What It Really Takes to Foster an Innovation Culture in Your Organization

Surely we all know the saying, "Culture eats strategy for breakfast." Most organizations are well aware of the importance of an innovation culture, but many struggle to establish it. This article unfolds how to foster an innovation culture in your organization by providing seven tips and practical insights into how innovation experts from global companies successfully drive an innovation culture.

But first, let's dive into the what and why.

What is innovation culture

Innovation culture refers to a workplace environment that supports creativity, risk-taking, experimentation, transparency, and continuous improvement within an organization. It fosters an environment that encourages employees to think outside the box, challenge the status quo, and generate new ideas and solutions to complex problems. It also views failure as an opportunity to learn.

Why is innovation culture important

Today's fast-paced business environment requires organizations to adapt continually to changing market conditions. By encouraging employees to adopt an agile mindset and think outside the box, you foster the development of new ideas, products, and services that meet evolving customer needs and preferences.

A company that cultivates a culture of innovation also drives employee engagement and retention. By having employees contribute their concepts, views, and creative thinking, they gain a sense of purpose and ownership in what they do, which leads to higher motivation. In addition, it can also help attract top talent, as employees are more likely to be engaged and fulfilled in an environment that values their contributions and encourages experimentation.

An organization with a strong innovation culture is better equipped to adapt to changes in the market, stay ahead of the competition, and drive growth and success over the long term. 

7 tips on how to create a culture of innovation in your organization

1. Promote an open failure culture

In a company with an open failure culture, employees are encouraged to be transparent about mistakes and failures: employees are not criticized for making mistakes but rather are supported and encouraged to learn from their failures. The emphasis is on identifying the root causes of failures and using that knowledge to improve processes, products, or services.

An open failure culture promotes a growth mindset, where learning from failures is viewed as an essential step in the path to success. It also fosters trust and collaboration among team members, as people feel comfortable admitting mistakes and asking for help without fear of retribution. Ultimately, an open failure culture helps organizations to be more innovative, adaptive, and resilient in the face of challenges and uncertainties.

Adopting an open failure culture can be a significant shift for companies, but there are several approaches you can take to make this transition:

Encourage transparency: 

Executives and managers can set an example by sharing their own failures and encouraging others to do the same. Creating a safe space where employees feel comfortable admitting mistakes is crucial to fostering an open failure culture.

Reframe failure as a learning opportunity:

Instead of punishing or criticizing employees for making mistakes, leaders can emphasize the importance of learning from failures. Encourage employees to reflect on what went wrong, identify the root causes, and develop solutions to prevent similar mistakes in the future.

Celebrate progress, not just success: 

Recognize and celebrate efforts and progress made towards achieving goals, even if they haven't yet been fully achieved. This helps to foster an environment of continuous improvement and growth rather than just focusing on final outcomes.

Provide support and resources: 

Ensure that employees have the resources they need to succeed, including training, tools, and support from colleagues. Also, provide constructive feedback to help employees learn from their failures and improve their performance. Unfortunately, this point is often overlooked by many companies.

Make failure visible: 

Encourage employees to share their learnings and failures openly, for example, in team meetings or through communication channels such as newsletters or social media. This helps to normalize failure as a natural part of the learning process and encourages an environment of openness and accountability that fosters innovation.

2. Establish key stakeholders on different levels

Key stakeholders can provide diverse perspectives, insights, and expertise to inform innovation strategies and initiatives. By involving stakeholders from different levels and departments, organizations can ensure that innovation efforts are aligned with business objectives and priorities and that they are integrated into daily operations.

This approach also helps to foster collaboration, engagement, and ownership around innovation, which is essential for sustained success.

• Corporations can start by identifying and engaging individuals who have a strong interest in and commitment to innovation.

• Managers can also create cross-functional teams to tackle specific innovation projects, bringing together employees with different skills and expertise.

• Companies can establish regular communication channels and formats for sharing ideas, insights, and best practices related to innovation, creating values of continuous learning and improvement.

This all can help to stimulate the growth of groundbreaking ideas.

3. Provide spaces to unfold creativity

To unlock creativity among employees, they need a space where they can disconnect from their regular tasks and that provides a home to work on innovation topics. 

Creating a space that looks different from the normal working environment (fancy furniture, special equipment) engages employees to think outside the box and helps them to brainstorm, share ideas, and experiment.

Want to bring some innovative mindset to your office spaces? Download our free innovation posters!

Such a space can be a dedicated innovation hub, for example, or events like hackathons. Also virtual platforms for ideation challenges can be a space for employees to contribute innovative ideas.

4. Implement a go-to platform to unlock engagement and collaboration

To foster a strong innovation culture, corporations also should create digital spaces for internal and external stakeholders to contribute and collaborate.

It's important to involve people with the right skills at each stage of the innovation process to increase the chances of finding a good solution. With increasing participation from internal teams and external parties such as customers or partners, collaboration sparks the emergence of new ideas and enhances existing ones.

Using a platform that centralizes all innovation endeavors fosters transparency and facilitates participation across the corporation. Gamification and communication features motivate engagement and make it rewarding for people to get involved and contribute their ideas.

The key benefits of software for driving innovation culture:

• Allows for full transparency of company initiatives to enhance alignment towards strategic planning imperatives and ensure improved prioritization and resource allocation.

• Supplying an organized, secure collaboration space for idea generation and progress toward innovation.

• Enabling knowledge and document sharing, process optimization, and more efficient management of innovation projects.

• Providing a structured means to evaluate information, ideas, and initiatives for consensus based on quantified input.

• Monitoring participation to recognize and reward contributors.

Also see: 10 Software Features That Unlock Engagement and Collaboration in Innovation

5. Provide incentives

If employees do not fully participate in innovation activities, one possible reason could be that the incentive structure is not sufficiently rewarding. Rewards and incentives are a great way to motivate people to participate in innovation initiatives and to show them that their contributions provide value to the company. Incentives can be in the form of bonuses or promotions, for example.

Incentives can also foster cross-functional collaboration when companies incentivize teams to collaborate with others on a specific task. This creates an environment where ideas are discussed more openly with other team members, which can contribute to faster and better problem-solving.

6. Foster outside-in innovation/ open innovation

Open innovation has become a popular approach for businesses to leverage a larger pool of ideas and knowledge, resulting in more successful and innovative products and services. When done effectively, open innovation practices can foster an environment of innovation within the organization.

Successful innovation requires a rethinking of how value is created, from ideation all the way through to commercialization. Establishing open innovation practices that are well-developed, integrated, and easy to coordinate and maintain can significantly advance innovation success.

Also see: Open Innovation: Strategies and Best Practice to Manage Partnerships

7. Establish a systematic process and support transparency

Organizations must create a structured approach to innovation that is transparent, systematic, and accessible to everyone in the company. Knowing the process of ideation, evaluation, and implementation builds trust among employees and improves participation in innovation.

Moreover, insights and results have to be communicated transparently throughout the company to keep key stakeholders and employees informed.

Also see: 3 Ways to Communicate Key Findings from Innovation Activities

Innovation culture examples that drive global companies

Global corporations such as Microsoft, Cisco, PayPal, and Doodle are very eager to foster a strong innovation culture. In our Innovation Rockstars podcast, we've welcomed experts from these companies who discussed their learnings and best practices.

Nicholas McQuire, Director of Growth Innovation and Strategy, Strategic Missions and Technologies at Microsoft, explained that a key to an innovation mindset is establishing a culture around what they call a “growth mindset”. Microsoft's growth mindset rewards deserving employees, and the company also believes in giving employees psychological safety that removes the fear of failure.

Nicholas mentioned an example where the company invited a YouTube influencer to talk to employees about the art of dealing with rejection.

The company also hosts hackathons four times a year, giving employees time, space and resources to focus on innovation. They are encouraged to hack together on a new product idea or learn something new.

Organizations need to have a company-wide vision for innovation. Embedding it throughout the organization top-down, bottom-up, and left-to-right is an important starting point for culture.

Nicholas McQuire in the podcast episode “Breaking Silos: How Microsoft Innovates”

Doodle also believes in creating and facilitating a favorable environment for people to experiment and bring their ideas to the table. According to Ricardo Brito, Innovation Lead at Doodle, this is complemented by a core culture of unlearning bad habits and eliminating obsolete thought processes.

Doodle understands that if the employees don't realize the value of their contribution and everyday decisions, it creates a culture based on doubt, problematic ethics, and fear, which consequently brings failure.

Therefore, Doodle believes in starting with the individual and giving employees room for exploration (bottom-up), then moving on to leadership (top-down).

You can't innovate a product if you don't innovate the people behind.

Ricardo Brito in the podcast episode “People First: Innovating the Individual” 

To enable innovation and engage employees, the global fintech company PayPal holds an annual tournament to crowdsource innovative ideas internally. Maria Mileder, Global Head of Innovation at PayPal, explains: The five-month-long tournament encourages employees to formulate, prototype, and present their ideas to investors, represented by PayPal's C-suite executives.

It also includes a learning program to allow employees to acquire new skills in a safe environment. The fintech giant also leverages what they call an “innovation toolkit,” designed to encourage innovation on a daily basis. The toolkit includes things like hackathons, competitions, or playful activities and welcomes every employee to contribute fresh ideas.

Another company that leverages the effectiveness of tournaments and competitions is Cisco. Sanjeev Mervana, Vice President of Product Management, Emerging Technologies & Incubation (ET&I), highlights in his podcast episode that Cisco holds annual competitions that challenge core innovation. These competitions are held not only for employees but also include partners. Cisco has also set up a financial reward system to make them even more attractive.

Innovation is not something you take care of when you have a spare moment. It has to be part of your culture, it has to be deeply rooted.

Sanjeev Mervana in the podcast episode “THINK BOLD: Creating Possibilities for Greatness”

How ITONICS can help you foster an innovation culture

We know that software alone won't change behavior within an organization, but it contributes significantly to more transparency, engagement, and collaboration.

With ITONICS' powerful innovation management software, you'll not only have everything you need to streamline your company's innovation processes from end-to-end but you'll also be equipped with the tools you need to collaborate with team members across departments and locations, breaking down silos and fostering a culture of innovation.

The ITONICS Innovation OS allows you to scout, monitor, and collectively evaluate drivers of change, easily manage your ideation campaigns, steer your innovation portfolios, and track projects, all in one place.

Want to learn more about how transformative software can be? Get a free demo of ITONICS and see for yourself!