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People, processes and culture: don’t let these three innovation enablers become roadblocks

Businesses, both small and large, should know by now that innovation is the key to competing in the digital age, and that longevity isn’t possible without a culture that is inherently innovative 

A report by IBM provides evidence that creativity is at the heart of innovation, revealing that executive leaders consider creativity the most crucial leadership skill for dealing with an increasingly complex future [1].

Keeping this in mind, it is important to note that whether a business succeeds or stagnates will depend on the combination of their people, processes and culture. With nurturing, these three factors will drive innovation but without it, they’ll become roadblocks to innovation.

The people

Whether or not leaders are passionate about innovation will have a huge impact on the businesses they lead. While a passion for innovation needs to permeate the whole organisation, it needs to be driven from the top. A report by the Centre for Creative Leadership (CCL) found that one in three people from ‘ineffective’ organisations cite ‘leaders who don’t encourage innovation’ as the major barrier to success. This demonstrates that without a progressive leader or management team it is almost impossible to excel.

Creative thinking can thrive in SMEs if the leader permits it to. By virtue of their size and flatter structure, they are in a position to take a ‘top-down, bottom-up’ approach to innovation where wisdom, information and the best ideas are effectively ‘crowdsourced’ from within the business. This gives individuals a sense of ownership over the work, boosts both engagement and motivation, and results in a community of creative thinkers, not just workers.

Engaging a successful Entrepreneur in Residence to coach on projects in the business is also a useful means of igniting a passion for innovation. While it’s more feasible for smaller businesses to engage an entrepreneur for one or two days a week, rather than full-time, this expert coach can provide staff with an understanding of best-practice methodologies as well as an outsider’s perspective, useful for keeping them on track and helping them gain momentum.

The process

Turning the practice of innovation into something closer to a production process helps businesses, both big and small, ensure great ideas are properly brainstormed, developed and implemented. Whist some ideas may ‘come out of the blue’, it’s important to have a strategic vision for the business, supported by a proactive and efficient innovation process. An effective innovation process will involve observing customers and trends, with a view to uncovering changing preferences as well as new problems, opportunities and solutions. It will also involve prototyping and in-market learning.

The Culture

Culture change can take years – even for smaller businesses; however, by looking at what’s working in the culture and how it can be leveraged—as well as what overtly blocks innovation – it’s possible to create a culture that sustains it.

Innovation requires considerable amounts of trust due to the risks involved for both the business and the employees. Therefore, the level of trust in a business, and the degree to which staff are empowered to take risks, are good places to start when determining whether a culture of innovation exists.

To build trust, it’s important to incentivise workers to take ownership of – and be accountable to – their employing business. The changing nature of work, such as millennials entering the workforce, the rise of the ’solopreneur’ and flexible work options, has meant businesses increasingly understand trust is very much valued. David Thodey, for example, increased the proportion of Telstra staff that owned the company’s shares from below 70% to 90% while he ran the telco. This helped to build the community, created an improved work environment and, ultimately, created trust. If equity is off the table, consider phantom equity, which is an equity derivative based payment that many entrepreneurs use to reward their key staff without giving away control.

Managing risk, including the possibility of failure, is important for businesses seeking to create a culture of innovation. In the same CCL report I mentioned earlier, a fear of risk-taking was identified as factor that prevented businesses from being innovative. I often say ‘fail-fast’, which isn’t to say failure is the ultimate goal; rather, it is learning. Failure is simply working out what doesn’t work, so you can find out what does. Failing fast means working out the path to success, fast.

The bottom line

Ensuring SMEs and larger organisations are inherently innovative requires passion and dedication. People matter, process matters and culture matters, and considering where all three aspects currently stand within a business will help to ensure it can get to where it needs to be.

About the author

Peter Bradd is the co-founder and CEO of The Beanstalk Factory, which works with corporates to inspire innovative thinking. He was the founding director and initial CEO of StartupAUS, Fishburners and ScribblePics. He has previously shared his thoughts on failure in business with Dynamic Business. See: “Failure isn’t fatal, nor is it defining – it can equip you for success”: Beanstalk Factory CEO and “Don’t let a fear of failure stifle innovation – mine mistakes to strengthen your business”.

[1] IBM. (2010). Capitalizing on complexity: Insights from the global chief executive officer study: Executive summary. Retrieved from: https://www-03.ibm.com/press/us/en/pressrelease/31670.wss

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Peter Bradd

Peter Bradd

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