Almost every organisation in the world wants innovation. It’s a natural and important response to the constantly changing contexts they operate in, and for most of them, absolutely essential for survival. That’s why innovation is now listed in vision and mission statements, and is a theme at every annual conference. And yet, there’s a problem: almost none of these companies can deliver innovation on demand. With all the energy and effort, they are failing to deliver innovation when and where they want it.
There’s a simple reason why. And a (not quite as simple) solution.
The reason companies are not getting the innovation they want is because they don’t understand that innovation cannot be mandated, demanded or commanded. Innovation is the outcome – the final product – of a culture. It is not an activity, a process or something you can just hold a competition for. It emerges from a systemic environment that nurtures the ingredients that make up a culture of innovation. The good news is that we know what this culture of innovation looks like, and any organisation can develop it.
It is possible to build a culture of innovation, and deliver real innovations month in and month out; but it takes a shift in mindset, organisational culture and the development of a few new skills. In fact, the clue is in noticing that it’s a “culture of innovation” that needs to be built.
A Culture of Innovation
Our team at TomorrowToday Global investigated companies that are recognised as being innovative and identified the key elements of the innovation culture that these organisations have created. We believe these seven elements need to form the basis of any successful approach to systemic innovation. Note that these elements form a system – they must ALL be present for the system to function properly. Companies that are getting innovation right have the following in place:
1. Everyone is an innovator and must be involved in innovation
Too many people think that innovators are the Einstein-haired crazy thinkers who come up with genius ideas. While those people are certainly important to innovation, that’s not actually how innovation works. Think of Thomas Edison and the light bulb – this has become the very symbol of innovation. And yet, not quite as we imagine. Innovation is not about some “light bulb moment” – it’s about the whole process. It was Edison who conceived of the idea of a lightbulb – the crazy idea that electricity would result in light (it’s not that difficult – electricity produces heat, and lots of heat produces light. The trick is to get it to just the perfect point where there’s light, but not so much heat that everything melts or burns up). Edison then hired a small army of technicians to experiment with different approaches. No-one knows how many experiments they tried, but it was certainly hundreds if not thousands. This group of technicians are also innovators (and a good Chief Innovation Officer would give them a lot more credit than Edison ever gave his team, by the way!).
When finally they had their breakthrough and discovered what worked, the “lightbulb moment” happened. But this was still not the end of the innovation cycle. If they had stopped there, we still wouldn’t have lightbulbs today. Edison turned next to a group of engineers, who had to devise a way to make lightbulbs at scale – lots of them, as cheap as possible. This part of the innovation process is often overlooked, but it’s vital: making sure the great idea can be replicated and actually used. Henry Ford’s Model T assembly line is one of the most famous of all “process innovations”. The people who come up with these parts of an innovation are not often hailed as innovators – but they should be.
Once Edison’s factory was churning out lightbulbs, he still needed at least two more groups of people to help him deliver his innovation to the market: logistics and marketing. Building a delivery infrastructure and convincing people to actually buy the product are critical components of delivering innovation.
It’s not a perfect analogy, but I hope it makes the point: too much energy is focused on the initial crazy idea, and not enough effort – and praise – given to the many other parts of the innovation process. Companies that do innovation well ensure that everyone feels part of the process, and that everyone knows their place in that process – including, by the way, the grumpy sod who always says, “But this will never work” – because maybe, sometimes, he’s right.
2. Focus on Business Model Disruptors
Real innovation in the digital age is not merely looking for new products and services or new channels to market, rather it is the ability to change your business model itself. The classic examples of innovation in recent years have almost all been about changing the rules for success and failure in an industry, rather than merely tweaking or augmenting existing industry norms. From Uber to Airbnb, we’ve been almost anaesthetised to these examples, but we ignore them at our peril.
We can look for business model disruptors in the digital space: the power of data to transform our industries, the significance of AI to how we deliver value, the power of a “platform play” underpinned by transparency, openness, sharing and collaboration, or merely looking at what a truly mobile-first strategy could do for us.
We can also look at some of the principles underlying some of the most successful digital business ideas of recent years: gamification, social, building communities, real-time, etc.
For motivation, watch this video about Moonshot Thinking: https://youtu.be/0uaquGZKx_0 (see point 7 below).
My favourite lines in this video sum up this element of an innovation culture:
3. A Culture of Experimentation
This is by far the most important element of a culture of innovation. Companies that do not experiment will not be here by the end of the 2020s. The old model of strategic planning just won’t survive deep, disruptive and constant change. So, we need to create a culture that experiments. Not huge big experiments that could blow your business up, but a culture where everyone in the business is experimenting all the time with small things. We need to encourage – in fact, I’ll go further and say we need to require – our staff to experiment all the time. They should be looking for things that are frustrating, irritating, time consuming, baffling, and they should try other ways of doing them.
This obviously means we have to become more comfortable with failure. Some experiments will produce great results, others won’t, and we need to be happy with that. More than merely accepting it, we need to build systems that actively encourage it. Which leads to…
4. Measure All the Elements of the Innovation Process
It’s a management truism that you get what you measure and reward. So, first and most important is that we measure and reward experimentation. This implies measuring and rewarding experiments that don’t quite work out the way we planned. I am resisting saying we should “reward failure” because that sends the wrong message; but we must reward attempts, even if they don’t succeed.
We then also need to measure and reward each of the people we spoke about in point 1 above. Too many innovation programmes only reward the person who came up with the great idea. But what about rewarding the grumpy sod who shot down a bad idea, this saving your company millions in wasted effort? Or the engineer who plugs away at ways to improve your core capabilities – that’s innovation too, if it enhances your business.
And because we’re building a system of innovation it should be clear that you must not just reward the outputs of the process (i.e. prizes for best innovation), but should also be recognising and rewarding the inputs to the process as well. There isn’t any magic to this, which is why I can’t give you a list now of all the things you should measure and reward. In fact, deciding what should be measured and rewarded in your specific context is, in fact, part of building a great innovation culture. So, have the conversations, ask the questions and work it out for yourself.
5. Embrace Difference
An important aspect of innovation culture is having lots of different opinions and lots of different viewpoints on the same issue. Organisations that are getting innovation right almost always are also doing well in creating diverse teams. Diversity is not just about race and gender – it’s also about personality, experience, academic achievement, age, language, ability/disability, sexual orientation, religion and more. The more diversity you build into your system, and the more confident and competent people feel in expressing their unique viewpoint and insights, they more likely you are to build a fertile soil for innovation to grow in.
6. Remove Organisational Constraints
The two biggest killers of innovation are bureaucracy and best practice. Red tape, onerous regulations, unnecessary systems, unthinking compliance and all other forms of bureaucracy suck the life out of creativity and innovation. And best practice results in people saying things like, “we’ve never done it that way before” and “around here, we don’t do that”.
One of the easiest starting points in building an innovation culture is in this area. Give people permission to express their annoyance at organisational constraints, and enable them to try experiments that will lead to streamlining, removing obstacles and generally making life in the workplace better.
Of course, not all constraints are bad and unnecessary. Some constraints are necessary. Some systems are important. Knowing which are valuable and which are holding us back is what can distinguish great leaders from bad ones. And if in doubt, get rid of it!
7. Moonshot thinking
Innovation happens best when people are inspired to think big, break the mould, step out and be bold. You’re not going to inspire innovation if all people are aiming at is a 10% improvement. Innovation requires inspiration.
Here’s a great example of what a culture of experimentation and a moonshot mindset can create (spoiler alert: it’s pretty impressive) – this two minute video was put together by my colleague, Dean van Leeuwen, one of our team’s chief futurists: https://youtu.be/hHBWSbm6y3E
Innovation for Real in Your Organisation
The seven elements above are ALL vital ingredients of a culture of innovation. This is the necessary precondition for innovation in your organisation. It’s a simple recipe, but not easy to implement. And don’t forget that it is a SYSTEM: all of the elements are required; you can’t cherry pick just a few of them.
If you would like to have one of our team talk to your team about Innovation and the research we’ve done on it, please contact us now. Follow the link for more about the keynote and workshop our team runs on: Innovation for Real.