According to BCG’s Global Innovation Study, the biggest obstacles standing in the way of innovation are often related to company culture.
Culture consists of various different aspects, such as ethics, values, collective beliefs, assumptions, working methods and standards, to name a few. Because culture is such an all-encompassing concept, it’s no surprise that many leaders face challenges when trying to shape their cultures to be more innovative.
Although it can be almost impossible to avoid every hurdle in the process, what matters more is the ability to identify the most common bottlenecks to cultural change and to find ways to remove them.
We’ve previously held a webinar to help you transform your company culture with innovation practices and have also written an article about this topic. This post extends the topic even more and focuses on introducing some of the common challenges companies face in cultural transformations, as well as practical tips for overcoming them.
What is a culture of innovation?
Although innovation means different things to different people, there are certain traits innovative teams share. According to The 2018 Global Innovation 1000 study, the high-leverage innovators have the following key characteristics:
1. They closely align innovation strategy with business strategy.
2. They create company-wide cultural support for innovation.
3. Their top leadership is highly involved with the innovation program.
4. They base innovation on direct insights from end-users.
5. They rigorously control project selection early in the innovation process.
The best innovators excel at each of these first five characteristics and can integrate them to create unique customer experiences that can transform their market.
What comes to company culture, you can tell a lot about a company and its culture by observing how people behave – especially when the boss isn’t around.
Culture of innovation emphasizes on generating and implementing new ideas and is focused on making constant improvement in various areas of the business. Innovation is all about making progress on a company level as well as on a personal level. Therefore, the ideal culture for innovation supports constant learning and experimentation.
Because culture is mainly shaped by people, often the most common challenges are also related to them.
1. Resistance to change
Shaping peoples’ mindsets and attitudes can be challenging. Often, people have their own, fixed ways of seeing and doing things. While there isn’t necessarily anything wrong with that, those underlying beliefs and assumptions can sometimes hinder innovation.
When things have been done in a certain way for a long time, it becomes the norm. This easily leads to people becoming blind to possible inefficiencies in their own work and commonly used processes.
Things that have worked well in the past aren’t necessarily guaranteed to work in the future, which is why it’s important to constantly challenge your assumptions, be open to change and look for ways to improve the way you and your team work. Getting too content with how things are now has already proven to backfire in the long run.
In addition to this, people can be resistant to change because they are afraid of failure. Being afraid of making a mistake is only natural as no one really wants to be responsible for something that didn’t go quite as planned.
These types of attitudes, however, can be changed by creating an environment that embraces the “fail fast mentality”. Innovation involves almost always a certain amount of risk and uncertainty. Because not all ideas can be successful, it’s important to communicate that not all ideas are expected to work and it’s ok to fail as long as people are learning from it.
Start with small victories
Getting started with changing mindsets is often the hardest part. To succeed, it’s important to understand why people are against change.
Often, the reason is that they don’t understand what change means for them. They might, for example, see innovation only as a requirement to work more but don’t necessarily see the possible positive impacts it can have on their work.
Your job is to communicate how these changes affect your team in practice and most importantly, what’s in it for them. Help people understand why change is necessary for the continuity of the business and the well-being of the team.
You can start by making small, gradual changes to the way your team works and focus on getting positive results fast. Consider picking those so called “low hanging fruits” first before announcing any major company-wide reforms.
One way to start is to open the conversation by organizing an idea challenge, for example. Once you’ve gathered a few first positive experiences, people can see the upsides and are more likely to have a more open attitude towards improvements and new opportunities.
2. Not communicating the purpose
Most of our time awake is spent at work. Without a larger purpose for what we’re doing, people can easily start seeing their job as just another pay check. It can also be difficult to get people give their best at all times. Without purpose, there’s no direction, and without direction, there’s really no chance of reaching your destination.
By communicating purpose I’m not referring to giving a motivational speech or hanging inspirational quotes on the office walls. For people to find real fulfillment and meaning in their jobs, they must feel they are an important part of something that makes a real difference.
In the context of creating an innovative culture, it’s important that people know why change is inevitable. If, for example, you’re operating in a declining industry, you simply have to renew in order to survive. It’s your responsibility to communicate what needs to be changed as well as what each individual should do for making this change happen.
Create a movement
Communicating the purpose starts with clarifying your vision and turning that vision into a compelling story people are keen to be a part of. This helps convince people to align their actions towards the common goal and join the “movement”.
If you were uncertain of the continuity of your business, you’d want to make sure your people understand that they need to keep improving their skills and knowledge on an individual level too.
Even if your situation wasn’t as critical, you should still try to constantly learn more about your employees and what energizes and motivates them. Also, when hiring new people to your team, instead of only emphasizing skill, always look for qualities that can help advance your grand vision.
3. Rigid organisational structures
Organizational structures are typically quite hierarchical, especially in larger organizations. Although having some form of hierarchy is necessary, it might also cause some bottlenecks for innovation if it restricts information flow.
Often, middle management, which controls the information flow to and from the front line, ends up as that kind of a bottleneck. Even if managers would want to hear ideas from the front line, they are often too busy and thus end up prioritizing their current tasks over innovation.
Typically, this sends a signal that the employees’ input isn’t appreciated, which again leads to decreased motivation to share any new ideas.
Move decision-making closer to the front-line
Innovation should happen at all levels of the organization. When ideas need to go through several levels of management, there’s a risk that the feedback and evaluation process will slow down and become ineffective. For this reason, too high organizational barriers and hierarchy will eventually kill innovation.
Communication shouldn’t just flow up but also down and across the organization. If middle managers have too much on their plate, they often only see short-term goals and constant pressure to hit their performance metrics, which leaves little room for long-term improvement.
One way to overcome this challenge is to move decision making closer to the front-line. Managers could tell more about innovation from a larger perspective and direct the right type of activity by setting goals that support the right kind of change.
To do that, managers need to trust their employees and let them execute their ideas but also provide them with certain limits in order to stay focused. Creating an innovative culture requires just the right amount of freedom and control.
So, instead of having managers make all the decisions, you should give more responsibility to those who are willing to take it and are passionate about moving things forward.
4. Lack of commitment and reinforcement
Another reason why innovation culture efforts fail is low levels of managerial commitment. If innovation is seen as just an “extracurricular activity”, it easily gets in the way of daily tasks and routines. If management isn’t committed, employees aren’t likely to be either.
Innovation isn’t just an activity for times when there’s nothing else to do. You need innovation to reach your goals now and in the long term.
Innovation is like a habit; it takes time and effort to form one, but once it’s learned and integrated in the daily life, you’ll eventually start seeing desired results. Just like acquiring any positive habit, scattered and short-term efforts don’t last. Change rarely happens overnight and especially innovation requires a true shift in mindset as well as constant reinforcement.
Although employees are coming up with new ideas all the time, the real challenge is to constantly harness those ideas to create more value. Keep offering interesting challenges to increase activity and excitement. If active employee involvement isn’t encouraged, you really can’t expect to see outstanding results because often, the amount of activity correlates with the outcomes.
Tie innovation to actual ways of working and reward active participation
To get the best possible results, innovation should be tied to the actual ways of working and projects your teams are currently working on. This ensures that people are always making progress and learning while doing what they’re supposed to do.
Introducing a few simple performance metrics can encourage people to keep improving the way they work. Be clear about the common company goals as well as how the input of each team and individual contributes to the big picture.
Executive level is also eventually responsible for keeping the conversation active. Inspiring and innovative environment encourages rapid exchange of ideas both vertically and horizontally and constantly provides people with the right kinds of challenges.
In order to keep the ideas flowing, always remember to reward the most active participants. Give credit for great effort and never underestimate the power of positive feedback.
Brian Chesky, the Co-founder and CEO of AirBnb, once said that culture is simply a shared way of doing something with passion. I think we can all agree, as it’s the people who have the real ability to make a culture great.
Improving company culture should be everyone’s responsibility. Your culture doesn’t only concern those working for the company but has an impact on your customers as well. To be able to better serve your existing and potential clients, you want to keep your standards high and work hard towards creating better solutions and services for them because that’s what innovation is ultimately about.
Although you might not be able to avoid all challenges when shaping your culture, you should try to approach them systematically. If you fail to see positive change, look for possible obstacles that might be standing in the way of innovation and start removing these obstacles one by one.
This is the first part of Viima’s guest post series for KISMC. Stay tuned for the next article in which we’ll talk more about how the right tools and practices can help succeed in driving innovation in your organization.
About the author
Julia represents Viima, the best way to collect and develop ideas. Viima’s innovation management software is already loved by thousands of organizations all the way to the Global Fortune 500. She’s passionate about helping leaders drive innovation in their organization and frequently writes on the topic, usually in Viima’s blog.
In July 2014 the Knowledge, Innovation and Strategies Management Club with the support of the Innovation Management Academy and Bulgarian Industrial Association organised a workshop on Innovation Management - how to assess the innovation potential of companies, how to generate new opportunities and how to realise them, more about innovation strategy, innovation culture and leadership as well as open innovation.
More than 50 people joined the workshop where topics on innovation management were discussed. The interest of Bulgarian companies on the subject is well grounded as in the current economical situation if companies do not innovate and invest in R&D it's more likely that they will not survive in the next few years or even much less than this. This workshop is the first of such on the theme of Innovation Management.
If you are interested in participating in similar workshops, please send an email to firstname.lastname@example.org
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The Knowledge, Innovation and Strategies Management Club is a non-profit organisation set up in Sofia, Bulgaria in 2012 to foster knowledge and innovation management across South East Europe. KISMC is supporting the development of the innovation ecosystem in the region by bridging the gap between education, research and business.
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