If you want to lead innovation, get prepared to give up some control and trust the system.
Organizational Centralization is the extent decisions are centralized and controlled by senior executives. Are you trying to control everything (high centralization) or are you enabling others in the organization (low centralization)?
How do you think this impacts your organizations ability to innovate?A study thought that a high level of centralization would lower the organizational absorptive capacity (ability to learn more than competition), and thus the lower the degree of organizational innovation. As well as lead to slower decision speeds, and again lower the degree of organizational innovation.
Basically hypothesizing that centralization is bad for innovation.
The study measured 260 organizations. Their first hypothesis was supported by the data. When leadership controls everything, employees canÕt learn.
The hypothesis that centralization slows speed was overturned by the data. Fast decision speed still had a positive effect on innovation, but the data couldnÕt significantly show that centralization impacts speed.
Based on my experience, I agree with that finding. When leaders insist on controlling innovation, they can still make decisions quickly and innovate quickly. The downside isnÕt their speed, it is the quantity of innovations the organization can actively have in their pipeline. Because only leadership can make decisions and move innovations forward, less innovations get created and developed.
If you want to grow innovation, then enable your employees. Allow them to learn, test, and create. Remember that your job is to LEAD, NOT CONTROL.
Here is the name of the study from Contemporary Management Research that sparked this blog post:
Check out this tool we use to help lead innovation -- it will help you to set your organization's mission: