How to create a culture of innovation

A company is like a shark: it needs to keep moving to stay alive. But to be an industry leader, simply swimming in the same direction — doing the same thing, offering the same products or suite of services to clients — is not enough. True growth comes from new ideas, new ventures, and new creative solutions. True growth comes from evolution.

Innovation happens when employees feel empowered to try new things and to take risks. Creating a culture of innovation involves getting comfortable with failure and being messy..

There must be failures to find the successes and even in “failures” there are learnings that can be applied to not only future innovations but to incrementally evolve existing products. The incandescent lightbulb — the very icon of innovation — was a product of thousands of failed experiments with filaments that Edison and his team tried before finding the right one.

To look across the business landscape right now is to see a plethora of medium-to-large companies in industries that are being disrupted. In pharma, in healthcare, in financial services, in virtually every industry, there are startups with tremendous amounts of capital angling to knock out the incumbent players.

These traditional companies ultimately have two options: evolve or fade away. And no one wants to be Kodak or Blockbuster, former industry leaders that failed to change, so evolve it is. In some sense, what’s required is a return to innovation. After all, it’s in the DNA somewhere; creativity and strategic thinking helped incumbent players become giants, but that culture disappeared as they matured.

They know that they need to get back to being innovative. But it’s vital for them to understand that a successful innovation program doesn’t need to be constantly churning out a high volume of new products. It should be about experimenting and new thinking, an important way to keep vitality and manage risk of disruption. A separate track for innovation

Truly succeeding in the innovation space requires separate work streams and micro-cultures. The people focusing on the day-to-day running of the company need to spend their time there, guiding the traditional business lines and maintaining the status quo. Meanwhile, whoever is responsible for creating new ideas needs to be empowered to do so — both from a resource perspective and from a logistical one. Too often, the innovation group gets bogged down helping manage the primary touch points of the business and never gets to actually innovating.

Or another scenario: A multi-billion dollar company’s executive board and management team wants to get into innovation. So they conduct a job search, paying a head-hunter to help them hire a vice president of innovation. The VP recruits a team, gets a small budget, and starts “doing innovation.” There’s little accountability, oversight or connectivity to other teams — just some buzzwords and a nice story to tell at the quarterly meeting. This isn’t actually innovation; it’s innovation theater.

Innovation, like anything, is something people improve the more they do it. It’s also helpful to have diverse and overlapping skill sets. There’s something very powerful about employees who make things while also being the ones who are doing the imagining. They understand what is possible on a more intrinsic level. There’s a reason Google’s moonshot division only tackles problems using technology that either exists or is demonstratively achievable.

While successful innovation can’t be built on a linear timeline, it’s possible to create a repeatable model. Think about a design sprint where a new product gets developed. Now apply that to an innovation model. Every six weeks, a new problem to solve. Every six weeks, a new solution.

The cycle: understand > sketch > decide > prototype (> validate optional). Maybe one sprint tackles a new loyalty program while the next re-thinks the shopping journey. These prototypes might fail horribly. But they might succeed, too. What really matters is the process and the volume of exploration over time.

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