9. Cultivating Innovation: How to Design a Winning Culture

How Culture Affects Innovation

Layered on top of and spread throughout the organization, a company’s systems and processes are a network of social interactions—the organizational culture. Culture, comprised of unwritten rules, shared beliefs, and mental models of the people, alters the effectiveness of the innovation tools we have described. The mightiest company in the computer industry, IBM, nearly disappeared in the early 1990s. The company’s culture prized homogeneity and conformance, and the company could not deal with the rate of change going on around it. Only a risky and forceful change driven by a new external CEO put IBM back on the track of success.

Figure 9.1 depicts how these ...

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