Change A Culture to Change the Game
Why do some companies win at innovation while others fail?
How important is innovation to your growth?
From individual entrepreneurs to large global organizations, it seems everyone is chasing innovation. And it’s no wonder: Economists estimate that 80% of business growth comes from innovation.
So how do you develop an innovation culture powerful enough to consistently produce?
Gaia Grant and Andrew Grant are the authors of The Innovation Race: How to Change a Culture to Change the Game. They are the Directors of Tirian International Consultancy and help create innovative cultures for a range of businesses.
I recently spoke with them about global innovation.
The Pace of Change
How is the accelerating pace of technological innovation impacting strategy and innovation?
Andrew Grant: Most people would be aware of how the pace of technological innovation has been accelerating, but conducting the research for our book The Innovation Race has really highlighted this issue and made us think about the potential impact of this manic race. We have discovered that the pace of change is now so rapid that we are in an unprecedented position. It’s like there’s an automatic speed-up setting on the treadmill that can’t be changed, and if we’re not careful the pace will just become too much to handle. Since the rate of technological innovation in particular has become exponential, a whole new leadership strategy and approach will be required. Small incremental innovations will not be enough to keep up. It will also be necessary to look ahead and anticipate the next new trends. By constantly looking for breakthrough new ideas and being ready to implement them faster, it can be possible to stay ahead of the curve. Agile new systems and structures will need to be built that can respond rapidly and effectively.
What is sustainable innovative action?
Gaia Grant: There’s no point innovating for the quick sale and short-term success. Innovation also needs to be able to be sustained over the long term. And, at a deeper level, it should be socially and environmentally responsible for the good of all people and the planet. Sustainable innovative action requires a balance of focusing on both short-term survival and long-term strategy: On the one hand the organization needs to be flexible enough to adapt to new needs and trends, but it also needs to be stable enough to be able to ride out the stormy times with a firm foundation. This will be both the greatest challenge and the greatest opportunity for success.
Authentic Connections Foster Innovation
How is empathy related to innovation?
Gaia Grant: Many people will innovate from their own perspective. That is, they will decide what they think the end user wants or what will sell the best and innovate based on this viewpoint. But being able to see from another person’s perspective is essential for innovation that connects with real needs, innovation that can make a difference in people’s lives and in the world – or purpose-driven innovation – and this requires empathy. To really embody empathy, you need to be able to see what someone else sees and, more than that, to be able to feel what someone else feels. This ensures the innovation process is human-centric and user-focused rather than innovator-centric. What’s essential to remember here is that the empathy process should not be a shallow marketing tactic but rather an authentic connection that enables the innovator to address real issues and meet real needs.
How to Create a Culture of Innovation
How do corporate leaders foster and encourage a sustainable innovation culture?
Andrew Grant: Most people assume that innovation is all about openness and freedom, but this is only part of the equation. Sustainable innovation needs to focus on balancing both openness and freedom – as well as the antithesis of these. That is, while there certainly needs to be openness and freedom, there will also need to be some focus and discipline to effectively guide the innovation process. Maintaining this delicate balancing act is at the crux of a sustainable innovation culture. The strategic leader will constantly be adjusting the balance to fit the market changes along with the organization’s current needs and future goals. It needs to be an ongoing constant strategic action, not a set-and-forget approach. It’s situational leadership.
4 Paradoxical Challenges to Innovation
You share four paradoxical challenges to innovation. Would you walk us through these? Is there one that trips up more organizations than others?
Andrew Grant: In our research we have discovered four main paradoxical pairings that must be effectively balanced in order to support innovation over the long term. At the core of these is the paradox of ‘exploration’ vs ‘preservation,’ both of which are important for sustainable innovation. On the one hand ‘exploration’ requires setting up an agile culture that supports breakthrough innovation, while ‘preservation’ requires ensuring a secure foundation is maintained for incremental innovation through the exploitation and development of existing products and services. All of these factors are fairly interrelated, so where there is a struggle in one area, the other areas also tend to be impacted, but usually the effectiveness of the balance between freedom and control is an important indication of whether a culture will be ready for innovative growth in the other areas. An oppressive culture can, for example, limit opportunities for growth in all the other areas.
□ Paradox 1: Freedom + Control
This involves setting up opportunities to challenge existing systems and structures (shared decision making), along with providing clear visionary guidelines (a principle-based innovation strategy). Too much freedom can mean the innovation process will become chaotic, while too much control (through excessive bureaucracy) can lead to an oppressive stifling of creativity.
□ Principle 2: Openness + Focus
There need to be connections with diverse people and ideas (community consultation, community service, attending conferences, etc.), along with more targeted opportunities to cater to specific needs (flexible work-from-home time). There should be spaces that can actively foster collaboration (co-working areas), along with places where individuals can focus on tasks (enclosed private spaces). Too much openness can lead to a lot of great ideas but no clear direction, while too much focus can lead to insulation and unoriginal ideas.
□ Principle 3: Group engagement + Individualism
People will need to have the skills and tools to collaborate effectively to come up with unified solutions (through strategic training), along with the autonomy to follow through on different possibilities (independent work plans). Have rewards for both individual and team creative efforts. Too much of a group focus can lead to groupthink, while too much individualism can lead to disconnection and isolation.
□ Principle 4: Flexibility + Stability
Ensure there is the flexibility to adapt with rapid change (agile approval processes), along with systems to support innovation implementation (consistent resources and support). Too much flexibility can lead to a lack of follow through, while too much stability can lead to rigidity and no opportunities for real transformation.
Gaia Grant: Ten years of data from the World Values Survey reveals that close to 40% of Americans consistently rate themselves as happier and more optimistic than the populations of a wide range of other economically advanced nations. Optimism has been found to be related to flexibility, and research has revealed there are links with both the initiation of the innovation process and the perseverance to follow through with implementation. This might help to explain why the US typically does well in global innovation measures. Yet optimism on its own is not enough to fuel the whole innovation process. That sense of optimism needs to be enabled or empowered to translate into practical innovative action. In the book we talk about how through Hurricane Katrina there were some who were pessimistic and adopted an emotion-focused coping strategy, while others who were optimistic and felt empowered had a problem-focused coping strategy. Those who adapted a problem-focused mindset were typically more able to come up with practical ideas and solutions for moving forward successfully. So this provides an important clue for how to approach innovation.
Innovation is a Team Sport
Innovation has the rap of being a lone sport, but you argue that it really works best in teams. How do you best encourage team innovation?
Andrew Grant: This is one of the four key innovation paradoxes we highlight in the book. While we tend to recognise innovative genius in individuals, most innovations are built on others’ ideas or emerge from a process of collaborative development. So you need both: both the individual drive and passion that can lead to that groundbreaking ‘aha’ moment, along with the ability to collaborate with others to build on others’ ideas to sharpen and refine potential solutions. You can encourage this by providing recognition and rewards for innovative team actions as well as individual ideas.
What kills innovation? What stymies group creativity? How do you protect against that?
Gaia Grant: In our previous book in this area, Who Killed Creativity..And How Can We Get it Back?, we highlighted some of the main potential creativity killers. These can include, at the individual psychological level, the mindsets of apathy and disengagement as well as fear and insulation. In The Innovation Race we focus on the potential blocks at the organisational culture level. The factors that can impede the innovation process at this level can include controlling systems (such as bureaucracy or oppressive leadership styles) along with organization disconnection internally (working in siloes) and externally (little exposure to different organizations and different ideas). Group creativity, in particular, can be stymied when individuals aren’t given the opportunity and tools to work together on innovation projects, or—at the other extreme—if the group emphasis is too strong, there can be a tendency towards groupthink. Individualism at the expense of the group can be inadvertently encouraged if individual recognition and rewards for creative ideas and innovations are provided instead of group rewards or are valued over group rewards. It is important that the potential challenges at both levels are addressed to effectively support the innovation process. So there should be a lot of education around the importance of creative thinking and innovation as well as training in specific creative thinking skills and innovation processes. Then systems and structures should be set up to support the group innovation process.