How to Cultivate an Innovation Culture
Companies like Amazon, Apple, Google, Facebook, and Microsoft invest billions annually into innovation. In 2020 Amazon spent $42.7 billion on “technology and content,” aka research and development. Organizations are looking to innovation to fuel growth. In a global survey by McKinsey & Company, 84% of executives emphasized the importance of innovation. However, this same survey found that 94% of executives are not satisfied with their organization's innovation performance. As the world changes, people and organizations must change too. Culture is the one thing that impacts everything, and successful innovation is a catalyst for organizational growth. Leaders looking to maximize innovation investments need to cultivate an innovation culture.
Organizational culture defined is "a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems." Edgar Schein
Leading Culture Change
Executives attempting to change their organizational culture should proceed cautiously and recognize that culture change is a perpetual endeavor. Corporate culture is oriented around:
Visual structures and processes
Spoken goals, strategies, and values
Changing culture starts by clearly defining the desired goal in terms of employee behavioral expectations. Next, leaders need to align these behavioral expectations with:
What they pay attention to regularly. If the goal is a culture of innovation, does leadership ask employees about innovation in meetings?
How they respond in a time of crisis. When a problem arises, does leadership ask about how innovation can be a part of the solution?
Where they allocate resources. When budgets are created, is there a line item for innovation?
What they reward. Are employees rewarded for interesting failures and innovation success?
How they buy, build, and bounce employees. When opportunities exist to hire, develop, and exit employees is innovation a part of the decision process?
Attributes of an Innovation Culture
An innovation-based culture comprises many various attributes, and the capability to learn quickly. Cultures that produce innovation adhere to the following three rules:
Placing individuals on teams and removing them from normal organizational pressures
Holding employees accountable and providing persuasive prompts for innovation
Rewarding, recognizing, and supporting innovation champions.
Surprisingly, an empirical study of over 800 organizations found that the attribute of creativity is not clearly linked with an innovation culture. Also, the organizational attributes supporting product innovation are not the same for process innovation. The research demonstrated that increasing problem-solving freedom (i.e., creativity) among employees decreased product innovation. Although, organizational motivation, allocation of resources, and supportive management process improved both market-driven product and operational process innovation.
Overcoming a Fear of Failure
The role of leadership is to encourage, guide, and empower innovative behaviors within minimum viable product parameters. Fear of failure is the enemy of an innovative culture. An organizational fear of failure limits experimentation, risk-taking, and failure, all of which are necessities of innovation. In three separate studies, researchers found that the fear of failure triggered by an objective or psychological reaction is detrimental to decision-making and reduces opportunity-seeking behaviors. The acceptance of failure as learning is fundamental to innovation but challenging to comprehend. Watch the following short video to see why Honda accepts failure and suggested it is the secret to their success.
A step toward learning to overcome failure fears to reframe the failure as necessary and a learning opportunity. The following are three proven strategies leaders can use to help employees overcome a fear of failure:
Game Theory: Game theory can be used in a safe environment without the harmful consequences of the real world to teach employees about failure as learning.
Mindfulness: Mindfulness-based stress-reduction meditation training has been shown to have a positive outcome in overcoming the fear of failure. Mindfulness meditation is defined as learning to focus on purpose at the moment without judgment of experiences.
Rewards: Innovation behaviors need to be rewarded and recognized even if they do not directly achieve the desired goal. Reinforcing desired innovation behaviors increases the behaviors.
We Can Help You Build a Culture of Innovation
We can partner with you to assess whether you have the right culture for your strategy, develop attributes needed to support building your organizational culture, measure progress, and sustain the change. We offer a variety of proven organizational culture and leadership solutions available both virtually and in person.
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