August | Development and Growth | Read time: calculating...
Innovation mindset: How people and culture determine success
Many clients ask us to help them build an innovation culture within their organisation. Culture change is our bread and butter, but first, we need to get clear on what innovation means to that particular client.
There must be a shared understanding of what’s deemed ‘innovative’ for the organisation; the term exists on a continuum, from outside-the-box big ideas to small improvements. And innovation shouldn’t be confined to the realm of an elite function in an organisation.
We frame innovation as the successful conversion of new concepts and knowledge into new products, services, or processes that deliver new customer value. The foundation of any successful firm will be an innovation of some sort — a person or group saw a different way to make it in the market, took a risk and proved themselves correct. At least for that financial cycle.
However, as businesses grow their national and global ambitions, they tend to systematise and double down on what they believe will always work. R&D departments start getting downsized as everything scales, being seen as an unprofitable element in the corporate structure. Innovation slows. The risk is then being left behind when a Silicon Valley unicorn blindsides a whole industry. Just ask a taxi driver what innovation their industry was pursuing before Uber arrived.
Innovation has become a core driver of growth, performance, and valuation. Brands like Apple, Alphabet, Amazon, Microsoft, and Tesla maintain billion-dollar valuations and have changed society. They also placed in the top five of BCG’s analysis of the 50 most innovative companies of 2021.1
Perhaps your organisation is the vanguard in a new space. Or you’re starting to sweat about competitors who are moving in on ‘your’ turf. We believe that there is no business that can’t pursue innovation further by transforming its culture into one that embraces an innovation mindset. Innovation can be encouraged at any organisation tier, but not without transforming organisational culture and leadership methodologies.
We believe that focusing on culture is the only way to create a sustainable competitive advantage — one that might not seem immediately apparent to those outside the business. Intellectual Property can be acquired, bought or improved upon, but think of innovation culture as your invisible advantage that remains even when a rival firm poaches a power player on your team.
Culture by design — not by default — turns ideas into reality. Leaders have the power to unlock this capacity through how and what they value, celebrate and encourage. For example, when leaders praise ‘trying’ rather than only the result, things change rapidly.
“If you always do what you’ve always done, you’ll always get what you’ve always got.” ― Henry Ford
The quadrants of innovation
Culture covers a lot of things; a mix of values, supporting behaviours and rituals. It’s all the things that get celebrated or recognised, and the elephants in the room that get ignored. All of these are human-made constructs, and therefore, changeable.
A culture of fear can quash the potential of an innovative idea before it’s even uttered in the team huddle or boardroom. Fear of being seen as stupid, of job insecurity, or retribution for speaking one’s mind will quietly gnaw away the goodwill of an organisation like a termite problem, eventually destroying your foundations.
Creating a workplace that puts value on ‘psychological safety is a big step toward the innovation culture you’re looking to create. Employees must trust that their ideas will be valued, voices believed, and it’s safe to express and act on those ideas and learn from failure. You can begin remedying this fearful mindset by relinquishing control.
Micromanagers tend to find this a challenging task. Still, when employees have a clear goal, empowered responsibility, implicit trust, and the knowledge of a support structure, they will usually perform over and above having someone ‘over their shoulder’ or ‘cracking the whip’.
Org Structure Permeability
While org charts are a valuable tool for keeping accountability, they’re all too often used as ‘ego charts’. Rather than simply showing the chain of command, the underutilised purpose of these corporate documents is as a map to collaborative initiatives and group problem-solving. Anyone should know who to talk to, and be able to, without noses getting out of joint.
Corning’s Silicon Valley technology chief Dr Waguih Ishak has a technique for onboarding that gets people thinking beyond their pod. “I ask my new hires to generate a list of who’s who at Corning within the first few months on the job. This helps them overcome the assumption that many hold that they must do everything themselves.”3 Ishak’s thinking is that people in the organisation have already sorted through similar problems, and this knowledge transfer can reduce wasted effort and help with more collaborative creativity.
Systems and Processes
There’s no methodology for genius, is there? R&D departments would argue otherwise.
If you think your business doesn’t have an R&D team, sorry, you’re wrong. Anyone can become a researcher in their field and collaborate to unearth discoveries, but many businesses don’t allow teams the time to do so.
Google somewhat famously created a policy that their engineers would work 80% of the time on prescribed projects, and the rest on ideas that “they thought would most benefit Google.” Dubbed The 20% Project, it led to Google News (2002), AdSense (2003), and Gmail (2004). However, it’s not something that gets formal management oversight, and since 2013, employees report figures closer to 5-10% time — but the idea matters more than the exact numbers.
By building in time to focus on innovation into the balance sheet, you’re casting the net wide for more collaboration to overcome the pressing challenges.
One half of R&D is development, and that goes for people too. A company must invest the time in people to develop skills and mindset to become innovators. Perhaps you already offer opportunities for professional development and an education budget to ‘upskill’. That investment also needs supporting structures for people to use and share their skills and guidance in selecting a course or perhaps a formalised internal mentorship program.
HR take note because there is one quality that supercharges performance in a role: curiosity. During the interview process, be sure to find out what candidates know, as well as what they want to know more about. Seek out curious people who question the status quo and encourage that attitude. The ‘fresh eyes’ of someone joining your organisation will uncover more insights than you may realise.
How to become the Einstein of innovation in business
Redefine your language
How we phrase a question will be reflected in the answers. So rather than saying, “how can we do XYZ?”, change that question to be about how ‘might’ we achieve that goal. It assumes there’s no binary can/can’t and keeps the solutions open-ended, for anyone to answer. Similarly, moving from a negative position to a positive one will open up positive solutions. For example, change, “How do we stop losing clients?” to “What are some interesting ways to keep our best clients with us?”
The other word to lose from your innovation vocabulary is ‘failure’ or even ‘mistakes’. On the contrary, experiments and the wrong turns that come with them are essential for a business to move forward, and indeed, for us to solve humankind’s biggest challenges.
Challenge your assumptions of what a ‘win’ looks like when you’re attempting innovation. An experiment in its scientific sense is to ascertain whether a hypothesis is true (and continues to be so when replicated). We haven’t failed if we find out that the hypothesis doesn’t hold water, but we have learned. Learning builds in aggregate and over time reinforces the secret superpower that all businesses have, but few fully realise: innovation.
“We cannot solve our problems with the same thinking we used when we created them.” — Albert Einstein.
Identify the right problem: A big one
Lofty goals inspire massive action and require a multidisciplinary approach to solving them. The world still has plenty of big problems, and the companies that solve them will be handsomely rewarded. Whatever you’re trying to achieve – what if you 10x it? Did it in half that time? What would it take, and what options aren’t you considering because of ‘small thinking’?
Set targets that sit within your purpose, sure. Then when it comes to problem-solving (or ideating, if you want to call it that), allow some time, in the beginning, to get wildly impractical. Then, “Yes, and” each other’s ideas, rather than “No, but”. There will always be a time to pare ideas back with a critical mindset later.
Shirk off limiting beliefs of what’s possible, even with something as significant as a business transformation, by asking the following: What might we do if we had an unlimited budget and time? Or, no budget at all, and had to do it all in 12 months?
“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” — Albert Einstein.
Get comfortable with imperfection. It’s all there is.
Your idea of a ‘perfect’ house and mine will be wildly different. There is no such thing as perfect. Sure, processes can be refined to protect people from getting into harm’s way, but other than that, ‘achieving perfection’ means dealing with an abstract and subjective concept. Instead, focus on learning as the outcome.
As long as you’re alive, there will be lessons to learn. No one person knows everything.
Cosmetics juggernaut L’Oreal encourages their employees to take a “test & learn” approach to their roles. The 110-year-old company, founded by a chemist, isn’t afraid to try new things and turn them into learnings. From interns to directors, they make it clear that experimenting and failing are inevitable to create the best innovations.
Try removing the burden of shame and ‘fault’ that many associate with failure. For example, pharma company Eli Lilly holds annual “failure parties” — and has done since the ’90s — to honour well-considered scientific experiments that failed to achieve the desired results.
If we all work at this, maybe the whole country can get behind it. October 13th is Finland’s National Day of Failure. Started in 2010 by some students at Helsinki University, they saw the country’s ‘perfect-or-not-at-all’ mentality as a hindrance to people trying new things – such as starting a business or pursuing new jobs. In celebration, many well-known people in business and entertainment use the day to share their mistakes or try new things and share how they went, regardless of the outcome.
“Only those who dare to fail greatly can ever achieve greatly” — Robert F. Kennedy
Don’t overload on innovation
Change brings challenges and surprises. But there are only so many balls we can juggle before they get dropped. Having one innovation project may seem the most manageable; however, when progress stalls (it happens, for many reasons), it’s easy to lose momentum. So having two innovation projects on the go seems to be ideal – it’s a manageable workload and allows for switching when stagnation feels imminent.
Cultural change can occur from an internal driving force or an external one. The ideal is when both forces are at play – such as an external consultant working with internal leadership.
From the founder to the newest hire, everyone has an impact on the culture of an organisation. However, when hiring becomes too narrow, so too do the ideas. What’s needed is a ‘scenius‘ – a meeting of minds with a variety of experiences and skills, able to create something bigger than the sum of its parts. Choosing to employ people who show a freethinking and entrepreneurial bent and developing those attributes will, over time, seep into the fabric of the organisation.
Immediate Action Recommendations
Define the kind of innovation that drives growth and helps meet strategic objectives.
Add innovation to the formal agenda at regular leadership meetings.
Set performance metrics and targets for innovation.
Questions to ask when embarking on an innovation journey
What’s the smallest step that will have the biggest impact, despite barriers?
What’s an example of previously successful innovation that grew, despite a perceived barrier?
What have we learned from previous attempts?
What can we proactively do now without permission?