How to build an Innovative culture?
“Innovation distinguishes between a leader and a follower.” ~ Steve Jobs
In this digital age, all companies want and need to ride the wave of innovation (also called digital transformation), whether it be as simple as building a proper website or going all in and developing applications and automating crucial procedures within the company. Whatever the phase your company is in, innovation is the heartbeat of any company. I would describe an innovative culture as being:
A culture where employees share new ideas, then use fast and cheap processes to get breakthrough solutions to market.
Being innovative isn’t just about putting in a foosball table and painting the walls with bright colors with inspiring quotes. It’s easy to announce that innovation is going to be one of the company’s top priorities. Sometimes companies even offer cash prizes to employees who come up with great ideas. There’s usually a wave of excitement, but three months later it’s business as usual. I’ve seen this happen more than once.
For so many companies, even for tech companies, the challenge is to go from the statement “We are an innovative company” to actually driving that sense of innovation into the daily company culture. Because it’s easy to deprioritize innovation due to the size of the company or short term goals that have the priority. Common views on innovation:
- “Our company is too big or too small to waste time on small ideas that are not maximizing our profits.”
- “New ideas are good, but I’m paid to make my sales on existing business.”
- “We’re doing fine so far; so let’s let our existing line hit new records first before we try something new.”
And the list continues. All statements of course make some sense if you only look at the short term. Once the realization of the new era of digitalization and innovation comes into play, it becomes a different story because there are so many traditional companies that “missed the boat” on innovation and are struggling to keep up. A great example is the sale of 900MM USD of Walmart shares by guru investor Warren Buffet, in one of the interviews he mentioned:
…Buffett last year acknowledged that traditional brick-and-mortar retailers were struggling in the face of competition from the e-commerce giant, Amazon. “It (e-commerce) is a big, big force and it has already disrupted plenty of people and it will disrupt more,”.
Eventually, company culture is the net effect of shared behaviors, and therefore adopting innovative behaviors must come first. You change the culture by becoming more innovative — not the other way around. Small changes on a daily basis can create massive change in the long run.
“I came to see, in my time at IBM, that culture isn’t just one aspect of the game–it is the game.” ~ Lou Gerstner (CEO IBM during 1993-2002)
Below I share 5 steps that can be implemented in any company to ignite innovation, and at the same time leadership, through all layers of the company:
1. Innovation can come from everywhere
Although leadership should initiate a certain behavior, the company should be open to any type of innovation from anywhere in the company. This way a habit is cultivated that anyone in the company can contribute to the innovation process.
2. Create a flat organization
The more hierarchy the longer it takes decisions are approved. Fundamental to innovation is being lean and agile, which means nothing more than making decisions fast and adjusting on the way. A flat organization supports this way of thinking and acting. A flat management structure doesn’t have the long approval processes and disjointed lines of communications that put a brake on innovation.
3. Embrace failures
Test – Launch – Adjust – Repeat, is the usual cycle any innovation goes through. The majority will stop after failing one experiment, but true innovation keeps on failing and optimizing. If failures are embraced, people are not afraid to think out of the box.
4. Give innovators public recognition
People or teams that bring innovative ideas and are able to execute should be publicly given recognition. This way of giving appreciation will show that this behavior is crucial and desired.
5. Focus on impact, not on risks
Innovation teams should have the freedom to test and iterate in a safe environment where they can only focus on the positive impact their innovation can bring to the company or the customer. Too much focus on the potential risks is a bottleneck for any innovation process.
“An innovative culture begins with accepting that the world really has changed and being open to more changes to come.” ~ Fastcompany
Leaders should take charge and demonstrate that innovative behaviors generates undeniable value to the business — and before long, others will follow. If companies want to build an innovation-driven culture, the leadership team needs to exemplify and show appreciation for innovation throughout the company. Innovation does not happen overnight, but just like a drop of water falling in a pool of water, small waves of change executed on a daily basis will bring massive results (or waves) in the long term.