What is a culture of innovation anyway?

I read a significant amount of material on innovation. Even though I’m deep in the trenches of innovation, and have written a fair bit about it myself, I think many of us (self included) are guilty of asserting positions without diving into them very deeply. When we talk about the importance of culture, especially when we advocate a “culture of innovation”, we often write or say these words as if there is a general agreement as to what it means. While I suspect that everyone has some interpretation of that statement, I thought it would be interesting to write a post that describes what I think a “culture of innovation” is, after all, and ask you, gentle readers, to append your thoughts about my oversights or areas of over emphasis.

After all, the more we define our methods and clarify our approaches, the better we’ll communicate and the simpler it will be to actually implement this stuff rather than simply talk about it. Herewith, my dissertation about “a culture of innovation”.

To define this, we should start first with what is “corporate culture”. To me, corporate culture is the set of assumptions, beliefs, practices, formal and informal rules and attitudes about how a company operates. Corporate culture evolves over time, and is both formal and informal. Corporate culture often shifts over time as well. Young entrepreneurial firms and startups have a culture that thrives on risk, speed and change. Growth is paramount. Older, established firms have a culture more typically based on rules, hierarchy, achievement of predictable milestones. While many firms have elaborately detailed organizational hierarchies and established workflows, corporate culture is often much more informal, and more powerful than any individual, and often more powerful than senior executives appreciate or expect.

In an organization with a strong corporate culture, people learn to fit in quickly, adjust their thinking to the predominant culture or are quickly ostracized. Corporate culture, more than any other factor, details how people think, what they believe is important and valuable, and dictates how work should get done. It is difficult to change, especially under duress, and often communicates much about the values and intentions of a business. For a blog post, that’s as far as I’ll go to define culture. There are plenty of other resources that, given time and space, will do a better job defining culture.

Now, to our main question: what is a culture of innovation, and is it very important? If corporate culture is as overarching and powerful as I’ve described above, if it can dictate how people think and what people do, then culture is clearly either a significant barrier to innovation or a significant enabler to innovation. And yes, it is binary. Most cultures, especially in larger companies, are focused on consistently achieving quarterly goals, eliminating risks, reducing variances. These corporate cultures make perfect sense – they are tuned to achieve what the markets tell the firm is important: consistent quarterly achievement against financial goals, with few hiccups or surprises. However, in most firms these cultures are at best resistant to innovation if not actively fearful of the implications: change, uncertainty, new tools and skills, variance, failure and risk.

A culture of innovation, therefore, indicates that an organization is at least willing to embrace many of the tools and techniques that innovation requires, but moreover is able to endure the potential outcomes. For every innovation success there are many attempts and several failures. Every innovation is potentially cannibalizing an existing product or service, and innovation forces constant change – not just to products and services, but to experiences and business models. This means that a culture of innovation is agile, nimble, constantly adapting and learning, open to experimentation and many points of view. A culture of innovation tolerates and learns from failure, incorporating the best parts of the failure into new efforts. A culture of innovation understands that innovation is a continuous, consistent process rather than an occasional effort. A culture of innovation seeks out internal and external viewpoints and perspectives that are different from what the team “wants” to hear, and works closely with customers, partners and even the disinterested to understand future needs. A culture of innovation has as much invested in understanding the future as it does in delivering value in the present. A culture of innovation constantly generates ideas but also has the ability to commercialize the best ideas and ships valuable products. A culture of innovation isn’t just an idea machine, it is a commercialization machine.

So, how does a firm shift its culture to become more innovative? Just as it takes miles and a lot of space to turn a battleship, a corporate culture doesn’t shift overnight. A culture of innovation is enhanced by leadership that reinforces it, but as 3M demonstrates a resilient culture of innovation can bear leaders who aren’t supportive of innovation, and rebound when new leaders are announced. Strong cultures are more powerful than strong leaders. To build a culture of innovation, establish clear, consistent innovation goals, hire people with broad perspectives and interesting networks, encourage collaboration internally and externally, seek out new needs and new customers or market segments, train your teams on innovation tools and techniques, shift reward systems, compensation systems and most importantly evaluation systems. Make innovation as important as whatever the culture once thought was the most important thing – and do all of this over an extended period of time, because cultures have great inertia, a lot of patience and much resilience. A half-hearted approach won’t work, and once a culture feels threatened it will simply burrow more deeply into the fabric of the organization.

We are simply too blithe about “a culture of innovation” as if this concept is simple, obvious and well-defined, as if we can take the red pill and suddenly our culture embraces innovation. Most cultures are actually resistant to innovation – at least its implications and many of its outcomes – so we need to move beyond the throw-away lines and recognize how important a culture of innovation is, and how difficult it is to achieve, and also how valuable it will be to have a culture of innovation when innovation becomes one of the few differentiable competencies left to us.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.