Corporate Culture Is Dead. Long Live Innovative Culture! Here are 5 proven ways to create an environment that will rocket your equity value like nothing else

Learning Centre > Corporate Culture Is Dead. Long Live Innovative Culture! Here are 5 proven ways to create an environment that will rocket your equity value like nothing else

When you think about “corporate culture” you may think about a drab and stuffy office space where dreams go to die.

When you think about “corporate culture” you may think about a drab and stuffy office space where dreams go to die. When you think about “corporate culture” you may think about a drab and stuffy office space where dreams go to die.

When you think about “corporate culture” you may think about a drab and stuffy office space where dreams go to die. These are the images often satirized in TV sitcoms and Hollywood comedies.

But when you think about “innovative culture”, your mind probably takes you to wild places: automated offices, futuristic napping pods, and splendidly wacky brainstorming rooms. These are the images popularised by Silicon Valley startups and tech companies from the mid-2000s.However, these images are just the physical spaces. Real innovation happens at the cultural level of the workplace. Few workers, managers, or leaders realise the challenges and hard work required to build a sustainably innovative culture. In this post, we rise to the challenge and talk about the good and the bad that need to be considered when building an innovative culture.

What is an innovative culture?

For some experts in the business world, what we traditionally think of as “corporate culture” is dead (or dying). A workplace culture features several things that interact with each other, like the work environment, leadership, shared values, and company expectations. Corporate culture can be deliberately shaped or happen organically through everyday decisions and norms.However you define company culture, there’s one thing for certain. A sharper, more specialised version of culture has emerged in the business world, the innovative culture.An innovative culture can be difficult to pin down and quantify. It’s one of those “you’ll know it when you see it” kinds of things. It’s most evident if some of the following qualities are displayed at a company:

  1. A willingness to try new things;
  2. An ability to accept (and learn from) failure;
  3. A psychological safety net;
  4. A collaborative environment; and,
  5. An accessible leadership team.

Why is innovation important to emphasize in a company culture? You can find the answer to this question in the innovation value pyramid.

What is the innovation value pyramid?

The innovation value pyramid is a visual way of describing how an innovative culture can both exist and persist at all levels of an organisation.The ultimate goal is to achieve a culture that is both innovative and self-directed, which is possible through the transformative efforts of several stages in the pyramid:

  1. Low-value organisations rely heavily on their owners or senior leaders to enact innovation and growth.
  2. Mid-tier business value can be achieved by steadily encouraging idea-generation from employees.
  3. High-tier business value is obtainable through a combination of people-driven innovation and systems for innovation. Systems are the policies, processes or procedures to encourage, track and implement new ideas.
  4. Optimum business value is a combination of the lower layers plus a healthy dose of culture-driven innovation.

The optimal business value can only be achieved by fostering a strong team-based environment where all staff are dedicated to continuous improvement. It happens when systems are in place to monitor and track innovative efforts but staff are also continuously improving those systems.The sustained and innovative culture is a virtuous cycle. Once achieved, business improvements are self-directed and autonomous since they’re embedded into the way that a business operates.

Balancing the equation

How can you get to the top of the innovation value pyramid? At Innovolo, we're realists. We know that for every exciting activity you can do to spur innovation, there’s also a catch.As Milton Friedman famously put it, “There’s no such thing as a free lunch.” To attain unbridled innovation, there’s plenty of less glamorous activities that need to be done, too. You must work hard and balance the equation with some not-as-fun things to make sure your innovation culture is healthy.Here’s the hard truth for getting an innovative culture. You need to mix in tough discipline with all the wacky experimentation. Your employees must be frank with each other in addition to being collaborative. And, your leadership team must have a short leash with incompetence while still accepting failure.These things are not easy to do. It’s a delicate balance but one that’s worth working hard to obtain. Next, we’ll show you how to balance the equation.

1. Encourage new ideas, even if they fail.

The best company policy is one that gives employees a safety-net should they fail. One of the most stifling things for ideation is a fear of failure. Poor corporate culture is one that punishes failure by forcing employees to work overtime or take on someone else’s work in an effort to “make up for it.” These tactics can leave employees overworked and demoralised.Rather, companies need to learn from their mistakes. By increasing your return on failure, you can earn back any resources that were wasted on an idea that went nowhere. Encouraging this mentality at the workplace is the safest way to encourage new ideas without the fear of failure.

  • Balance with: a tough approach to ineptitude. While it’s great to tolerate failure and learn from mistakes, you also need to create a balance. One mistake here and there might be acceptable, but there’s a whole different story if those mistakes transform into performance issues.

If ineptitude persists, the best organisations make the tough decisions to move on to better talent. It’s important to identify if expectations aren’t met. A short leash can ensure that inadequacies don’t cause a drag on momentum or potential.The evidence is out there that some of the most competitive and innovative firms are building performance frameworks to match their innovative cultures. One such case is Adobe, which cut traditional performance reviews from their workplace in favour of having regular “tough discussions” with employees who struggle with performance issues. The lesson? The best culture isn’t the “nice” culture that’s like having dinner with mom & pop. It’s better to have a stern lecture and set high expectations rather than settle for mediocrity.

2. Give your employees the time and space to incubate new ideas.

Part of the process for fostering a culture that challenges the norms is to make sure that employees have the opportunity to do so. It’s considered a double standard if a leadership team asks for more creativity and innovation all while preventing staff from being able to live up to that expectation.An innovative culture gives employees time to be innovative. For some, that might mean a few hours of desk time per week. For others, it might come in the form of innovation meetings at a team or department level.

  • Balance with: reining employees in if they get too distracted. Yes, it takes time and opportunity to create and validate new ideas. But one of the hard truths for building an innovative culture is that it takes discipline, too. You’re running a company, not a madhouse.

A good rule of thumb is the 80/20 rule popularised by Google. This guideline suggests that 80% of your employee’s time can go toward regular activities while another 20 percent can go to side projects. The two different activities are complementary: taking a breather from mundane tasks can help further boost productivity once the employee returns to regular duties.

3. Promote a candid but respectful environment.

To be able to really dig into innovative concepts, a trusting and safe employee environment is required. Employees need to be able to dish out criticism respectfully but also need to be receptive to constructive feedback. That's not easy to do.Does it sound like anarchy? It doesn't have to be. Staff need to be direct with each other but fair. They need to be open but straightforward.

  • Balance with: demonstrations by leaders. The leadership team must be able to accept (and request) opposition - even to their own ideas. If a leader requests feedback, employees will develop some well-organised and constructive criticism. Getting them into that habit can trickle down to how employees interact with each other, too.

4. Get your leadership group involved

A leader shouldn’t just create a task and assign it down the chain, rather, he or she should put their own hand up and get involved in the idea incubation. Sometimes this is best accomplished by having a leader make an example of themselves as a champion of innovation. Seeing buy-in at the executive level can break down common barriers that hold employees back from speaking their mind.

  • Balance with: ways to get creativity and innovation happening from a bottom-up approach. While it’s great to get leaders involved with everyday processes, employees also need to feel like they own those processes. A great way to ensure that employees are involved is to make sure that robust mechanisms are in place to move ideas up the chain.

In other words, open up that pipeline! Tools such as a distinct chat room for brainstorming, monthly employee workshops, or a manual with step-by-step procedures can help get all staff members involved in the process.

5. Rely on your employees to execute.

An innovative culture is one that puts faith in employees to follow-through with their projects. However, it happens all too often where the business doesn’t give the employee the right tools to be able to do so.As an example, consider an employee who has an idea to improve an engineering process. Who does that employee turn to? Some managers have an “open-door policy” and so the employee explains the idea to his manager. But, the manager is overwhelmed with her own daily tasks and so forgets to follow-through with the new concept.Great ideas can often fall short of expectations when there isn’t a way to get momentum for those ideas.

  • Balance with: a mechanism for the idea to progress. While it’s great to put faith in your employees to lead side projects, some businesses also lack a well-defined routine for progressing those new ideas.

An innovative culture needs to be balanced with a rigorous and consistent process for how ideas are brought up, evaluated, and carried forward for implementation. It also needs to be transparent. What works for one employee has to work the same for the next employee.For a passionate and constructive innovative culture, it’s important that employees feel like their ideas are valued and plausible, or else they’ll shy away from ever bringing them up in the first place!

Innovolo’s Innovation Maturity Certification Scheme

Without a doubt, managing the competing requirements for building an innovative culture is no easy task. The company has to be fair but tough, employees have to feel safe but disciplined, and leaders have to be present but not overbearing.One route to finding this balance is through Innovolo’s Innovation Maturity Certification Scheme (IMaCS).It’s one of the first steps in an Operational Kickstart programme intended to help SMEs get started with innovation and research and development. Through a partnership with the UK Research and Development Facility (UKRDF), your organisation will be assessed for opportunities and challenges for innovation across four innovation dimensions:

  1. Technology;
  2. Customer experience;
  3. Employee experience; and,
  4. Products and services.

As we’ve seen, even the most mature organisations can fall short of striking the perfect balance to achieve an innovative culture. A programme like IMaCs can help prevent otherwise unavoidable problems from arising in your innovation transformation, such as:

  • Employee resistance and complacency. Not everyone at your organisation will be willing to take on the challenge. The very same people who thrive in a stagnant organisation are the ones who will resist change.
  • Chaos and confusion. Because of the fine balance that’s needed for an innovative culture, the transformation can be quite chaotic. Without strict guidelines in place, employees can become confused and the business will suffer because of it.
  • Dishonesty and hand-holding. Change can be a difficult pill to swallow. Immature organisations lack the accountability to make it happen. They often use euphemisms for change and soften the tough realities. This can hold the business back from true growth.
  • Trying to skip ahead. There are no shortcuts to building an innovative culture! Culture is a highly interpretive matrix of norms, behaviors, and unspoken rules that are impossible to change overnight. Only the most diligent organisations can reach the goal through hard work, discipline, and of course, some exciting new ideas.

For more ways to transform a stagnant, risk-averse culture into a vibrant, innovation-driven one, reach out to us today!

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