Denison Organizational Culture Survey:

Content Modules
Employee Innovation

July, 2010
Executive Summary

The Denison Innovation Module was created as part of the Denison Organizational Culture
Survey: Content Modules. This report includes information on:

How Denison Consulting defines employee innovation

The relationship between organizational culture and employee innovation
Psychometric properties of the Innovation Module
Comparison between the March 2010 and updated July 2010 database

Employee Innovation

While organizational innovation is an extremely broad concept that has been defined in
many different ways, at its core, innovation refers to bringing a new idea to use.
Although intertwined, creativity and innovation are different processes. Creativity is the
production of novel ideas and is a necessary precursor to innovation, but by itself
creativity is only half of the equation. To be truly innovative, an organization must also
implement those ideas, and further, those implementations should lead to positive
outcomes for the organization; they should be successful. Therefore, we define
innovation as the successful implementation of creative ideas.

Because businesses today are functioning in highly competitive and rapidly changing
environments, an organizations ability to innovate is regarded as crucial to its long-term
survival. Innovation is important for every organization as it can yield positive business
outcomes, such as new products for the marketplace, efficiency, or quality improvements
to existing systems and processes.

A positive organizational culture is key to facilitating the innovation process, and many of
the values and behaviors that promote innovation are captured within the Denison model.
Specifically, the Involvement trait measures an organizations ability to build a sense of
capability and ownership in employees, which are important to creativity. In addition,
organizations that are market and customer focused have a broader source of potential
new ideas and are more likely to be successful when implementing new ideas as they will
have the market in mind. These concepts are captured in the Adaptability trait of the
Denison model along with measuring an organizations ability to create change, which is
also a key innovation facilitator. In addition, having clear goals and direction provide a
road-map for the challenging journey of translating ideas into products and services. The
Mission trait of the Denison model measures the extent to which there is a meaningful
long-term direction for the organization; when an organization is focused in a common
direction, it is easier to move from idea to implementation. Finally, the Consistency trait of
the Denison model also plays a role in innovation as organizations must be able to reach
agreement and have systems and processes in place to be able to deliver on creative
ideas.

2
While the DOCS measures many of the values and behaviors that are important to
facilitating innovation, the Innovation Module focuses specifically on innovation and
directly asks questions about creativity, the implementation of creative ideas, and the role
that innovation plays in the organization. Asking these questions, along with the DOCS
assessment, will allow organizations to see how strengths or weaknesses in their culture
are impacting the degree to which they are engaging in the process of innovation. For
organizations interested in innovation, the Innovation Module is a great addition to the
survey.

Scale Reliability

Reliability refers to the dependability of a measure. In other words, it indicates the degree
to which a measure yields consistent results over time. One of the easiest and most
common methods for assessing scale reliability is to calculate Cronbachs alpha, a
measure of internal item consistency. Accepted levels of internal consistency are those
higher than .70. The reliability for the Involvement Module, as measured by Cronbachs
alpha was .94, indicating adequate reliability.

Validity

Validity refers to the accuracy of a measure, indicating the degree to which an instrument
measures what it is supposed to measure. Factor analysis and scale-level correlations
were calculated to provide evidence to support the validity of the Innovation module.
Correlations between the Innovation module and the twelve indexes and four traits of the
DOCS were calculated to assess the degree to which the Innovation module contributes
unique information when conducting an organizational culture survey. The Innovation
module is expected to retain a one-factor structure. Given that Innovation shares similar
concepts to the DOCS (mentioned in Employee Innovation section), moderate to high
correlations are expected between Innovation and the DOCS indexes and traits.

Results from this factor analysis indicated a one factor solution, meaning that the
innovation items measured one, single construct. Correlations at the index level showed
that the Involvement factor had high correlations with the DOCS indexes ranging from .73
to .93. The highest correlations were with organizational learning, creating change, and
vision. Similar results were found at the Trait level, with correlations ranging from .83 to
.94.

3
Table 1. Correlations between Involvement and DOCS Indexes and Traits

Index Innovation
Empowerment 0.85
Team Orientation 0.85
Capability Development 0.84
Core Values 0.73
Agreement 0.85
Coordination & Integration 0.82
Creating Change 0.89
Customer Focus 0.83
Organizational Learning 0.93
Strategic Direction & Intent 0.77
Goals & Objectives 0.79
Vision 0.87

Trait Innovation
Involvement 0.89
Consistency 0.83
Adaptability 0.94
Mission 0.84

Description of the Innovation Module Normative Database

Data from 15 organizations were added to the initial database of 52 organizations. The
additional data was collected from March 2010 through May 2010. Data from pilot studies
are not included in the normative database. This norm update is the first of a series of
quarterly updates until the sample of organizations reaches or exceeds 200.

Table 2. Description of Normative Benchmark

Normative Description
Data Range August 2009 through May 2010
Number of Organizations 67
Average Sample Size 116
Total Sample Size (of respondents) 7756

4
Industry and Geographical Breakdowns

Denison Consulting uses the North American Industry Classification System (NAICS). To
accommodate requests from clients, and to reflect the industry categories in the 2009
DOCS report, the NAICS categories were further divided (specifically, in Manufacturing).
The Engagement benchmark includes 15 professional, scientific, and technical service
firms, 10 educational services, 8 manufacturing firms, and 7 retail and wholesale trades.
A complete breakdown of industry representation in the DOCS database is provided in
Figure 1.

Geographically, approximately 88% (59) of organizations in the database were

headquartered in North America. Other than the United States (55 organizations), other
countries include Australia (2), Canada (4), Colombia (2), Israel (1), Malaysia (1), and the
United Kingdom (2). On the individual level, 46% of the respondents were from the
United States. The second largest representation of respondents was from Colombia
(41%)*.

Figure 1. Distribution of Organizations.

NOTE: Mfg = Manufacturing; Srvcs = Services; Prof/Sci/Tech = Professional, Science, and

Technical Services.

*
Although a large number of individual respondents were from Colombia, they only represent two companies at the
organization level. The norms were extracted from the organization level.
5
Percentile Shifts

Differences between the March and July benchmarks were also considered by examining
the extent to which percentiles obtained by the same organizations differed when
evaluated using the two sets of norms. For this comparison, the Innovation item mean
scores obtained by the 67 organizations making up the July 2010 benchmark were
converted into percentiles twice first using the March 2010 norms and then using the
July 2010 norms. The results shown in Table 7 indicate the amount of shift an
organization would experience based on their percentile scores from March 2010.

Results indicate that there is a general positive shift in percentile points. The biggest
positive shift appears at the 50th percentile, where all items display a positive shift ranging
from 1 to 9 percentile points. The one exception is Innovation is a large part of our
business activities, an item that displays a negative shift in the 80th and 95th percentiles.
These major shifts may highlight the high variability within our small sample size. As the
sample size continues to grow from regular updates, these shifts should be less
pronounced in future analyses.

Table 3. Difference in Percentile scores from March to July

Mar 2010 July 2010 Difference

Innovation Factor 5 6 +1
People are encouraged to be creative. 5 9 +4
We are able to implement new ideas. 5 7 +2
New ideas are continually evaluated and improved 5 7 +2
upon.
Support for developing new ideas is readily 5 6 +1
available.
Innovation is a large part of our business activities. 5 6 +1

Innovation Factor 20 23 +3
People are encouraged to be creative. 20 25 +5
We are able to implement new ideas. 20 20 0
New ideas are continually evaluated and improved 20 20 0
upon.
Support for developing new ideas is readily 20 27 +7
available.
Innovation is a large part of our business activities. 20 22 +2

Innovation Factor 50 56 +6
People are encouraged to be creative. 50 57 +1
We are able to implement new ideas. 50 53 +3
New ideas are continually evaluated and improved 50 57 +7
upon.
Support for developing new ideas is readily 50 59 +9
available.
Innovation is a large part of our business activities. 50 53 +3

6
Table 3 continued.

Mar 2010 July 2010 Difference

Innovation Factor 80 82 +2
People are encouraged to be creative. 80 83 +3
We are able to implement new ideas. 80 80 0
New ideas are continually evaluated and improved 80 83 +3
upon.
Support for developing new ideas is readily 80 81 +1
available.
Innovation is a large part of our business activities. 80 79 -1

Innovation Factor 95 97 +2
People are encouraged to be creative. 95 97 +2
We are able to implement new ideas. 95 97 +2
New ideas are continually evaluated and improved 95 97 +2
upon.
Support for developing new ideas is readily 95 97 +2
available.
Innovation is a large part of our business activities. 95 92 -3

Figure 2 displays the pattern of shifts of all mean items. Generally, the positive shifts are
more pronounced around the 50th percentile, and they become less pronounced toward
the anchors (5th and 95th percentiles), with the exception of Innovation is a large part of
our business activities, which displays an increasing negative shift at the 80th and 95th
percentiles.

Figure 2. Trend in percentile shifts for all Innovation items and overall rating.

NOTE: I1 through I5 refers to the Innovation items sequentially shown in Table 3.