Entrepreneurs set the tone for their venture’s culture. Some opt for efficiency-optimized companies, while others entrust employees to work at their own pace. Some companies play it safe, while others invest in creativity, embrace risk, and launch exciting ventures — the product of a strong innovation culture.
Though culture seems intangible, it greatly impacts companies. When job seekers evaluate an organization, they often look at its culture. Almost 9 in 10 workers consider a company’s corporate culture when applying to jobs.
And in-demand employees tend to join organizations with great, innovative cultures. This in turn increases the productivity and profitability of your company, driving its long-term success.
Table of contents:
What is Innovation Culture?
Innovation culture is a type of workplace environment that encourages and invests in risk-taking, unconventional thinking, and problem solving. A culture of innovation encourages the entire organization — from top to bottom — to feel comfortable with offering new ideas, collaborating with others, and brainstorming.
Organizations with a culture of innovation reap many benefits, such as:
Continuous product optimization: Innovation involves thinking of new ways to solve problems. In companies, this manifests itself in new products, features, and services.
Increased competitiveness: A culture of innovation creates an environment unsatisfied with the status quo and ready to challenge it, pushing the company to be ever evolving.
Heightened employee satisfaction: Research shows that employees crave autonomy and flexibility. An innovation culture empowers workers to think outside the box and take on projects independently.
Greater market opportunities: Innovation pushes your organization to think big. A solid idea could transform into a full-blown entry into another market.
Increased adaptability: Organizations have to weather economic downturns and unexpected events. A culture of innovation prepares your organization to deal with these challenges, as every employee takes a solution-oriented approach to problems.
How To Build Innovation Culture
1) Know your organization's tolerance for risk
Not every organization can take on significant risk, depending on its size and structure. When building an innovation culture, first understand your organization’s tolerance for risk. Ask yourself:
- Which areas or departments can afford the most risk?
- How innovative are my competitors?
- At what level can employees engage in risky, innovative projects?
Work with other stakeholders in your organization to answer these questions. Set these limits early on to make it easier to incorporate a culture of innovation with your company’s existing environment.
2) Craft an inspiring and motivating story
Develop effective messaging that encourages employees to embrace innovation. You can start by modifying your company values to better emphasize creativity. Then, think of ways to craft an inspiring message. Consider the following mission examples, which all encourage high-level innovation:
- "To make computers more accessible."
- "To change the landscape of health care."
- "To help businesses manage finances and make money."
Each of these goals entail endless optimization, which a culture of innovation embraces. Your message should have workers asking how they can help the organization achieve their mission.
3) Rethink team structures
The structure of your business may be curbing innovation. For example, if your organization’s departments tend to keep to themselves, this stifles the collaborative nature of innovation. When deciding to adopt a culture of innovation, evaluate the current structure and processes of your company.
You could consider the following moves to restructure your business:
- Reduce daily oversight of employees — instead, ask them to frequently communicate their progress with managers
- Encourage teams to make some decisions without going through executive approvals or additional red tape
- Modify certain responsibilities for different roles, such as adding more project ownership to entry-level workers
4) Incorporate innovation-based performance metrics
To incentivize innovation, you need to incorporate metrics into performance reviews and involve workers in innovative projects.
You could look at projected profitability for budding projects, or total number of ideas generated by an individual per quarter. On a more organizational level, human resources could measure employee comfort when it comes to offering suggestions and ideas.
5) Set aside time for innovation
If a worker spends their entire 9-5 on day-to-day tasks, they end up with no time to think outside the box. A culture of innovation necessitates setting aside time to work on projects and think creatively.
You could dedicate a week to hacking a certain problem the organization faces, or set aside time for a “hackathon.”
6) Reward learning
Create a culture that views failure as an opportunity to learn. Ensure managers avoid punitive measures if their workers experience failure as a result of experimenting. Consider hosting workshops to cover how the company views failure and how workers can learn from miscalculations.
7) Offer educational resources
Encourage learning among your employees by offering free educational resources, such as access to online courses or internal workshops. You could also create a learning hub in which employees teach others in a wiki or shared set of documents.
8) Ensure employees remain focused
An eager employee could dive into five side projects, committing 20% of their free time to each one. But by spreading themselves too thin, they cannot completely execute on any of their ideas.
Instead, ensure managers limit the number of side and main projects workers can commit to. Consider starting with two side projects at a time, and consult with the employee on what they hope to get from the role.
9) Partner with other organizations
Sometimes, bringing in an external partner can help ideas flourish. Though this may take careful planning, such as handling who takes on what risk, partnering with another organization on projects or research can bring in a fresh perspective. You could do this by:
- Bringing in students or faculty from local universities for research projects
- Collaborating with a startup on a mutually beneficial project
- Working with local organizations, such as nonprofits or government agencies, on solving problems in your area
10) Communicate and lead by example
To build an innovation culture, you need to send a clear message and show buy in from the top. As an entrepreneur or business leader, this means communicating about innovation regularly and spotlighting innovative behaviors from senior executives.
11) Create space for feedback
Innovation requires collaboration. Create time and space for employees to receive feedback on their innovations.
You could host science fairs where employees introduce their side projects and get feedback from colleagues. You could also create an open-door policy, which empowers workers to ask for feedback from executives and leaders.
Innovation Culture Examples
Despite the company’s growth into a media giant, the maker of Toy Story and Finding Nemo has retained its culture of innovation.
Pixar ensures their employees take care of their psychological well-being while creating an open and candid environment, which helps drive innovation. For example, Pixar often hosts Braintrust meetings to review movies in production. Each attendee, regardless of rank, offers their honest feedback and thoughts after watching a movie screening.
These meetings encourage honesty and openness among employees, and help the company to continuously create better, more entertaining movies.
The aerospace startup counts innovation as one of their top values. The company builds its culture by making innovation a requirement to get hired.
SpaceX also encourages innovative behavior by offering aspirational incentives. Workers can tour the factory floor and watch live cams of the rockets they help build, showing the impact of their work and creativity.
The company has hosted tours for celebrities such as Jennifer Aniston and Will Smith, which gave a morale boost to its workers. Founder Elon Musk also regularly delivers speeches that focus on pushing SpaceX forward with new technologies.
To encourage side projects, Adobe created the Kickbox, a kit with tools and resources an employee can use to build and validate new business ideas. Inside the box, employees work through a six-step guide on developing ideas, go-to-market strategies, and prototyping, alongside $1k to help them build their vision.
By giving every employee the resources to innovate, Adobe created a culture that encourages true experimentation and incentivizes their workers to find unique solutions to business problems.