Abstract
Organizational transformation depends on creating and sustaining innovation in the firm in order to guarantee the effective competition within the market. From this point, innovation can be discussed as implementation of new efficient methods and approaches to organization, management, production, and operation. It is possible to discuss the organization as innovative when changes and innovation are associated with both the process of production and organization of the work.
The process of developing the innovative organization depends on such aspects as involvement of employees in creating innovation because it is important to motivate employees with the focus on developed incentives systems, training, and education. The next critical moment is the leadership because transformational leaders play the key roles in changing the organization. In addition, it is also necessary to focus on using the effective individual reward systems as the methods to encourage innovation at all the stages of the business development.
Introduction
The modern business environment is rather competitive, and to succeed within the market, it is necessary to focus on changing the traditional approaches to leading the organization. The progress of new technologies and approaches makes entrepreneurial leaders pay more attention to the idea of promoting the innovation in an organization. Thus, organizational transformation is often the result of focusing on innovation in the firm in order to recognize new opportunities for the business’s development and implement them in the organization (Lussier, 2011, p. 215).
In spite of the fact that innovation in a firm is often implemented as a result of a series of organizational changes and transformations, the process of promoting the innovation is rather challenging, and much attention should be paid to the focus on incentives for employees as well as on training and education; on the leadership; and on the development of the individual reward system in order to build the innovative organization.
The Roles of Incentives, Training, and Education in Promoting Innovation
Promoting innovation in an organization, the leader also focuses on using the innovative approaches associated with the implementation process. At this stage, much attention should be paid to stimulating the activities of employees in order to guarantee their adoption of the innovation and associated changes (Day, 2014, p. 757). Thus, the roles of incentives, training, and education are extremely important at the first stages of creating innovation.
The organizational transformation associated with developing the innovative firm is a challenging process which is often perceived negatively by employees because of the necessity to change the aspects of their activities and improve performance. The implementation of the incentive system can work to avoid this problem because of stimulating the employees’ motivation while paying for proposing, developing, and implementing innovative ideas. The next step is training and education. Many companies fail to become innovative ones because their employees are not ready to promote significant organizational changes (Day, 2014, p. 758). Thus, the role of appropriate education and training in the process of promoting innovation is critical.
The Role of Leadership in Creating, Managing, and Sustaining Innovation
Leadership is the next important condition to affect innovation in an organization. In order to create, manage, and sustain innovation, it is important to understand that the focus on strategic thinkers is significant because the implementation of innovative approaches is connected with changes in the firm’s business, culture, relationships, and operations. To control this challenging process, it is necessary to focus on the principles of transformational leadership. To sustain innovation, companies focus on transformational leaders who are able to motivate and inspire the team in order to change the traditional approaches to production, operation, and organization because of the obvious benefits (Day, 2014, p. 758-759). The role of transformational leaders is significant in creating innovation in an organization because these leaders can develop the effective strategies for implementation and adaptation in order to accentuate the benefits associated with innovation.
The Ethical Implications of an Individual Reward System
To support transformations in the organization and create innovation, it is reasonable to refer not only to the system of incentives but also to developing the individual reward system. However, there are certain ethical implications associated with the implementation of the individual reward system. To achieve high results during the adoption of innovation, it is necessary to concentrate on the fact that many individuals are inclined to discuss the principles of the individual reward system as unfair (Day, 2014, p. 314). From this point, sustaining innovation and motivating the employees, the leader should focus on reducing stress factors in the workplace associated with the reward system.
Furthermore, the rewards should be promoted depending on the employees’ effort and ability instead of their status and position in the company. Thus, if an individual reward system meets the employees’ needs, the progress of the business dependent on innovation becomes the reality because of the efforts of highly motivated workers (Day, 2014, p. 315; Lussier, 2011, p. 210). The individual reward system should work to motivate employees instead of developing the conflict in the team because of following the unfair principles and unreasonable decisions.
The Innovative Organization
Modern IT companies can be mostly discussed as innovative because the implementation of innovation is associated not only with the organizational structure but also with the spheres of operations and production. Small IT companies are inclined to follow the examples of such large innovative companies as the IBM, Google, and Apple while focusing on developing effective strategies and implementing the radical changes (Lussier, 2011, p. 215-216).
Innovative organizations are characterized by such features as the implementation of new technologies and strategies, the recruitment of the creative and strategic thinkers, the use of the contemporary management strategies, provision of financial rewards to employees for proposing new innovative ideas, provision of the additional training for employees, the focus on the beneficial collaboration, the concentration on creativity and flexibility, mobilization of new effective resources, and management of changes (Lussier, 2011, p. 215-216). The IT company can be discussed as innovative because it concentrates on innovation developing in two directions of the product and process innovation. In order to achieve the success within the competitive environment, it is possible to focus on innovation as the effective approach to develop the business potential.
Conclusion
The focus on innovation is the characteristic feature of the modern business environment. As a result, many organizations start to follow the path of the significant transformations in order to create and sustain innovation in spite of many associated risks and barriers. This process is often challenging, and much attention should be paid to the methods which are used to implement innovative approaches in the company. That is why, organizational transformation and promotion of innovation should depend on developing the system of incentives and individual rewards. Transformational leadership is also the important factor to promote innovation and lead the company to the success. IT companies use the focus on innovation more often in comparison with the other firms while stimulating the growth of the competitive advantage.
References
Day, D. (2014). The Oxford handbook of leadership and organizations. New York, NY: Oxford University Press. Web.
Lussier, R. (2011). Management fundamentals: Concepts, applications, skill development. New York, NY: Cengage Learning. Web.