Innovation is just another word for change.” – Jeffrey Immelt, CEO, GE

Team Building

Innovation is a Culture Thing

Most companies – small and large – depend on increasing innovation to fuel growth.

And yet, the quest for innovation and efficiency often pits the corporate culture in a war with itself.  The mindset and behaviors that support traditional business outcomes are often in direct contrast with cultural behaviors that support innovation.  This is largely why the R&D function in organizations has been silo’d, assuming the people and their work are so different that their work cannot effectively co-mingle with tightly controlled and managed manufacturing, sales, or accounting practices.

The Culture-Innovation Link

Operational goals in a business usually center around predictable implementation – i.e., efficiency, cost-cutting, and compliance. The behaviors that support these outcomes include specialization, silo’d approaches to work, following protocol, sharing less information (it takes too much time otherwise), and little or no experimentation.

Even if a business has intellectually embraced the idea of open sharing and dialogue, and freer work practices, most still hold mindsets that reward and encourage compliance behavior across the business.

Innovation is the alchemy of balancing ideas and implementation well.  Innovation is no longer just getting R&D right; the culture that supports rapid adaptability to change means innovation must take hold all across the business, in every function.  Collaboration and open work practices must be embedded to gain speed and efficiency:

  • People believe they can take smart risks without being punished.
  • Teams focus on small steps to put an idea into practice, get feedback, make rapid adjustments. (Repetitive, scaled down promises to a customer usually gain faster traction.)
  • Create room for people to “play” with ideas.  (i.e., requires ruthless prioritization so people aren’t “doing it all, all at once”).
  • People are trusted and can perform their roles free from blame, judgment, and harsh criticism about “non-compliance.”

New Ideas + Effective Implementation + Positive Impact on Business =  Innovation

Imagine what’s possible when you optimize the equation between ideas + disciplined implementation. The businesses doing it (like Google and Apple) are clear winners in the financial realm, far above their competitors. There are 3 primary innovation-friendly mindsets leaders must adopt in how their organization conducts its day-to-day work:

First mindset to change: Achieving sustainable innovation is the balance between fostering good ideas that can take hold and realizing there are many, many ideas that never do. The mature executive knows more ideas will fail than succeed – and you must reward efforts to innovate, versus just results. At Google, a recently failed product touted leaders, issued generous bonuses, and provided a prestigious founder’s award to those who worked on it. This is a crucial mindset to ensuring innovation is supported by the culture; and yet, it is outside the comfort zone and generally accepted practices of every organization that clearly defines and measures predictable outcomes, not behaviors that lead to those outcomes.

Second mindset to change: Separate innovation and compliance as different life stages of the growth process, and know which stage you’re in. Even if the same teams or people are working on both compliance and innovation activities at the same time,  define the difference in a project or activity by asking a simple question: “Is this work effort or stage primarily toward an efficiency outcome or is it a growth and improvement outcome?”  True innovation in an organization should aim to achieve both. Often the most powerful innovation gains are made not from major new products or services, but from achieving new ways to implement or deliver those products or services.

Third mindset to change: Communication between leaders and employees is mostly still from a parent-child mindset – one person is the authority, the other is expected to “do what they’re told.’ This behavior is toxic to innovation efforts.  We call it the “Elephant Factor.” See if this conversation rings true:

LEADER: The customer is concerned we haven’t delivered the specs for the module upgrade yet.

TEAMMATES: Yeah, we were just talking about that. We got waylaid by Project X this week.  But we think we have the answer now.

LEADER: Great!  What can I tell the customer?

TEAMMATES: Tell him we’ll have something definitely positively in the solution realm to show them next week.

A week later:

LEADER: How’s it going?

TEAMMATES: Well … that solution we had in mind didn’t really work. In fact, we actually wondered if it would.

LEADER: So, why did you tell me it would?

TEAMMATES: We were afraid to disappoint you.

The Elephant Factor (not telling the truth) is tearing up idea-generation and risk-taking in every organization, and people talk around them as if they don’t exist.  One side agrees to promises to appease the other side, knowing they can’t deliver. One side feels they don’t have power. The other side thinks nobody is accountable. Both sides are frustrated. And yet, everything in a business moves faster when people practice truthful, relevant conversation with the outcome of satisfying needs and building trust, versus finger-pointing and misunderstanding.

To produce harmony between innovation and implementation, practice two ground rules and one FAQ.  When an innovation culture takes hold, passion and winning catch fire.

Just keep an eye out for those Elephants.

Lisa Jackson and Gerry Schmidt are corporate culture experts with a proven method to teach leaders how to evolve their corporate cultures to perform better, innovate faster, and show they truly care about people in an unprecedented era of rapid change and transformation.

Visit them on the web at or follow them on Twitter at

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