Welcome to the latest in a series of brief interviews with guest experts from KnowledgeBrief’s Innovation Programmes, providing a window into the experts’ latest ideas and new advice for executives.
Jeanne Meinholt, Senior Researcher at KnowledgeBrief (KB), discussed how organisations can measure and improve the climate for innovation and high performance with Andy Wilkins (AW), Visiting Fellow at Cass Business School, following the Innovation Day in January.
KB: What’s the key business challenge that organisations need to address, that your research tackles?
AW: Two of the key reasons for organisations, departments, and teams not realising their full potential are that context, culture and climate are often all but ignored, and there is muddle between culture and climate.
Our research provides a productive way forward, based on three distinctions between climate and culture that are really useful to understand:
- Culture is a broader concept, which, if you need to understand it, means you will need to look at the entire organisation. If you focus on climate it is much more situational and so you can use individuals and their perceptions of a group or division or other units of analysis. Climate is scalable.
- Culture tends to be relatively descriptive, meaning that one culture and its attendant assumptions and values are no better or worse than others, whereas climate is more normative, meaning that we are looking for environments that are better for certain things. Climate is measurable.
- Climate is distinct from culture in that it is more easily observable and more amenable to improvement efforts. Climate is changeable.
There is a great deal of interest in this topic because many people are finding that traditional approaches to change, innovation and performance improvement are not realising the hoped-for potential. It is far more useful to work on climate than culture. Indeed, it has been suggested that, even when successful, cultural interventions can take nine years or more to implement and embed, while climate improvements can be implemented and measured within seconds. It is often easier to kill an organisation and start afresh rather than try to change the culture!
KB: What advice would you give to executives, based on your findings?
AW: Since between 60-80% of the perception of climate is affected by local ‘leadership’ behaviours, you can change climate if you are ready, willing, and able to. You can change the climate at a low financial cost – the real cost is in the energy, desire and commitment to personally grow, develop and improve. This is what the high performers do:
- Make fostering climate an organisational priority
- Develop leadership capability to support climate awareness
- Equip management with skills and knowledge to foster climate
- Measure (formally or less formally) the climate for innovation and change in the organisation, teams or around leaders
- Select and promote people who are better at fostering climate
KB: How does your latest research approach this? What do the results indicate?
AW: Our research shows that organisational, departmental or team climate impacts economic and social performance outcomes by between 20-60% depending on what is being measured. Some of the more notable findings include:
- Innovation and growth: the highest performing innovators have climate as one of the three distinguishing characteristics.
- Economics: climate studies have shown a 23% impact on profitability; 37% on growth; and 36% on EBIT margin. Climate enables organisations to get new and successful products and services to market faster.
- Social aspects: climate studies show up 61% impact on engagement; patients have positive outcomes on wards; care homes get much higher assessments; absence and sickness levels are lower.
In summary, organisations that focus on deliberate development of their work environments perform better than those that leave it to chance.
With thanks to Andy Wilkins, Visiting Fellow at Cass Business School.
Next month, KnowledgeBrief will be talking to Dr. Ali Bigdeli, Aston Business School, on ‘servitization’ – a fresh approach that involves looking anew at what you do, to deliver both better customer outcomes and financial sustainability. Find out more here.