Insights

Why and How to Promote a Culture of Innovation

como inovar

 

Many business and public decision-makers consider that the most important element for innovation is technology. It's natural. Technology increasingly transforms our lives.

 

In the future, a large part of our lives will be digitized, connected, automated, robotized. In addition, decisions associated with the development or purchase of technology are visible, direct, measurable. But the essence of success in innovation lies in culture. An innovation culture is a strategic advantage these days.

Silicon Valley is the place in the world where more innovations are developed, more rapidly escalated, and more successfully. Several countries, regions and, cities have formally defined and announced the goal of replicating Silicon Valley, and have structured programs linking their companies and entrepreneurs to the world's largest innovation hub. Many of the world's largest companies are represented in Silicon Valley. Entrepreneurs and businesses from all kinds of areas visit Silicon Valley to learn how to stay more innovative. I myself, in affiliation with my company, have already received and guided more than 300 Portuguese executives in immersion programs in Silicon Valley and supported 70 Portuguese startups. I have lived in Silicon Valley for ten years, having lived and worked in three European countries, including Portugal. I share my learning here during this journey, which I consider relevant for the Portuguese context.

When we think about Silicon Valley we think of computers, mobile phones, artificial intelligence, automobile, blockchain, augmented reality, Apple, Google, etc. But, after all, what sets Silicon Valley apart? It is not technology. Silicon Valley is, above all, a state of mind. A state of mind focused on challenging established business models, seeking change, rewarding creativity, which does not penalize error, ambition, difference, different ideas. But always focused on pragmatic methods and results.

 

1. What is the determining factor for innovation?

What makes it possible for large companies to remain leaders’ decades after decades? Technology? Rarely, because over the decades’ technology has changed. Strategies and organizational models? These are instrumental because they change according to the circumstances.

What these organizations have that makes them successful over time is a culture of innovation and leadership that allows them to anticipate, create and manage change. Companies that win in the market have an organizational environment that inspires and impels each employee to be alert to innovation opportunities at any time, when no one is watching (outside of the innovation and presentation of strategic plan and innovation events), and to implement innovations that make sense for the organization. It is to have a culture of innovation.

According to the futurist Gerd Leonhard, the companies and organizations success in the future will be determined by human traces (like creativity, imagination, intuition, emotion, and ethics) rather than by technology. To win at innovation it's essential to go beyond technology and focus on people and the environment that makes them more innovative.

 

Innovation is made of people

Innovation implies mental and cultural preparation. In organizations, the mental and cultural plans are intimately connected - one condition the other. The mental plan requires a mind predisposition to think differently, to do differently and to promote difference, in order to create value for the final client. The cultural plan implies an open and prejudicial organizational context, which welcomes and promotes curiosity, creativity, and disruptive thinking, and which welcomes all ideas, no matter how absurd they may seem, for a well-crafted absurd idea may give rise to more interesting results. In each organization, the champions of innovation must be identified, valued and supported, facilitating and driving change.

 

Innovation is for people

Many innovation efforts fail to be diverted to the researcher's idiosyncrasies, especially in Europe; focus on the perspective and opinions of the creator. Each innovative idea, concept or model aims at creating value for an identified recipient: a consumer, a user, a beneficiary. For this reason, tools like design thinking have become so relevant to the innovation process.

It is based on the concrete identification of a need ("pain") specific of the observed and justifies think, design and test a solution to solve it. Due to addressing issues in an experiential way and from various angles, design thinking has become a critical tool for innovation.

 

Innovation is done by people

In innovative companies, innovators are more valued than innovations, which turn out to be the result of the first ones. And as the innovation is made by people, we return to the cultural concept and the individual responsibility that it is up to each one to assume in their organization. Innovation without an organizational culture that encourages it does not materialize. Innovation implies a balance between creativity and discipline: creativity to think differently and find new solutions; discipline to make, err, persist and redo until you reach the value-generating solution. For this to happen incentives for certain behaviors and attitudes are needed.

 

2. But after all, what is a culture of innovation?

An organization can have several formal and organized initiatives to promote innovation. These result from the formal strategy, from the defined objectives. But on a daily basis, outside of these initiatives, how do you innovate? What happens when no one is looking? Out of this control, there are values, relationships, behaviors and attitudes that condition performance and organizational results. Innovation must be a responsibility of all, at all levels of the organization. It is not unique to an innovation department or management team, it is shared at all levels, by all functions, and incorporates specific competencies and responsibilities. Innovation is done daily and throughout the organization. From our experience working in more than 900 companies around the world and almost a decade of direct interaction and work with innovators such as Steve Blank, universities such as Stanford, or leading companies in Silicon Valley through the GSI - Global Strategic Innovation, we have identified the characteristics of a culture of innovation:

  1. shared values;
  2. beliefs;
  3. habits and routines;
  4.  behaviors

Valuing speed and making clear decisions is also critical to a successful culture. Delaying, complexifying, justifying and not meeting deadlines is contrary to a results culture. The key lies in simplification, in evidence of results, even if negative, as this allows you to close one path, save resources, and jump to another opportunity.

Another fundamental behavior is the assumption of responsibility for the results obtained, whatever they may be. Otherwise, there is hardly any autonomy and confidence to take risks and work in collaborative teams.

A culture of innovation rejects and expels the position of the 'devil's advocate'. Innovation begins with a divergent process of expanding possibilities. It is therefore essential to judge less and be receptive to all contributions and ideas. A seemingly absurd idea can turn out to be great. At a later stage of the process, however, it is important to have counterpoint and discussion of the applicability of the idea provided that the above-mentioned values ​​are applied.

Finally, a culture of innovation, like any healthy culture, must be strongly based on ethical principles, without which the necessary confidence for autonomy, sharing and risk-taking are lacking.

 

Cultural trait defining

However, these cultural traits apply in a different way in companies, according to the competitive structure of the economic sector and the competitive positioning of each company. Each organization must define a characteristic and distinctive cultural trait, in line with its strategic positioning. Many companies considered innovative have cultural characteristics that they have defined strategically and that they want to see reinforced constantly.

That's how, among others, Apple focused on "Design, design, design", Google intended to be "A place where you make things happen," Logitech promoted the "Think like a start-up" and Amazon culture in a 'Customer obsession'.

 

3. How is an innovation culture promoted?

Promoting an innovation culture is the challenge of most organizations. Organizational culture is a two-way road. On the one hand, it is strongly conditioned by the dynamics originating at the bottom of the hierarchical pyramid, in a bottom-up sense. On the other hand, conditions that encourage the implementation of cultural traits can and should be created, and in that sense, it is top-down.

In a very pragmatic way, and from the cases of the most successful innovative companies, eight steps are suggested:

  1. Create a stimulating physical space that fosters creativity and a positive and relaxed mental state. Small changes can have a big impact.
  2. Set the defining trait of your company's innovation culture in alignment with the business, i.e. with the needs of the customer or the end user. Culture must reinforce the differentiators of the company. Identify your differentiator, share with the organization, and promote debate and creativity on the defining trait.
  3. As an innovation leader, you must create a sense of accountability in creative people in terms of the organization's objectives, core focus areas, key capabilities, and stakeholder engagement.
  4. Define and communicate desired attitudes and behaviors. Distinguish operational errors from unsuccessful attempts at innovation. Repeated behaviors lead to work habits. Reward and encourage those you want to see in your organization.
  5. Promote an environment of new ideas inside and outside the company, and allow time and resources to be presented, analyzed and discussed. Promote discussions of ideas and workshops. Open innovation is one of the best channels of innovation and often with lower costs.
  6. Empower champions, give them autonomy, time-bound, and responsibility to develop good ideas. Reward the successes and spread the word.
  7. Change incentives if you feel they are not appropriate. Sometimes the incentive is not in value but in internal recognition. Cherish and celebrate. Communicate successes, however small they may seem.
  8. Provide the framework and tools that facilitate the innovation process. Innovation does not occur simply because it is desired, it is the result of a process that involves risks, uncertainties, and needs careful management of the balance between creativity and discipline.

 

Each organizational culture is unique. It is necessary to discover yours and develop the aspects that will make your company more innovative, not in the innovation strategy document, but on a daily basis, driven by all elements of the company in a natural way. With this in mind, LBC has developed 3 soft-spoken programs on the Culture of Innovation to help organizations in this process:

  1. Assessment and Characterization of Organizational Culture
  2. One-day Workshops on Culture of Innovation
  3. Projects for the development of a Culture of Innovation

 

If you are interested in stimulating the Culture of Innovation in your organization, you can contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.. It will be made a customized program and adapted to the needs of your company, always focusing on Innovation.

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