Chris is the CMO of FlexMR, a hybrid research agency & tech firm that empowers brands with agile insight. He also hosts the MRX Lab podcast.
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If at any point in the last decade you’ve picked up a business book or attended a management school lecture, you’ve likely heard tales of the fabled innovation culture — environments in which staff is empowered, new ideas are supported and greater financial value is derived. In fact, you’d be forgiven for thinking that a culture of innovation is a great cure-all for business ills.
Examples of companies that have created innovation-led environments are wildly successful. Top technology firms, such as Microsoft, Spotify and Tesla regularly top the innovation charts. And advice on how to replicate this success practically mirrors key B-School teachings. Flatten your hierarchy. Encourage blue-sky thinking. Hire the right people. Why then, with such clear benefits and simple steps, are cultures of innovation generally short-lived? Why is such an environment still an aspirational goal rather than the modern standard?
Because while every step may sound simple in theory, there are some difficult choices and complex actions that lie behind each. Throughout my own career, I’ve been involved in creating innovation-led cultures for three very different SMEs. Here’s what I’ve learned along the way.
Culture Is Everything
Let’s start with the basics. That word, culture. It’s important to recognize that changing culture is a lofty goal. It’s not something that can be achieved in a single project or even multiple projects. It’s wider than that. For a start, culture is driven from the top down. If you want to change how people behave and what they prioritize, that can’t be done with words alone. Leadership teams must set the example.
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And that doesn’t just mean (as I’ve seen a few too many times) holding a nebulous innovation day once per quarter. Creative ideas can’t be switched on and off at will. Changing a culture requires rethinking everything about your business. You need to ask yourself: How are our actions shaped by extrinsic and intrinsic motivations alike?
You may want to start with your own behaviors, documenting them and asking what needs to change to encourage others to change too. But soon the net will broaden. Are your teams structured in a way that enables cross-pollination? Do staff have the time in their day to take ownership over new ideas? Are your compensation structures geared toward innovation? Nothing can be off the table.
Systemization and Documentation
Naturally, innovation involves a degree of experimentation. Every new idea is something different to try. Whether it’s an incremental evolution, disruptive proposition or anything in-between, there’s a need to be systematic in process and thorough in documentation. Because while the idea of agile innovation may be exciting, the truth is a little more dull and pragmatic. The truth is that not every new idea will succeed. Just because something is innovative doesn’t make it inherently successful.
And therein lies the mundanity. In order to create an impactful culture of innovation, firms must adopt rigid, systematic processes of evaluation. First, an idea must be conceptualized. Then, information needs to be gathered on who needs to be involved and in what capacity. Existing benchmarks must be studied and data gathered to define what success looks like. And even then, careful consideration should be given to both risk factors and resource investment — all before any work in earnest really begins. Then, of course, there comes the need to thoroughly document, report and review experiments in the field before any potential widespread adoption.
Creating Capacity
Innovation takes time, investment and willpower. It’s true that those closer to the front lines of your business are in generally better positions to see what could make a difference. How are customers reacting to products and experiences? What issues affect their efficiency and job satisfaction? Where can improvements be made? These are the questions they are best poised to answer, and often the source of the best innovations. But front-line staff also bear the brunt of real-world pressure. Especially true in small and medium-sized businesses, the day to day takes precedence over everything else.
It’s fruitless to create a culture that supports innovation in theory but doesn’t provide staff dedicated time to be a part of it. New innovations take time to develop, to take through an experimental procedure and report back on. Either through systems that kick in once an idea is brought forward or by providing a persistent amount of allocatable capacity, empowered staff needs access to both the tools and time to be a part of any innovation-led culture.
Embracing Risk and Failure
Finally, for all its wide-ranging benefits, creating a culture of innovation is not a risk-free endeavor. In fact, it opens a business up to a much more exposed position of risk. While some of this can be mitigated by rigorous criteria for progressing with new ideas, there is still a sunk investment that should pay dividends in the future.
But still, this means embracing the risk that some innovations fail. Some do not add value. Some detract from unexpected sources. And some simply take a long time to develop. It’s this fear of risk and failure that most often puts pause to cultural changes. Because culture means everything. And changing the fundamentals of how your business works, with such large unknowns in play, is not a move that every leader is willing to make.
So, where does this leave us? I hope this has been an illuminating read. Certainly living some of these challenges brought to light for me the difference between academic theory and practical action. My parting advice would be this: Innovation-led cultures do help companies scale up, push boundaries and become market leaders. But it’s not the only option. Equal success can be found in collaborative cultures, purpose-led cultures, customer-first cultures and more. The question to answer at the end of the day is: What type of company do you want to build?
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Author: Chris Martin, Forbes Councils Member
