The Holy Grail: Changing Innovation Culture - The Bakery %

The Holy Grail: Changing Innovation Culture

Andrew Humphries

In response to ever growing threats that have caused the average life-span of a company to fall from 60 to 17 years, we have seen the need to innovate faster and at a larger scale becoming more and more widely accepted amongst large corporations in recent years.

This has led to a proliferation of new approaches to innovating in tandem with the start-up ecosystem. Every corporation that we meet has a slightly different approach to ‘open innovation’ from partnering, accelerating, venture building, to M&A (build, partner, or buy). Essentially, everyone is striving to find the best methodology that works best for their organisation.

However, a successful approach to build, partner, or buy, isn’t the only thing that is needed to protect large organisations from extinction. In addition to attempts to bring outside talent and ideas into their organisations, corporates are looking harder at how they can provide the individuals already inside their businesses with the right mindset to innovate as part of their day job. At The Bakery, we’ve spent the last 7 years helping large corporations all over the world achieve better results from their innovation efforts we see the need to transform culture in order to create real meaningful change becoming ever more prevalent. 

So why is an innovative culture so important, exactly?

An organisation’s employees are fundamental to success in innovation; they are best placed to generate impactful ideas, appraise the feasibility of chosen solutions, and ensure its future adoption. Most of the corporations that we work with have experienced impactful innovations go to the wall given the lack of mindset, internally, needed to embrace and utilise new innovations throughout the wider business. 

Therefore, without a culture that is ready to suggest, embrace, and cherish new innovations, all the hard work and resources that go into transformation will likely be in vain. Leaving large corporates open to the risk of losing competitive advantage to their rivals (big and small) who are willing to maximise opportunities for innovation. This, in turn can cause rising costs, loss of marketing share, a fall in reputation, and a drain on the best and brightest talent.

If a company is to buck the prevailing trend and extend their life span well beyond the average 17 years then a targeted effort must be made to not only innovate at pace and scale but to ensure that their culture evolves as well.

So what can large corporations do to foster a culture of innovation?

1)    Give all departments responsibility for achieving innovation 

Innovation labs that are siloed from the rest of the organisation can achieve some transformative new initiatives (if they aren’t all theatre, that is) but they won’t help embed an innovative mindset that pervades the wider organisation.

Over the years we have worked closely with many innovation teams and find that while these teams are excited to get things done, it is often hard to rally support and implement innovation within the wider business. The innovation team/department/lab should be seen as the specialists that guide and shape innovation around the organisation, not the sole guardians of innovation for the business. 

Businesses should encourage employees to be responsible for innovation within their own department and look to the innovation department as a resource that can help them achieve their goals; a source of knowledge to be utilised.

To help your teams achieve this and feel responsible for their own innovation, it’s important to ensure that they have targets for trialling/implementing innovative ideas and the necessary time allocated to do achieve this. The most famous (yet often contested) example of this is Google’s 20% rule, a policy that allowed Google staff to spend 20% of their time on any project of their choosing.

In practise, the important considerations here are that all of your staff are allocated sufficient time to make innovation part of their routine and objectives around innovation are added to their targets to ensure it is given the importance it requires.

2)    Celebrate, and reward failure

Understanding that failure is not only inevitable but an essential part of the innovation journey is a fact that corporates are beginning to recognise.

But recognition won’t change culture and failure won’t celebrate itself in a world that has traditionally based its very existence on avoiding risk and prioritising success metrics and stakeholder returns.  

With this in mind, how can you build in a process that goes out of its way to recognise, communicate, and celebrate “failure”? We see companies who address failure head on and discuss its positive impact have the best shot at tackling the fear of failure that frequently holds innovation back.

To change aspects of corporate culture that have been embedded for so long, such as “omission bias” and “loss aversion”, this inevitably needs to come from the top.  We have helped large corporations of all shapes and sizes to implement transformational initiatives across their business and yet we still see time and time again, that these aspects of their culture are the hardest to budge without direction from C-Suite. 

When it comes to creating a culture that celebrates failure, you need to spend time and effort getting senior stakeholder buy-in. Do the leg work gathering the research and examples of its importance and use this to persuade your leadership to change their language and get behind the message.

3)    Build a cohesive yet multi-layered approach to innovation

I admit, it is much easier said than done to create and successfully deliver on an innovation strategy that simultaneously solves your current challenges, protects from external threats, and aligns with strategic goals. However, building a truly cohesive innovation strategy is an essential part of any approach to innovation that is destined for long term success. Furthermore, without a clear and well communicated harmony between your strategic goals and the chosen approach to innovation, your employees will never get behind it. 

Being able to clearly demonstrate the ‘how’ and the ‘why’ behind innovation efforts is an essential step to getting people on board, changing attitudes, and creating a new mindset. Essentially, generating the buy-in needed to make innovation happen around the organisation.

One thing that is sometimes missed by large corporates is the need to build a multi-layered approach to innovation; the use of multiple approaches to drive different outcomes depending upon the objectives and specific challenge to be tackled. 

A one-dimensional approach won’t solve all challenges and suit all teams. Rather, it will lead to some departments being left out when the spoils are shared. Create a multi-layered approach to ensure that all ripe challenges and opportunities for innovation can be tackled – spreading the benefits as evenly as possible throughout the organisation, an important factor if a company-wide culture is to be embedded.

4)    Be patient

We regularly see innovation strategies being thrown out and redesigned every year or two due to a gap between expectations and reality; but doing this does underlying damage to the reputation of innovation initiatives throughout the business. It inevitably reinforces the hesitation of the “if it isn’t broke, don’t fix it” brigade, making the long-term desired change in culture all the more difficult to achieve.

Whilst we certainly believe in how essential it is to continually assess and gauge the relative success of an innovation strategy, at the same time, the biggest predictor of success can often be patience.  Reiteration can be great, but it is also valuable to trust in the process, rather than chop and change up what you are doing every time that a new leader joins the company.

The once widely accepted ‘Three Horizons’ view of innovation from McKinsey may be changing but an underlying point remains – innovation does not happen overnight and the road to success will inevitably be bumpy. 

Success in innovation, and particularly the holy grail of culture change takes time and persistence – stick to your strategy (whilst continually looking to refine) and believe in the vision.

It’s commendable that so many leaders have a desire to create and facilitate an innovative culture, but this change does not happen by accident. Leaders need to build steps into their approach that not only enable, but also drive forward a change in mindset.

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