How Can a Manager Foster Innovation?

The systems model (inputs → transformation process → outputs) can help us understand how organizations become more innovative.42 If an organization wants innovative products and work methods (outputs), it has to take its inputs and transform them into those outputs. Those inputs include creative people and groups within the organization. But as we said earlier, having creative people isn’t enough. The transformation process requires having the right environment to turn those inputs into innovative products or work methods. This “right” environment—that is, an environment that stimulates innovation—includes three variables: the organization’s structure, culture, and human resource practices. (See Exhibit ...

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