Importance of Building a Culture of Innovation in the Workplace

Innovation culture is a much-talked-about topic, but businesses fail to acknowledge its importance. We explore why it’s essential for all workplaces and how you can benefit.

Successful businesses push the boundaries to succeed. They constantly evolve, create new techniques and work on fresh projects that leave their competitors far behind.

For every Pixar, there is a DreamWorks chasing its tail, trying to keep up with the latest trends. For every Apple, there is a Motorola desperate to reach the same levels of technical innovation and cult appeal.

But what sets these firms apart from their competitors?

Could it be that these global giants are embracing the ongoing digital revolution and facilitating an innovation culture throughout every aspect of their business?

And what does this mean?

Far from being a buzzphrase, a successfully integrated innovation culture can be the key to success.

Let’s find out more.

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What is innovation culture?

To understand innovation culture, it’s helpful to break it into two separate components: innovation and culture.

Innovation

The clear definition of innovation is the development of new methods or ideas.

In a business context, the Organisation for Economic Co-operation and Development (OECD) suggests that this can be broken down into four distinct subcategories:

  • Product innovation
  • Process innovation
  • Marketing innovation
  • Organisational innovation

From here, we can logically assume that innovation in a business context is about the creation of new products, new services, new technologies and new ways of working.

Culture

As we know, a business’s working culture defines how employees work.

In a strong, positive working culture, employees feel motivated, passionate and rewarded. They truly live the brand ethos if they are engaged with the brand. Your staff understands your mission and works collaboratively with you to achieve your business goals.

Your working culture is driven through every aspect of your organisation, from the c-suite executives and shareholders to the junior apprentices starting their first day. Your culture will comprise how your staff behaves and what you expect from them. It provides an immediate representation of how you treat your staff.

To combine the two, we can relate to innovation culture as a creative way of working embedded throughout your organisation. All employees are encouraged to look at how they can use different working practices to create new products or services.

In an innovative culture, all employees are empowered to make changes. It can be as simple as feeling confident to make suggestions for improvements or understanding that different perspectives can lead to new visions for potential growth areas.

Simply put, everyone in your organisation is working collaboratively to:

  • Push boundaries
  • Create new products
  • Use new technologies
  • Open up new opportunities

What innovation culture is not

It’s essential to understand that innovation isn’t about research and development. It’s not just about creating new services or individual teams working on their own to try something new.

Innovation culture needs to be embedded throughout your entire organisation.

Every single person across every single department should feel compelled to make a difference.

In a truly innovative culture, employees can openly share ideas and make suggestions. They can talk directly to senior management teams to give direct feedback (even from their very first day), and they are not forced to jump through hoops to make minor changes.

Instead, every staff member is given full autonomy to work in new ways. There are no barriers preventing people from trying new things. Truly innovative businesses know that for every idea that succeeds, hundreds will fail.

But they are not deterred.

They understand that creativity can come from anywhere and anyone within their business.

What does innovation culture look like in real life?

  • Apple
  • Google
  • Tesla
  • Pixar

We can name hundreds of globally recognised brands as drivers of innovation culture.

We can name these firms and not the hundreds of thousands of start-ups around the world because they have truly redefined their genres.

Let’s take Pixar as a key example.

Within the film industry, Pixar revolutionised the way we watch animation. Every animated film we watch takes inspiration from the way Pixar has continued to push boundaries. When the company wants to try something new, it simply invents the technology it needs to bring that vision alive.

Pixar’s innovations have been so ground-breaking that its initial pioneering techniques have been incorporated into traditional filmmaking throughout Hollywood, as well as the work of amateur filmmakers.

But how does the company do it?

It all starts with an innovation culture that is embedded throughout the very fibres of the business.

Everything that Pixar does is about working collaboratively with its internal teams.

It knows the value of talent and provides each employee with the freedom to work in a way that suits them.

In an interview with the Harvard Business Review, Ed Catmull, president of Pixar and Disney Animation Studios, describes the company as a risk taker:

‘Management’s job is not to prevent risk but to build the capability to recover when failures occur.’

This is an interesting thought process. It suggests those firms that heavily focus on contingency and recovery planning can achieve better success because they are better prepared for inevitable failures.

Therefore, they are ready to take those creative risks because they have processes in place that will cushion any losses.

Pixar’s culture is steeped in trust and respect.

Employees know they can take risks and push boundaries because they will be supported if an idea doesn’t come to fruition. The lack of blame culture and the freedom to act as creatively as they need to mean that every Pixar employee is working towards the same goal: to be the absolute best.

And once you garner a reputation for being the best, you can start to attract the best people. From there, you have that perfect blend of great ideas and great talent.

The benefits of building a culture of innovation

Now we understand what innovation culture is, we can start to develop an appreciation for the business benefits of facilitating a culture of innovation.

Let’s look in more depth at some of these benefits.

Strengthens competitive advantage

Your working culture is by far your biggest asset. We often hear how ‘people buy people’, and your working culture is a key indicator of:

  • Who you are as a company
  • How you treat people
  • What sets you apart from other companies

It is often argued that having the right culture is far more important than having the right business strategy.

From a competitive advantage perspective, facilitating an innovative culture brings about a myriad of opportunities. It’s not just about business growth (we’ll come to that shortly). It’s about:

  • Being able to attract the right talent
  • Garnering a reputation for being the best at what you do
  • Changing your brand’s perception
  • Helping your stakeholders to understand that you are trying hard to push boundaries

From a sales perspective, your market share could be broadly similar to your competitors. Still, you could argue that your competitive advantage remains higher due to customer loyalty or brand reputation and perception.

Let’s look at the mobile phone sector:

In the first quarter of 2022, Apple claimed an 18% share of the global smartphone marketplace.

Its biggest competitor, Samsung, had a 23.4% share of that same market (source: Statista). But, anecdotally, many people would agree that, of the two firms, Apple would be perceived to be the driver of innovation and product development.

This perception is a clear example of competitive advantage.

Customers around the world rely on Apple to drive innovation. They trust that Apple has the right people working for it and that innovation is just around the corner, even when products have been launched that feel similar to previous models.

Fosters business growth

The purpose of innovation is to drive business growth and make a significant impact on your revenue stream.

Undoubtedly, continual innovation is a key driver of business growth. Launching new products or services will inevitably lead to increased sales and greater market share.

Let’s look back at the past two years when COVID-19 changed the world as we know it:

There are numerous examples of companies using innovative thinking and creative problem-solving to rapidly adapt their business models.

For example, pubs and restaurants quickly pivoted to takeaway and delivery options, and retail stores facilitated online shopping, video appointments and bookable in-store appointments.

In fact, the requirement for innovation was so severe that for many firms, the purpose of innovation was less about business growth and more about mere survival.

But for those firms to be able to react to changing scenarios, they needed to have the flexibility, agility and infrastructure in place to respond as quickly as possible.

They also needed to be able to have entire workforces (many of whom were working from home) think of innovative ideas and facilitate ways to make those ideas come to fruition.

Empowers employees and boosts employee engagement

We’ve mentioned that your working culture is key to your success. Of course, any business wants to believe that its staff feels motivated, excited and enthusiastic.

But often, firms pay lip service to innovation.

They may say the right things but if there are barriers preventing them from trialling innovative ideas (i.e., no funding, a lack of technology or poor resourcing), they are not truly fostering a creative culture.

The first thing you need to consider is the happiness and well-being of your staff. Those firms that offer a great work-life balance could find they are more innovative because employees feel refreshed and less affected by burnout. Likewise, the more relaxed your staff are, the more productive and creative they could be.

In an innovation culture, your staff feels they are welcome to make ideas and suggestions.

How often do you hear about companies where a junior staff member can talk openly and honestly with their senior management team or CEO?

Promising ideas come from all places. For example, a retail worker on a shop floor may better understand how customers behave, compared to a senior manager working in a corporate office.

They may see a new trend emerging (even if it’s just a local trend). They could use their initiative and make suggestions to increase sales long before the senior team has the data analytics to come to the same conclusion.

Earlier, we noted that Pixar takes a risk-management approach to its innovation culture. It puts plans in place to minimize any losses (financial or reputational) and facilitates a no-blame culture.

This is key to any employee engagement. Teams need to feel confident to make mistakes because you can learn just as much from what goes wrong as from what goes right.

Encourages diversity

One of the reasons why businesses fail to grow is because they are stuck in a thought process of ‘that’s how we’ve always done things’.

While your initial processes and working patterns may have been successful, a failure to keep up with your sector could see you fall away. Conversely, those innovative giants remain market leaders because they continually try new things.

It could have been easy for Apple to focus just on the Macintosh computer. But what was ground-breaking in the 1980s and 1990s is no longer in vogue.

Apple saw the potential for smartphones. It also saw the potential in tablets. So, the company didn’t just move into new markets – it created those markets.

But how does this relate to diversity?

Well, an innovative culture allows you to take ideas and suggestions from people throughout your business. Many firms are actively focusing on their diversity and inclusion policies, so it’s essential this is built into your entire working culture.

If you fail to listen to new voices, you’ll end up churning out the same products or services repeatedly. Failure to diversify your business could cause a retraction of your business growth.

In an innovative culture, all opinions are equally welcome, whether you are a first-time apprentice or you have worked for the company for years.

By listening to voices of different ages, races, genders and religions, you can create solutions from different perspectives.

In addition, you can hear other opinions and facilitate a broader thought process. As a result, you can start to eliminate any unconscious bias that may have crept into your business and ensure that everyone’s voice is truly heard.

Builds resilience

As we briefly mentioned earlier, an innovation culture has a stronger level of resilience for businesses.

As we saw from the pandemic, it was those firms who were able to collectively try new things that thrived.

And as Pixar says: it is better positioned to succeed by planning to fail.

Therefore, implementing an innovation culture throughout your business may make you stronger and more resilient to unexpected changes.

How to start building innovation culture in the workplace

Image: Pexels

How to start building innovation culture in the workplace

Now you know why you should implement an innovation culture, it’s essential to think about how you can do this.

As we’ve already alluded to, innovation culture isn’t something that can be paid lip service to. It needs to be a genuine culture encompassing every aspect of your business.

But here’s the good news: it’s never too late to start.

Identify your objectives/goals

First, you need to understand what has been holding your company back. Has it been a fear of failure? Do you have the right people in place to help you work collaboratively across your business?

Innovation is about knowing what you want to achieve and why.

  • Are you looking to create new competitive advantages or is it just about growing your bottom line?
  • Do you want to attract new talent or is it about reducing your employee attrition rate?
  • Are you regularly communicating with staff? Does everyone know about your objectives and goals, and are you all working towards the same vision?

Look at your short-term and long-term goals. It would help if you were clear that true innovation focuses solely on your long-term successes and that, in the short term, you may be risking failure on new products or services to get you to where you want to be.

As part of your planning, why not talk to your entire workforce about how they view success and where they see your company in five years?

You may be surprised to learn how the definition of success changes throughout your workforce. You can then use this data to create ideas and goals to benchmark your long-term and short-term progress.

Alongside this, you should also be regularly undertaking employee engagement surveys to ensure that your staff is working to your corporate vision.

Put innovation at the heart of your leadership

We know that innovation comes from senior management. But it’s also important to look at how your middle management and junior teams are working to see how you can implement an innovative culture.

A problem that many firms face is that their senior teams believe wholeheartedly that they already have an innovation culture.

However, they may not be paying attention to the middle management, who may be focusing on individual ambitions and priorities or hiring/promoting individuals who are not great at working as part of a team.

Your managers should focus heavily on communication:

  • Are people happy to talk about issues that bother them?
  • Do they feel empowered to make suggestions, and if so, do they think that they will get credit for their ideas?
  • Are managers rewarding the right people?

Your leaders need to focus heavily on the working culture they contribute to. As we mentioned earlier, your innovation culture is just as important as the strategies on which you are working. Failure to focus on this could lead to weaknesses that can be exploited.

Focus on day-to-day strategies (communication, tools, resources)

A core part of your focus should be on removing any barriers to innovation. This can be as simple as ensuring that all staff can work in the ways that suit them best.

For some people, it may be about offering flexible working hours.

Creative people may say they feel more inspired working late at night, rather than during a fixed 9 to 5 working day.

For others, it could be about having the right tools in place to help them work collaboratively.

For example, you may have a suggestion for a new piece of software. Are your employees given the autonomy to invest in that software or do they need to provide a business case for investment? Are your processes quick enough to allow staff to work in new ways?

Do you have the right skills in place? With technology ever-changing, we’re rapidly seeing digital skills gaps emerge. Can you immediately identify gaps in your team’s skill set, and can you factor in swift recruitment strategies to minimize these skills gaps?

For example, you could find that key projects are taking too much time away from daily tasks. Could you use temporary staff or the freelance community to maintain productivity while your team is trying new things?

The more barriers to innovation you can remove, the quicker you can start to see the results.

Measure and analyse your strategies

Finally, it helps to have benchmarking procedures in place.

Innovative firms take a continual improvement approach to their working practices. They know that innovation doesn’t always have a definite start and end point. Instead, it can include incremental successes that show you are on the right path.

By factoring in benchmarking, you can see what is working and what areas need improvements at an early stage.

Thanks to technology, we now have access to greater data analytics than ever before, which makes benchmarking much easier. In addition, the visual nature of data analytics means that you can share progress with your staff members throughout your organisation, helping everyone look collectively at what is working.

In Summary

There are huge advantages for businesses to implement innovative working cultures. But to do so means taking a critical assessment of your strengths and weaknesses.

You must consider what you do well and what is holding you back from further success.

The crux of any working culture is ensuring you truly walk the walk. It’s not about saying that you are innovative. It’s about demonstrating that you are resourceful.

Communication is a crucial aspect of this. Think about the last time you spoke to your entire workforce. Have you listened to ideas from new starters? Do different departments feel that they can make comments on other teams’ work?

To create an innovation culture, you should assess your internal communications and facilitate ways for vertical and horizontal feedback. The more your team feels energised and compelled to get involved, the greater your innovation culture will become.

About the Author

Amy Dawson is a freelance copywriter specialising in content creation and PR strategies. With a background in recruitment, Amy has spent many years writing about how to make the most of your job hunt, from finding out where to search for your dream job, to prepare for your interview and understanding what to expect from your employer.

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