Innovacion

Impacting Climate For Innovation

Impacting Climate for Innovation: Can CEOs Make a Difference?

Stephanie Kazama, Jessica Foster, and Michelle Hebl
Rice University

Michael West and Jeremy Dawson
University of Aston

Paper presented at the 17th Annual Conference of the Society for Industrial and
Organizational Psychology, Toronto, Canada. August, 2002.

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Abstract
Leader influence in today’s turbulent environments will occur primarily as a result of the
management and successful implementation of change. The data are drawn from
interviews with 57 CEOs, organizational climate surveys from 25 respondents, and
interview responses from other organizational leaders. CEO discourses, derived from
interviews about the organization’shistory, structure, environment and competitive
strategy, were coded for examples of reflexivity – the extent to which the CEO reflects on
organizational objectives, strategies, and processes and plans and implements changes
accordingly. The data reveal that in those companies whose CEOs score highly on
measures of reflexivity across the course of the two-hours interviews, employees reportstrong climates for innovation. Moreover, in measures taken after the interviews the
extent of structural change implemented in those organizations was significantly higher
than in other organizations. This study suggests that an essential component of effective
leadership is the ability to reflect on objectives, strategies, and processes in a way that
influences the attitudes and behavior ofemployees towards innovation, and then planning
and implementing change.

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Impacting Climate for Innovation: Can CEOs Make a Difference?

"Think like a man of action, and act like a man of thought."
- Henri L. Bergson (French Philosopher awarded
the Nobel Prize for Literature in 1927)
Now more than ever, chief executive officers (CEOs) need to be ableto develop a
flexible and innovative workforce that can rapidly respond to the volitility of world
markets. Political, economic, and technological changes are abruptly altering the demand
for products and services, as well as the feasibility of their production (Adams, 2001;
Cascio, 1995). Simultaneously, globalization is decreasing the likelihood of gaining
competitive advantage fromorganizational size or strength of assets. Instead, competitive
advantage is increasingly being derived from organizations' utilization of employees'
knowledge and skills (Cascio, 1995; Lubit, 2001; Tidd, Bessant, & Parvitt, 1997). Given
the current paradigm of a rapidly changing business environment in which success relies
heavily on human capital, it is of paramount importance that CEOs create aworkforce
that can continually create and implement innovation. One way for CEOs to do this is
through the establishment of a strong climate for innovation. The current research
intends to examine CEO behaviors that will stimulate the development of a strong
organizational climate for innovation.
Van de Ven (1986) suggests that in order for innovation to occur in organizations,
employeeattention needs to be directed toward creating new products, processes, and
services crucial to the organization's survival. A strong climate for innovation may act as

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a way of focusing employee attention and creating a collective mentality that is
supportive of innovation. Research consistently demonstrates that climate for innovation
is linked to actualinnovation (Abbey & Dickson, 1983; Bain, Mann, & Pirola-Merlo,
2001; Burningham & West, 1995; Paolillo & Brown, 1978; Siegel & Kaemmerer, 1978;
West & Wallace, 1991).
Research also suggests that one way of achieving a strong climate for innovation
is through leader behavior (Nystrom, 1990; Scott & Bruce, 1994). Studies have shown
that climate for innovation is associated with strategic...