How to Create a Culture of Innovation

Global organisations are today obsessed with creating a culture of innovation.  Innovation has been the buzzword of this decade so far, with organisations lining up to adopt or embed entrepreneurial attitudes and creativity into their businesses.  But can you do that?  Can a global organisation ever behave like a startup?

I would argue not.  But there are a number of key things you can do that absolutely help create and maintain a culture of innovation.  Yesterday I participated in a great online discussion about creating cultures of innovation. Here are a combination of my top 12 tips and those of the speakers (listed below).

  1. Understand what Culture is and how it is designedCulture in an organisation can be a nebulous thing.  You can walk in a feel it but it’s often hard to describe. Academically we describe culture as the space of positions and position taking within a cultural field. An organisation is a cultural field; it’s a space in which things are made possible in terms of human action.

    You can configure this space by using Principles of how you are going to act within this space. For example, Amazon has a key principle of discussing every action it takes from the customer’s viewpoint which they call the Principle of Customer Obsession.

    After designing organisational Principles, the second layer of culture is the Mechanisms by which people can interact within those Principles.

    And finally you move to design a system which Moderates the Behaviours that are coming forth.
    The three key pillars of culture are therefore Principles, Mechanisms, Human Behaviours. When you get all three right, you create a self-reinforcing system by which people understand what they can be doing and what they should be doing where shared values and shared norms emerge naturally.

  2. The Role of Purpose & PrinciplesTwo of the key ‘levers’ to pull when designing a culture of innovation are Purpose and Principles. There is no doubt that clarity of Purpose of an organisation – where all stakeholders clearly understand the ‘why’ of its existence and what it is working towards – helps keep innovation and culture on track.  It does this by being a lens through which every action can be looked at and assessed.

    Principles derive from Values which are equally important.  Values can’t be a dry list of adjectives painted into the CSR plan, but must be real and lived.  Principles develop from values and are expressed ways of being and acting which underline how a value should be applied.  In some companies they are the same.  So for example a key value could be Sustainability and the corresponding principle could be Acting Always with Long Term Sustainability in Mind.

    These Principles and Values must be aligned to the way in which the company acts and behaves for there to be integrity in the organisation.  If a company chooses to always act with long term sustainability in mind, it isn’t congruent to reward top management for short term gains or actions.

    By using Principles and Values as a lens through which you can ‘score’ any proposed action or innovation you take against your set of values, you have a consistent framework to ensure your culture is stable.

    In my experience and research, there are definitely some values in people that are more likely to deliver a culture of innovation; these include comfortability with uncertainty and ambiguity, open-mindedness, imagination, and curiosity.

    It’s also important to note here that organisational Purpose and Principles aren’t always necessarily positive for people and planet.  Enron for example, was voted the most innovative company for 6 years in a row in the late 1990s.  Uber was once held as one of the most disruptive organisations on the planet but has since fallen from grace because it’s culture turned out to be rather punitive and aggressive.  The kind of Purpose that is valuable, is one which is aligned to positive social and environmental outcomes.

  3. Audit for AlignmentWhen you start a programme to create a culture of innovation, you have to know what your starting point is.  A great way to do this is to carry out an Alignment Audit.  Using your Purpose, Principles & Values, audit your company mechanisms and behaviours to see where you are in alignment with your stated values, and where you are out of alignment.  Being out of alignment will cause a culture of innovation – or any culture – to fail.

    What sort of things are you looking for? Let’s take the above example once again. You have a value for long term sustainability.  But what are the Principles that are guiding the way people are incentivised? Are they incentivised through mechanisms for short term results?  If they are, inevitably the mechanism will win over the principle. If someone has a new idea – is there a mechanism for any employee anywhere to take that idea and get it funded?

    Rather than just speaking about having a culture of open-mindedness, and a lack of hierarchy to foster innovation, you have to design mechanisms so that for example,  a junior engineer who has a great idea has a way to bring it the attention of the people who will give it capital expenditure. As you audit, it becomes easier to see where the risks are to but the breaks on a culture of innovation.

    Another approach is to audit your employees calendars; how are they investing time according to your organisational principles and values? If the CEO gives a talk, how much of that talk is focused on driving the values? You can get very concrete and personal when you look at the share of time or money is aligned to the principles and values that drive your culture of innovation.

  4. Work In ProjectsThis is an insight gained from mentoring a lot of startups in the last few years, and something we have experimented with in larger organisations.  When you make a decision to see something as a project, creativity and innovation increases.Most people have a lot of day-to-day actions within their job specification.  But the moment you design a framework around something and make it a project, you have a stronger focus on roles within the team, and on actions that are designed, and on an ‘end-goal’ or outcome.  The success of Working in Projects is also driven by the ability to Shape Containers.
  5. Shaping Cultural ContainersOf all actions you can take to drive a culture of innovation, this is the hardest to master.  What do I mean by ‘shaping the container’?  Working in Projects creates a container – the project.  Principles & Values are containers which shape action.  Rules & regulations are containers which constrain action.  Laws and standards (like ISOs) are externalities which might shape a container.  In the world of education degree and masters validated content and programmes shape a container for how that degree can be delivered.

    It is intensely difficult when designing a culture of innovation to decide what the walls of a container look like.  To decide how porous they are, how and when you can migrate over the invisible boundaries of action and behaviour you choose to set.  And it is different for every single organisation.

    Generally innovation teams should be managed from inside a company.  As a consultant this is a hard one to chew on.  A lot of my work is done helping organisations to activate creativity and innovation.  If a company was determined to drive innovation without outside expertise, this is the one area I would still absolutely suggest you get help.  Knowing how to shape your cultural containers is a real skill that takes daily practice and instinct to recognise where, within an existing culture, you are ready to push the boundaries without frightening the sheep or the tupp.

  6. Make Culture Tangible Through MechanismsOnce you have your basic framework in place – Purpose, Principles & Values – you can begin to design mechanisms that reinforce the culture of innovation you want to build.  It’s important to recognise that different companies have different mechanisms according to their culture and way of working and that any of these can work for innovation.  There’s not a single recipe.  All of the cultures below are very different; all worked.Amazon has an innovation culture which is strongly data oriented.

    Apple (under Steve Jobs) had a culture which was autocratic, secretive and non-collaborative
    Early Google was very collaborative, open-minded with a sharing-first ideology

    In the journey between Ideation and Actualisation, there can be lots of ‘holes’ where ideas can get lost.  You need tangible processes and mechanisms which activate each step of the way towards funding.

    How, where and who do early ideas need to be shared with and shown to?
    What’s the process for that?
    How and by whom do ideas need to be evaluated?
    How well do you set expectations and communicate the likelihood of success and failure through the process?

    You can design mechanisms and processes to support innovation without dampening creativity and enthusiasm along the way. The Mechanisms help shape the container in which creativity can happen.

  7. Top Down or Bottom UpNine out of ten times in large organisations I would say that you absolutely have to have CEO and board level support for how you want to approach change to your culture of innovation. The ways in which people are incentivised, the way in which communications is structured are usually top down, not bottom up in large organisations. Innovation strategy has to come from people who are making investment decisions and know what the long term health of the company looks like.

    But it can be done successfully from the ground up.  Bosch is a great example, where, using Working Out Loud techniques first in small circles within the IT departments, the culture of WOL started to show real benefits to the organisation, grew and was eventually adopted by the HR Director as a champion.  It’s now being used much more widely throughout the organisation as a technique to drive innovation.  It’s still probably the exception rather than the norm, and still relied heavily on the Global IT Innovation Lead Dennis Boecker to support it at the start.

  8. Understand what kills InnovationMight sound strange, but very few CEOs and business leaders have a natural understanding of what kills innovation in their organisations.  One of the key ways in which to kill energy in a project stone dead is to mention the phrase ‘ROI.  Of course it’s natural for business leaders to think ROI.  They are mainly incentivised on growth and profit, so they don’t naturally want to invest time and money into something that may not have a return.  To foster a true culture of innovation, you have to kill this language pretty quickly if you can.

    Having a culturally adept adviser work with your leadership team, – anyone involved in designing mechanisms and structure, and in particular anyone who is involved in funding decisions – how to ask the right kind of questions to create a thriving culture is essential.

    Questions like: How many customers have you talked to? How many ideas did you generate? Which ideas did you throw away which you initially thought would be great ones? are great open questions are, according to ex IDEO anthropologist Tatiana Mamut.

  9. Creating the right Team Dynamics

    Having a deep understanding of human behaviour and how to design great teams might be the most important part of the jigsaw puzzle, so it’s not at no9 because it’s any less relevant than all the other points.A team is the basic molecule of innovation. Making team time magical, connective and productive is the sweet spot of activating creativity. Getting the team dynamic right is where you produce great ideas, action and implementation.There are many different ways of structuring and supporting a team that deliberately go deep into the psychology of the team to create a culture of psychological safety where vulnerability and open sharing can happen. Amy Edmondson of Google’s Aristotle project is probably the most well know model where equal sharing and turn taking is balanced with performance pressure.Explicit processes and mechanisms for decisions making within your team structure are valuable. Clear decision making processes, clarity around what everyone’s role is and where it blends with someone else’s role are two key features of a successful team.

    Diversity is another; not in the obvious sense but in having a wide diversity of characters and personalities  You need ideates, but you also need completer/finishers.  You need introverted thinkers and you need extroverted sellers.  You want to be able to understand how each member of the team culturally deals with leadership, decision-making, giving feedback, give trust, disagree, persuade and evaluate.  This takes hard work. Role Crafting or designing a structure that allows for constant re-imagining of the employee-employer relationship, is an emerging skill.

    There are thousands of apps to help; two great tools that I have found useful are We-Q,  and The GameChanger Index.  There’s little doubt that AI is going to make a significant difference in this field.  I’ve been mentoring startups in the past 18 months who are testing new ways to harvest emotional intelligence and unmet needs from group online conversations in organisations to help develop culture.

    You have to find the team dynamic that’s right for your organisation.  All are different. Amazon has the ‘2 pizza team’ approach. Salesforce has a very mindful approach to bringing people together to alignment, which is the direct opposite of Amazon. All work. There’s no simple recipe for innovation in teams, you have to design your own.

  10. Learning to Live with TensionsThere are inevitable tensions between different parts of an organisation.  The tension between operations and innovation is often marked.  To innovators, nothing is more important than pursuing the creative and the new idea.  Often innovation has to be put on hold because operations takes precedence in a business with a growth agenda. This is just practical but it can be intensely frustrating for the innovation teams.  Communicating openly why decisions which go against innovation have to be made – whether or not they are liked or appreciated – is important.

    Companies who can learn to manage the balance or design through the paradox between innovation and implementation, are likely to have a strong competitive edge today and in the future.

  11. Planetary Purpose as an innovation beacon

    In the group we talked about what would keep an organisation at the head of the curve when innovation becomes the ‘norm’ in companies. What out-innovates innovation?

    I  mentioned purpose at the outset  Just purpose isn’t enough anymore for organisation stop play a part in the global challenges we face like climate change and the future of work or food.  Planetary Purpose is needed.  This means that all organisations – large and small – need to really take a long hard look at choose where they are going to play a primary role.  It doesn’t matter whether you’re Unilever or a company that manufactures toilet brushes. The latter plays with plastic and water/sanitation/health.

    We need to really understand the future value we are building for people and planet, and bring those innovations forth in a socially and environmentally responsible manner. You can choose to be part of a brighter future.

  12. The Conversation with the CEO

    What do you do if you don’t have the buy-in from leadership to create a culture of innovation?  Tatiana has a simple solution from her years at IDEO.”There were times when we had done work  – a product or service design – that hadn’t really landed in the market. That hadn’t operationalised as we hoped. You have to ask the question – we had lots of great ideas, we designed great products and services so what happened? Often we had a culture that killed them. We had a mechanism for prioritising resources that killed the idea. We had managers with skill sets that were antithetical to the product we were trying to launch. When that happens a couple of times, that’s when you can have the conversation with the CEO – why do you think this happens? We want to get this to market, we want it to be successful but we’re not achieving that. That’s a golden opportunity to change a culture with leadership backing when they can actually see that culture is the hand break.”

    Equally there’s an opportunity with failed acquisitions. A large company acquires a great startup and gets the whole team. The product fizzles out and all the great people leave. Why? When that happens a couple of times, you can have the conversation at a senior level so that the next time the CEO or SLT wants to allocate capital to transform the company into an innovative company, you can show the board how to understand and not undermine the process because you have concrete examples.

If creating a culture of innovation were easy, all companies would do it like falling off a log. In reality it takes a complex set of conditions to come together and it’s always an evolutionary process.

With thanks for insights to:

Connectle: a great online platform where intelligent conversations happen at a very high level
Tatyana Mamut, Tech Exec; Dennis Boecker, Global Inovation Lead at Bosch; Dan Hoffman CEO at Circl.es; Martijn van Tilberg at 10,000 Feet; and Greg Judelman, the host.

By | 2018-03-21T16:04:32+00:00 March 21st, 2018|Culture, Purpose|0 Comments

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