Culture of innovation – what it is and how to build it

Is incorporating new technologies necessarily innovation? I do not think so. In this article, we will review what innovation is, its relationship with technology, and some keys to innovating and building a culture of innovation.

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According to an article published in the Harvard Business Review, the adoption of the latest technologies has accelerated in the last century, being a major driver of change in all areas.

Source

Historically, technology companies have been the main competitors in the innovation field and they are the ones that have caused disruptive changes in both the social and cultural dimensions, along with the changes in the ways of consumption.

But, is innovation merely incorporating new technologies? I don´t think so.

In this article, we will review the basics of innovation, its relationship with technology, and some keys to innovating and building a culture of innovation.

About the definition of innovation

There are many definitions of innovation. The ISO 56000 Innovation Management Standard, the excellent Board of Innovation, and books on the subject or papers from experts such as James Harrington maintain coincidences and have some peculiarities. But my intention here is not to discuss the concept of innovation but share some suggestions that I consider can help boost innovation.

How to innovate – tips

  1. Learn to identify innovation opportunities

In 2017, Amazon bought Wholefoods, which meant a disruptive change in supermarkets. No one saw it coming, and yet there were thousands of signs that could have tipped off their competitors. Let’s look at some important milestones in the company´s history:

  • In 1999, Amazon bought 35% of homegrocers.com
  • In 2006, Amazon started selling food
  • In 2007 it launched Amazon Fresh
  • In 2016, Amazon announced the launch of the Amazon Go Grocery Store and the Wickedly Prime food brand.

The problem with change is not that you can’t see it coming, but the fact that it is very slow until it isn’t anymore. Every change has previously shown signs and there are people able to read those signs and predict the transformation.

If you want to generate disruptive innovations, you must first be vigilant to signs of innovation from others. How to do this? Look in the metasystem – beyond your environment – and keep an eye outside the sector you are in.

  1. Establish solid and standardized processes

Build in your organization an environment that helps to innovate. Establish processes for ideation.

Some keys to generating processes that stimulate innovation:

  • Develop an agile culture and identify the facilitators of collaborative work.
  • Standardize practices such as working on improvement projects and applying Design Thinking techniques.
  • Don’t penalize mistakes. On the contrary, reward those who take risks.

And, finally, an additional suggestion: in order to have time and resources to innovate, you must reduce resources dedicated to waste – those activities that do not add value. Standardize processes, delegate decisions, and train people to improve efficiency.

  1. Focus on understanding your client or stakeholder

Scott Berkun defined innovation as “a significant positive change”. Change is not necessarily innovation. To be considered an innovation it must matter to someone – otherwise, it is not innovation. 

Nor is it a race to incorporate the latest technologies. For something to be truly innovative, it must add value to stakeholders such as customers, employees, society, or shareholders.

Innovation is only such if it has value for someone. For this reason, it is essential that you understand who your stakeholders are and what they consider value.

Establish systematic practices and tools to gather information and feedback about your client or stakeholder. Immerse yourself in their customer journey and analyze the requirements your clients have now and will have in the future. This is the starting point for innovation.

Related: 3 key stakeholders you should add value to

  1. Experiment and take risks

“To invent, you need to experiment. If you know in advance that it’s going to work, it is not an experiment” explains Jeff Bezos.

An innovation must pass two “tests” in order to be successful in business terms: the Value Hypothesis and the Growth Hypothesis.

The Value Hypothesis “if we could harvest the fruit with drones we could speed up the harvest” is related to validating -– learning from – the benefit for stakeholders. 

The Growth Hypothesis “15% of current farms would like to buy at least 5 drones” is related to validating that these stakeholders will indeed be willing to buy the product.

Hypotheses must be validated with experimentation. And, as we know, any experimentation can lead to disappointments. An experiment does not have good or bad results, they simply confirm the hypothesis or not. This mean we must be willing to accept that any of these things can happen:

  • that we validate the hypothesis, learn and continue the development,
  • that we partially validate, learn, and make changes, or
  • that the experiment does not validate the hypothesis and, therefore, we could pivot and test a new hypothesis.

Most of the innovations we know today had at least one previous failed version.

Let’s assume that you already know the problem, need, or opportunity that you want to address with your next innovation. There are multiple possible solutions. How do you know this one will work?

Test a minimum viable product (MVP) and evaluate the results. Work on improving your innovation in short cycles and make sure you learn in the process.

Of course, there are risks. But if you don’t test you’ll never know if you’re on the right track. Don’t forget the main purpose of experimentation is to learn.

  1. Make data-driven decisions

If you have taken point 3 seriously, you have most likely collected a large amount of data about your stakeholders. But, are you making correct use of this data?

Digitization and use of data do not necessarily lead to better decisions. On the contrary, if you do not establish practices to make effective use of information, it will probably serve only to justify decisions you have already made or will make.

And it is not just about best practices. If you want innovation to be part of your organization’s day-to-day, you should focus on building a culture of innovation. Let’s look at some keys that can help you.

Keys to a culture of innovation

Establish a sense of purpose

“Find your why” says Simon Sinek. A large part of the workers has always sought much more from work than economic remuneration. Finding meaning in what we do and doing what we are passionate about and what mobilizes us have been, and are today, fundamental requirements when looking for a job and sticking with an organization. And this is truer every day.

A study conducted by McKinsey reveals that 70% of employees find a sense of purpose in their work.

Additionally, a joint survey by Imperative and LinkedIn shows a clear relationship between a sense of purpose and organizational growth. In fact, 58% of companies with a clearly articulated purpose achieved growth of 10%+ over three years, while 42% of companies without it showed negative growth.

If your collaborators have a real conviction that they are positively impacting the environment with their work, this will show in the results. If the desire to innovate and improve is part of the culture of your organization, you will be giving your employees a reason that will motivate them and drive their development – ​​and with it, the development of your organization.

Empathize with your collaborators so that they empathize with your customers

Empathy – the ability to put yourself in someone else’s shoes – is a core competency needed to develop a culture of innovation.

If you want your employees to empathize with stakeholders and truly understand what your customer needs, the first step is to consider the employee experience as a fundamental part of your business strategy.

And when we talk about empathizing, it’s not just about today but also about empathizing for the future. We must anticipate future needs, discover the unsaid (or not yet said) and devise solutions that project into the future.

Build a culture of continuous learning

The passion for learning stimulates innovation. We innovate, we create something new because we are willing to experiment and learn from mistakes. Because we believe that there is always something we don’t know, something more to learn.

However, the passion for learning is not innate and it is also not taught. But, the good news is it can be promoted with certain changes in the forms of leadership that transform the culture. A culture that should be based on principles such as:

  • Teamwork and networking: All ideas are welcome. The more ideas the better, no matter who they come from and what position or title the person has.
  • Agile implementation and no fear to fail: The fear of error paralyzes us. In an agile culture, everyone will understand that failure is a necessary part of the learning process and will dare to take calculated risks, quickly learn from those mistakes, and re-test improvements.
  • Self-criticism capacity: We all have skills that we master and also weaknesses – even leaders. Knowing our areas of development is essential for growth.

Build a data culture

Measuring and making decisions based on data should be a common practice in any organization that wants to innovate.

How will we know if we have been successful – if our client or stakeholders have found value in our new product – if we have not first established indicators that allow us to measure the results? How will we learn from mistakes and turn apparent failure into future success?

A data-driven decision-making culture is critical for experimentation, continuous learning, and innovation.

Focus on talent development

Many organizations make the mistake of thinking that creating an “innovation” department is enough to become an innovative company. But innovation only happens if the culture is ready for it. And this is a task of the Human Resources area.

We need to put focus on the development of talent and the necessary skills to innovate.

Human Capital areas can help:

  • Identify talent: Recognize facilitators and innovation leaders (who will not necessarily have a leadership position) and provide them with opportunities to develop.
  • Create awards that promote innovation: Launching an innovation award or creating a group of innovators are just a few ideas.
  • Develop leaders: Empower leaders, managers, and directors to change their mindsets and become enablers of innovation.
  • Review the structures to promote networking: Horizontal structures and relationships between areas help generate ideas, bringing to the table a richer variety of perspectives.

Conclusion

If your organization doesn’t have a culture of innovation, maybe you can find an “innovative genius” that can drive innovation. But this “genius” will have to fight against countless people who will question his ideas. And, although we all have heard these unusual success stories that triumph despite all adversity, the truth is that there are 99% of failure stories that surely have not reached our ears.

Instead, if you focus on developing a culture of innovation, you will have a team of innovators. The entire organization will complement each other to generate innovation.

You will establish practices and processes that will stimulate creativity and that will make ideas come to fruition. You will develop a sense of purpose and skills such as empathy that will allow you to add more value to stakeholders.

Innovation requires effort and teamwork. But if you develop a culture of innovation, you are already half of the way there.

Author: Raúl Molteni

Cover photo by Daria Nepriakhina 🇺🇦 on Unsplash

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