Innovation culture sounds like something every business should strive for. But how is a culture of continuous innovation built? What are the specific things organizations can do – beyond paying lip service to the idea of innovative thinking – to build an innovation culture? What are the most innovative companies we can look to as examples of how to get innovation culture right? These are some of the questions we’ll explore in this article.
Most business students and professionals have a good sense for what it means to employ innovative thinking at work. It means a person or a company comes up with new, unique, ideas – pretty simple. But what is innovation culture exactly? This refers to the social environment and organizational structures that allow and encourage continuous innovation.
Innovative thinking can be stifled when employees are punished for taking risks and don’t get rewarded – financially or not – when an idea pays off. If managers don’t encourage creative ideas, they are far less likely to get communicated. It’s also difficult to innovate without any free time to think creatively beyond the day-to-day workload.
Innolytics suggests innovative thinking and an innovation culture can be encouraged through five elements:
- Challenging the daily routine, meaning building a culture of asking provocative questions.
- Making time for innovation workshops where unique ideas for new products or processes are the sole focus.
- Building innovation networks where employees can engage with each other and also with third parties – to bring innovative thinking into the organization from outside.
- Innovation software as a way of tracking and sharing ideas across a company.
- Innovative people are, perhaps obviously, a key to innovative thinking and the continuous innovation and innovation culture that results. When a company is hiring, if it does not place a premium on hiring innovative people, it’s going to have a less innovative culture.
Most Innovative Companies & Countries
Continuous innovation is critical to the success of companies and countries on both a micro and macro scale. To succeed, a company must innovate, unless they have a true monopoly or extremely strong market position. The same is true of a country on a macro scale. The U.S. is an economic powerhouse today, but this position is largely driven by technology and services. In the past, manufacturing was a key source of global economic advantage. As other countries became able to outcompete the U.S. in many areas of basic manufacturing, the U.S. innovated around technology and services to maintain its strong economic position.
The most innovative countries don’t always house the most innovative companies, but there is a significant relationship there. And, as you might expect, investment in new technologies helps drive a country’s (or company’s) overall level of innovation. In addition, countries with higher income levels are in a better position to invest in innovation. However, investment is only part of the story.
The World Intellectual Property Organization (WIPO) has created an “innovation index” based on over 80 factors such as research and development (R&D), venture capital, high-tech production, the regulatory environment, and much more. WIPO reports its results in income brackets, with the understanding that “high income” countries are going to have higher innovation scores.
But China, a country in the “upper middle” income bracket, achieves a higher score than dozens of “high income” countries, including the likes of Ireland, Japan, Canada, and Norway. This is because China has a strategy and a regulatory environment that encourages innovation in particular industries. Key “inputs” to innovation – besides investment – include university institutions, PhD students, infrastructure, business sophistication, ecological factors, venture capital firms, % of spend on R&D, and the regulatory environment.
Some of the most innovative companies in the world are involved in Big Tech: Alphabet (Google), Apple, Facebook, Tesla, etc. Many are part of fast-growing industries like FinTech, Alternative Energy, Artificial Intelligence and Machine Learning, Robotics, or Data Analytics.
Let’s explore one particular company that has been delivering continuous innovation for years: Nike.
At the micro or company level, innovation often comes not from top-down investment in new technologies (though that is often part of the innovation formula). More important is an innovation culture and set of processes where good ideas can be surfaced. Nike innovation is driven by a commitment to staying close to its customers. As Nike itself says “It’s our connection to athletes and consumers that allows us to create game-changing technologies and products.”
Nike has 11 maxims that are often repeated. More than half involve innovation on some level, and the number one maxim is directly about innovation:
- Nike’s Innovation maxims:
- It is our nature to innovate.
- Simplify and go.
- The consumer decides.
- Be a sponge.
- Evolve immediately.
- We are on the offense. Always.
- Other Nike maxims:
- Nike is a company.
- Nike is a brand.
- Do the right thing.
- Master the fundamentals.
- Remember the man.
- Nike’s Innovation maxims:
Of course, ideas and insights must be backed up by investment in time and people to develop solutions, which Nike does through its sports research labs.
Ways Of Sustaining Innovation
Sustaining innovation is not easy. But to compete effectively in most product or service markets, it’s critical. If you want to know how to be innovative, remember that first and foremost you should focus on building an innovation culture and set of processes to encourage innovation. People need to be given the time and space to innovate, and be rewarded for taking calculated risks, even if/when they don’t pan out. Sustaining innovation also involves making specific financial investments in projects that show promise.
Innovation culture is the key to building an innovative country or an innovative company. There are a wide range of factors that combine to explain why one country or company is innovative while another is not, but culture and processes lie at the heart of most successful innovation stories. Now it’s your turn – go and innovate.