You can throw all the capital, resources and talent you like at innovation. But if you’re not also investing leadership time and energy into evolving the culture of your organisation, you’re likely to run into some challenges.
This is where we began in November 2021. Hardly an original notion, nor a controversial one.
But culture — or mindset, behaviours, people, capability, or however else you refer to it — still causes headaches for innovation leaders. Not to mention its very real impact on commercial performance.
We set out to explore why this remains the case, and what can be done about it, introducing #FutureProofonCulture — a three-month series designed to look at common issues through a series of different perspectives.
Our starting point was one of frustration, with recent research painting an all-too-familiar picture:
- Innovation is important (ranked a top-three priority by 86% of global executives, according to McKinsey)
- …but the results aren’t forthcoming (fewer than 10% of leaders say they are satisfied with their organisation's innovation performance, according to the same research)
- …and while investment is increasing (60% of companies planned to boost financial investment in innovation, one-third of them significantly, according to BCG)
- …this will put more hard-earned capital at risk (70% of complex, large-scale change programs don’t reach their stated goals, per another McKinsey study).
Over the last seven weeks, we’ve spoken with world-renowned academics, expert advisers and corporate innovation leaders. We’ve sought both practical stories, as well as reflections and learnings. And we’ve emerged with a number of pertinent questions innovation leaders should be asking themselves about culture.
These are our top five (so far).
Have you articulated the desired traits for an innovation culture in your organisation? If so, have you defined their “counterweight” to keep them grounded, disciplined and attainable?
This question encourages us to think about two related points.
First, have you defined what innovation, or "being innovative", means for your organisation? Have you spelled out the cultural code you’re looking to inculcate? Can you describe the desired attitude, mindset and behaviours with such clarity that others in the organisation will know how to recognise them (or their absence)?
It’s one of those simple steps that’s easily overlooked, but if your goal isn’t well-defined, you risk leaving it open to interpretation and that’s where ambiguity comes in.
But the second point to which this question leads is whether our definitions of innovation culture are sufficiently balanced.
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“People gravitate towards the nice side of culture” said Gary Pisano, professor of business administration at Harvard Business School, speaking to Sifted about the "dark side" of culture.
Pisano suggests that the concept of an innovation culture has become somewhat popularised, faddish or clichéd. The easy or attractive traits have taken centre-stage, and in doing so have perhaps undermined the hard work it takes to get to them. We can all recite the more common ones — tolerance for failure, freedom to experiment, an emphasis on collaboration and flat organisational structures.
“These characteristics are all great, but many organisations found that they didn’t work or didn’t yield any attributable impact,” Pisano added. “Why? Not because they’re wrong, but because people… overlook the harder, or darker, side of culture.”
This has led to intense cynicism, “not just among leaders,” Pisano said, “but among the people involved in innovation throughout an organisation.”
Pisano shared his examples of the “counterweights” that were often missing from otherwise idealised innovation cultures, including:
- A tolerance for failure — but with an intolerance for incompetence
- A willingness to experiment — but combined with extreme discipline
- Collaboration — but tied with crystal-clear individual accountability
- Freedom to speak up –— but an embracing of candour
- A flat structure — but coupled with strong leadership
Embracing these paradoxes is critical, Pisano told us. “We have to recognise that building an innovative culture isn’t going to be a walk in the park… it’s going to be tough, but if we embrace that, we stand a good chance of getting over some of the scepticism that currently confronts us.”
Are you celebrating rule-breaking? Why not just change the rules?
Celebrating success is undoubtedly a positive thing. It can help to nurture and reinforce the cultural change you’re looking to catalyse.
But when we spoke with Tendayi Viki, an award-winning author and Associate Partner at innovation consultancy Strategyzer, he urged caution, referring to organisations unwittingly running an innovation "Hunger Games" where these activities tend to celebrate success in spite of the organisation’s efforts to build an innovative culture, not because of them.
“That’s where you find innovation awards with names like ‘The Contrarian Award’ or ‘The Rebel Award’,” Viki said. “They’ll find the innovator who’s finally managed to get something out to market, bring them up onto stage, have them tell the story of the challenges they faced and their battle with adversity. They’ll lay bare how difficult it was to work around the barriers to land something with a customer, and showcase their creativity and ingenuity in making it through.”
Viki argued that organisations can easily fall into the trap of celebrating the innovator that lived the struggle, rather than truly confronting what made it a struggle in the first place.
“Instead of celebrating rule-breaking,” Viki said, “why not just change the rules?”
Is your organisation really ready to change?
It’s one thing to say you want change, another thing to really mean it and another altogether to really understand what it's going to take to make it happen.
Sifted asked Herminia Ibarra, the Charles Handy chair and professor of organisational behaviour at London Business School, what advice she would offer an executive charged with (re)igniting an organisation’s innovation agenda.
“I’d start by asking the CEO and the board these five questions," she told us. "Their answers, or lack thereof, will be telling."
- Have you tried this before?
- What worked, and why?
- What didn’t, and why?
- What’s going to be different this time around?
- What are you prepared to do personally to support it?
Posing simple yet fundamentally important questions to the CEO leaves little room to hide, and any obfuscation or deviation will be easily revealed. And, she suggested, posing these same questions to the wider executive committee would quickly reveal any differences in opinion that it would be essential to tackle early on.
Have you got your ‘burning platform’?
Innovation brings with it much talk of change, disruption, uncertainty and volatility.
But for many organisations, things aren’t on fire. In fact, for many, financial performance is satisfactory or even exceeding expectations. And for many executives (and, indeed, employees further into the organisation), all this talk of disruption doesn’t feel relevant.
We spoke to Matt Atkinson, a C-suite veteran of organisations including Tesco, Saga and The Co-op Group, who told us that nothing meaningful can really happen with an innovation agenda without a “burning platform”.
“You don’t get movement unless there’s a threat to life, and then you need to direct that movement towards a destination that people can understand,” he said.
Atkinson told Sifted that every innovation leader needs an arsenal of “decent insight” — short, medium and long-range signals that can be drawn on to stimulate debate about the future.
“Sometimes you’ve got to rattle people’s cages, just enough that they say ‘I get it, we need to address this, and we need to dedicate some resource to exploring it’. That gives you the opportunity to secure the second foundation — a pot of at-risk capital.”
Do you have someone willing to put political capital on the line?
Winning buy-in from leaders is not always easy.
And not just buy-in to an innovation agenda, but to all that it might entail in terms of budgets, resources and priorities.
Credibility and hands-on involvement of the senior leadership team are crucial, said Ben Allgrove, the chief innovation officer at worldwide top-five law firm Baker McKenzie, who is also a practising technology and media lawyer and chair of its global IP & technology group.
“Having someone from the firm’s practice leadership willing to say ‘this is the future, we need to change and I believe in this' is key. But having that person also say that they’re willing to lead that agenda, to sacrifice 50% of their time to serve as chief innovation officer rather than focus on business as usual, going out and selling work and growing their practice — that’s seen as a risk, but it also adds credibility.
“In our business, if it wasn’t a partner, if it wasn’t somebody taking a risk with their practice, there would be a question as to whether everybody else should make the investments needed to make that shift.”
While some of the dynamics of the legal sector’s partnership-based business model are unique to that environment, the point he raises about credibility is widely valid.
Festive food for thought
These five questions only scratch the surface of hours of interviews and the broader articles which we have started to share over these last seven weeks.
Our #FutureProofonCulture series is taking a short pause during the festive season, but we’ll be back on January 4 and counting down the final weeks to bring the series to a conclusion.
🎄 In the meantime, we hope our questions will stir a thought or idea in between the minced pies, mulled wine and merriment! 🎄
Let us know where these questions take you, using the comments below or on LinkedIn or Twitter using the hashtag #FutureProofonCulture.