Designing an Innovative Company: Sensegiving and Sensemaking of an Organizational Experiment

Prior research indicates that successful innovation is stimulated by an innovative culture that is grown out of the context and history, but how can one design an innovative culture by order and what are the required changes? The objective of the paper is to investigate how a dynamic and active - forceful - top-down sensegiving changed the meaning of management, which produced a innovative organization within a rather short period of time. Furthermore, it seems that the CEO of the company considered the whole exercise as an organizational experiment, induced by his interpretation of the situation and sensegiving of possible solutions. We do this by reanalysing a well-researched company case and present a re-interpretation of the data from a multitude of sources that covers a period of more than five 5 years. Findings demonstrates that the top-management created an organisational experiment which were accepted through sensegiving, supported by various organisational devices, including IT-systems, organizational dismantling of organizational structures and new explicitly defined value systems which altogether over a few years changed the operations and processes of the organization from a machine bureaucracy to a flexible organic structure. After the organisational transformation, the company became much more innovative, profitable and regained its leading market position. Although there were reluctant employees and even some direct outspoken resistance towards to changes directed from the top-management, these voices did have little impact on the changes. Top-management worked from a solid and established powerbase and most employees recognized that the current situation did not provide a viable amount of innovation or profit for the company and thus envisioned a crisis situation. Implications for innovation management and the use of organizational experiments to achieve a wide organizational turn-around and change is discussed, rather than investing in a number of small incremental modification. Furthermore, the use of organizational experiments has been overlooked in both practice and research as vehicles for creating innovative organizations, and we discuss some reasons for that, e.g. risk avoidance as experiments might be considered more risky than incremental modifications.