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How Leaders Can Create a Culture of Innovation


The most effective way to get people to do what you want is not by giving them a strong incentive, but by making them want to do it. This is the difference between hiring someone to dig a ditch because they want your money and hiring them because they love ditches. When do people naturally want to do something? When it’s part of their identity.

This is why the most effective way for leaders to promote innovation is not by exhortation, or by offering prizes, or by dangling carrots, or even by firing people when they fail. It’s by creating an environment where people can construct their own identities. This is true in art and politics (where leaders have no direct control over what people create) and also in companies (where they do).

The most effective leaders know how to build a sense of shared meaning, not only in what they do but also in how they do it.

The great industrialists of the past may have been right to be passionate about their work, but they were misguided in their ethic of “no pain, no gain.” In today’s world, a company’s competitive advantage rests less on the strength of its individual employees’ knowledge and more on its ability to mobilize collective knowledge. A key factor in this mobilization is an organization’s culture specifically, its norms for creating, sharing, and applying knowledge.

Scholars have come up with various models of organizational culture. The strongest are complex and multilayered. But we can think of organizational cultures as having two basic dimensions: How strongly are people encouraged to think and act as members of the group? And how much freedom do they have to challenge the status quo? Organizational cultures that strongly encourage people to think and act as members of the group without challenging the status quo tend to encourage conservatism and conformity; those that allow people the freedom to express themselves without encouraging them to consider the needs or input of others tend to produce chaos or anarchy. 

The most common mistake startups make is to solve problems no one has. A company that is developing technology to meet a customer’s need has a much better shot at success than one that’s just hoping to develop some cool technology and then find a use for it.

In the software business, this problem isn’t as widespread as you might think. For example, companies that set out to build a better programming language or operating system are usually solving real problems. But there’s still a wide range of ways to go wrong here, and the most dangerous one by far is the feature creep that results from listening too closely to users.

The problem with listening to users is not that they don’t know what they want. It’s worse than that. They don’t know what they want, but they do know what they don’t want. And if you give early versions of your product to enough of them, all the things they don’t want will add up to something that is in no way attractive.

  • Create a culture of innovation from the top down

If innovation is important to your organization, make it important to your leadership team. Provide opportunities for your leaders to brainstorm together, come up with new ideas and share best practices. Encourage them to come up with new solutions to problems they encounter on a daily basis as well as larger challenges they face. It’s not enough for you, as the CEO or manager, to say that innovation is important; you have to walk the talk by setting an example that others in the company can follow.

  • Reward innovative thinking

When employees come up with a new idea or take risks with new initiatives, reward them publicly by telling their stories and sharing insights they’ve gained with their colleagues. Highlight them on the company intranet or blog so that others can learn from what they’re doing and why it matters.

  • Allow employees to work outside their department

Cross-departmental collaboration is one of the best ways for employees throughout your organization to develop a stronger understanding of how things get done at your company and how one person’s work contributes to another’s success. This understanding helps people see beyond their own roles and responsibilities and see how everything works together toward a common goal. Encourage employees from different departments to collaborate.

  • Inspire with vision

A clear vision helps people know what success looks like, and more importantly why it is important. It’s the reason people get up in the morning and come to work. It’s what they will tell their friends and family about when they get home.

  • Create new processes to support innovation

Leaders don’t have to do everything – but they should be able to identify where there are gaps in processes or policies that need changing in order to support new ways of working or thinking. They should then work with others within the organization to create these new processes and policies that will drive the change they want to see.

  • Communicate, communicate, and communicate!

Leaders need to make sure they are communicating with everyone, everywhere, all the time. A simple email from a CEO or Head of the Department can quickly become “company lore” – so make sure you’re telling people how much you know.

  • Lead by example

Leaders need to be the ones who are experimenting with new processes and technologies first — not just talking about it. There are always excuses for why not to try something new — we don’t have enough time; we don’t have enough people; we don’t know if it will work; etc. But if you’re a leader and you want your team to take risks, you need to be willing to make those decisions yourself first.

  • Encourage people to try new things

We’ve all heard the saying “Insanity is doing the same thing over and over again but expecting different results.” So how do we get people out of their ruts? Encourage them not to step away from trying something new.

For more productivity tips and tools, visit RisePath PlanCentral.

Asha patel

Asha has been a program manager, project manager and product manager for multiple Fortune 500 global companies. She has experience with implementing many successful technology, operations and product management projects.

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