A recent Google search for the phrase “culture of innovation” yielded 665,000,000 results. There is no shortage of opinions on how to create an environment that enables teams to find, shape, and execute new products, services and experiences, whether incremental improvements or game changing disruptors. Indeed, inside any organization, top talent expects an environment that fosters innovation.
Since the pandemic hit, thought, much of the conversation about employee experience has focused on immediate needs: ensuring employee health and safety, enabling remote productivity, etc. But there is a whole other set of considerations where talent managers can take the lead.
As I speak with executives across business sectors, and at companies from startups to large and established, what I am hearing is an absolute need to innovate. That may mean accelerating digital transformation, rethinking business models, rebuilding supply chains, or tossing out assumptions for how the business operates and rewriting the playbook. All acknowledge that organizations must consider the environment they create for people to make their best contributions. This means establishing cultural conditions that set up great talent to be innovative.
Revisiting Innovation Culture Orthodoxies
It’s been a while since anyone has mentioned their foosball table or unlimited free snacks or open plan layout as fundamental elements of a culture of innovation. These are suddenly irrelevant and unlikely to return as more than superficial perks, artifacts of another time.
Beyond these symbols, certain orthodoxies have taken hold. However, they miss the nuances of what it really takes to make innovation part of how a place operates, and where innovation efforts translate into meaningful stakeholder results. For example:
- Promoting the value of embracing failure. It is true, innovation demands experimentation. And anyone who has taken a science class knows that experiments don’t always work. Beyond just talking about accepting failure, are recognition programs in place and compensation and performance review systems aligned to this principle?
- Implementing design thinking or agile practices. Design thinking and agile practices are useful, proven methodologies that enable listening to the customer, speed, and collaborative processes, all of which are crucial to discovering, prototyping, and building new offerings. Their adoption, done right, signals to employees that the organization is serious about changing how they work. But they are not “silver bullet” answers, and there are many nuances to adoption that will determine their success.
- Hiring from Silicon Valley. I’ve been part of many conversations with executives who believe that the answer to creating a culture of innovation is to attract talent from Silicon Valley or other innovation hotbeds. A big hire from Silicon Valley can energize the organization, signal management commitment, and enable a transfusion of fresh mindset and capabilities. But you’ve got to do so with care to manage the risk of demoralizing talent within the organization who are more than capable and want to contribute but have not been asked or empowered. And of course, a great leader who has been successful in one culture may not graft readily onto another that is markedly different.
- Setting up an incubator far from the “home office.” Management consultancy Arthur D. Little reported last year that most corporate incubators “lack a major impact on growth.” The reasons are many. A key one is that while there is value to freeing the incubator from home-office bureaucracy, by housing these activities elsewhere, management runs the risk of generating concepts divorced from the business model. Additionally, such concepts don’t benefit from valuable institutional knowledge about customer needs and buying behavior. This approach also dilutes the opportunity for knowledge transfer that could spread the innovation DNA of the incubator more widely across the organization.
Innovation Culture Musts
Based on my research of real-world experiences of nearly 50 startup founders, corporate innovators, investors, and other hands-on participants in a wide range of innovation successes and failures, here’s a summary of the most important attributes of an innovation culture:
Top leadership — especially the CEO and their direct reports — must walk the talk, and commit head and heart to prioritizing innovation. Culture is the sum of the thousands of decisions, communications, and choices that happen every day inside any organization. But the beliefs and behaviors —down to the smallest — from the top of the house set the pace and are transmitted and internalized everyplace in the organization. The CEO and the CEO’s direct report establish the boundaries for how everyone behaves.
Beware of the appointment of a chief innovation officer if that person’s colleagues do not have skin in the game to ensure shared success.
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Nothing matters without selecting and bringing together the right mix of talent. The leadership profile and skills of an innovator are quite different than the profile of people who shine in more traditional roles. As food for thought, here are some of the attributes that consistently rise to the top of the list:
- Passion for the work
- Obsessive customer focus, sharpened through strong active listening and collaboration skills, including listening to, influencing, and engaging, with colleagues who bring other perspectives and skills
- Accountable, and operating with a sense of urgency to achieve meaningful results
- Intellectually and executionally curious, seeking the new and unfamiliar, not merely affirmation
- Makes a habit of creative problem-solving with a constructive attitude
- Optimistic, truly treating failure as learning to apply to the next iteration
- Adaptable, flexible, and open-minded
- Values- and principles-based
- Builds diverse teams
A team of individuals who demonstrate these attributes collectively in their behavior can be a powerful force. They can also act as role models to others in the organization. Additionally, businesses committed to internal mobility, they can spread what they know by taking on new assignments.
Cultural attributes must translate into recognition and reward systems. Mature businesses recognize and reward based on the metrics they have honed over many years of experience to drive employee, customer, and financial outcomes. These can be disastrously inappropriate to measure the value of a nascent concept, or the contributions of employees progressing growth experiments. As a result, it’s easy to discount innovation contributions and not recognize and reward innovative employees adequately.
Innovation progress is measurable, but on its own terms. Through public recognition, formal or informal, as well as performance evaluation and compensation process, you can develop measures that appropriately acknowledge extraordinary work of innovators in your organization.
We have all been disrupted by the pandemic. Innovation is the antidote to disruption. But it takes leadership to establish and sustain a culture of innovation — and ultimately ensure that the organization is more strongly positioned to move beyond crisis to recovery and opportunity.