from different business units and divisions. This contributes to a continuous flow of important innovations, even from brand new companies. This is in contrast to innovation activities that focus only on single products or companies. By concentrating on areas of innovation, companies can gain expertise in new and emerging business areas.

Top managers with different backgrounds, functions, industries and organizations need to combine with very different visions and they also need to have more constructive task conflicts that encourage thoughtful strategic choices regarding their company’s innovation strategy. These areas can be specified on the basis of different specification criteria, such as technology, market and internal company aspects.

To set up such areas, top managers need to recognize and find links and opportunities between different projects. They will also have to decide on all the resources they are going to invest in these projects, be it human, financial or time resources, allocated to each domain.

We can now ask ourselves the question: What should managers or policy makers do more or differently to better manage innovation. To answer this question, we can look at several managerial implications.

First, as mentioned in the text, the upper echelons perspective, which consists of how the background characteristics of the top management team can predict organizational characteristics, can be somehow tricky to implement for managers. Upper echelons is one key to an organizational success. To manage this issue and for the company to success, the teams at the top are instrumental in defining the organization over time. TMT must set their values, competencies, ethics and unique characteristics which will reflect throughout the organization.

It is also said that companies must focus on innovation fields, where the projects originate from different business units and divisions. So how can we create more synergies among the projects of each innovation field? Having a cross-group approach is thus very important for TMTs. For that, the organization must be made of teams with individuals that have different experience, age, gender, skills… Having a diversified organization can help to innovate better. A second tip could be to keep every individual and team goal aligned with the company objectives. Teams should understand the connection between their efforts and the overall goals of their employers.

In theory, innovative firms would want to have as much diversity in their TMTs in a way that this would allow the companies to have a clear competitive advantage. But this is often not the case because in practice, we see that individuals with certain characteristics (males, economists, older persons) are more likely to be considered as potential TMT candidates. Therefore, firms must reconsider predominant perceptions of ideal TMT candidate profiles. It is something already happening in some firms who are institutionalizing positions, an example is having a head of diversity.

However, there are limitations to these implications.

First, it is true that having TMTs with different characters can lead to more ideas and potentially more sources of innovation. However, this may be a brake on innovation. Indeed, for a new innovative project to be implemented, each department often has to accept the project; but if an idea proposed by the head of a section is not followed by the others because it is too different from his mentality and ideas, the project will never succeed.

Second, “The organization must be made of teams with individuals that have different experience, age, gender, skills…” is an area for improvement. But there are limits to this advice. For example, it might be beneficial to hire more women, but it appears that they apply less than men for top management positions. This problem is generally due to the fact that women are less likely to apply if they think that they do not meet the qualification.

If you wish to go further, here are new articles that you can consult.

Khaire, T. A. (2008, October). Creativity and the Role of the Leader. Retrieved from Harvard Business Review: https://hbr.org/2008/10/creativity-and-the-role-of-the-leader

Sylvia Ann Hewlett, M. M. (2013, December). How Diversity Can Drive Innovation. Retrieved from Harvard Business Review: https://hbr.org/2013/12/how-diversity-can-drive-innovation

Wegge, J., & Schmidt, K. H. (2009). The impact of age diversity in teams on group performance, innovation and health. Handbook of Managerial Behavior and Occupational Health, pp. 79-93.

The first source will focus on the importance of the role of business leaders in the development of creativity and so on the innovation. The second will show how the diversity of employees within a company can have an impact on innovation. The third goes further by stating the disadvantages of diversifying teams.

References :

Debra L, & James Campbell Q. (2013). Organizational Behaviour. South-Western Cengage Learning, 8, 334-336, En ligne https://books.google.be/books

Pavel, N. (2018). Cross-Functional Team: What is it and How to Make it Work. Retrieved from: https://kanbanize.com/blog/cross-functional-teams/

This paper identifies two types of innovation leaders, the front-end and the back-end. The first ones are more curious, they think out-of-the box and they have a certain level of failure and risks tolerance. The seconds are more focus on rigor, discipline in planning and execution. Then, it also presents two types of innovations: the bottom-up innovations (coming from employees around organizational culture, taking risks, experimenting, sharing information and learning from failures) and the top-down innovations (when decisions come from the top managers and need to be execute by employees). The last point concerns the differentiation between four innovations dimensions. The totally new product category or service offering requires a strong commitment from the leaders in charge of it, the new/improved customer solution or customer system needs to be coached by a manager with a deep-understanding of the market, with a certain sensitivity and charisma. The totally new business model or system business is a powerful way to enhance a business. It needs a pragmatic architect-type leader. The new/improved product, process or service offering category is the most practiced and is the only one generally proceeded in bottom-up mode. The leader needs to be demanding yet supportive.

We can pull two implications from this paper. The first means the companies need to plan innovation and know exactly the way they are going to innovate (strategy) in order to define what are the best people to drive this innovation. It can be done by developing the human resource system, being able to identify people with the right set of skills that will fit the strategy. Then, innovation has many steps through its whole process and every processes require different sets of skills capabilities from the “leader” of the innovation. That’s why it has to be driven by a dedicated team without hierarchical level.

We outlined some limitations in this paper. To be able to recruit appropriate people to innovate, companies need to identify potential workers having the required skills. Even if some tests such as MBTI or Enneagram exist, it is very hard to have an objective identification of these. Then, we think that firms don’t always require the same type of people even if they follow the same strategy. Depending on the location, industry or size of the company, the skills needed to innovate can be differents. On the one hand the text suggests to have a better balance between top-down and bottom-up innovation, and on the other hand it only outlines one situation out of four where a bottom-up innovation can majoritarly be done. It shows the difficulties to develop these types of innovation even if we hear more and more its importance in this process. Finally, the text teach who are the right people to hire depending on four strategies. However innovation is way broader than this. That’s why to go a bit further it can be interesting to develop other situations and see the type of leaders required to deal with it.

To go further:

Herstad, S. J., Sandven, T., & Ebersberger, B. (2015). Recruitment, knowledge integration and modes of innovation. Research Policy, 44(1), 138-153.

Hotho, S., & Champion, K. (2011). Small businesses in the new creative industries: innovation as a people management challenge. Management Decision, 49(1), 29-54.

Saari, E., Lehtonen, M., & Toivonen, M. (2015). Making bottom-up and top-down processes meet in public innovation. The Service Industries Journal, 35(6), 325-344.

This paper explains that the role of a leader is to create a more innovative organization. An innovative leader needs to create a community inside the company. And for innovation to happen, the community has to be willing and able to innovate over time.
The willingness comes from the mix between the purpose of the company, the shared values and the rule of engagement. The purpose will drive the company in the right direction. It is about having a collective identity and what it means for the employees to be part of the company. The values shared by the group will influence its actions and allow the individuals to set priorities and make thoughtful choices. Four main values are embraced by most innovative organizations: bold ambition, responsibility to the community, collaboration and learning. Finally, the rule of engagement will keep all the members focused on what’s imperative and encourage activities that foster innovation. In practice, this is applied through the process to give everyone in the community a voice to influence the decisions and to allow everyone to question everything. These steps in the leadership approach allow to build a community. However, organization willingness is necessary but not sufficient for innovation to happen.
To foster innovation, a community also needs the ability to make it happen. And that ability is composed of a set of 3 specific capabilities: the creative abrasion, the creative agility and the creative resolution. First, the community needs creative abrasion. This means that ideas should be generated through debate thanks to the intellectual diversity and intellectual conflict. Second, the community should encourage creative agility for discovery-driven learning through experimentations and plan-adjustments. Finally, creative resolution is essential to integrate the different ideas in the decision making process.

In other words, the main idea of this paper is that leaders of innovation are creators of a context in which others make innovation happen. They let each individual take the role that put their skills on display and provide them with the experiences and the tools they need to both unleash and harness the individual genius. This hypothesis leads to some interesting managerial implications.
First, special workshops for the community’s individuals can be held in order to enhance their willingness. Indeed, through those workshop, employees will be remembered of the purpose, shared values and engagement rule. But the limit of those workshops is that it might lead to only incremental changes and not radical innovations. Furthermore, if some people have completely opposite positions, it might not lead to a compromise and rather slow down the decision making process.
Second, the leaders must give a higher autonomy to their team in order to enhance these individuals’ creative agility. However, the right balance must be found as too much autonomy might decrease the focus or even lead to products which aren’t answering any customer need.
Finally, leaders might consider to make different teams participate in different stages of a product process. This change in the work of process, by adding more insight views, might increase the product’s acceptance by the consumers. Still, the leaders need to consider the downside of the approach. Indeed, it might slow down the process of decision making and thus slow down the launch of the product. Thus, in rapidly evolving markets were the product launches must be as quick as possible, this is not advised.

— New sources identified–
• This book will give more in-depth information regarding the creative abrasion process, which is one of the tools to create and sustain knowledge flows.
Leonard-Barton, D. (1995). Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation. Havard Business School Press, Boston.
• This article will allow the students to make a link between the shared values, needed to enhance the willingness, and the intellectual diversity, needed to have an effective creative abrasion. Indeed, this study analyses whether or not different personal and contextual characteristics complement each order to enhance innovation.
Miron, E; Erez, M. & Naveh, E. (2004). Do personal characteristics and cultural values that promote innovation, quality, and efficiency compete or complement each other? Journal of organizational behavior, 25(2), 175-199.
• As explained, experimentation enhances innovation as it part of the creative agility process. This book explains that every company’s ability to innovate depends on the possibility to experiment in order to create new or improve existing products and services.
Thomke, S. (2003). Experimentation matters: unlocking the potential of new technologies for innovation. Harvard Business School Press, Boston.