Culture is the invisible hand that guides decisions and shapes the environment in which your workers operate. For many, corporate culture seems intangible, a nebulous term used in boardrooms without barriers or transparent movements attached to it. However, as you dig deeper, you’ll notice that your culture, whether through design or by default, has a significant effect on your organization’s ability to innovate.
Companies like Tesla, Google, and Apple excel not only because they innovate: they are able to innovate because they tame an environment that nurtures it. According to a study conducted by NTT Data, 78% of executives feel that a poor organizational culture hinders their innovation efforts, highlighting that many organizations with untapped prospects are suffocating under the weight of their own culture.
If you’re a leader wondering why your company isn’t the next hotbed for revolutionary ideas, it’s time to examine the following seven barriers to innovation that could be embedded in your corporate culture today.
Your corporate culture might just be the culprit if your brightest minds are timid rather than bold, hesitant to share new ideas or resistant to change. The fear of failure can be paralyzing. When employees are more concerned with avoiding mistakes than they are with exploring uncharted waters, true innovation becomes a distant dream.
According to a McKinsey study, 85% of leaders agree that worry (about failure, complaints, and the effect on their career) is holding back innovation efforts in their organization. However, true innovators see failure as an essential component of the learning process. And they are in intelligent company. Apple’s remarkable series of successful products became imaginable because Steve Jobs followed failure as a learning mechanism. Amazon’s mistakes (like the Fire Phone) paved the way for successful corporations (like Amazon Web Services). Sir James Dyson went through more than 5,000 prototypes before perfecting his bagless vacuum cleaner. Innovation and failure are strongly linked.
Recognizing and rewarding “intelligent failures” is one way to shift the tide. By celebrating the lessons learned from unsuccessful ventures, employees will begin to understand that failure is not the end but a stepping stone to success. Furthermore, provide visibility into the innovation process, highlighting the efforts and challenges faced along the way. Transparency diminishes the fear associated with making mistakes by showing that everyone, even the greats, can stumble.
How is power distributed in your organization? Is decision-making concentrated at the top or is it democratized? A top-down leadership style can stifle innovation. When leaders are the sole arbiters of change, they often miss out on valuable insights and ideas from the employees who interact with the day-to-day realities of the business.
Inclusion and innovation research expert Timothy Clark shows that the wisdom essential for innovation comes from the lower levels of an organization and not from its upper levels.
Encourage innovation, empowering and inviting leadership styles. Create channels for painters to present their concepts directly to senior management. Create cross-functional groups that work in combination to solve problems, regardless of hierarchy. By opening the lines of communication, leaders can tap into the collective intelligence of the entire organization, unlocking innovation at each and every level.
Is your organization structured in a way that encourages departments to function in isolation?A silo mentality, in which data and resources are not shared across the organization, poses a serious barrier to innovation. When groups work in silos, they duplicate efforts, miss opportunities for synergy and adjustments that could threaten their autonomy.
A recent survey on collaboration revealed that 83% of companies have identified the existence of silos within their organization as having a detrimental impact on performance.
To encourage innovation, break down the walls between departments. Foster a culture where sharing is the norm. Implement systems and technologies that allow for the seamless flow of information across the organization. Cross-train employees to work in multiple areas and on different projects, encouraging a shared sense of purpose and a wider perspective on the business.
If your corporate culture is one of “do more with less,” your employees are likely too busy putting out fires to focus on igniting new ones. A lack of dedicated time to explore new ideas, coupled with scarce resources, can lead to innovation stagnation. In fact, only 21% of organizations reach their innovation objectives, primarily due to the scarcity of resources.
To make room for innovation, leaders want to do more than pretend to emphasize its importance. They want to prioritize this by allocating time, budget, and other resources to innovation initiatives. Implement policies such as “20% of the time” (popularized through Google), in which workers dedicate a portion of their working hours to projects outside of their normal responsibilities. Create an innovation budget that invests in promising ideas, even if the return is rarely very immediate.
Does your corporate culture prioritize the visitor experience? Innovation for the sake of innovation is rarely successful. True innovation comes from a deep connection to the needs of visitors. If your company is disconnected from your visitors, your innovation efforts risk missing the mark.
Sunil Gupta, the Edward W. Carter Professor of Business Administration at Harvard Business School, points out that most companies prioritize their products and services over their customers, concentrating on improving their offerings instead of empathizing with their customer’s experiences.
To ensure that your innovation efforts are focused on visitors, integrate visitor data into all stages of the innovation process. Engage directly with consumers through surveys, focus groups, or beta testing. Implement design thinking methodologies that prioritize empathy for the end user. It’s a cultural norm to ask, “How will this benefit our consumers?”
Is your corporate culture obsessed with metrics and key performance signs (KPIs)? Although metrics are imperative to understanding business suitability and functionality, an over-reliance on metrics can stymie innovation. Creativity and innovation are notoriously difficult to quantify and can favor activities that are less difficult to measure.
To foster innovation, leadership must create a balanced approach to measurement. Encourage the use of leading indicators that may not show immediate return but are critical to long-term success. Celebrate not just the outcomes but the innovative processes that lead to them, even if they don’t immediately show up on a balance sheet. Develop a culture of experimentation where metrics are used to learn, not just to punish or reward.
Does your organization hold on with wonderful pride to “the way things have been done”?Tradition can be a source of stability, but when it becomes inertia, it becomes an impediment to innovation. Cultural resistance to replacement can prevent new concepts from taking root and thriving.
A systematic review of the literature on organizational inertia shows that nearly 70% of business transformation projects fail, mainly due to organizational inertia being a primary barrier to change.
To break free from the shackles of tradition, leaders will have to be intentional about the culture they build. Instill in the organization a sense of purpose and an adaptable, forward-thinking identity. Encourage continuous progression that demanding situations maintain the prestige quo. Institute replacement control protocols that help workers make a smooth transition from old strategies to new ones.
Sustainable innovation does not happen by accident. This is the result of an intentional and cutting-edge corporate culture. Start small, changing the way workers are rewarded and recognized. Build momentum by creating areas for collaboration and experimentation. Over time, these cultural changes can make your company a style of innovation in a world in the process of conversion. When innovation is part of your company’s DNA, it’s not a question of whether you’re going to revolutionize the market. It’s about when and how often.
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