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Book Excerpt: Measuring Return on Investment, Vol. 2, edited by Jack J. Phillips Premium Content

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Monday, May 16, 2005 - by Jack J. Phillips

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Chapter: "Transforming Supervisors Into Innovative Team Leaders," by Darlene Russ-Eft and Kathleen Hurson

A Consortium of Companies

One Way to Get Bottom-Line Results From Training

American corporations face a new world order in terms of economic, social, and environmental circumstances. That order requires new organizations with new responses. Past activities and responses, such as downsizing, reengineering, and cost-cutting, have limited usefulness. Because market competition rewards the superior product, service, or process, organizations are now seeking ways to promote innovative thinking among their employees. Indeed, Kanter (The Change Masters: Innovation for Productivity in the American Corporation, 1983) indicated that companies must identify and use effective methods for involving the entire workforce in innovative problem solving.

Later, Van de Ven ("Central Problems in the Management of Innovation," Management Science, 1986) reported that repeated meetings with chief executive officers of public and private organizations revealed managing innovation to be their central concern because it can lead to increased productivity and improved quality. Specifically, the attitude toward innovation can make or break success. Indeed, Walton ("A Vision-Led Approach to Management Restructuring," Organizational Dynamics, 1986) described the vision-led approach to management restructuring that emphasized increased effectiveness rather than greater efficiency. One of the factors leading to increased effectiveness valued outcomes, such as flexibility and innovation.

One approach to investigating innovation involves examining structural and cultural factors. For example, Drazin and Schoonhoven ("Community, Population, and Organizational Effects on Innovation: A Multilevel Perspective," Academy of Management Journal, 1996) reviewed and introduced a series of research articles examining community, population, and organization effects on innovation. Hemmasi, Graf, and Kellogg ("Industry Structure Structure, Competitive Rivalry, and Firm Profitability," Journal of Behavioral Economics, 1990) identified characteristics of industry structure, such as industry growth, that are related to executives, perceptions of competitors, rates of process innovation. Both structural characteristics and perceptions of competitors were, in turn, related to profitability. Feldman ("How Organizational Culture Can Affect Innovation," Organizational Dynamics, 1988) also examined organizational culture and broader social and historical processes that affected attitudes toward and the capacity for innovation.

A second approach to research on innovation and creativity focuses on the great idea generators like Thomas Edison and Albert Einstein. Indeed, Max Wertheimer's classic book Productive Thinking discusses Gauss, Galileo, and Einstein. Such case studies of geniuses have been written to help identify the key components of innovative thinking.

Current research recognizes that ordinary individuals can make important contributions. Though not as earthshaking in their consequences as those of the geniuses, their "ordinary" contributions improve societal and organizational life. In addition, many such contributions come from groups of people, rather than individuals working in isolation. So, recognizing the contributions of ordinary groups of people, we will adopt Van de Ben's ("Central Problems in the Management of Innovation," Management Science, 1986) definition of innovation as "the development and implementation of new ideas by people who over time engage in transactions with others within an institutional context." This definition appears compatible with those proposed by Thompson ("Bureaucracy and Innovation," Administrative Science Quarterly, 1965) and Kanter (The Change Masters: Innovation for Productivity, 1983).

For example, Kanter (The Change Masters: Innovation for Productivity, 1983) depicted "corporate entrepreneurs," who work through participative teams to produce change. With such environments, she suggested that three new sets of skills are required. First, "power skills" are needed to persuade others to invest needed resources. Second, "team skills" are needed given the increased use of teams and employee participation. Finally, "change management skills" prove essential, including an understanding of how small changes undertaken by teams contribute to strategic reorientation.

Such a definition of innovation enables us to apply the word to an organizational setting and to specific groups within those settings. We know, for example, that many innovative ideas come from first-line supervisors and their employees. These ideas, when articulated, developed, and implemented, lead organizations to success. Unfortunately, few studies identify the skills needed by first-line supervisors and their employees to make these innovations work.

The purpose of this study was to investigate the accomplishment of innovation in the workplace. We wanted to test a training process for helping first-line supervisors undertake innovative projects. We asked three major questions. First, what kinds of projects will these supervisors undertake? Second, what will be the results of these projects? Such results can be measured both in terms of project completion and in terms of dollar benefits to the organization. Finally, what factors affect the success of the projects?

Book Excerpt: Measuring Return on Investment, Vol. 2, edited by Jack J. Phillips

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Authored By:

  • Jack Phillips
    Jack J. Phillips

    Jack J. Phillips, PhD, is chairman of the ROI Institute and a world-renowned expert on measurement and evaluation. Phillips provides consulting services for Fortune 500 companies and workshops for major conference providers worldwide. Phillips is also the author or editor of more than 75 books and more than 100 articles. His work has been featured in the Wall Street Journal, Bloomberg Businessweek, Fortune, and on CNN.