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Building an Innovation Culture
In today’s highly competitive, fast-paced, technology-driven world, the only constant is change. With the economy increasingly characterized by globalized commerce, widely available information, and rapid technological advancements, the ability to remain agile and innovate are critical factors for maintaining competitiveness for today’s scientific organizations. The reality is that companies that do not innovate are destined to lose market share and be surpassed by more agile organizations that demonstrate the ability to reinvent themselves when necessary.
The kind of innovation we are talking about here is not a one-time thing. Whether your organization is a startup or one that has been around for over a century, success in today’s rapidly changing world will require you to consistently reach above and beyond what you have done before in order to stay relevant. This means that it is imperative to build a culture, along with associated structures and processes, that drives the concept of innovation deep into the marrow of your organization and makes it a daily way of life.
Developing a culture of innovation goes well beyond just making sure your R&D department has the resources it needs. We’re not just talking about developing new and better products here. Innovation is essentially the organizational ability to develop new ideas, convert them into value, and distribute them throughout the organization so that that value can be effectively captured. Innovative improvements can happen in many different domains – marketing, products, work processes, business model, company policies, etc. Let’s take a look at some of the key best practices to develop a culture of innovation that will help to future-proof your business and keep your organization on the path to success.
Best Practices for Creating an Innovation Culture
While company culture is the foundation upon which successful innovation is built, creating an innovation culture is not necessarily an easy task. Many companies recognize the importance of creating a culture that fuels innovation, but few succeed. A common failure scenario involves company executives announcing that innovation is one of the company’s top priorities, coupled with cash prizes for employees who come up with great ideas. After a short period of initial excitement, its back to business as usual.
Industry-leading companies, on the other hand, work to create a culture that encourages the use of new technologies, eases barriers to creativity, kindles a passion for learning, seeks out innovative opportunities and embraces change. Best practice recommendations to creating a successful innovation strategy include:
Encourage Innovation in Several Different Areas. It is important to clarify that the type of innovation that your company is interested in is not just market-facing. You need to help your employees move beyond just the development of new products in order to engage everyone in the innovation effort, including those with non-customer-facing roles. The reality is that innovation which can move the needle on your company’s profitability and competitiveness can come from a variety of areas – products, business processes, company policies, business model, etc.
Demonstrate Thoughtful Leadership. Although innovative leaps do sometimes come from the executive team, more often than not, innovation comes from company employees. That said, company leadership plays a critical role in creating the right environment for innovation to flourish. A good leader will drive innovation by inspiring and influencing their employees in ways that go well beyond just a simple suggestion box.
Company leaders set the tone. When leaders talk over their employees and finish other people’s sentences, it communicates a non-safe environment for idea expression. Leaders should instead encourage sharing of ideas and lead by example through listening, mentoring, trusting and empowering their teams in order to create an environment conducive to creativity and collaboration.
Additionally, while leaders must be accountable to the bottom line, a recent PwC survey of CEOs across the globe found that 64 percent think innovation and operational effectiveness are equally important. Innovative leaders need to give employees broad discretion to experiment and think outside the box, while at the same time grounding creative initiatives and people in the reality that they cannot waste a lot of money and effort on unproductive ventures. This helps develop an atmosphere of trust and responsibility that is conducive to both innovation and business success.
Facilitate a Hierarchy Bypass. Most organizations have a hierarchy that provides clear structure and reporting lines. While a hierarchical structure can provide operational benefits, it can also be a hindrance to innovation. Tasked with maintaining operational efficiency and business metrics, middle management often has little desire to risk core business activities for unproven innovation efforts. Department managers can function as a bottleneck for ideas and an inhibition on the flexibility necessary to cultivate new and improved ways of doing things.
Organizations with successful innovation cultures emphasize the equal importance of right-brain skills (e.g., creativity, imagination, empathy and analogy) and left-brained skills (e.g., process, execution, measurement). Instead of separating these individuals into siloes (e.g., marketing and R&D), successful companies encourage innovation from the bottom up by allowing innovators to bypass barriers and form cross-departmental teams that can shepherd new ideas and processes into viable business initiatives.
Build Collaboration Across Your Ecosystem. Innovation is a team sport and often requires collaboration across siloed business units and sites, and even with external partners. Given that your own employees are uniquely positioned to understand how your business operations, customers and product development pipelines intersect, internal collaboration typically forms the core of successful innovative activities. That said, no organization has cornered the market on brain power. As such, collaboration with outside entities (e.g., corporations, universities, government agencies, and think tanks) can yield the new perspectives and ideas necessary to move innovation efforts forward. Combining the best resources from both within and outside your organization is one of the defining characteristics of innovative organizations.
Create Trust and Build a Blame-Free Culture. Creating a blame-free culture is particularly important if you want to stimulate innovation. It stands to reason that if you want your employees to experiment and generate new ideas, they have to know that their innovation efforts will not be viewed as time-wasted and generate repercussions. The reality is that successful innovation requires some failure, and successful organizations embrace these failures as learning opportunities.
Additionally, innovation can be threatening to some employees if they fear that big changes could make their roles redundant. Management should strive to reduce this fear by letting employees know that they are valued, and that management has their back. While trust in an innovation culture can never guarantee freedom from impactful and sometimes unpleasant changes, employees should understand that the company will do everything in its power to take care of its people through the process of change. A currency of trust is a critical component of any successful innovation culture.
Provide Training. A good idea can’t come to fruition if employees aren’t given the tools or framework necessary to develop it properly. You can’t teach people how to come up with good ideas, but you can teach them what to do with their good ideas to ensure they are thoroughly vetted. Best practice for implementing an innovation culture is to provide both training and resources for your employees so they know who to talk to about their ideas and how to create presentations that highlight the potential value of an idea to the company.
Redefine Performance Metrics. Employees are not going to be motivated to develop innovative ideas if the time spent doing so will negatively affect the performance metrics by which they are judged. If you want to stimulate innovation in your company, it is important to align your performance goals, promotion decisions and compensation packages with this goal. You might also consider setting aside a small amount of your employees’ time every day to innovation activities. The international powerhouse 3M, for example, launched its 15 percent program in 1948, where 15 percent of employee time everyday was devoted to innovation. Today, 3M has over 23,000 patents, many of which were developed during its 15 percent program, including Post-It Notes.
Agile Mindset and Effective Change Management. It is difficult to effectively implement new ideas if your organization is not ready for change. It’s one thing to come up with fabulous new innovative ideas, and quite another to actually implement them, especially when it likely involves highly complex organizational change. As such, an effective change management program to manage the human and cultural elements of the change is a critical part of any successful innovation culture. The bottom line: without a structured process for implementation, even the best ideas are likely to fall short of achieving their potential to provide business value to your organization.
Hire the Best People. Developing a successful innovation culture is virtually impossible without great people. The reality is, however, that competition among US companies to attract and retain talent has never been fiercer. The booming economy and record low unemployment in the United States has many companies struggling to attract needed talent amid tight labor pools. An effective partnership with a quality staffing firm can provide a huge competitive advantage in today’s challenging labor market.
Identifying, recruiting, and retaining high quality scientists and visionaries requires good connections and a significant investment of time and energy. This is time and energy well spent, as developing a strong corporate culture that supports innovation is very appealing to top talent. Such a culture eventually becomes self-sustaining, as high-quality employees will want to be part of a dynamic culture, and your business as a whole will become a magnet for talent.
Conclusion
What does your organization’s innovation strategy look like? Is innovation something you view as an “idea factory” that you only visit on occasion, or have you embraced innovation as a strategic imperative? While many companies want to create an environment in which innovation thrives, few succeed in establishing a culture in which employees feel empowered to produce, develop and pitch their ideas to management.
Realizing that an innovation culture is important is the easy part. Actually building a successful innovation culture requires commitment and will take time, energy and resources. Following the best practice recommendations for creating an innovation culture described in this blog will go a long way towards advancing your company’s agility and innovation capacity. Ultimately a strong innovation culture will help ensure your organization remains competitive and thrives in today’s rapidly changing business environment.
