Today, digitally disruptive innovation has become all too common. The world is evolving at a very fast pace and innovation is the key to survival for most industries today. If a company or individual is not willing to adapt, they will fail.
Forbes magazine finds that culture is at the heart of organizational innovation. Societal culture has the power to transcend national boundaries and help firms gain a competitive advantage in new foreign markets.
Kerry Slade, assistant professor of strategic management at the Fox School, explains why it is important to consider innovation in a multicultural context. In her practitioner’s guide, Slade discusses how societal and organizational contexts impact innovation.
“The empirical truth is that culture is a critical factor in organizational innovation,” says Slade. She adds, “Data on innovation and culture strongly supports the principle that an innovative organization must have a culture that is inclusive, non-hierarchical and empowering.”
Frameworks to understand successful organizational cultures
Slade uses two cultural frameworks—Hofstede’s Dimensions and Erin Meyer’s Cultural Map—to explain how societal culture impacts innovation within an organization.
Hofstede’s model explains societal culture uses six dimensions: individualistic/collectivist, masculinity/femininity, power distance, uncertainty avoidance, long–term/short–term orientation and indulgence/restraint.
Meyer’s Culture Map uses eight scales to define societal culture. However, since only some scales apply to most countries, Slade discusses only six of these tools: communicating, evaluating, disagreeing, leading, deciding and trusting.
Slade says, “This data and the related analysis support the idea that egalitarian and empowering cultures are good for innovation, and that hierarchical and controlling cultures are not. These findings should give us all pause in light of the patent inequalities found in many societies, including our own.”
Using Philips India Limited’s case study as an example to understand cultural innovation
To further help understand the application of these tools and dimensions, Slade uses the case study of Philips India Limited to demonstrate how societal culture has worked to fuel innovation.
Philips is a multinational conglomerate focused on health technology. Its Innovation Campus was established in 1996 in Bengaluru, India, to find solutions for healthcare technology-related problems in both emerging and developing economies. Slade toured the Philips Innovation Campus in 2015 as part of the Fox Global Immersion Program.
Slade explains that one of their most successful products is the battery-operated portable ultrasound machine designed for rural settings. The campus collaborates with startups in India that are considered its competition, demonstrating its openness, lack of complacency and willingness to react quickly.
The campus has a rule that requires 50% of the innovation team members to work in the field at any given time. This helps the team more quickly answer the question of whether they can create a market for a particular product because they’re embedded in the community.
Slade explains, “Philips’ leadership intentionally set about creating a culture that could mitigate and maximize some effects of India’s societal culture. The rule that half of the innovation team works in the field at any given time heightens equality and trust between the team members and the populations they serve and lessens the power distance.”
Lessons for corporations from the Philips India Limited case study
The guide concludes by outlining specific steps companies can take to implement societal culture when they think about corporate innovation.
- Assess the current culture of the country you plan on entering and compare it with the existing corporate culture.
- Find new ways to merge the organization’s culture in the new market in a way that is consistent with the imperatives for innovation.
- Immerse yourself in the new market so you can deeply understand the cultural factors that will determine the success or failure of any products or services.
“An organization’s job as an innovation leader is to maximize the benefits and minimize the drawbacks of relevant societal cultures in a coherent and effective way to promote your organization’s innovation goals,” says Slade. “The tools discussed in this article provide a foundation for doing so.”