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Consulting Group Finds Innovation, Dependent on Environment, Not Personality

Friday, January 2, 2004

The Society for the Advancement of Consulting, LLC (SAC) recommends that firms seeking to foster innovation in fast moving, competitive markets adjust their own environments, not merely seek entrepreneurs from outside the company.

SAC members have observed that entire organizations can be more rapidly reshaped into innovative operations through effective culture change than through the insertion of a few "heroic" type entrepreneurs brought in to "energize the place." Although counterintuitive, the group of independent consultants maintains that organizations with entrepreneurial environments foster innovative and creative thinking, while those with stifling, conservative environments can undermine the efforts of successful entrepreneurs hired from the outside.

"Environment is the key," says Alan Weiss, Ph.D., CEO of SAC, whose doctoral dissertation examined the same phenomenon over a decade ago. "You don't improve entrepreneurialism -- probably more needed today in a global economy than ever before -- through a 'cult of personality.' Executives must establish a culture, including rewards, feedback, and independent action, which promotes innovation and prudent risk-taking."

"Ironically," notes Weiss, "the one person who does matter is already there -- the CEO or profit center leader who can authorize, initiate, and support the culture change. Creating an entrepreneurial environment usually requires help from an outside consultant, who can recommend key changes and the sequence of rewards, communications, delegation, and reporting. Usually, no one internally is in a position to understand the nature of those changes."

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