The importance of building a culture of innovation in a recession
| Date | 23 February 2010 |
| DOI | https://doi.org/10.1108/14754391011022208 |
| Pages | 5-11 |
| Published date | 23 February 2010 |
| Author | Jaideep Prabhu |
| Subject Matter | HR & organizational behaviour |
The importance of building a culture of
innovation in a recession
Jaideep Prabhu
Abstract
Purpose – The purpose of this paper is to determine how corporate culture can be harnessed to foster
radical innovation in a recession.
Design/methodology/approach – The paper uses the findings of a survey and archival data from 750
public firms in various manufacturing industries across 17 major economies of the world in 2003-2004.
The firms in the sample come from developedeconomies such as the USA, UK, Germany and Japan, as
well as developing economies such as China and India, thus allowing the comparison of the drivers of
innovation across very different national contexts.
Findings – The paper finds that, if certain attitudes, practices and behaviours are shared by members
of a firm, it is more likely to have a forward-looking, risk-taking culture.
Practical limitations/implications – Managers can benchmark their corporate culture against three
crucial attitudes and three related practices.
Originality/value – Previous studies have focused on how national policies drive innovation; the paper
challenges those conventional views. This work can enable HR managers to overcome the challenges
posed by the economic climate to develop a more enterprising corporate culture.
Keywords Innovation, Culture (sociology), Risk management, Patents, Recession
Paper type Research paper
In the current economic climate, many firms are downsizing and restructuring their
workforces to create a lower cost base and remain competitive. However, this poses a
multitude of challenges to the HR professional, who must continue to maintain the
support of employees and, more critically, make sure that the organization is primed for
innovation. After all, the development of new products and services is one of the keys to
recovery.
Radical innovation drives the growth of firms, markets and the economies of nations. It can
take small companies to the heights of success and bring down those that fail to innovate. In
fact, firms that commercialize radically new products dominate world markets (Tellis et al.,
2009). For these reasons, managers and governments see innovation as vitally important,
even in a recession. But in tough economic times, when a bold approach gives way to
conservatism and a focus on cost control, it may be difficult for firms to get themselves on to
the innovation frontline. Where should they focus their resources to ensure the ongoing
radical innovation that will keep them in the lead?
Finding the innovation drivers that lead to success
Radical innovation differs substantially in firms across nations and these differences have
been explained in numerous ways. Our research looked at 750 public firms of various sizes
and sectors across 17 nations. We examined what drives innovation in companies and what
makes one firm more innovative than another. We looked at 42 drivers of radical innovation,
including skilled personnel, patents, R&D and the culture of nations and individual firms. Of
DOI 10.1108/14754391011022208 VOL. 9 NO. 2 2010, pp. 5-11, QEmerald Group Publishing Limited, ISSN 1475-4398
j
STRATEGIC HR REVIEW
j
PAGE 5
Jaideep Prabhu is based at
the Judge Business School,
University of Cambridge,
Cambridge, UK.
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