EVERY ORGANIZATION needs to innovate if it is going to survive, but employees and other organizational members frequently resist change. Leaders sometimes try to persuade individual staff members to support new initiatives, but creating true innovation requires a more sweeping effort that involves substantive changes to a company’s climate and its culture.
This is a dilemma familiar to many business schools that choose to pursue accreditation. Many academic leaders view accreditation as one of the best ways to signal that they offer high-quality programs and engage in continuous improvement activities. But in some cases, faculty are uninterested in participating in the accreditation process, making it difficult for schools to achieve their innovation goals.
That’s been the case at the Western Sydney School of Business in Australia, where we have 94 full-time and fixed-term faculty members who teach about 7,000 students in more than 50 undergraduate and postgraduate programs. When we embarked on a journey toward AACSB accreditation, we found that some of our faculty were reluctant to join accreditation-related activities such as redevelopment of assessment and strategic planning. Some lacked interest, some lacked time, and some simply didn’t believe that accreditation was important for the school.
To win faculty support for accreditation, we needed to understand—and make changes to—our climate and our culture. But the steps we have been following are the same ones that work for any organization pursuing innovation.
A DIFFERENT KIND OF CLIMATE CHANGE
Organizational climate is shallow; it forms and evolves quickly. Organizational culture is deep; it evolves slowly, providing a historical record of a specific social unit. Both climate and culture operate within an organization’s system of beliefs, values, and assumptions.
However, there’s a key difference: People are consciously aware of an organization’s climate, and they react to its immediate realities. But people absorb culture at preconscious, subconscious, and unconscious levels. Therefore, in the short term, it is easier for an institution to influence climate in order to enable change and innovation. Where climate change is managed sustainably, cultural change will follow.
WHERE CLIMATE CHANGE IS MANAGED SUSTAINABLY, CULTURAL CHANGE WILL FOLLOW.
An organization's climate can be divided into social and organizational domains, each one containing four characteristics. Within the organizational domain, employees perceive the company’s behavior and attitudes along four different dimensions:
Value placed on learning. When organizations value learning, employee learning is considered an investment rather than an expense. This encourages employees to develop relationships outside the firm with individuals who have similar competencies, which gives them access to external networks of knowledge. Previous studies have found that the extent to which an organization values learning correlates with its ability innovate.
Learning orientation. The learning orientation of an organization is the strategic direction that leaders communicate to employees by encouraging them to actively seek new knowledge or create innovative services and programs. For instance, when a school creates favorable learning conditions, its faculty and staff will develop mindsets toward lifelong learning, and that development will benefit both individuals and the school as a whole.
Openness. When organizations are flexible, adaptable, and open to change, employees will hatch new ideas, take risks, and embrace innovation. Recent literature stresses that organizations that are open—that engage widely and deeply with the external environment—are more likely to encounter and exploit opportunities to innovate. That’s particularly true in the service sector.
An organization’s innovativeness. Innovativeness is a multidimensional attribute that refers not only to the types of creativity a company cultivates, but also to the processes, services, and innovations it actually implements. An innovative organization promotes safe environments where its members feel comfortable taking risks and thinking outside the box. This, in turn, leads to progressive change.
Within the social domain, employees perceive their relationships with the organization and with their co-workers along these four dimensions:
Organizational commitment. Employees become more committed to organizations that value teamwork; encourage employee involvement; embrace open communication; adopt employee-friendly hiring policies; and facilitate employee morale, satisfaction, and commitment. All of these attributes encourage innovation.
IN COMPANIES WITH POSITIVE TEAM SPIRIT, EMPLOYEES SUPPORT EACH OTHER, CELEBRATE EACH OTHER, MOTIVATE EACH OTHER, AND WORK IN HARMONY.
Team spirit. In companies with positive team spirit, employees are confident they can meet new challenges and overcome uncertain situations by developing innovative solutions. Employees are less focused on politics and status, which discourage engagement and innovation. Instead, organizational members support each other, celebrate each other, motivate each other, and work in harmony.
Internal politics. By contrast, companies where people engage in internal politics—that is, use power to promote their own self-interests—will see a decrease in employees’ intrinsic motivation, which will diminish the creativity employees bring to their jobs.
Job satisfaction. The relationship between job satisfaction and innovativeness may be reciprocal. For instance, satisfied staff and faculty members at universities pour more effort into improving the learning environment for students and supporting the research efforts of colleagues. Although job satisfaction is more of an attitude than a behavior, it is an important element for organizational leaders to measure in their quest for innovation.
As outlined here, these eight dimensions focus not only on the intangible attributes of the company or institution, but also on the people within the organization who contribute to the climate. How employees perceive the company’s attitude toward each dimension not only defines the institution for them, but also helps them determine how they are expected to behave. If an institution can learn how its members currently perceive its boundaries, it can redraw those boundary lines to create a new climate that makes employees receptive to future innovation.
CLIMATE IN PRACTICE
Organizational climate is an untapped and often forgotten resource in many universities, but it’s an important factor for academic leaders to consider as schools pursue greater innovation in their programs. They can use the framework outlined here to understand how faculty and staff perceive the school, and then identify specific areas where faculty perceptions hinder change and innovation within each discipline or department.
At that point, they can develop strategies to encourage faculty to cohere around specific goals, make better decisions, and grow more receptive to innovation. Then they can close the loop by measuring current levels of engagement or achievement, reviewing results, deploying interventions, and measuring again.
As shown in the chart above, our business school’s climate was strong in areas such as organizational commitment and value placed on learning (on a scale of 0 to 5), but less so in areas such as openness and learning orientation.
Such analysis is especially valuable when a school is seeking accreditation or pursuing continuous improvement. For instance, when we began our journey to AACSB accreditation at Western Sydney University School of Business, our preliminary data uncovered areas we could improve upon to promote climate improvements at our school. Our results are shown in the radar graph above.
It is clear that we are strongest in terms of organizational commitment, job satisfaction, and value placed on learning. We score lower in areas such as team spirit and openness—and, in fact, there is room for improvement in all dimensions. Our analysis also indicates that there might be multiple “sub-climates” within our departments, as faculty differ in their perceptions of the working environment.
After our initial analysis, we began working on a plan that would lead us toward the organizational climate we wanted as we pursued accreditation. As an example, we organized collegial discussions to initiate cross-collaboration among disciplines to promote a greater sense of belonging and interconnectedness within the school.
We plan to conduct a more detailed analysis to gain even more defined insights into our school climate. We will use these insights to drive change in employee perceptions. Following any interventions, we will measure the climate again to determine if our initiatives have had a positive influence.
As we get closer to achieving initial accreditation, we will be able to determine the impact of climate change at our school. We will know how changing the perceptions of our faculty—to create a climate that favors change and innovation—has influenced our accreditation journey (and vice versa). Most important, we will know what kind of climate we will have to create to make continuous improvement an integral part of our school.
Helen Black is a lecturer in accounting at Western Sydney University’s School of Business in Australia.