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Mixing Terms: Innovating in Innovativeness

In the sphere of mobile technology, innovation is perhaps one of the most frequently used words. End users may identify specific innovative products, for example in the form of sensor-packed clothing, or a mobile phone sporting both a standard screen and an e-ink screen on the back.

Tibor Vörös, Senior Lecturer of Management, CEU Business School

True to its promise, mobile technology has created a ripple effect that has spread throughout the global economy, affecting supply chains and customer buying habits alike. Not surprisingly, there are millions of articles recommending that organizations be “more innovative’” (in fact, hundreds of millions, based on the results of a quick web search).

From the management perspective, “innovation” is an umbrella term: in many discussions, the terms “innovation”, “innovative behavior” and “innovativeness” are often used interchangeably, despite their core differences.

We may conceptualize an “innovation” as a product: a result at a given point in time, created by a dedicated R&D team, or a specific startup. “Innovative behavior” may also be discussed in an organization, focusing on actions to generate, apply or produce a particular novelty over a time period, say introducing tablets to gather up-to-date field data from sales agents.

Finally, “innovativeness” reflects the inherent organizational capability of a firm to be open to new ideas, explore and exploit new niche markets, product portfolios etc., also referred to as continued strategic level of innovativeness.

And for most organizations, in the long-term, innovativeness is considerably more important than a one-time innovation. Sure enough, that one-time innovation may well be the success story of the company: but how the company holds up over time will depend on the innovativeness of the firm.

Innovativeness in this context is an equal-opportunity trait: not all employees may use it, but it has to encompass all participants, no matter their hierarchical level or work context. Employee-driven innovation (EDI, but don’t confuse it with Electronic Data Interchange) is a term that is becoming even more important in using mobile technologies.

A recent survey among Hungarian medium-sized enterprises (50-250 employees) attempted to measure organizational innovativeness at different hierarchical levels.

More than 1,000 participants from 22 companies across different sectors ranked their organizational innovativeness on a five point-scale from a perceived non-existence to high levels. The results showed a – perhaps understandably – skewed picture: while more than 60% of mid-to-senior level management perceived a high level of organizational innovativeness, a similar percentage of junior or non-managerial employees experienced the opposite and graded the innovativeness at barely existing levels.

Organizational signature

One key organizational signature of the digital era was supposed to be the flattening of organizational hierarchies, but it seems that the democratization of innovativeness is still an ongoing process and requires an additional effort from all employees – just as EDI was envisaged.

Here is some food for thought: in your organization, what do you think about innovativeness? And more importantly, if you ask employees from all hierarchical levels, ranging from field workers to CEOs, would they think the same? If the answer is “perhaps”, perhaps it’s time to revisit the term “innovation”.

This column is part of a continuing series of opinion pieces from experts at the CEU Business School in Budapest. The opinions stated here do not necessarily reflect those of the Budapest Business Journal.