5 Keys To The Culture Change Required For Innovation

Based on my years of experience as a business executive and consultant, I am convinced that most companies gradually lose their ability to be creative as they mature, and over time are overcome by new competitors and market changes. Only a few have found the leadership to continually innovate in the face of change, and the rest are still looking for the recipe or secret.

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Companies and leaders with notable success include Amazon with Jeff Bezos, Apple with Steve Jobs, and Starbucks with Howard Schultz. Even these have had their ups and downs, but credit their team culture with a mindset of being innovative and agile, compared to the more prevalent corporate culture of focus on profits, repeatable processes, minimal risk, and business as usual.

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I’m convinced that the key to transformation success is being proactive, rather than waiting for the next crisis to tell you that you need to change. In terms of specifics, with action items that you can start now, I like the strategies outlined in a new book, “Going On Offense,” by Behnam Tabrizi.

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Dr. Tabrizi is a renowned business transformation advocate with decades of experience with executive programs at Stanford University, Harvard Business School, and his own consulting practice. I like his summary of the challenges involved, real case studies, and especially his recommended building blocks to a culture of perpetual innovation in any company:

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1. Extract and instill a long-term vision in your team. Your people on the customer front lines have the input you need on institutional changes required. Listen to them, garner their trust and support, and assimilate your transformational vision for the organization. Communicate the vision priorities so that everyone knows what they are working toward.

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In my experience, most team members by default have only a short-term focus on immediate problems, leading to team members becoming less motivated and more cynical. It takes a strong leader to pull such a business out of its downward spiral.

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1. Synthesize empathy with customers with new trends. Build a deep understanding of customer needs and ecosystem megatrends through interviews, focus groups, data analytics, and your own transformation team research. Define your target customer set, and make sure you are empathizing with that customer at the company-wide level.?

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Be sure to address all three domains of empathy: emotional, cognitive, and compassionate. Be aware that hybrid work settings of today are testing your company's empathy strength in its daily operations. Don’t forget to follow through in actions.

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1. Transform employee mindsets from inside-out. Before you bring in outsiders, help current team members see the transformation as an opportunity. Focus on team member strengths and unique contributions, and show how your plan facilitates their progression and growth. Have each develop a personal transformation plan with your support.

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Continuous innovation is a mindset that you cannot outsource, or bring in through acquisition or consultants. It requires that the core team be totally engaged and committed, also supported by management and in-house executives at all levels.

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1. Create flat cross-functional teams and experimentation. You need a structure for rapid and fluid decision-making, with experimentation, continuous testing, and learning. Supporting the rapid-response teams should be a core of executives led by a committed transformation leader with necessary investment resources and success responsibility.

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Jeff Bezos at Amazon is a big proponent of conducting regular change experiments in the business model. Bezos believes that if you double the number of experiments you do per year, you’re going to double your innovation, and assure new business opportunities.

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1. Motivate volunteers for rapid-change teams. You need an army of volunteers eager to drive your strategy forward while continuing their day-to-day jobs, from all levels of the organization. If selected and motivated correctly, these key team members will informally spread the message through the hierarchy, and become the next generation of leaders.

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A key to motivation for continuous innovation is not penalizing failure, and recognizing learning as well as success. When you learn from mistakes and move forward by taking accountability for results, even the ones you don't like, mistakes become opportunities.

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Fundamental to this transformation is the underlying emotional commitment of the team to something bigger than profits and revenues. Only then can you all break out of the conventional corporate bureaucratic mindset and become perpetual innovators, overcoming individual wants and insecurities, and beginning the work of doing better for your business and the world.

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*** First published on Inc.com on 08/28/2023 ***