What does it really take to establish a sustainable culture of innovation?

09 of November of 2020

When I think about innovation, I don’t only think about the literal definition (“Invention*Commercialization = Innovation” as MIT’s Bill Aulet, Managing Director of the Martin Trust Center for MIT Entrepreneurship and Professor of the Practice at the MIT Sloan School of Management would say), I also think about the impact and the effect it can have on an individual, team and organisational level. Although innovation can help provide solutions to the global challenges a company and the world are facing, it is more importantly a way of working. Innovation activities, however, must live and grow alongside the rigid structures and processes the organisation has to manage complexity and uncertainty at scale. This is challenging. Ford and AT&T are examples of how you can be at the top of your game one minute, reshaping how people live and work, and the next, fighting for relevance, struggling to rekindle the innovative spirit that once drove them.

What is an innovation culture?

So, in an ever-changing world with ever-accelerating business cycles, how does a company go about creating a sustainable culture of innovation? First of all, let’s begin by understanding what is an innovation culture. And to answer this, it is important to understand what an organisational culture is. According to this HBR article, culture is “the consistent, observable patterns of behaviour in an organisation”. Culture is not transmitted by messages on posters in offices or by having more comfortable chairs, or by pay policies, or by the hours spent on training. Culture is something that is transmitted by percolation and collaboration.

Therefore, an innovation culture is simply an organisational culture that truly values and supports innovation, so that employees can actually make innovation happen around the organisation.

“Tell me and I forget, teach me and I may remember, involve me and I learn.” Benjamin Franklin

What makes a culture innovative?

Harvard Professor Gary Pisano, in his article The Hard Truth About Innovative Cultures, describes why creating a truly innovative company culture is such a challenge:

“The easy-to-like behaviors that get so much attention are only one side of the coin. They must be counterbalanced by some tougher and frankly less fun behaviors.

A tolerance for failure requires an intolerance for incompetence. A willingness to experiment requires rigorous discipline. Psychological safety requires comfort with brutal candor. Collaboration must be balanced with individual accountability. And flatness requires strong leadership. Innovative cultures are paradoxical.

Unless the tensions created by this paradox are carefully managed, attempts to create an innovative culture will fail.”

Being able to combine attributes and behaviours that are typically seen as mutually exclusive is really what creates an innovative culture.

Making Innovation Stick

Clearly, there is no magic trick for accomplishing this goal. Advocating it is one thing. Making it happen is another. Established habits will need to be questioned, as will collective assumptions, mindsets, silos and outdated ways of doing business. Clearly, the bar will need to be raised for trust, communication, teamwork, experimentation and the willingness to learn from mistakes. Innovation requires a commitment from employees to devote their energy and ideas to generating new opportunities. It requires a commitment from leadership to support blue-sky thinking and tolerate failure. Culture is the key to developing this commitment. By focusing on leadership, communications, rewards and recognition, environment and structure, businesses can unleash the power of innovation, embed it in their culture and transform their organisation to make it sustainably innovative.

Zuritanken – the quintessential innovation culture programme

This year, I have been lucky enough to join Ferrovial’s Zuritanken team for its fifth edition. This programme is just one of many that have been designed and executed with the objective of developing an innovation culture across the entire organisation. These initiatives have facilitated the identification and implementation of innovation solutions for our businesses and have provided added value to our clients. I believe a culture of innovation needs to be based on one fundamental idea: innovation arises from ideas, which are developed by people, and therefore all employees have the potential to be innovative.

Zuritanken was launched in 2012 and is an ideation programme sponsored by the Chairman, which provides the employees with an opportunity to develop their creativity skills together with their colleagues. It provides them with the time and space to develop innovative ideas in order to help Ferrovial improve as a company. Born from the union of Swahili expression “nzurin” which means big and the Norwegian word “tanken which means idea, the Zuritanken awards have now become established as Ferrovial’s innovation awards with a community of more than 3,800 Zuritankeners who have generated around 3,200 new ideas.

Other Examples of Innovative Company Cultures

Microsoft – Following the PC age, Microsoft became stagnant. Their culture had become individualistic and bureaucratic, and collaboration had given way to internal competition, and a fear of failure. Things changed when Satya Nadella became the CEO, and her immediate push to embolden employees to be more creative has been exemplified by the company’s annual hackathon. The event has helped spark a shift in the culture towards a more innovative, empathetic and purpose-driven culture with a focus on a humility and growth mindset.

Decathlon – Decathlon is a company of sports fans created for sports fans, which prides itself on its autonomous and innovative culture. Its lateral organisational structure encourages free communications that drive innovation. Workplace, a platform developed to allow employees to share, contribute and offer feedback, regardless of their positions or departments, amplifies this attribute.

Pernod Ricard Winemakers – At Pernod Ricard Winemakers, strategy, leadership and innovation are intrinsically linked and are well-connected to the global business to ensure there is a joined up approach worldwide. This helps to drive connection, passion, energy, and a commitment to innovation across all areas of the business. Having their CEO and chairman lead their Innovation Steering Committee was the place to start in creating their innovation culture.

So the moral of the story is, innovation is not just a strategy. For an organisation to truly embrace and benefit from a constant flow of new ideas, it must create a culture of innovation. It is true to say that cultural changes start from the top (leaders really do need to become role models for the kind of behaviour that is expected from everyone)…but can also happen from the bottom-up.

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