The key to adapting and succeeding in any environment
Managerial leadership in modern business environment Increased complexity, contextual unfamiliarity and knowledge intensity in firms today Necessity of leveraging managerial leadership qualities.

Innovation is often seen as a process or an event that occurs in organizations. This implies that innovation is episodic. To ensure that some continuity is maintained, organizations put committees (NPD etc.) or processes in place. These are sub-optimal states as the capability to innovate or innovation capability of an organization is not looked at. An innovation capability can be built on the base of other capabilities and can help the organization to stay ahead in any environment. So it is not about only fast changing environments where organizations are seeking to stay ahead by innovating, it also is about organizations seeking to set the pace in relatively stable environments. Innovation capability seems like a rather intractable term so it makes sense to operationalize it. The attempt is to do it such that practitioners in organizations can put their arms around it and know enough of its antecedent variables to be able to manipulate them to their organization’s advantage. First the definition of innovation capability:

Innovation Capability:
The ability to come up, consistently, with novel ideas that deliver short and long term profits to an organization. The next question that follows is “What gives the organization the ability to come up with ideas consistently?” It comes from the ability to link insights, concepts and facts in a new/different way. There are essentially three capabilities that form the pillars on which Innovation Capability is built.

Building Innovation Capability
Knowledge Capability is the first pillar. If coming up with ideas is about linking concepts, insights and facts in a unique manner, then the first thing that an organization needs is to possess these concepts, insights & facts. It needs to know these or have the ability to learn them quickly. Attitudinal Capability is all about having the right attitude, as an enabler of new ideas. Attitude at an organizational level results in people behaving in a certain way that can have far reaching impact on innovation capability. Creative Capability is the topping so to say, once the knowledge is there and the attitude is right, the insights, facts and concepts still need to be linked together. This is what creative capability is all about. These three pillars need to come together to hold the roof of innovation capability. In the next few sections, we will go through the steps to build each of these capabilities.

Building Knowledge Capability
Knowledge capability not only to aids innovation but also determines the ability of the organization to absorb new knowledge. To be able to innovate, an organization has to be able to draw on a vast reservoir of knowledge. It also has to use two or more kinds of knowledge and link them to create new knowledge (i.e. new ideas or innovation). Knowledge can exist in two forms; explicit knowledge that resides in documents, research reports, databases in easily retrievable and usable forms. Implicit knowledge on the other hand resides in people in the form of skills, intuitive knowledge, heuristics, etc. Both these need to be maximized to aid the formation of new ideas. The ability to absorb new knowledge from the environment is also important. This comes from having a pre-existing reservoir of knowledge. You need to know how to count before you can do multiplication. Here are some ways to build knowledge capability.

Recruitment
This is a simple and an effective way to build knowledge capability. A diverse workforce with diverse educational backgrounds, interests and ethnicity can provide the base from which the knowledge capability of an organization can be built. Hiring specialists for jobs provides the necessary technical diversity. The calibration required here is a balance between diversity and homogeneity necessary for smooth functioning. Some amount of turnover also helps to bring in new knowledge and new ideas that an organization can use. The trade-off here is between stability and new knowledge.

Consumer\Customer Knowledge
A deep understanding of the consumer is essential but it needs to be taken a step further. There is a tendency to focus all research on existing consumers. This is sufficient for day-to-day functioning and validation studies. Emerging trends, however, take place at the fringes of consumer society. If you want to ride a new trend on its way up, the scope of the research net needs to be widened to include these weird & wonderful fringes of society.

R&D Investment
As was said earlier, pre-existing knowledge determines the ability to absorb new knowledge. If your competitor launches a new product, you need to quickly launch a counter product. If you have not tinkered with something similar in the past, then you are going to start from first principles & be too late for the market. Even if you do not want to invest in basic R&D, make sure there is something invested in applied R&D. You may not be the one to drive the bus, but make sure you don’t miss it completely.

Networks
Networks are the pathways along which information flows both within organizations and from outside the organization. Industry bodies, industry-academia interfaces and special interest groups are some of the types of networks that can keep organizations alive to new knowledge and opportunities. Suppliers, dealers and business partners can also act as knowledge pathways if handled with a focus on learning. Both these kinds of networks need to be cultivated consciously.

Multifaceted Training
Usually training programs end up as paradigm builders or sources of organizational inertia. Training more often than not is an exposition of the organization’s way of doing things. Outside influences are not welcome and are shown to be inferior to the organization’s way of doing things. The better option is exposition of ‘equifinality’, many paths leading to the same result. The choice of the path to be taken is determined by the environmental factors at that point in time. In simple terms, expose people to many ways of doing the same thing and let them choose their way depending on the situation. Knowledge capability building is an ongoing process and at each step the payoff is exponential.

Attitudinal Capability
It takes special ability to be able to play with a large amount of information and be able to come up with an absolutely new association of ideas. This comes from a special attitude and is true for both organizations and individuals. Attitude leads to a certain kind of organizational climate that can enable or destroy the innovation capability. The organizational climate should be geared to both absorb knowledge as well as connect that knowledge in new creative ways. What is needed is a creative workshop climate and here are the ingredients:

Openness
Openness is about being open to new influences and ideas, willingness to step out of comfort zones and to try out new ways of doing things. Many organizations find it difficult to practice openness, because it takes them out of their comfort zone. Openness works at two levels, at building knowledge capability and at encouraging experimentation.

Awareness.
The ability to spot discontinuities that miss others and the ability to abstract higher order concepts from it represent a higher order of awareness. There are again two strands here. Awareness of what is going around you, in the vicinity and in the wider world, as also the ability to stand back and see the wider perspective. This helps the organization see concepts and insights in a new manner, and then make connections.

Curiosity
The need to know more is at the very base of knowledge acquisition. It is a child-like quality and adds to perspective, keeping awareness levels up. The second role it plays is in making unconventional associations between concepts, insights and facts.

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