7 Ways To Create An Innovation-Friendly Culture

Organizations that struggle with new product innovation typically don’t fail because their leader isn’t a visionary. It’s not that the team isn't creative or smart. It's because, as humans, we favor routine. Innovation takes most of us outside our comfort zones and often requires new skills and behavior change. 

Before we start working with organizations on creating processes to support innovation, we encourage the leadership team to first examine their culture and skill sets to make sure that they have the people and environment to be successful.  Or, what we call focusing on people before processes.  

Here are the 7 things we recommend leaders do:

1. Start with a Strong, Well-Articulated Vision 

The CEO and leadership team must first articulate a strong, clear vision for the innovation strategy. A great example of this comes from Jennifer McCollum of Linkage, Inc. Linkage is a leadership development consultancy that specializes in assessing, training, and coaching leaders. While the company had evolved over its 30-year history, it still relied on a people-intensive, highly customized services model. So, Jennifer began to develop a strategy of “productizing” its services to help the organization scale and grow. 

Jennifer started by anchoring the organization around the ambitious vision of impacting leadership effectiveness and equity in 500 organizations by 2022. Setting this goal would require the organization to innovate and get out of the business of highly customized services. This very clear vision is memorable, measurable and is what is guiding the entire organization through a true transformation of its business model.

2. Plan for Behavior Change from the Top Down

While a strong vision is necessary, it is not enough. Leadership teams must also model innovation-friendly behavior.  For example, the Linkage leadership team developed The Linkage Way, an outline of specific behaviors to help change company culture one behavior at a time.  
Behaviors such as: 

  • “I ask questions and I bring ideas,” 
  • “I adopt new technology,” and 
  • “I seek out multiple perspectives.”  

​To help reinforce the behaviors, each week a member of the leadership team shared their experience witnessing or practicing one of the organizational behaviors. The Linkage Way is now rolling out company-wide. Employees from all divisions and at all levels share their experiences with The Linkage Way organizational behaviors on the internal chat board. 

3. Hire and Develop the Right Skills

Organizations also need to acquire the right skills either through training and development or hiring. For example,  bringing in new talent and also working with outside consultants and trainers to teach the rest of the team critical product innovation skills.

What do we mean by “product innovation” skills? These competencies include being able to:

  • Identify breakthrough product opportunities based on data and pattern spotting 
  • Translate those breakthroughs into a great user experience and financial plans 
  • Design well-functioning products or solutions      
  • Define how a new product shows up in the market 
  • Analyze new product usage data
  • Soft skills such as communication, influencing, and problem-solving

​We also recommend finding people who can work with uncertainty and doubt such as “Chaos Pilots,” a clever label for people who can “create structure within chaos and take action.

4. Make Room for Diversity of Thought

Once organizations start to bring in new skills, we have to make sure that new hires don’t suffer “organ rejection” from the rest of the organization. When you commit to bringing in new skills, you also need to commit to welcoming and leveraging the diversity of experience and thought.  We recommend investing in training leaders on how to practice inclusive behaviors including how to create “psychological safety” on teams.  Read more about building an agile team in this Harvard Business Review article. 

5. An Organizational Structure that Facilitates Collaboration and Agility

Even if organizations have brought in the right skills and are inclusively allowing these skills to flourish, functional silos can kill innovation. You can read more about this in The Silo Effect by Gillian Tett.  Innovation tends to flourish in cross-functional teams because these teams have more diversity of perspective and can act more rapidly to develop and test product ideas. 

6. Company-Wide Technical Acumen 

For most organizations, “new product innovation” means using technology to create new products.  As such, technical acumen, also known as digital fluency, is an incredibly important competency.  Not just for our teams tasked with innovation but for the entire organization. Boston Consulting Group (BCG) describes the importance of digital fluency well: “If the growth in digital talent outpaces the ability of the rest of the workforce to keep up, the company as a whole will be left behind.” 

7. A Test-and-Learn Mindset

Last, but definitely not least, organizations need to develop a test-and-learn mindset that is applied at every stage of the new product development process. Read more about this approach here.

A test-and-learn product design process is a new way of working for many of us. But the payoff can be significant. A recent survey of 170 executives who work in R&D, strategy, and new product development roles at large public companies found agreement on several benefits of taking a test-and-learn product design type of approach:

  • Speed! 
  • Making decisions based on evidence and data
  • Better quality feedback 
  • More flexibility

Consider asking for help
True innovation is hard but a necessity in a fast-changing environment.  It requires getting outside of our comfort zones as well as new skills and behavior change.  We are here to help.  

Find out what to look out for next when designing tech-enabled services in 2021, read our white paper on the Top 7 Product Innovation Mistakes to Avoid in 2021.