How To Build A Culture of Innovation
Change has become a constant. Rising consumers expectations have created an innovation battleground for companies. With the pandemic and ongoing digital transformation layered on top, businesses face immense pressure to mobilize ideas and adapt. Unfortunately, innovation cannot simply be mandated. It requires a culture that motivates and empowers workforces to challenge old mindsets and bring creative solutions to life.
We’ve spent over a decade working with transformational companies and high-growth startups. Below are tips for creating a culture of innovation based on our years of experience and research.
Fail Forward
Failure always has a negative connotation. But the reality is that if you never fail, you’re probably not innovating. Innovation requires questioning what’s possible and experimenting - all of which come with at least some degree of uncertainty. Leaders need to recognize that the potential of failure is inseparable from exploring the unknown and deducing what works. To foster innovation, leaders need to create a safe environment for failure. Without this, your teams will never feel comfortable pursuing anything more than small improvements to what you already know works.
“Innovation is iterative, it is the result of a continual process of learning and failing. ”
— Ari Agency
Rather than playing the victim to failure, allow people to fail fast and fail forward. Encourage large scale experimentation and reward leaps of faith so that your teams can discover truly differentiating innovations. Managers should focus on what was learned in every experiment and ensure those insights lead to better performance.
Align resources to empower your people
Organizational alignment and lack of budget are 2 of the top 4 obstacles to innovation according to a corporate leader survey. Political clashes, budget wars and scapegoating the responsibility of innovation to one or two departments can leave both leaders and teams without a paddle when it finally comes to executing innovation initiatives.
Innovation and culture start at the top. Real transformation takes people, resources and budget - not just a mantra. It requires a plan to make it happen. In fact, company culture is much like dominos. Executives can design a domino line, but if they aren’t the first to fall down it, then no one else will follow.
“The responsibility to innovate and transform starts with the CEO and runs down to your most junior employee. Leadership’s most important role is to create the conditions that empower their people to experiment and mobilize new ideas and ways of thinking.”
— Ari Aronson, Founder at Ari Agency
In a time where innovation has become a non-negotiable, leaders need to create strategic alignment on how innovation across the organization ladders up to the greater vision. Executives must put turf-wars and politics aside and focus on empowering their people to create sustainable competitiveness.
Creative freedom without fences
Innovation isn’t built within a box. And while all organizations require strategic direction and structure, leaders should be conscious of the negative effects red tape and over-processing have on experimentation. According to McKinsey, leaders benefit from the classic parenting advice of providing children both “roots and wings”. This entails holding people accountable for company objectives and their work while giving them the creative freedom when pursuing their goals.
The micromanagement of time, process and budget can suffocate innovation. In fact, 47% of innovation professionals confessed that product testing suffers most when speed to market is the priority in a Nielsen study. Products launched that were deemed “not ready” in pre-market tests have an 80% failure rate. Even so, many of these products continue to be launched as companies prioritize rapid turnaround times and cheap process costs.
The real potential of exceptional ideas and products is constantly being shorted when teams are forced to walk executional tightropes. Employees are often told to think outside the box and improve, but then are provided neither the time or freedom to make decisions necessary for innovation.
To create a culture of innovation, companies need to walk the talk. Start by identifying what processes have become barriers to creativity. Then consider how you can create breathing room and autonomy for new ideas to successfully grow into plans and implementation.
Prioritize diversity and inclusivity
Research shows that diversity increases both innovation and financial success. Diversity and inclusivity of people leads to diversity of ideas, perspectives and experiences, which are integral to creativity and problem solving. Simply put, the more diversity you have, the more human capital you have.
Creating a diverse and inclusive workforce is no small feat, but its criticality cannot be overstated when striving for innovation. Much like culture, diversity starts at the top. According to BCG, businesses with diverse leaders foster more innovation than non-diverse leaders by building environments that encourage new ideas. In order to establish a culture where diversity of people and ideas are encouraged and celebrated, companies should invest in creating diversity at the executive level as well as throughout their workforce.
It’s not easy to create a culture shift towards innovation and experimentation when companies have been focused on perfectionism and risk aversion for so long. Companies can start this shift by showcasing through their leadership, resourcing, and processes that they prioritize and reward innovation. Finally it will come down to the people you have - and making sure their skill sets and values align with your innovation culture and strategy.
Connect With Us
We’re committed to helping future-proof businesses. Over the years, we’ve helped many organizations work through the challenges of building innovative workforces, executive teams, and cultures.
Connect with us to get a free 1 hour consultation. We’ll help you identify your innovation blind spots and skills gaps to provide you with an assessment on whether or not you have the right talent to move your organization forward.
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