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Posted by on Dec 12, 2014

The Yin and Yang of Innovation: Building People and Organizational Capabilities

The Yin and Yang of Innovation: Building People and Organizational Capabilities


Several years ago we had the great fortune of taking part in transforming a traditional training department for a large company into a world-class “Performance Improvement” organization. This new function was designed to provide consultation and expertise to senior leaders to improve organizational effectiveness and results. The transformation of this department involved developing a new vision and mission, new strategies, goals, methodologies, tools, competencies, and measures. It also meant a fundamental change in philosophy from an order-taking, “training-is-always-the-answer” mindset to a consultative-collaborative mindset that assumed that training was almost NEVER the sole solution to a performance problem. We created new Performance Consulting positions that applied the new methodologies to diagnose root causes of performance issues and recommend a set of integrated solutions that often included new or redesigned work processes, job models, incentives, measures, and other human performance factors. 

Throughout this transformation we had the honor to work with the late Geary Rummler who many call the “Father of Performance Improvement." Geary participated in many of our reorganization activities and provided guidance throughout the process. He also conducted several workshops on Performance Improvement in which all of our team members participated.

The reason for this story, and in particular referencing our work with Geary Rummler, is because of something Geary repeated to us many times along our journey. It went something like this: 

“You can hire the most talented, gifted, and highest performing person in the world, but if you put that person into a misaligned or broken organizational system—the system will eventually win every time.” 

The purpose of Geary’s statement was to reinforce the fact that human performance is complex and a function of many interdependent and interrelated factors. Although a person’s skills and knowledge are important, without proper support from the organization, the person will have great difficulty performing effectively over time. One way to think about the relationship between people and the organization is as a kind of yin and yang of performance. This idea reinforces the complementary and interdependent nature of both people and the organization and the need to have alignment between the two in order to achieve and sustain high performance.

This yin-yang relationship between people and the organization has great significance to those organizations striving to become more innovative. Most organizations now recognize that their long-term success depends on their ability to innovate. Senior leaders have given many inspirational speeches around the need for more innovation and have invested heavily in training programs, such as "creativity" training, intended to boost employee innovation skills. However, in spite of all of the inspiring speeches, pep talks, and training programs, many organizations still fail to sufficiently address the “yang” of performance—building organizational capabilities. After all, it's easier to invest in creativity training than it is to invest in the organizational changes needed to support, spark, and sustain innovation. However, failure to sufficiently address the organizational side of innovation ignores the very point Geary Rummler was making. In fact, we are certain Geary would endorse the following statement:

“You can hire or train people in an attempt to develop innovation talent, but if you don’t build an organization around them that supports innovation—both the people and the organization will ultimately lose.”

The reality is most organizations are not designed to innovate and you shouldn’t expect an organization to do what it is not designed to do. There are still leaders who do not expect, encourage, or recognize people for generating new ideas, and at times even punish them for doing so. There are also organizations where trying out new ideas and taking risks are not only frowned upon but have led to “derailing” careers. As Elon Musk, CEO of Tesla Motors, stated in an interview (2013):

“Companies are often too conservative. They want to innovate, but create the wrong conditions, leading to stagnation. In many organizations, people do not dare to think big and take the necessary risks. If they fail, they get punished heavily, and lose their jobs or bonuses.”

There are also many organization that have not established innovation goals for individuals, teams, or departments as part of their performance management process. They have not developed compensation, rewards, and recognition programs that specifically target innovation nor have they formally embedded innovation responsibilities into job descriptions. In addition, many organizations do not have talent acquisition processes that specifically assess and hire for innovation skills or have succession planning programs that use innovation as a priority criteria for identifying “high-potentials” and future leaders. There are also many organizations that have gaps and a lack of integration in the systems, tools, and platforms to support innovation (e.g., collaboration tools, idea management processes, communities of practice, knowledge-bases, digital libraries). And in many organizations, leadership development programs do not include specific “innovation leadership skills” needed to foster and sustain innovation on work teams. This is particularly significant because leadership can be one of the greatest barriers to innovation. Many years ago Peter Drucker (1985) wrote:

“Any top management can damage and stifle entrepreneurship within its company. All it takes is to say ‘no’ to every new idea and keep on saying it for a few years. And make sure that those who came up with a new idea never get a promotion.”

An organization's failure to effectively support innovation can also result in new ideas being kept at an individual or localized level—unleveraged for broader organizational impact and potential competitive advantage. More significantly, organizations that are not designed to support innovation (or worse, stifle it) can lead to lower employee engagement, higher frustration, and the loss of talent altogether. A lack of organizational support for innovation can also result in difficulty attracting and retaining new employees, especially Millennials. A study from Deloitte (2014) reported:

“Millennials want to work for organizations that support innovation. In fact, 78 percent of Millennials were influenced by how innovative a company was when deciding if they wanted to work there, but most say their current employer does not do enough to encourage them to think creatively. They believe the biggest barriers to innovation are management attitude (63 percent), operational structures and procedures (61 percent), and employee skills, attitudes, and lack of diversity (39 percent).” 

The good news is that most organizations are realizing that generating, cultivating and sustaining innovation has never been more important for their long-term success. Innovation is now everyone’s business, not just specific industries, functions, or roles. However, it is essential that we understand Geary Rummler’s message and the yin-yang of performance. We must build both people and organizational capabilities to support innovation, and achieve alignment between the two, in order to truly advance our organizations, our communities, and our world.



  • Drucker, P., “Innovation and Entrepreneurship.” Harper and Row Publishers, 1985.
  • Elon Musk, quoted in Dutch Management Team Magazine, November 2013
  • Deloitte, Touche, Tohmatsu, Limited. “Big Demands and High Expectations, The Deloitte Millennial Survey,” 2014.

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