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Why an Innovation Culture Matters

Companies need to continuously introduce innovations to fuel growth. The financial and operational rewards for innovation are significant. Top-ranked innovation companies like Apple, Google, and Amazon accelerate out of market disruptions. Creativity and risk-taking are essential to overcoming challenges, but businesses often reward efficiency and avoid risk. Innovation doesn't just happen in the workplace without a supportive culture. Employees are only as innovative as their environment. Company culture is the one thing that influences everything in the workplace. Leaders that focus on cultivating an innovation culture and developing innovative leaders outperform their competition.

As the world changes, so must leaders and organizations. But, not all change is innovation. Innovation is a word that commonly gets used and can have multiple meanings. Innovation is best defined by producing significant positive change for customers, communities, and the business's bottom line.

Many leaders are curious about where innovative ideas start, and many people are wrong in thinking that innovation occurs from a random action. Innovation is like a puzzle in that the last piece is the result of a series of prior activities supporting the finishing of the idea. Innovation requires opportunity recognition, talent, commitment, sacrifice, and risk-taking.

According to a recent global study by the Boston Consulting Group, more than two-thirds of executives have identified innovation as one of their top three business priorities. Leaders want employees that will take risks and challenge the status quo. However, more than half of these same leaders indicate they are severely challenged to inspire teams to innovate.

How Innovation Helps a Business

Although innovation requires taking risks, failing to innovate can be fatal. The proven benefits of innovation include:

One modern innovation that is impressive to watch is SpaceX's reusable Falcon 9. Space travel alone is challenging, but reusing a rocket by landing it on a drone ship takes the complexity to another level.

Jefferies International, a financial services company engaged in investment banking and capital markets, estimated the customer benefit of the Space X Falcon 9 reusable rocket. If Space X passed on 50 percent cost savings to its customers, this one innovation could reduce company costs by 21% or $48.3 million per launch.

Leaderships Role in Creating an Innovation-based Culture

Culture change should be approached with purpose and caution. Leaders need to realize that culture change is never-ending. Organizational culture is oriented around visual objects, spoken words, and the taken-for-granted processes and perceptions.

Leaders looking to change an organization's culture should clearly define employee behavioral expectations. Then leaders need to align what they regularly pay attention to, how they respond in a time of crisis, where they allocate resources, what they reward, and how they buy, build, and bounce employees with the defined behavioral expectations.

A culture of innovation comprises many different attributes, and learning quickly is critical to building an innovation-based culture. Cultures that produce innovation adhere to three basic rules:

  1. creating innovation teams and addressing the "lack of time" barrier

  2. holding employees accountable and providing persuasive prompts for innovation

  3. recruiting, rewarding, recognizing, and developing innovation champions

An empirical study of over 800 organizations found that effective innovation characteristics are not the same for product innovation and process innovation. For example, the research demonstrated that increasing problem-solving freedom among employees decreased product innovation.

Leaders can increase innovation effectiveness by clarifying the gap between the current and desired state, identifying and removing barriers to innovation, and clarifying innovation processes.

Innovations are dependent on senior leadership's ability to deliver:

  • effective leadership

  • company innovation integration

  • controlled change volume and focus

  • creativity and innovation value realization

  • reward and recognition for desired behaviors

  • internal and external diverse relationships and talent

  • removed barriers and negative reactions to innovation


Organizations naturally reward efficiency thinking and avoiding risk. Senior leadership has a vital role in creating and sustaining a culture supportive of innovation.

Bad leadership habits and ineffective leadership approaches are not destiny, and all leaders need to continually develop at a pace consistent with the change in the leader's world. One of the core philosophies in my new book, Breaking 10 Leadership Bad Habits, is that leaders must continually transform and adapt or fall behind. Sign up to be the first to know when the book is available and begin receiving weekly leadership tips delivered to your inbox now.

Key Summary Points

  • Companies need to continuously introduce innovations to fuel growth.

  • Employees are only as innovative as their environment.

  • Leaders that focus on cultivating an innovation culture and developing innovative leaders outperform their competition.

  • More than two-thirds of executives have identified innovation as one of their top three business priorities.

  • Culture change should be approached with purpose and caution.

  • Cultures that produce innovation create innovation teams, address the "lack of time" barrier, hold employees accountable, provide persuasive prompts for innovation, and recruit, reward, recognize, and develop innovation champions.

Are your followers taking risks and innovating? Let's talk about how we can help you achieve your goals with transformational executive coaching and organizational consulting solutions that work.


BCG. (2022) Overcoming the innovation readiness gap.

Berkun, S. (2010;). The myths of innovation (1st ed.). O'Reilly.

Cameron, K. (2006). Competing values leadership: Creating value in organizations. E. Elgar Pub.

Çokpekin, Ö., & Knudsen, M. P. (2012). Does organizing for creativity really lead to innovation? Creativity and Innovation Management, 21(3), 304-314.

Davila, T., Epstein, M., Shelton, R. (2013) Making innovation work: How to manage it, measure it, and profit from it (Updated ed.). Pearson Education Inc.

De Selding, B. (2016). SpaceX's reusable Falcon 9: What are the real cost savings for customers? Space News.

Gierczak-Korzeniowska, B., & Golembski, G. (2017). Benchmarking in the process of creating a culture of innovation in hotel companies. Economics and Business Review, 3 (17)(2), 101-113.

Schein, P. (2017). Organizational culture and leadership (5th ed). Wiley


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About Dr. Jeff Doolittle

He is the founder of Organizational Talent Consulting in Grand Rapids, MI, and Program Director of online graduate and continuing business education at Olivet Nazarene University in Bourbonnais, IL. Executive leaders who work with Jeff describe him as thoughtful, decisive, intelligent, and collaborative. Jeff is a business executive with over twenty years of talent development and organizational strategy experience working with C-suite leaders in Fortune 100, Forbes top 25 private, for-profit, non-profit, and global companies in many industries.

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