By Stephen F. DeAngelis, Principal Author. Bradd C. Hayes, Editor. - See more at: http://enterpriseresilienceblog.typepad.com/enterprise_resilience_m...

Retrieved July 27, 2013

Institutional Innovation

Each day, dozens of articles are written about the importance of innovation in the business world. Most companies believe that their future survival depends on their ability to be innovative. For example, Danny Baer and Luc Charbonneau, write, "Innovation is the primary force that can catapult a company to market leadership and keep it ahead of its rivals." ["Ernst & Young Insights: The innovation engine: Your company’s s...," Financial Post, 1 February 2013] Vinnie Mirchandani, however, believes that talking about "innovative companies" is a silly idea. ["Companies do not innovate. People do." Deal Architect, 30 January 2013] He writes:

"Apple is Apple because Steve Jobs brought together an amazing team with Tim Cook, an operational genius, Jonathan Ive, a design genius, Ron Johnson, a retail genius, Philip Schiller, a marketing genius and many more. Apple is Apple because it leveraged the innovations created by people at Corning, Foxconn and countless other suppliers. Innovation happens at a cellular level [rather] than a 'company' [level]."

Although it may seem that Baer's and Charbonneau's position is mutually exclusive from the position expressed by Mirchandani, I don't believe it is. During the last U.S. Presidential race, Mitt Romney became infamous for declaring, "Corporations are people." He was ridiculed for the remark, but his point was that people are at the heart of corporate activities, including innovation. If, in fact, you equate a company with its people, then both positions (i.e., that companies and people can be innovative) can be reconciled. That really seems to be what Baer and Charbonneau are saying. They explain:

"As a business grows, you need to keep the spirit of creativity alive — it's too easy to snuff out the creative spark with a stifling layer of process and bureaucracy. Successful companies focus on more than just growth, profit and the bottom line. They build in new capabilities, functions or even departments that centre on creative, disruptive and sustainable ventures."

Obviously, the spirit of creativity and the creative spark can only be kept alive in people. The fact that they discuss new capabilities, functions, or even departments also aligns well with Mirchandani's point that innovation happens at the cellular level. If you buy into the concept that when talking institutionalized innovation you are really talking about how to create the environment, culture, and processes that will help make people more innovative, then you should have no trouble accepting the notion that innovation can involve a structured, repeatable process.

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