Innovation is the lifeblood of organizations, helping them to get ahead in the marketplace or close the gap with competitors. Yet innovation is not always a natural skill within organizations. A 2023 McKinsey study found that while 80% of executives thought that innovation was a top priority, only 6% of executives were satisfied with their innovation performance.
There are a number of factors that impact an organization’s ability to innovate – from the hiring of a Chief Innovation Officer to the introduction of new technologies or cross-functional innovation teams. When it comes to driving day-to-day innovation in the workplace, another often unspoken factor is culture. Recent data shows a clear connection between innovation and culture:
We may miss the impact of culture because it serves as the foundation for innovation in organizations. A strong and supportive culture won’t guarantee success around innovation. But there is unlikely to be meaningful and consistent innovation without it.
There are elements of the culture that can have a disproportionate impact on innovation. These elements help satisfy certain needs that trigger and enable an employee’s ability to innovate:
Employees have to be seen as a priority as well. In many less engaged/less productive organizations, we hear a common refrain from staff members: “If only our leaders would treat us as well as they do our customers/patients/community at-large.” Even where increased pay or bonuses are not an option, leadership can show their dedication to employees through other perks and benefits, particularly those related to work-life balance and employee well-being.
REI, the outdoor gear and apparel maker, is particularly effective in this regard. From its product sustainability standards to its efforts to make outdoor activities more accessible to customers, the company puts its mission front and center. It has also been supportive of its employees, offering discounts on REI Adventure travel and “Yay Day,” where employees receive two days off a year to partake in an outdoor pursuit.
Day-to-day decision-making processes can also be helpful in this regard. If a team member has an idea to propose, they are more likely to have confidence that idea will be considered and implemented in an organization that embraces change, employs an agile mindset, and takes a proactive rather than reactive approach, staying out ahead of its challenges:
Another signaling device to the organization is how leaders incorporate AI and big data into their decision-making. An initial embrace of AI and other new technologies suggests that leaders are receptive to new ways and patterns of thinking. With big data, the implication is that leaders will be making decisions more objectively, allowing the best ideas and innovations to win out.
A key tenet of psychological safety is believing that leaders have your back, regardless of the outcome. It is significantly easier for leaders to create that impression when they are visible and accessible to employees – e.g., they walk the halls, communicate directly with team members, and make themselves available to team members who are having problems.
Beyond accessibility, team members also look to leaders for day-to-day support. Empowering leaders start by providing their team members with the information and training they need to excel. They then create opportunities for team members to shine – in meetings and presentations, on teams and committees, and through other stretch assignments. Google has institutionalized this process through its “20% time” policy, which allows employees to spend 20% of their work time on any projects that interest them.
The sense of empowerment can be reinforced through real-time feedback and recognition, which helps employees to calibrate their actions while assuring them that their contributions are known and appreciated by leadership.
A caveat here. The benefit of psychological safety is it allows employees to try and fail, without fear of reprisals. It is important, however, that the organization employs a process to capture and learn from those failures. Otherwise, there can be an endless stream of innovation activity without achieving the desired results.
Inclusive in this context means embracing people with backgrounds and perspectives. Hiring for fit to culture doesn’t mean that everyone has to fit the same mold. That can quickly lead to groupthink, stifling new ideas at the source.
Once new team members are hired, they need to be made to feel welcome. Effective onboarding can acclimate new hires into the culture, while mentors and buddies can help new hires navigate the culture and find their pathways to success. Other, more subtle norms – around language, dress code, even pictures on the walls –further encourage people to be their true selves.
It is also important to break down barriers between departments. Cross-functional meetings, supported by a broader range of knowledge sharing, can enable groups to air and address their differences, expanding the range of what’s possible. Some organizations accomplish this through the use of shared platform channels or discussion boards. Spotify goes one step further, embedding people into other departments as part of its organizational learning process.
Carpe Diem as Your Trusted Partner in Innovation
At Carpe Diem, we see innovation as more than idea generation. To elicit ideas and to bring those ideas to fruition is an organizational skill, enabled by leadership, systems, and culture.
Carpe Diem offers a breadth of services across three pillars – leadership acquisition, leadership development, and leadership advisory. We help clients to drive innovation by finding the right leaders, onboarding and coaching those leaders to make them more effective with their teams, and defining and enhancing the organization’s culture.
We find that organizations don’t always have a firm grasp of their culture. So, our work in that area begins with a timely but comprehensive assessment of the current state. Rather than just looking for the presence or absence of different cultural traits, we rate each trait along a spectrum – e.g., proactive → reactive, collaborative → competitive, empowering → controlling. This allows us to highlight key cultural strengths, but also to more readily identify cultural barriers that may be getting in the way of innovation efforts. We then work with clients to reduce or eliminate those barriers.
The recommended changes to the culture often go hand in hand with more tactical changes to systems and processes. In one example, a healthcare manufacturer needed to fill an innovation gap with competitors. As part of that effort, they added a new project management function that allowed them to more effectively prioritize and execute projects. They also changed the incentive structure, which to that point had favored scale and efficiency over innovation. From a cultural standpoint, a key part of the effort was to increase trust between the marketing and R&D functions, through trust building workshops and other team building activities.
These market insights from Carpe Diem Global Partners are gathered from the firm’s extensive client work with Board, CEO, CXO, and CHRO leaders in public and private multinational companies. For deeper, custom insights, contact Craig Kamins at ckamins@carpediempartners.com.