This is the second part of a two-part series in building an innovation culture. Make sure to read Part 1: What You Need to Know Before Creating an Innovation Culture here!
In a perfect world, it’d be nice to be able to order an innovation culture online. Simply press a button and click, there we have it, a ready-made source of innovation. Unfortunately, the reality is a little harder than that, though the evidence shows that it’s worth the effort. Companies like Pixar or 3M aren’t successful just because they’re lucky.
Delivering a steady stream of award-winning films doesn’t happen by accident – it’s the result of deeply embedded patterns of behavior that capture and channel the creativity of employees. In the case of 3M, the ability to keep renewing its vast stable of products (3M has about 50,000 in its range!) depends on something the company has been doing for over a hundred years: Working in ways which deliver a regular flow of incremental improvements liberally interspersed with breakthrough ideas which chart their progress – Scotch tape, masking tape, Post-It notes, and beyond.
It’s not just about products – Toyota is another long-term success story where much of the edge comes from its strong process innovation culture, engaging every member of its workforce in continuous incremental improvement – Kaizen. Toyota has been doing this for over 50 years – and has been counting. The company typically receives over a million suggestions each year and implements most of them.
If we look at members of the "Hundred Club" – organizations surviving and prospering for over a century – we quickly see that their success is due to continuous innovation. Look a little closer, and you’ll see that the underlying culture underpins it.
Take a company like Hella – somewhat of a hidden champion in the automotive industry. From a startup in the earliest days of the car industry, Hella grew to become a global player active in lighting and electronics, well-placed to take advantage of the new game emerging around mobility. This hasn't happened by accident but through a consistent commitment to innovation.
So, having an innovation culture is pretty useful. But merely wishing for one isn’t going to get us very far – as we saw in an earlier blog post. If we’re serious about building an innovation culture, we need to start by understanding what this involves – and that except for a small startup, the chances are that we’ll need several "sub-cultures" under our overall organizational umbrella.
Culture is all about "the way we do things around here" – the shared patterns of behavior that become the norms we live and work by. As Edgar Schein’s model points out, culture doesn't magically appear; it's built up over time by process of rehearsal, negotiation, and practice. Eventually, it becomes part of the fabric of our organization and gets reinforced by artifacts like structures, policies, and procedures.
In an "innovation culture," we’d expect to see structures for creating ideas and developing them into something that creates value. There would be reward and recognition systems in place, measurement frameworks, resource allocation rules, all sorts of things to enable innovation to happen. People working within this system would behave in particular ways, reflecting their shared belief about innovation.
Over time, we want these patterns of behavior to become embedded in the way we do things around here. If we’re successful, they become "hard-wired" into the organization, its processes and procedures, and its rules and structures.
The technical term for these innovation behavior patterns is "routines." They’re a bit like the genetic code which provides the programs shaping how the organization behaves. And just like DNA, these routines are to some extent specific to any particular organization – its personality. The Toyota Way, Google’s entrepreneurial culture, Pixar’s creative candor – these are all company-specific patterns.
How to build an innovation culture
So how do we go about building our innovation culture? An excellent place to start is to think about the key routines we’d eventually like to see in place. How do we search for ideas? How do we make choices about which ones to back? How do we manage the process of development and launch? How we mobilize the creativity and knowledge of our employees, customers, suppliers, and other stakeholders?
Dispelling some myths is important. First, it’s not about following fashion – trying on new clothes because they seem to offer something new. There are plenty of attractive culture recipes around – for example, Google’s policy of giving its engineers 20 percent "free" time, Amazon’s "two pizzas" model for organizing teams, or Adobe’s Kickbox process for employee engagement. In the context of their host companies, these are potent approaches. But merely copying them isn't likely to get us far. It’s like trying to become Beyoncé just by wearing the same clothes as her.
Back to Edgar Schein – we need to build up from foundations, constructing the set of behaviors which work for our organization. We can borrow ideas – a bit like splicing new genes into our make-up – but we need to make sure they are absorbed into our world.
It’s also not about programming – people aren’t robots. That’s one of their strengths in the world of innovation – their ability to think in different ways. It might seem infuriating at times, but rather than try and program culture, it’s worth looking at a different approach – one which creates structures and support within which they can work.
Corning Vice President Waguih Ishak ( and another Hundred Club member), puts it nicely with his concept of "innovation parenting:"
"… in my experience, innovative cultures start with a philosophy and a tone – one analogous to the classic parenting advice that children need both “roots and wings.”
And it’s about trust – giving people space and time, providing them with direction and support but then letting them get on with it; and acting like entrepreneurs, experimenting, learning, and very possibly making mistakes. One of the core values within Hella is the idea of "entrepreneurial responsibility," expressed in an interview with Dr. Jürgen Behrend, Managing Partner, as:
"…an essential prerequisite for the creating of technologically advanced products or for the designing of innovational processes is freedom […] the kind of freedom that our employees enjoy when they are trying out their ideas and breaking new ground. Against the backcloth of entrepreneurial responsibility for all employees, a vital feature in our corporate values, such freedom provides great scope for creativity within the development process."
4 essential steps to building an innovation culture
Cultures don't just happen – they are built up and reinforced. And there are four key tasks at the heart of this challenge:
Let’s look a little closer at each of these.
A good starting point is to clarify what we believe in – the values we want others who join us to share. What kind of organization do we want to be in terms of the way we approach innovation? For example:
"Innovation is not just reserved for so-called creatives or leaders – it is for everyone." - Richard Branson, Founder of Virgin Group
"Failure isn’t a necessary evil. In fact, it isn’t evil at all. It is a necessary consequence of doing something new." – Ed Catmull, President of Pixar and Disney Animation Studios
“Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations.” – Steve Jobs, CEO and Founder of Apple
"Failure is an option here. If things are not failing, you are not innovating enough." - Elon Musk, CEO and Founder of Tesla, SpaceX
But we need to go beyond these high-level pronouncements. Otherwise, they run the risk of simply hanging in the corporate air like so many "motherhood" statements. We need to specify the kinds of behaviors which will support those beliefs. What do we want to see people doing, and hear them saying as they go about their work? What stories do they tell about success – and failure – in innovation, and what behaviors underpin that?
For example, the global design and innovation company IDEO papers the walls of its project rooms with reminders of the behaviors which work for them. Phrases like "embrace ambiguity," "learn from failure," and "take ownership" can be found all over their offices in different parts of the world. But they are not simply slogans; each of them is illustrated by examples and reinforced by exhibits interpreting and adding to them, developed by team members. IDEO realized that its culture was so important to its business that it eventually set up a team with the job of codifying the company's culture and putting it into a book to give to new employees called the "Little Book of IDEO."
Similarly, Toyota has its core behaviors mapped out in a document issued to every new employee which states "The Toyota Way," the company's underlying values and its core practices around innovation.
The next stage is to put in place mechanisms to enable people to learn and practice these behaviors. This might involve training them in specific skills such as problem finding and solving or using design thinking. It might include providing structures to support and guide the behaviors – policies and procedures to be followed. It may be creating an enabling platform – for example, if we want high involvement innovation it makes sense to have a way to share and build on ideas, collecting, and deploying them.
3M’s innovation culture includes a long-standing commitment to the "15% Culture," a policy that essentially gives people time and space to explore their own ideas (an approach borrowed successfully by Google which attributes some of its major successes like Gmail to this model). As 3M technical director Kurt Beinlich comments, "it’s one of the things that sets 3M apart as an innovative company, by sticking to that culture of giving every one of our employees the ability to follow their instincts to take advantage of opportunities for the company."
For Pixar, the ability to challenge and confront is critical to the company's creative success. Pixar recognizes that people may feel uncomfortable speaking out, so it created the "Braintrust," – an approach which offers a "safe zone" kind of meeting in which anyone, irrespective of job title or seniority, can challenge and give honest feedback.
Sometimes, the enabling can come from a physical environment. Hella was concerned to create a different culture to enable it to work in startup mode, challenging, experimenting and playing around with often crazy ideas. Rather than try to do this within its traditional headquarters, Hella set up a different kind of innovation space – an incubator/lab within which different behaviors could flourish.
Back to Pixar, one of the major innovations Steve Jobs introduced during his time there was changing the architecture of the building to allow for creative collisions – people bumping into each other and having conversations. The goal was to use the physical environment to enable and support key innovation behaviors.
Anyone with children, especially toddlers, will be familiar with the challenge of installing behaviors. It's not a simple matter of setting out the rules of the game – most two-year-olds have a wonderful facility for making sense of the world in their own ways and in forcing it to conform to them. If it doesn’t, then they just open their mouth and yell!
Getting them to understand that it's not a good idea to bite people, throw food, or draw on the walls is a matter of embedding a culture. Being clear about the message is a good start, creating an enabling environment helps as well, but another key device is setting a feedback pattern to help reinforce the desired behavior. This is all about reinforcement – and learning theory makes it clear that approach works, using a combination of reward and sanction – for example a visit to the "time out" corner.
It’s the same in organizational cultures. Making them stick will certainly involve reinforcing the message, through feedback, rewards, and incentives. Examples include celebrating innovation achievements, having a "Hall of Fame," recognizing teams and individuals who make a contribution – and particularly making sure that people who take risks or move outside the expected don't get punished or blamed if they fail!
In an uncertain, unpredictable world, simply doing the same thing may not always work. So, for a long-living culture, we also need the capacity to review and adapt. Occasionally, we might have to do a major reset; certainly, we’ll benefit from continuous improvement, tweaking and adjusting as we go along.
We can see this in a startup where there’s a fast pattern of learning and culture development. But we can also see it in long-established organizations where "dynamic capability" – the capacity to reflect on and change routines – is critical to survival. For example, for much of the early part of this century, 3M looked to be comfortably residing near the top of the world’s most innovative companies lists.
But by 2007, 3M found its position slipping; closer examination suggested the company placed too much emphasis on behaviors associated with the discipline of Six Sigma. 3M realized it was losing its capacity for risk-taking, reducing the flow of breakthrough products. A reset was called for, duly implemented, and, by 2010, things were back on track.
For Procter and Gamble, the reset was significant around 1999. After over 150 years of successfully working with a culture which emphasized internal strengths and capabilities, the company embarked on an ambitious transition to "connect and develop" – opening itself up to extensive collaboration with outside players. The move has taken time and involved a significant process of learning and embedding new behaviors – and letting go of some obsolete patterns.
To summarize, if you really want an innovation culture, consider these five things:
- Be clear about what you want. Articulate the culture in terms of behaviors and artifacts. What would you see, feel, and hear if people were doing this?
- Recognize that there are many different innovation cultures, involving various behaviors and underpinning values – ensure a good fit for your company.
- Remember that people can learn new behaviors. Train innovation skills, move them around, and stretch and develop them.
- Involve people in the project – cultures emerge as a result of shared values and beliefs; people buy into behaving in this way. You can’t dictate top-down, but you can indicate the direction you want to go and then allow space for building the culture together.
- Manage cultures actively – reinforce, reward, recognize, and review regularly. And aim to build "dynamic capability" – the capacity to review and change cultural routines. Question "the way we do things around here," including:
- What cultural routines should we keep or build on?
- Which ones should we do less of, or even stop?
- Which new behaviors will we need to deal with the newly emerging challenges?
Ready to learn more? Check out the latest white paper by John Bessant on measuring maturity in high involvement innovation.