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3 Keys to Creating a Culture of Innovation

By: Guest | October 27, 2010 | 
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Guest post by John Heaney, principal at Orange Envelopes.

The National Science Foundation released a disturbing study recently that revealed that only nine percent of American companies engaged in any product or process innovation during the three-year study period (2006-08).

Frankly, I’m not surprised with the near absence of corporate innovation because I see so few companies that encourage a culture of innovation.

Too many CEOs focus exclusively on improving financial metrics – increasing earnings and keeping a tight control over costs. Few understand their corporate value can be linked directly to their embrace of innovation and their capacity to constantly renew themselves.

That’s exactly what Apple has been doing, and its devotion to designing new customer experiences centered around technology has contributed to a 1,300 percent rise in its stock price in the past 10 years and a market capitalization that exceeds that of Microsoft.

Apple keeps innovating because it has intentionally created a culture of innovation. The company’s commitment to design and innovation is built into its DNA and enables it to foster, create, and execute radical ideas and remain in a perpetual state of reinvention.

Commitment to design and innovation is not the purview exclusively of large companies. Small companies actually have the capacity to move faster and more nimbly than their larger competitors, and it’s significantly easier to adopt cultural imperatives in a small company than a large one.

So, what are the essential cultural elements that your company needs to adopt to encourage innovation?

Purpose – Business leaders who can articulate a corporate vision with the right language can inspire their employees to perform heroic feats. Companies such as Apple, Nike, Amazon, Herman Miller, and 3M are all design and innovation leaders that inspire their employees with clear corporate visions of who they are, why they’re important, and where they’re headed.

They don’t inspire with challenges of nine percent top line growth or the extension of an existing product line. Their vision is much broader: They want to change the world in their own unique ways. And they believe they are the agents for that change.

Challenge – You can’t gain a competitive advantage from doing business as usual in the same way that virtually every one of your competitors operates. Innovators and design thinkers create new solutions to problems that other companies are unwilling or unable to address. Take a look at every touch point in your organization and ask yourself if each one is delightful and memorable for your customers.

Why should calls to help centers be frustrating? Why don’t you have instructional videos posted for every one of your products? How can your packaging be reduced and improved? You’re surrounded by challenges if you’re brave enough to take them on. And when you succeed, your corporate differences will be clearly defined.

Encouragement – Leaders in innovative companies encourage their employees to try new things and to test new ideas despite the certainty that taking on challenging projects will inevitably lead to some failures.

Apple had monumental flops with the Lisa and the Newton. Nike had divisive fair trade issues to overcome. Even legendary 3M went through a lean period of innovation when its focus drifted in the early 2000s.

But like all successful design companies, those who emerge with the greatest successes are the ones that encourage, embrace, and celebrate failure. They just ensure that they failed fast and learn lessons from each disappointment. Failure expands knowledge, builds courage, reveals your strengths and weaknesses, and ultimately makes success a little sweeter.

John Heaney’s professional experience has centered around marketing, branding, customer experience design, strategic communications, and business development. His current professional endeavors are focused on developing strategic digital marketing programs that integrate compelling social media components. His perspectives are captured on his blog.

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20 Comments on "3 Keys to Creating a Culture of Innovation"

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rachaelseda
5 years 8 months ago

Love this post! I wish more companies would embrace innovation and top focusing on the numbers and graphs that the “board” or whoever wants to see. Everyone seems so scared to try something new or think outside the box because you don’t want to be the one that doesn’t get praised at the staff meeting – or worse gets fired.

But if this is the culture of your organization how do you prove to your employees that you want to embrace innovation?

johnheaney
5 years 8 months ago
@rachaelseda As the former owner of a small manufacturing company that desperately needed to embrace innovation, one of the first steps I took when I bought the company was to involve everyone in the engineering department in company strategy sessions. They needed to see what we were faced with and encouraged from the top to generate ideas that could provide us with distinct competitive advantages. No idea was ever derided or dismissed. We had regular meetings where we would fill white boards with ideas to pursue. What we discovered is that the best ideas were actually spawned by combinations of… Read more »
jeremyvictor
5 years 8 months ago

Great post John –

I believe lack of “clear corporate visions of who they are, why they’re important, and where they’re headed” coupled with short term 3-month success measures based on beating “street” estimates is why America continues to inch closer to the brink of no return as a leader of the global marketplace for the next 100 years.

We need more of this thinking and leading in every company.

rachaelseda
5 years 8 months ago
@johnheaney That’s great John, thanks for the response. I hope to one day be this kind of executive leader when I am in this type of position. I hope other executives and organizational leaders learn from you and others and embrace innovation. I think especially for the younger generations, the lack of creative stimulation and innovation in many organizations and entry level positions can be stifling. Reminds me of Tony Hseih’s first job experience that he explain in his book ‘Delivering Happiness’ that I just finished reading. Unfortunately in this economy I think many people feel stuck and succumb to… Read more »
johnheaney
5 years 8 months ago
@jeremyvictor Jeremy, I work almost exclusively with small and mid-sized businesses, so the element of beating analyst expectations never comes into play, but I still deal almost exclusively with C-level execs who focus solely on financial metrics and ignore entirely design and innovation that could transform their company and potentially their industry. Few executives have any training in design or design thinking, so its no wonder that their focus revolves around the financial elements that they studied in business school or was passed down to them by the previous financial manager. What I do know, and have seen proven countless… Read more »
johnheaney
5 years 8 months ago
@rachaelseda Rachael, I believe that fear is the dominant emotion guiding most businesses today, and in an environment of fear, most managers will elect to hunker down and try to weather the storm. However, this is the ideal time to gain ground on competitors and to focus internal resources on business changing innovation. The innovation doesn’t have to be industry changing. It can be as simple as repackaging your spare parts kits in gorgeous, distinctive boxes instead of just wrapping them in bubble wrap and tossing them in a brown cardboard box, it can be redesigning your invoices so they… Read more »
johnheaney
5 years 8 months ago
@rachaelseda Rachael, I believe that fear is the dominant emotion guiding most businesses today, and in an environment of fear, most managers will elect to hunker down and try to weather the storm. However, this is the ideal time to gain ground on competitors and to focus internal resources on innovation. The innovation doesn’t have to be industry changing. It can be as simple as repackaging your spare parts kits in gorgeous, distinctive boxes instead of just wrapping them in bubble wrap and tossing them in a brown cardboard box, it can be redesigning your invoices so they are visual… Read more »
rachaelseda
5 years 8 months ago

@johnheaney @rachaelseda Of course the designer in me loves these suggestions and I completely agree! Thank you for such an energetic and fresh perspective!

JMattHicks
5 years 8 months ago

Great post. 9%?! WOW.

You were spot on about Apple. I always find myself thinking, “wow, what will they do next?” They recently announced they’ll be introducing a “Mac Store,” think App Store for the iPhone/iPad but for computer software. It seems simple enough, but soon optical drives and CD’s will be obsolete. Innovation!

Great points, awesome read.

johnheaney
5 years 8 months ago
@jmatthicks Jeremy, this is just another example of the innovative thinking that Apple continues to demonstrate. And I believe it will be another game changer. From a strategic perspective, it will enable Apple to further strengthen the relationships they have with Mac users. Unlike the iPhone and iPad, Mac users do not stay connected with Apple with the same frequency or intensity. But with a Mac app store, Apple will transform software expectations, eliminate entirely the need for physical product or the need to visit each developer’s website to buy and update software, and most importantly will derive an enormous… Read more »
ginidietrich
ginidietrich
5 years 8 months ago
John, this is such a good post and such an important topic! When I travel and speak with business leaders, most are so attached to the way they’ve always done business that they’re scared to make a change. And I would guess upwards of 80 percent really and truly believe their customers are still buying the way they always have…so why should they innovate? Coming from the side of a business leader who does innovate, I’ll tell you my biggest challenge: Change management. You’d be surprised at how much people love change, but also fight it. It’s great fun to… Read more »
johnheaney
5 years 8 months ago
@GiniDietrich I think you hit on the dominant emotion that prevents companies from innovation: fear. Fear of failure when they should embrace failure (as long as it’s fast and mistakes aren’t repeated), fear of looking ridiculous, fear of exposing their lack of knowledge of new technologies, materials and processes, and fear of the unknown. There is safety and comfort in doing things the same way, and there is risk (sometimes huge) in advocating change. That’s also why I prefer to work with small and mid-sized companies that have active leaders who have the capacity to energize their workforce with their… Read more »
JMattHicks
5 years 7 months ago

@johnheaney @jmatthicks You’re absolutely right, and the pricing is one thing that I can’t wait to see happens. How will it effect the big game companies (i.e. Blizzard, EA Sports, etc.) sales and production? How many people are going to move from PC to Mac simply for the software benefits? Apple has a real gem here, I can’t wait to see where it goes and the effect it has.

hire a java programmer
4 years 9 months ago

If there is one way to foster innovation in your business, it is to be innovative yourself and to be straightforward.

NancyM.
NancyM.
4 years 7 months ago
It’s very true what you said about apple. They innovate and create products and concepts that didn’t exist before. They lead a lot of technological advances and that’s because they are not afraid to take a chance. It is more safe to produce another TV, but to create a product that did’;t exist before and take chances with how the market will receive it takes a lot of courage. It sure has worked well for apple too.’ A 1,300 percent rise in its stock price in the past 10 years and a market capitalization that exceeds that of Microsoft.’ is… Read more »
Merissa
4 years 6 months ago

For the success of a small business, an idea is very important but what is more required is the engineering skills, execution ability and transforming the idea into reality. Just having an idea is not great enough, but the capability to take it from boardroom to showroom is what counts. For that organizations may have to borrow business loans to meet their expenses. But what is most important is the organization should have the inherent talent pool to make it really happening.

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[…] John Heaney, a Cleveland-based brand strategist and self-proclaimed innovation agent, reports that less than 9% of companies polled in a National Science Foundation survey engaged in product or process innovation from 2006 – 2009. To create cultures of innovation Heaney suggests that leaders need to: […]

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