Designing for Innovation: When your organisational architecture kills off the ideas
Innovation doesn't happen by accident. While we often celebrate the brilliant minds behind groundbreaking ideas, we less frequently examine the organisational architectural elements that have the ability to nurture or suffocate the creativity, risk taking and curiosity that can lead to innovation. The architecture of an organisation - think organisational design, workforce design, communication and information sharing channels, physical spaces, and cultural norms - plays a crucial role in determining whether innovation will flourish or falter in your business.
Let’s start with the ‘raison d’être’ of most organisations (that’s their ‘reason for being’). Traditionally organisations were created to maximise resource usage - with their hierarchies and work differentiation and grouping of similar activities. The aim was to design for efficiency and control - not creativity. These pyramid-shaped organizations excel at executing established processes but often struggle with innovation for several reasons:
Information bottlenecks: When communication must flow through formal channels, valuable insights get filtered or lost entirely.
Risk aversion: Hierarchical structures typically reward working to the status-quo or compliance over experimentation.
Commonality: Organisations tend to want things done the same way, by all the people, as a form of creating predictability**. If you want a practical, right now example of this, look at the amount of debate over ‘working from home’ versus working in the office, and whether three days in the office is better than four days in the office.
Specialised silos: When departments are allowed to operate in isolation, cross-pollination of ideas (a key ingredient for innovation) becomes nearly impossible because the teams tend to see things from one perspective (theirs, a shared functional view), with the same skill set or discipline shaping the solutions they think will fit.
As management theorist Gary Hamel notes, "Most organisations have been designed to produce predictability and order, not innovation."
So, what if your organisation wants to value innovation over efficiency? What are some of your options?
Flatter Hierarchies: Some companies have eliminated traditional management layers, allowing ideas to emerge from anywhere in the organization. This democratisation of innovation recognises that good ideas aren't correlated with job titles.
Cross-functional Teams: Organisations like IDEO and Pixar regularly assemble diverse teams that bring together different expertise, perspectives and thinking styles - creating the cognitive friction that often sparks creative breakthroughs.
Leadership practices that reward curiosity and challenge: Google's Project Aristotle found that psychological safety was the most important factor in high-performing teams. Innovation requires experimentation, and experimentation inevitably involves failure.
Incubate the alternates: As humans, we tend to want to behave like those around us. This means that when you bring new people or teams into an organisation, the organisation will tend to find ways to get them to adapt to what is considered ‘normal’. There are any number of acquisitions where the target was purchased because they were ‘different’ or ‘cutting edge’ – only to be subsumed into how the existing organisation worked within 24 months. So, if you’re interested in something a little different, let it work outside of the main organisation – whether that is as a separate entity or just in a different location. In this way, it doesn’t feel required to adapt to the ‘norm’.
The physical environment significantly impacts creativity. Consider how these architectural elements influence innovation:
Collision spaces: Pixar's headquarters was intentionally designed with central bathrooms and a large atrium to increase unplanned encounters between employees from different departments.
Flexible workspaces: Adaptable environments that can be reconfigured for different types of work-focused individual work, collaborative sessions, or informal conversations - support the full spectrum of innovative thinking.
The most innovative organisations don't eliminate structure entirely - they design it thoughtfully and deliberately to create the desired outcomes. They create what Amy Edmondson calls "disciplined autonomy" - clear boundaries and expectations coupled with freedom to experiment within known parameters.
If you’re interested in building an environment where innovation is more likely to flourish, then ask yourself:
How might we flatten decision-making without creating chaos?
Where can we create cross-functional connections?
How can our physical and digital environments encourage creative collisions?
What cultural signals are we sending about experimentation and failure?
The most effective organisations recognise that creativity isn't just about hiring creative people - it's about building and environment and systems of work that foster creativity.
**Note that ‘predictability’ doesn’t mean boring or conservative, it just means that you have a sense in advance of knowing what the outcome will be.
P.S. If you’re interested in hearing more of Gary Hamel’s ideas, here’s a short video:
