The Hidden Innovation Barriers: Company Culture and your

Brain
When you ask Executives what they want beyond short profit and revenue growth theyll
likely say more innovation. Why? Because they face unprecedented business challenges.
Lets look back. The current modern corporation was invented about 100 years ago at
the start of the 20th century. Thats when the big companies were born like the US
railroad companies, US Steel, the big banks, IG Farben. Some exist still today (GE).
Whats different about 100 years later?
Acceleration of Change: Change has become faster than ever. It took the radio 38
years to have 50 million listeners Facebook achieve this diffusion in 2 years.
Knowledge is becoming a commodity. An example: there are about 130 million books
(Google estimate) but over 2 billion accessible websites at least a factor of 15X.
Globalization creating Hyper-Competition. Not only more of the same type of
competition but competition from areas which you did not expect. Example: Polaroids
instant picture business was killed by digital imaging technology developed in photocopying.
More Innovation Mission Impossible?
Why is it so difficult even for successful companies to become more innovative? Although
they are already innovative to a certain extent? Because there are two major hurdles to
becoming more innovative at the individual, personal level and at the organizational,
company level. The former hurdle is anchored in neuroscience. We humans are programmed
by evolution against being innovative. Our brain is wired to keep us alive by perpetuating
what worked in the past no experiments please! Here an example: Neuroscience has
proven that the brain is wired to minimize loss. We want to keep what we already have.
Equally, we are not interested in something new, until we address our pains. The brain seeks
preservation over surprise, even if its a breakthrough promising great benefits.
Too much or too radical innovation is perceived as a threat .so it gets killed.
At the company level effectiveness and efficiency rules supreme. The modern corporation is
designed for scale and sustainability surviving and prospering by more of the same. Too
much or too radical innovation is perceived as a threat to the well-oiled machine like a virus
entering a healthy, well functioning body. So it gets killed.



How to get more innovation? First innovation is not an end in itself; it is a means to an end
to support the business. So innovation(online learning Innovation Program) needs to be
anchored in the business strategy. If you want more innovation you have to look at your
business strategy whether your business will in fact become more successful via more
innovation!
More innovation comes with more risk. So Top Management needs to help the organization
how to deal with more risk.
Lastly: if you want to get more innovation, your likely will have to change the organization
the structure and (some) people. Otherwise you will only get the same or at best more of
the same incrementally improved.
But how to deal with this neuronal handicap of managers for and the organizations immune
response against more innovation? You need to create a company culture which supports
innovation - a culture which consistently and persistently fights the evolutionary and
organizational pressure to perpetuate what worked well in the past.
Company Culture the Elephant in the Room
What is the culture of a company? My definition: Culture is what drives decisions when the
boss is not around. Here some illustration. How often have you heard your CEO saying:
The earlier this pays out, the better!
Dont take any unnecessary risks!
Keep me posted!
This is an R&D/Manufacturing/Marketing..idea!
But what culture messages does the CEO send to the organization by following those
principles most of the time. Here is what the organization hears him say:
Implement fast. Make only incremental moves.
Avoid risk do not fail. Failure is not an option.
Boss wants control. Dont venture too far.
This is not my project. Thank you.
So the culture the CEO is driving with these good, solid, no-nonsense management
statements is.

I I l lo ov ve e P Pr ro og gr re es ss s, , b bu ut t I I h ha at te e C Ch ha an ng ge e! ! ( (M Ma ar rk k T Tw wa ai in n) )






Will this create more innovation? I doubt it!
The Boss Drives Culture When the Boss Is Around
How to change culture? And who can do it? Remember the definition of culture: Culture is what
drives decisions when the boss is not around. Its corollary is the answer: The boss drives culture when
the boss is around.

When you fail, destroy any evidence that you ever tried!
Lets look at the strategies and goals set by Top Management for innovation as reported in a
study covering 1000 top companies around the world by Booz & Company in 2011 on the
importance of culture for innovation (Why culture is key):

Top Innovation goals (0-10 scale)
Superior Performance 5
Superior Quality 4
Products Optimized for Local Markets 2
..
# of Breakthrough Products 1
Success rate of new Products 1




Very clearly the focus is on current business and incremental innovation. Changes to be
tolerated need to be small: cheaper, faster, better more of the same.
How is this reflected in the company culture? Here are the results: company culture
perfectly mirrors the focus of Top Management on incremental innovation. So more
radical innovation the one many executives crave for will not happen.
Top cultural attributes (0-10 scale)
Strong Customer Orientation 6
Passion/Pride in Products 5
Respect for Technical Talent and Knowledge 3
..
Sense of Accountability For Innovation Process 1
Tolerance for Failure 1
Failures or unexpected outcomes as I like to call them are unacceptable, to be avoided.
When you fail, destroy any evidence that you ever tried! So the company can learn only
within the realm of the current operation business as usual!
Top Executives Need to Be Missionaries of Innovation
So how to change culture and who can do it? Like any lasting change in an organizations
it needs
Leadership Commitment
Consistency
Persistency
Communication (Internal & External)
Communication is the one factor most executives under-estimate and under-leverage. But
take spreading a religion as an example for a culture change.
If you want to change attitudes, start with a change in behavior.
You grow the faith in your community by talking about it in your community like the stories
of miracles experienced by believers. You convert non-believers to believers by talking about
your faith outside your community with suppliers, customers, partnerslike missionaries
do when they go out to convert the world. Top Management needs to become missionaries



for innovation. They can do it as proven by the successful introduction of Total Quality, Six
Sigma, sustainability
Remember: If you want to change attitudes, start with a change in behavior. (William Glaser,
American psychiatrist and developer of reality theory and choice therapy)
By: Joachim von Heimburg
About the author

Joachim von Heimburg is one of the most experienced innovation practitioners in Europe
and the Middle East. He designs and implements innovation strategies, processes and
structures and makes them operational creating value for the business. This he supports by
creating a culture fostering an innovative spirit and entrepreneurial activities.
From 2006 to 2009 he led the culture change of Procter & Gamble from traditional R&D to
Open Innovation in EMEA. From 2010 to 2012 he was General Manager Innovation and
Corporate Program at SABIC, one of the leading global chemical companies. At present, he
works as Innovation Architect and Executive Advisor on state-of-the art innovation
capabilities and structures helping companies and other organizations to innovate how they
innovate. He has extensive multi-cultural working experience in 7 countries (Belgium,
Canada, Germany, Saudi Arabia, Switzerland, Turkey and the USA). He holds a Ph.D. in
theoretical physics of the University of Marburg, Germany and studied economics at the
University of Frankfurt, Germany. More on his website www.jvhinnovation.de