Creating an innovative culture.

The culture of an organization:
* reflects and dictates the unspoken rules of interaction (Can we speak openly and share our opinions or our ideas?).
* drives the norms around how the work is done (Do we take ownership for our performance?)
* creates underlying expectations for those who take part (Do we act in ways that influence the success of our company?)
* is a powerful dictator of behavior

The key is a widely-shared corporate value system that promotes integration across departments and business units, and encourages people to share information and resources. Each company should have its own approach that takes into account its history and its vision. The culture should be loose, so that values can be expressed in ways that vary according to the type of innovation required in different parts of the company. At innovative technology companies, for example, managers value the openness and consensus needed to develop new technologies. Yet, when implementation is critical, they recognize that consensus can be fatal.

Decentralized decision making, with consistency achieved through information sharing, strong financial controls and individual accountability, can easily lead to fragmented strategies. The secret to avoiding this is strong social control, exercised through the corporate culture. Culture is the key both to short-term success and, if it’s not managed correctly, to long-term failure when it creates obstacles to innovation and change.

What if one of your executives or employees stops by your office, obviously excited by a new idea for the business. The typical first reaction is to acknowledge the idea and add it to your list of things to do. Many CEOs keep a yellow pad of good ideas that just keeps getting larger and often becomes a source of frustration. Jim Alampi suggests the secret to handling this is not to add yet another idea to your list, as counter-intuitive as that seems. The best response is to acknowledge the value of the idea but not add it to your list of things to do. A statement like, “That’s a really interesting idea and we should consider it. We already have our priorities set for this quarter and this idea doesn’t appear to be more impactful for the company than our current priorities, so please keep this on your to-do list and bring it up again at the next quarterly executive team meeting.”

Getting people to share their learnings triggers additional innovative ideas. I’ve found that:
- people can’t resist sharing when there’s a technical problem to solve and they have the expertise to contribute,
- people are eager to share when they have “bragging opportunities” – such as presentations at conferences, published papers and reports, brown-bag lunches, etc. Have someone document such presentations and post them on an internal website the next day for all employees to read. If it takes too long to disseminate the information, it’s likely to be out of date.

Three cultural elements that are strongly related to radical innovation are:
- a future market orientation,
- a willingness to cannibalize,
- a tolerance for risk.
Organizational tools such as incentives and product champions are also important. But perhaps the most important variable is constructive conflict: the climate of open debate, the honest and frank exchange of ideas. That’s something that can be significantly affected by top management setting the right example, rewarding people for sharing honest opinions, listening to what people are saying, and then doing something with it.