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How to build a culture of innovation in your business

March 24, 2014

Culture is the intangible glue that binds us. It shapes attitudes and behaviours. It generates tone and identity. And, it is the lens through which we make-meaning of the world around us, and our place as an organisation within it.

Building a culture of innovation in your business brings many benefits, including helping to give you a competitive advantage and making it easier to recruit new talent.

Over the last twenty years I have specialised in building cultures of innovation with and for our partners and clients. These transformational journeys often take several years, as we traverse the subtle phases and stages needed to shape innovative businesses that really stand out and make a difference.

So what is a culture of innovation and why do you need one?

For most people, culture is too intangible and therefore dumbed down to one-dimensional narratives based on engagement surveys and/or dictates from the top around values and behaviours.

Moreover, the dominant interest in culture has for many years centred on the development of high performing cultures, based on high-performing norms and bench-marked best-practices. And this is where the problem starts.

Culture is the implicit ‘way we do things around here’. It shapes how we collectively think, relate, organise and learn.

The challenge now is to create cultures that in themselves generate true and sustainable competitive advantage. These cultures attract and excite new talent, challenge us to work at our edge, help us value difference, increase our self-awareness, deepen our quality of relationship and contact, enable us to play with new and novel intersections, hold creative tension, tap into our collective intelligence, and enable us to do things we never imagined we could do in ways that lead to new patterns of thought and action.

This is so vastly different from measuring ourselves against other people’s best practices, or asking people to align themselves to a series of basic values like respect, integrity and teamwork.

Now I have nothing against these table-stake values, for they are examples of an ethical baseline that need to be established and upheld. But just plastering them on office walls, and embedding them in various HR processes and systems, doesn’t create a culture that is more innovative, or even one that is higher performing.

The most successful companies are those that work on their core identity

A recent piece of research from Booz and Co deep-dived into the characteristics of companies that have thrived during the last five or so years of turbulence and volatility triggered by the global financial crisis. Those that best traversed this more complex and ambiguous landscape didn’t do so by implementing benchmarked best practices, nor did they follow perceived customer needs.

Instead those companies that were most adaptive, creative and productive were those that had focused on developing their core identity as a beacon, or strange attractor, for internal talent as much as for their clients and customers.

This quickening of self, of who we are and what we stand for, generates an inner capacity to work with complexity, tension and ambiguity, and in turn builds a confidence and a resilience to shape next practice, new markets and new possibilities.

Doing what you’ve always done a bit better is no longer enough. More than ever before, organisations need to break free of old dogmas (even if rooted in past successes) and to open their minds (individually and collectively) to shaping, not following, more innovative, purposeful and sustainable ways forward.

The cornerstones of a culture of innovation

Building cultures of innovation is therefore a critical need for many. Ironically, the more complex the organisation the greater the chance of building a culture of innovation, because creativity resides in the space between, and complex systems have a greater number of new and novel intersections to mine. Unfortunately building a culture of innovation is also a subtle endeavour, where the objective, measurable and tangible world hits a ceiling. Let me briefly explain.

Every culture begins as ‘opportunist’, seeing a gap in the market or grasping a moment in time. These cultures then naturally seek out more knowledge and know-how, as they move towards being ‘expert’ cultures. If successful, they then evolve into ‘achiever’ cultures, where this success is scaled and replicated.

For good or ill, the dominant model that underpins the achiever’s capacity to drive growth is more often than not based on mechanical and industrial worldviews that encourage us to build systems and processes that control and manage work to the nth degree.

If we are lucky enough to have a great product or service then these systems and processes can, for a time, support an apparently successful business. However, in a world where our capacity to innovate, sustainably, is the only true strategic differentiator left, then simply turning the handle on a current great idea is no longer enough.

The challenge is how, strategically and culturally, we continue to build our collective capacity to innovatively shape the future. This means catalysing new patterns of creative thought that in turn generate new patterns of innovative action.

This is where cultures of innovation come in. Over the last twenty years nowhere has identified four cornerstones to cultures of innovation. They are:

1. Creative Fire

Cultures of innovation have a burning passion and compelling purpose that fuels inspiration and aspiration. This creative fire is palpable. You can feel its heat as you walk into an organisation.

Leaders who evoke cultures of innovation stoke this fire because they understand how it acts as an energetic wellspring that challenges and excites teams to ask the big questions and to break free of their limitations. This state and trait has a bursting-forth energy, radiating new possibilities at every turn to shape, make and co-create the future.

2. Wholeness

In contrast to this, evocative leaders also pay attention to the health of their systems. While creative fire burns energy and resources at a pace, evocative leaders know how important it is to replenish this energy and nurture their teams and organisations.

They therefore invest in and understand the importance of developing the wholeness of their organisation – its intellectual, social, emotional, physical and spiritual capital – so as to refuel its creativity. They often secure this cornerstone by designing structures and organising mechanisms that support growth and foster longevity.

3. Working with the unknown

The third cornerstone evocative leaders pay attention to is their team’s and/or their organisation’s capacity to work with and venture into the unknown. This means increasing levels of curiosity, deepening the quality of relationships, developing emotional intelligence and resilience, and expanding trust.

These qualities resource teams and organisations to step into the unknown, to work with uncertainty and to muster the resolve needed to continuously walk through the world with a sense of awe and wonder.

4. Elegant Action

The final cornerstone is elegant action. This is the capacity to move like a flock of birds. This is about ‘drawing beautiful lines in the world’. It is not a workman-like energy. Rather, this state is all about finding and following the flow of creative expression i.e. turning purposeful energy into innovative form.

To catalyse this phenomenon, evocative leaders deploy sets of liberating-disciplines designed to focus the creative energy of their teams and organisations, helping them move into optimal states of flow.

Building cultures of innovation is a multi-year journey that requires leaders to have foresight (because culture change has a time lag), courage (because it means taking yourself and many others out of their comfort zone), and conviction (because you need to stay the course when you disturb the status quo, and to resist collapsing back to what you already know).

Yet, these cultures are worth the investment of time and energy, for when they manifest they simply change the rules of the game. And we desperately need new rules in business, education and society at large if we are to innovate our way to more purposeful and sustainable futures, let alone face into the super-wicked problems of our time.

About the author

This article was written for ByteStart by Dr Nick Udall, the co-founder and CEO of
nowhere. He is also a founding member and the current Chair of the World Economic Forum’s Global Agenda Council on New Models of Leadership, and the author of Riding the Creative Rollercoaster, published by Kogan Page.

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