Managing for innovation: insights into a successful company.

Abstract

This case explores work climate and its relation with innovativeness in a small U.S. secondary wood products company. The primary objective of this in-depth stage of a larger study was to preliminarily validate the components and relationships of a theoretical model describing

the links among work climate and innovativeness. The company is one of three companies studied in depth after the theoretical model was developed and was chosen based on the researchers' familiarity with its innovativeness and creative climate. The study included a quantitative survey, plus qualitative interviews. Overall, 70 percent of the company's workforce responded to the survey, representing hourly workers, management, and office staff. Findings supported the theoretical model, and qualitative data provided additional insight. The following six factors appeared to adequately indicate a pro-innovation climate: supervisor encouragement, team cohesion, challenge, autonomy, openness to innovation, and availability of resources. Organizational commitment and job satisfaction show positive and significant correlations with climate for innovation. This illustrates the synergistic effect of management actively leading for innovation as a way to build competitiveness, while simultaneously creating a positive work climate. The case company profiled here illustrates this leadership very clearly.

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It is generally agreed that the forest products industry is facing tremendous challenges to remain competitive (Hansen and Juslin 2006). This calls for modern management approaches aimed at improving all stages of the production and commercialization process (Carlson et al. 2006). In this context, innovation is at the center of many initiatives (Frans and Meulenberg 2004), and the forest products industry is no exception to this (Hansen et al. 2006, Korhonen 2006). A successful commercial innovation is born from ideas that find their way through the organization and are accepted by the market. Some of these innovations will be a response to market needs and opportunities while others will be a response to internal needs and will remain within the organization in the form of administrative changes, new business systems, etc.

This study is part of a larger effort aimed at better understanding how organizational culture and work climate influence innovativeness and how these can be fostered in the workplace. The larger study is based on a survey targeting the U.S. forest products industry. The underlying model includes innovation strategy and climate for innovation as antecedents to innovativeness, which in turn affects firm performance. Our approach is similar to that of Hurley and Hult (1998) in the sense of viewing innovativeness as a cultural phenomenon. It is hoped that a clear understanding of this relationship can better inform managers and decision makers so that they can effectively foster innovation in the workplace.