Module Three: Nurturing and Managing Innovation

Specific Objectives
Students will be able to
1. Discuss the micro factors that would nurture innovation
2. Discuss the macro factors that would nurture innovation

NURTURING AND MANAGING INNOVATION

Innovation may be short lived unless there are deliberate attempts to keep going. There are
certain conditions in which it is known that innovation thrives or is sustainable.

 Micro factors = internal (inside the business)

 Macro factors = external (national/environmental influences)

Both must work together for innovation to thrive.

These conditions will be examined below:

Conditions for Effective Innovation on the Micro/ Organizational Level

In managing the innovative process, the micro/ organizational level has to be able to sustain the
innovative process. The following factors should be present:

Incentives for Innovating

Organizations may invite individuals and groups inside and outside of the firm, to come up with
innovate ideas. This may be in form of competition, as in the case of the National Commercial
Bank (NCB) in Jamaica, or by just opening up the pathways of communication so that any
employee or customer for instance, can offer their ideas. One way that this can be done is using
a portal. The incentives that may be given for such means of innovating include:
 Rewards (bonuses, promotions, recognition) motivate employees to generate new ideas.
 Cash Prizes (more suited for outsiders)
 Lunch with the Chief Executive Officer
 Awards – example Employee of the Month
 Recognition at Staff Meetings
Encourages creativity and risk-taking.
The organization must keep its goal in mind when developing a system of incentives. The
incentives must cause other incentives to consistently roll in. Hence, each incentive given must
fit the needs (psychological, financial, etc.) of the receiving party.
It must not be such that will cause conflicts and whatever is promised must be that which the
firm can fulfil, and in the time stipulated.
 Internal Policy
The internal policy of a firm speaks to the established standards of the organization as it

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 relates to the proper procedures to follow and employee behaviour.
An organization should make innovating a part of the internal policy if it wants to
encourage a constant flow of it.
Workers must be made to see that innovating is a normal or expected procedure in the
organization.

 Leadership
This means that the leadership executive team must create a cultural context that supports a
policy on innovation.
Top level management must set the tone for the organization. There must be trust, respect, and
open communication to facilitate innovation in the organization.
A project leader should be assigned to give guidance to the process of innovation. He or she will
ensure that the team’s goals are clearly defined and will challenge members to challenge the
status quo. A transformational style of leadership is essential.

 Organizational Culture
Organization culture is a system of share assumptions, values and beliefs which governs how
people behave within the organization. The leaders in the organization must make a
deliberate attempt to build a culture of innovation within their organization. This can be done
through:
(1) Inspiration – persons perform best when they are driven by inspiration. One way of
inspiring employees to innovate is by placing before them, using creative means, famous
innovators that they can emanate. Workers will observe the recognition of, lifestyle and
financial rewards of those innovators and wish to follow suit. Publicizing and celebrating
leadership’s innovative efforts will also help.

(2)Encouraging Observation – build a culture where employees, leaders, consumers,

suppliers, and other stakeholders, keep a watch out for and share their opportunities to
innovate.

(3) Listening to Consumers – build the mechanisms that allow for the constant flow of
innovative ideas in and assessments of them going out.

(4) Making Workers aware of the rewards – when workers know that their innovative
efforts lead to more profitability for the organization and in return more financial
gain for them, they will make it a practice.

(5) Educate Workers – educating workers through training sessions on creativity and
innovation will enable them to embrace the process.

(6) Do not punish Failures – persons within the organization must be taught that it is
okay to fail. It is just part of the entrepreneurial process. They must be told that they
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 just need to build a mindset to keep going. Fostering an environment where persons
are not fearful of failure, but understand that persistence will bring success, will
motivate staff to innovate.

(7) Collaboration – there must be a synergy between leaders and technical staff. This
enables the necessary convergence of efforts in the provision of the finances and other
resources that are needed for innovation to take place.

 Organizational structure – instead of setting up where there is much bureaucracy,

establish one that is flatter and encourages the smooth flow of communication back and
forth.

Conditions for Effective Innovation on the Macro/ National Level

On the national level, policies must be developed to encourage organizations to be innovative.
The nation must be made to understand that increased Economic Development and Growth can
only come when all entities enter partnership to accomplish such goals.
At the macro or national level, policy developments to nurture and manage innovation include an
examination of various environmental factors such as:

 Social
Social Policies of the nation must be conducive for effective innovation. Policies must surround
areas of gender, age, ethnicity etc. One area that is currently in focus, is the fostering of an
environment where there can be an increase in the supply of women entrepreneurs of the table.
Women have been found to be very entrepreneurial and should be significant drivers of growth in
the economy. However, they are faced with problems such as lack of financing and inability to
access the formal business network. These are limited in supply; therefore, their businesses
struggle to grow. The governments of the Caribbean need to increase the availability of finance
and infra structure to help women entrepreneurship to grow and flourish.
Socio-cultural factors: this would include an analysis of population in terms of age and its impact
on goods and services; changes in population demographics and its impact on recruitment and
selection; awareness of different customs and practices.

 Political factors: this includes the role of governments in impacting innovation and the
prevailing political ideology such as encouraging entrepreneurship through funding and
technology.
The government must offer good and stable governance so that entrepreneurship may be
encourages and sustained within Caribbean economies. Many of these governments tend to
struggle with eradicating corruption from inside and outside of government. The Caribbean
Heads of Government must partner to come up with policies, such as
Anti-Corruption Policies that can guide their countries into increase prosperity for all.

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  Economic factors: this entails policies and incentives geared towards the development of
small and micro enterprises such as training and development programmes, funding,
trade fairs, innovator of the year competitions; collaborative partnership with other
countries to provide training programmes; provision of avenues protection of intellectual
property and ideas development.
The government can also provide grants and subsidies to reduce the cost innovation in
businesses.
 Environmental factors
Environmental policies are a must to ensure that there is not a gradual breakdown of the
environmental systems as a result of innovation. They consist of laws and regulations that protect
and sustain the environment. They establish environmental responsibility. It therefore saves the
businesses from incurring unnecessary social costs as a result
 Initiatives geared toward environmental sustainability such as given policies and the
development of green products. Government can provide incentives for such
developments such as tax incentives, funding.

 Cultural
The government is responsible for protecting and preserving the good cultures of a
nation. With regards to innovation, the government should ensure, through laws and
regulations, that no particular subgroup of a country is violated as it relates to innovations
put out by enterprises. There must be no direct attempt to offend any group. There must
be a respect for indigenous customs and practices.

 Ethical factors
Ethics relate to the moral principles that govern a person’s or business’ behaviour. Ethics
is broad area but in order to avoid lawsuits and generally the violation of the rights of
individuals and entities, organizations need to have a thorough knowledge and
understanding of business ethics. There must be policy development with regards to this
area so that rules and guidelines will be clear to everyone.
Businesses have to strategically account for ethical behaviours and should develop codes
to govern the environment. Innovations should therefore be developed with the
understanding of cultural and ethical differences and with the knowledge of what the
business stands for. Therefore, it is imperative that there is adherence to sound principles
by regulators.
An organization is in breach of the law if it violates another’s rights as it relates to the
protection of their intellectual property. The organization too, has a legitimate case if the
same offence is committed against them.

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Challenges Associated with Social Innovation
Social innovation focuses on solving social problems, but it faces several challenges:
(a) Resources
 Limited funding, materials, and skilled personnel.
 Many social projects rely on donations or grants, which may not be consistent.

(b) Conflicts
 Disagreements among stakeholders (e.g., communities, governments, organizations).
 Different interests can slow down decision-making.

(c) Voluntary Nature

 Many people involved are volunteers.
 This can lead to inconsistency, low commitment, or lack of accountability.

(d) “Lumpy” Funding

 Funding is irregular (comes in large amounts at certain times, then none).
 Makes planning and sustainability difficult.

(e) Scale of the Challenge

 Social problems (e.g., poverty, unemployment) are often very large and complex.
 Hard to implement solutions that reach everyone effectively.

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