August 17, 2023

What does a culture of innovation actually mean?

While embedding innovation into company culture has become the go-to answer for today, not all business leaders have been able to create a culture of innovation that generates remarkable results. In fact, the impact of innovation remains precarious, with only a third of business transformations resulting in improved and sustained performance.

The lack of consistent success could be due to confusion about what a culture of innovation actually means and how it manifests in the workplace. To repeatedly develop cutting-edge innovation that makes a positive impact requires a careful balance between open-mindedness that sparks new ideas and structure that enables new ideas.

This is the business leader’s guide to achieving a financially viable culture of innovation.

What is a culture of innovation?

Often businesses make the mistake of not being proactive or practical enough when establishing a culture of innovation. For example, their efforts stop at including it in the company values and mission statement. Or companies set unrealistic expectations such as a number of new product developments every quarter. 

A culture of innovation is, in fact, a workplace environment that consistently identifies areas for improvement and opportunities for growth and finds ways to effectively resolve and leverage them. This results from a balance between open-mindedness and structure. 

Open-mindedness supports a culture of innovation by:

  • Encouraging creative thinking and sharing new ideas without fear of judgement or being dismissed,
  • Challenging the status quo because there are no preconceived ideas of what innovation should look like, and
  • Breaking down barriers to create opportunities for experimentation, inspiration and collaboration. 

Structure supports a culture of innovation by:

  • Creating processes that guide team members, such as how to validate new ideas,
  • Ensuring the effective use of time, resources and money so that investments in innovation are balanced with calculated risks, and
  • Enabling the team to learn from mistakes and gain from both individual and collective failures. 

Innovation efforts won’t result in meaningful results unless the organisation integrates a balance of these elements into the fabric of its business. 

What meaningful results can a culture of innovation garner?

The key indicators of success in a culture of innovation are efficiency, effectiveness and revenue. Companies with a culture of innovation gain a competitive advantage because they are proactive about utilising new technology, adapting to change and meeting customer needs. They don’t merely keep up with change, but instead are the leaders of change in their industries. 

As well as improving customer satisfaction which has a positive effect on revenue, a culture of innovation attracts top talent. And while having top talent boosts effectiveness and results even further, alone it isn’t enough. Businesses that deliver on innovation attract top talent because of increased job satisfaction that is created due to the elevated unity, autonomy and sense of purpose in the workplace. 

How to foster a culture of innovation

Having outlined the importance of establishing a meaningful culture of innovation and the benefit, here are our top tips for fostering a culture of innovation that achieves significant results. These tips ensure results by giving structure while maintaining the open-mindedness and flexibility needed to encourage creativity. 

Give structure through strategy

69% of executives believe having well-defined innovation processes is essential for establishing an innovative culture. The strategy should cover every step of innovation, from regular brainstorming sessions to analysing the results of an implemented idea, to ensure best practices are followed to achieve the best possible results. 

Ensure clarity across the business by setting the parameters for the types of innovation you encourage and the reasons behind this focus. Organise opportunities for collaboration across departments and management levels to create a diversity of thought that challenges preconceptions. After experimenting with ideas for innovation, analyse the results for effectiveness and efficiency so time and resources are funnelled into viable ideas. 

Whenever there is a failure, whether a new idea fails to meet standards or an implemented innovation not achieving its intended results, give the team the framework to learn from mistakes and take those learnings forward. To achieve your full innovation potential, organise employee incentives for engaging in innovation to ensure it gets the prioritisation it needs to succeed. 

Be open-minded to encourage creativity

As well as having a strategy in place to track progress and improve innovation metrics, encourage the creativity needed to come up with new ideas. You can empower employees to use creative thinking in multiple ways including through idea hackathons. A sense of autonomy and trust is important. It gives employees the confidence to pursue their own ideas, be active in brainstorming sessions and challenge suggestions because they don’t fear negative repercussions. 

The inspiration needed to be creative and challenge the status quo comes from a diversity of thought. That comes from a diverse workforce with different backgrounds, experiences, specialisms and interests. A workforce that thinks and works the same will struggle to find ways to do things better. 

To fully benefit from such diversity, ensure a flow of information. Projects should be visible to the whole workforce creating opportunities for another team member to make a valuable contribution or inspires a new idea. Be open to where innovative ideas could come from. It may be a conversation at a brainstorming meeting, customer interaction, or even market analysis reports from different sectors. 

Embedding the value of innovation into your company culture can be a challenge because the freedom needed for creativity to flow can conflict with the strategy required to produce results from innovation. However, meaningful results can be produced when given the time and resources to ensure structure through strategy and open-mindedness through creativity. 

If you struggle to establish, maintain and garner a positive impact from a culture of innovation, consider getting an innovation partner on board. At The Cornerstone Advisory, we can act as an in-house innovation hub for our clients, ensuring they have the capabilities to scale their innovative streak throughout the organisation. Get in touch with us to find out more.

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