Characteristics of a Culture of Innovation: Tackle the Tensions to Thrive In Invention

Aug 31, 2022
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No company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” – Jack Welch, former General Electric CEO

Does our company have an innovative company culture?” is a question that keeps some executives up at night. Much of this unfortunate lack of sleep is driven by the elusiveness of this concept – what does it really mean?

Part of the challenge of discovering the characteristics of a culture of innovation is that ‘company culture’ itself is hard to pin down. A quick Google search on the phrase ‘company culture’ produces a variety of ambiguous, not-too-helpful definitions.  

Mick Jagger may have summed it up best, from an employee’s perspective, at least, when he famously sang “I can’t get no satisfaction.” Employees suffer from the flip side of the executive challenges: they are sleep-deprived because they often feel powerless since they are often on the receiving end of cultural norms that may not align with their individual values.

This all leads to disengaged and disenchanted employees; in fact, a recent Gallup poll showed that the percentage of engaged employees has decreased in early 2022 to an eye-popping 32%. It’s safe to say that the remaining 68% of employees are not bringing their most creative and innovative selves to the table every day. So, even if innovation is happening, the average employee certainly does not feel a part of it.

Coming Closer to the Characteristics of a Culture of Innovation — Not for the Faint of Heart

One would be tempted to think that building any positive company culture — especially an innovative organizational culture — is out of the executive’s hands as it grows organically.

While company culture certainly grows organically, leadership plays an essential role in nurturing this growth. It’s clear that leadership’s values, and the continual alignment of decision-making to those values, is a large component of what becomes a company’s culture. This applies to everything from the smallest decision (e.g., sending a poorly worded email) to the largest decision (e.g., letting employees go at the first hint of a recession).

Decisions that promote a healthy, engaged workforce will inevitably lead to a better corporate culture of innovation; and solidifying this virtuous circle will put the company in a great position between employees, leadership, and investors.

Sounds easy, right? It’s not. At its very core, focusing on innovation is equivalent to challenging the status quo.  Any leader should expect pushback as they try to sail the boat out onto the waters of innovation. The boat will get rocked! 

In my experience, the level of success in building an innovative organizational culture is determined by the degree to which leaders can deftly handle the tensions which inevitably arise. Leaders need to be able to champion an overall system that is different from (and sometimes opposed to) the normal business routine with individual elements and behaviors that only make sense in the larger context. Executives have a difficult task: setting the stage for success, while at the same time relinquishing aspects of control regarding the specifics.

When we talk about “building a culture of innovation,” we are talking about a process that takes a high degree of purpose, planning, execution, fortitude, balance, integrity, and patience. It is, however, a worthwhile endeavor, and in this post, we explore the tensions that an innovation-focused leader will have to deal with.

Why Build an Innovative Organizational Culture?

In our ultra-competitive world, every company is looking for a way to outpace the competition – hoping to build an innovative organizational culture by generating creative ideas, yielding better solutions that will develop a strong tribe of supporters. 

The ‘business-as-usual’ approach and attitude simply isn’t geared towards these outcomes. It goes without saying that companies need time, effort, and resources specifically geared towards innovative organizational culture. Keeping the status quo can result in minor steps forward, but there is almost zero chance that this type of approach will surface the next hot product or solution that will rocket your company to success. 

Focusing on how to build a culture of innovation pushes the company towards a generative mindset. Conversations become about ‘what’s possible’, not just about keeping the train on the tracks. From an employee perspective, these conversations are truly what will separate companies that pay the bills from ones that stand out, and that people are vying to work for. 

Frankly, you really have no choice but to get innovative: your competition is spending time on innovation, and if you ignore it, they’ll certainly surpass you. If the other compelling reasons don’t move you towards innovative organizational culture, perhaps FOMO (fear of missing out) will! 

Measuring Innovation Culture in Organizations

As noted above, preparing for and understanding the tensions inherent in building an innovative organizational culture is essential to success. In my experience there are three primary innovative tensions for which leaders need to specifically prepare: 

1) Go All In and Maintain Delicate Balance 

2) Dream Big and Work Lean 

3) Empower Individuals and Relinquish Aspects of Control

Each of these are ‘tensions’ because they require a leader to exercise balance. Oftentimes ‘dreaming big’, for example, is associated with spending weeks on end coming up with ideas and not doing much else. The innovative leader needs to acknowledge this and set rails in place to ‘work lean’, creating a much faster time to evaluate innovative ideas. The ability to manage these delicate ‘tensions’ is what separates the great innovative cultures from the rest.  

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Innovation Tension #1: Go All In and Maintain Delicate Balance

When trying to get acclimated to a cold pool, it is tempting to dip one’s toe in first. This method doesn’t work well when getting in the deep end of a pool, and it certainly doesn’t work well when building an innovative organizational culture.

As innovation requires an entirely new way of thinking that often challenges the status quo, “going all in” means leaders need to hone in on the three C’s: commitment, communication, and collaboration. These characteristics of an innovative organization are critical for generating ideas that can drive your business forward. 

Commitment to innovation cannot be just giving lip service to it! When creating an innovative organizational culture, leaders need to understand the amount of time, resources, and up-front and ongoing costs of a successful transformative program, and then deliver. It will always be tempting to reallocate spending or resources to an urgent problem, but a fast and poorly-considered reallocation will inevitably lead to a disappointing death for innovation. 

Additionally, leaders need to commit to whatever outcome the innovation program leads to. A successful innovation program supported by innovation consulting services can lead to a host of positive outcomes, including better products, happier customers and smoother internal processes, resulting in more satisfied and more innovative employees. It’s even possible that it could lead to a complete revamp of how business is done, impacting the product portfolio and employee base – these unexpected results can be incredibly positive but also challenging for those who value the status quo.  

Challenges — some expected and others unexpected — will come in droves to any innovation program. Leaders who want to build a prolific innovative organizational culture will continually reiterate their commitment, especially when the going gets tough. Remember, leaders, you are jumping into the pool — you must be ready for what comes next.

Communication is critical at all steps of the move towards a more innovative organizational culture. Leadership first needs to identify all stakeholders impacted by the change and gain a clear understanding of what each of these stakeholders could gain or lose with a shakeup to the status quo. Leaders also need to understand how their stakeholders want to be involved, what their view of success is, and what kind of input they would like to have in the process.

Additionally, having ongoing open conversations about the vision and goals of innovation should help quell jealousy that could inevitably arise if others are seen as working on “cooler” projects. In a company that goes all in on innovation, the positive impacts should flow throughout the organization so that all employees feel a higher level of satisfaction.

Leaders should build and communicate a vision of ‘innovation culture’ and make all employees feel part of the journey. Transparent communication to all your stakeholders in many different formats is critical.  

Collaboration among stakeholders throughout the company is one of the essential characteristics of a culture of innovation. Once you’ve done the groundwork of setting the vision and communicating with stakeholders, everyone needs to work together towards a set of common goals.

To collaborate effectively, mechanisms need to be put in place to ensure all stakeholder contributions are taken seriously. For example, if you’ve set up a process to capture innovative ideas from anyone in the company, you need to ensure that these ideas are fully vetted and that the employees are part of the process as the idea moves forward or is deferred.

Clear accountability and responsibility in each phase of the innovation process is important so everyone understands how decisions are made and who can inform them. You should continually review and improve the process, gathering input from all your stakeholders to ensure that important voices are not being stifled because of an unnecessarily exclusive process.

In addition to improving the process, you’ll also need to continually evaluate and refine your vision and corresponding goals – and the means to achieve them. Outcomes need to be measurable and observable, which will also ultimately ensure that you can judge the overall success of your innovative organizational culture. People will always ask for evidence of success, so make sure you are not missing out on all of the wins.

Now that you’ve gone “all in,” you must manage the tension and maintain a delicate balance. Even if you set the right goals, identify the right people, and have the right conversations, be prepared for inevitable challenges. Some critical leaders may leave the company, market factors could change, decisions may be viewed unfavorably, and stakeholders may lose patience prematurely.

Maintaining a delicate balance means maintaining a willingness to change tactics without sacrificing the core vision. Leaders need to embrace the deep end of innovation, a place where ambiguity, opposing viewpoints, and healthy debate are welcomed. This is where a strong vision and steadfast leadership is important: there are always arguments that can (and will) be made to avoid embracing innovation.

Once you jump in a cold pool, the water is initially almost unbearable; quickly, however, it becomes tolerable and eventually pleasant. Getting confident in the waters is key to eventually being able to steer the company through the challenges that lie ahead in the depths!  

Innovation Tension #2: Dream Big and Work Lean

Historically, companies conflate big effort with big value, but this line of thinking regarding innovative organizational culture can end a program before it even begins. Innovation requires a different line of thinking: the question you should ask yourself is “How can we unlock the creativity within our employee base without diverting a ton of valuable resources, effort, and time?” Although not immediately intuitive, it is in fact possible to both dream big and work lean.

Dreaming big teaches you how to build a culture of innovation, but it requires an openness to out-of-the-box creative space that is atypical in corporate culture. It’s possible that your leadership team and workforce will need a boost to warm up the creative muscles that may have gone dormant.

In such cases, training employees in design thinking — as companies like Apple, Google, and Samsung have — is a clear win. Design thinking is an iterative process in which you seek to understand your users, challenge assumptions, redefine problems and create innovative solutions which you can prototype and test. As you can imagine, design thinking encourages employees to dream big while modeling behaviors of working lean. 

Gary P. Pisano’s article, “The Hard Truth About Innovative Cultures”, articulates a clear example of a company that manages to promote out-of-the-box thinking in a lean way, citing Flagship Pioneering, a Cambridge, Massachusetts company that creates new ventures based on pioneering science.

At this company, all ideas — however far-fetched — are entertained and perceived as bringing value, even if that value is exposing an idea’s flaws. They design “killer experiments” and ensure a lean approach by setting a low maximum cost and timeframe. As Pisano mentions, “such a lean approach to testing not only enables the teams to cycle through more ideas quickly; it also makes it psychologically easier to walk away from projects that are going nowhere… The philosophy is to learn what you have gotten wrong early and then move quickly in more-promising directions.”

When a company embraces the mantra “dream big and work lean,” an underrated benefit is this ability to walk away if necessary. Innovation efforts don’t always result in tangible characteristics of a culture of innovation, but there is always significant value in learning via testing hypotheses, which makes your team stronger and more likely to make a creative breakthrough in subsequent attempts.

Innovation Tension #3: Empower Individuals and Relinquish Aspects of Control

The kicker of an innovative organizational culture is this: you really need to believe in the creativity of your individual employees and work on your own attitude and approach to bring about the best ideas from all team members, so that your innovation program can flourish.

Amazon is a great example of this, as they empower innovators from every level and every team by encouraging employees to submit any big ideas in the form of a press release that outlines the vision for a product at launch. This program has led to huge successes such as Prime Now, Amazon Go, and Alexa.

Google is one of the good innovative culture examples that has placed a premium on innovation with its famous 20% rule, in which they encourage every employee to spend 20% of their work time exploring or working on projects that don’t promise an immediate yield.

Apple, SpaceX, Tesla, and Salesforce are other innovative culture examples that have prioritized individual employees’ focus on innovation. Is it any wonder that many of these companies are seen as the epitomes of 21st century success?

“Sounds great,” some leaders might say, “but what if our employees spend too much time on innovation and not enough on their job.” Or, maybe more secretly, “What if my star employee gets promoted onto another team because of an innovative idea?” There are many “what ifs” that can stifle creativity and kill innovation.

Of course, a leader who is truly interested in building an innovative organizational culture won’t let these concerns get the better of them. The innovation-centric leader builds a culture where employees feel free to speak up, provide candid feedback, and feel that their contribution is both valued and rewarded.

Empowering individual employees to contribute to innovation comes at a cost — you have to be ready to embrace, promote, and multiply the creativity that is unleashed, especially when it runs against the status quo. Innovation at its finest is a win for everyone involved: individuals, the company, and the customer.

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How to Build a Culture of Innovation

In Apple’s 2022 fictitious hit series Severance, Lumon Industries follows none of the recommendations outlined in this article. Over the course of the series, the viewer sees a company willing to do anything to keep employees from being innovative — placing disconnected small groups of employees in depersonalized rooms, giving them tasks they don’t understand, and punishing them for any hint of infraction to the company’s suspect code of ethics.

What unfolds over the course of the series — without giving away the storyline! — is a remarkable set of innovative solutions by a small group of employees that help clarify answers around the “what?” “why?” and “where?” of their existence — all questions their company is desperately trying to keep from them asking.

In their case, innovation was eventually born out of desperation. But the real moral of the story is this: one way or another, humans will strive to be innovative. It’s in our nature. Companies can choose to let creativity sit idle, allow innovation to randomly surface in fits and starts in ways that are impossible to capture, or build a company culture which unleashes the expertise and ingenuity that sits in their ranks in ways that benefit the company.

When viewed like this, is there really a choice other than boldly pursuing innovative organizational culture? The leader who confidently says “yes” to innovative organizational culture and pays special attention to the innovation tensions outlined in this article will improve culture, unlock creativity, and create fantastic lasting change.  

Author: Nate Joy