I have thought about this for a long time and have seen so many companies not considering their culture as one of the main aspects of their success. But it is.
Unfortunately a company can not simply stick innovation into their tagline and expect magic to ensue. If you want to innovate, you have to build the right environment. I know from experience that tackling the organizational culture of a whole company is a long journey. And it is actually more than “just” culture. It is about structure, people, processes and systems.
However, there is no manual for an innovation friendly culture. But innovation has to find us working. A company therefore needs an environment that is obsessed with constant delivery. And that can only be accomplished by rigorously thinking about what business a company is truly in.
One of the best approaches to this topic comes from Simon Sinek. His position is that most companies have no clue why their customers are their customers. Usually they are using manipulation such as price dropping, promotions, fear, peer pressure, aspirational messages or novelty, however, real innovation will change the course of markets or even industries as a whole. The light bulb, the microwave, the fax machine and iTunes were true innovations that changed how people lived their lives and challenged an industry to completely revaluate its business model.
Manipulation works in fact. It leads to transactions but it costs a lot of money, too. However, a transaction does not make your customers loyal to your company. The only other way to influence people’s behavior is to inspire. Executives are always drawn to the quicker cheaper option over the better long-term solution. They never have the time or money to do it right the first time but they always seem to have the time and money to do it again.
According to Sinek, we need to start thinking about the WHY. A company knows WHAT they are doing. WHAT is easy to identify. Executives know HOW they do WHAT they do. Whether they call it a differentiating value proposition, proprietary process or unique selling proposition – HOWs are often given to explain how something is different or better. However, most companies can not clearly articulate WHY they do what they do.
Your organizational culture can help people understand how you are better than the competition. Here are some suggestions that will make a difference.
1. Define your purpose. Your belief.
People do not not buy WHAT someone does but WHY someone does it. It is because our limbic brain is responsible for all of our feelings such as trust and loyalty. It is also responsible for all behaviors and all decision-making. The part of our brain that controls our feelings has no capacity for language. The part of our brain that controls decision-making does not control language – so we rationalize. This impairs the value of polls or market research. Your customers can’t tell you WHY they bought a product from you so again you focus on WHAT they bought. A vicious circle.
2. Build a dedicated team that is empowered and has separate resources.
From my point of view you need a variety of people that voluntarily cooperate. For example people with a true innovation mind set. They should be masters of strategic imagination, provocative inquiry, creative problem solving, agility and resilience. Together such a team is prepared to focus on the future and on key trends. They need challengers of the status quo and rule breakers in order to create best practice.
3. Nurture a questioning attitude and make it part of the company culture.
This attitude is reinforced by constantly experimenting, encouraging the discovery of new perspectives and doing things differently, which can be achieved by acknowledging and rewarding success as well as failure. But also punishing inaction. You need to support risk taking and change.
4. Tolerate mistakes but never low quality.
A performance based culture inspires us all to do our best hence we need to reward achievements with praise and pay for great performance but constantly keep raising the bar. Eric Ries, the author of The Lean Startup, is the vanguard of such a performance based culture. He suggests starting to acknowledge individual’s intellect and to recognize them as human beings worthy of respect regardless of hierarchical levels.
5. Establish a structure of small groups, teams and units.
Great products are the results of small and great teams. They are more likely to creatively overcome obstacles. The teams should be diverse and multidisciplinary with frequent contacts across functions, shaped like a T, with many centers of power with at least some budgetary flexibility to support their creativity. Get rid of redundant organizational layers, silos, bureaucratic structures and behaviors in order to stay agile and flat. This way your people will feel a sense of ownership and will be responsible for their own results, which in turn encourages action.
This degree of freedom will heighten the sense of accountability among team members, promote creativity and ensure that individual expertise is fully exploited. Managers should act as a catalysts and pioneers as much as their team members.
6. Create a great working space.
However, in order to be able to creatively explore new options and learn through strategic experimentation I believe any company needs an open, eclectic space optimal for flexibility and group work. A greenhouse with the right neighbourhood and movable parts is what you need.
This will ultimately influence the whole operation mode of your venture. Creating systems to capture ideas, creating new incentive and compensation systems focusing on rewarding risk taking and experimentation. Individual recognition will be more and more important than salaries, bonuses or promotions. To create a culture of delivery and work at high speed the use of digital technology will be crucial as well. Establishing closer and more responsive relationships with customers beyond simply opening new online sales channels will create advantages and create barriers for competitors. The use of digital technology to create individual solutions by recognizing people’s preferences and patterns is vital. By linking various departments by providing real time access to the entire data is the cornerstone of an innovator-friendly organization.
You need to establish a learning network powered by data that enables you and your team to collaborate and define milestones and performance criteria for reaching out into unknown space. I know that creating a culture from scratch is impossible and that there are barriers and bridges to change. Simply because culture happens.
But I also know that your personal behavior and the behavior of your colleagues will set the course for creating the right environment and a positive culture. At least you can start with the space right away. So…
7. Put everything and everyone together and start continuously doing things.