This chapter emphasizes the importance of formally promoting close social interaction and open knowledge sharing to achieve superior innovation capability. It does so by discussing the advantages of developing Communities of Innovation and citing a case study that exemplifies these concepts. This chapter addresses the challenges and opportunities faced by businesses in today’s complex and often unpredictable business environments. For success, an organization must be able to combine and recombine their resources in novel ways, eliminating or reconfiguring resources that are no longer relevant, and acquiring new resources. An organization’s capability to change by manipulating resources continuously and rapidly—to innovate—is a competitive advantage that is not readily imitated by competitors. Innovation is critical to an organization’s viability since it enables the development and introduction of new products and services and thus enables an organization to maintain, or improve, its current business position. The chapter reviews the numerous theories of change and change management in the literature based on practice and precept. However, research shows that competitive advantage is increasingly located by authorities in an organization’s intellectual resources including the skill base, business systems and intellectual property of its employees: its Human Capital. Organizational innovation depends on the individual and collective know-how of employees, and innovation is characterised by an iterative process of people working together, sharing insights, and building on the creative ideas of one another. The chapter emphasizes that an organization’s intellectual resources have significant potential to realize innovation and change capabilities, but that the impact of these capabilities largely depends on the means of an organization to foster close community social interaction and open knowledge sharing, and to leverage its informal leadership as a precursor to and part of any related Knowledge Management (KM) initiative.
TopThe Importance Of Social Fabric
The extent to which public and private conversations can take place across an organization, including its customers and stakeholders, will be critical to the widespread sharing and generation of knowledge. Successful knowledge management and innovation will depend on an organization having the means to readily share tacit and explicit knowledge. To this end, the current knowledge economy in both public and private sectors is optimally founded on having ready and effective communications across collaborative partnership-networks of all kinds. It is not just “What you know” or even “Who you know” but rather “Who you know and trust” that leads to a viable and effective social fabric. When examined closely, an organization’s social fabric is not homogeneous, but rather consists of innumerable unique social networks based on members’ interpersonal relationships. Its collaborative properties are exposed when the organization’s Social Capital (SC) is appraised. SC is “The set of resources, tangible or virtual, that accrue to a corporate player through the player’s social relationships, facilitating the attainment of goals” (Gabbay & Leenders, 1999; pp. 3). Trust, open-mindedness, and lack of prejudice enhance SC, whereas distrust, fixed mindsets, and deep-seated independence foster low SC. Most importantly, the SC of individuals aggregates into the SC of the organization – its social fabric. The formation of SC clearly depends on having positive individual attitudes and emotions with respect to forming and sustaining interpersonal relationships. SC is best developed when individuals work together, particularly in teams (Bakker et al, 2006), or on a special project (Snowden, 2005).
Reasons why organizations often do not achieve high SC and a collaborative and trusting social fabric are complex and illogical since tacit feeling-laden “people-factors” are involved. Unfortunately sub-optimal KM and innovative performance are in many cases directly attributable to these ambivalent or negative non-rational “people-factors”. These people-factors clearly will include task related issues, but at the semi-conscious level they include complex feelings and values, and at the unconscious level include deep-seated anxieties, survival instincts, impulses, and power needs. Such factors often deter formation of appropriate relationships and will suppress knowledge creation (Stacey, 2001).