Building a Culture of Innovation

When I talk about Innovation with people and ask them what gets in the way of driving Innovation, the most common answers are consistently Time, Money, Prioritization and Culture. While all of these are roadblocks to Innovation, I wholeheartedly believe the underlying issue is almost always Culture. A lack of a culture of Innovation within an organization bleeds over into collateral issues of time, money and prioritization which all stifle Innovation.

"Building a culture of Innovation" sounds fairly esoteric so I think we need to get more tactical. This article will be my attempt at that.

Let's start with the question "What is Culture?" We know that culture is made up of 6 components:

1. Vision - Know where you want to go and regularly communicate it.
2. Values - What do you stand for?
3. People - Diversity matters. Your people matter. Behave accordingly.
4. Practices - Live your values.
5. Narrative - What's your story?
6. Community/Place - Your Mom always told you to choose your friends wisely. The type of community you build will have a big impact on your culture.

Much has already been talked about regarding Vision, Values and People. So I am going to spend some time on Practices, Narrative and Community.

Practices

If you have a stated value yet in practice never follow it, you are doing more harm to your culture than just not stating the value to begin with. It makes your employees feel like they are being lied to and builds a culture of dissonance and mistrust. Core values should not be treated as casual new year resolutions.

I recently met with a company who claimed their core value was diversity. When I asked what diversity meant to them, the response was fairly uninspired "to hire more women and minorities to fill tech positions". Given that nearly everyone in their Sr. Management team was roughly the same age, same gender, most from the same Ivy League schools, that answer was a good first step. 

It was no surprise though that in 2 years of having a diversity program, they made no more than single digit improvement towards their stated goals. When I asked why they thought that was, the answer was telling. I was told that there just weren't enough qualified diverse candidates in their talent pipeline and they did not believe they should compromise on quality. I was assured that if they found a diverse candidate, that had equal qualifications, the diverse candidate would certainly get the job over the non-diverse candidate. One of the qualifications they score highly is "good cultural fit". You can draw your own conclusions here. I will just say the obvious, that diversity hiring starts in building a diverse pipeline from diverse places with people who value diversity of thought. If you have a diversity goal and do not have a diverse interview panel and diverse pipeline, you may want to assess if your practices can support your core values.

I have seen similar examples in areas of "innovation" as well. Many companies say they want to have a "fail-fast" culture yet have zero KPIs, incentives, or performance goals to encourage test and learn in their company. Worse, is that they treat people who push on the company norms as "troublemakers". If a company has no positive incentives for trying new things or questioning the status quo then the employee assumes all risk and no reward for trying to "fail fast". From my experience, when you setup those types of conditions, the "troublemakers" are the only ones who would dare try. Some are successful in getting the Innovation fly-wheel started, most just disengage. You cannot hire your way into a culture of innovation. If you aren't ready for the innovation "troublemakers" do not hire them. It is soul crushing for these types to be brought into a company to simply be normed into complacency.

For both examples above, I believe that these companies without realizing it, are telling their employees indirectly that the company values don't matter. That actions towards values don't matter. What matters is simply saying the "right" thing. "We have a diversity program". Check "We value innovation". Check. Ok, now everyone get back to your usual jobs in the same way we have always done things and be inspired by how "open minded" we all are. This is not the cultural environment where collaboration and innovation thrive.

Narrative

I have been privileged to be able to work for two companies that either created or fundamentally shaped their categories. Levi Strauss and Co invented the denim category and has remained the category leader since its inception over 150 years ago. Their story-telling is rich with history and sentimentality. Intel, in a radically different category, just recently celebrated a 50 year anniversary. For 50 years, the company has focused on driving experiences that drive computing. Intel has always been great at inspiring future possibilities. Both companies are very similar in accepting their responsibility as a category leader and in understanding that it is their obligation to help pull everyone up with them. Both do so through story telling in a way that stays both relevant and authentic.

Both companies are a great example of how powerful the right narrative can be to building community.

Building Community

I live very close to the Napa Valley. Late last year, the area was hit with massive fires. It is times like these where one gets to see their community values shine. Napa was able to shine like a beacon. The hashtag #NapaStrong took hold as the community came together to overcome adversity.

It is easier to tap into an established community when there is a common need and common goal. The Napa Valley community is not just a group of people who live in the same area, it is a group of people passionate about art and culture, and the uniqueness of the Napa Valley. Protecting that and supporting the arts, love of wine, appreciation of nature and the bond of the community is very important.

When wineries were hit, their competitors (neighboring wineries) jumped in to help. There were stories of companies sending employees and equipment over to other businesses to help pick grapes in the fields with fires burning nearby. Some offered storage to wineries who needed it and generally provided as much support to their neighboring businesses as they could. Yes, these were competitors in the wine industry, but they all still share the same core values of protecting the arts and the love of their community. They are passionate about the mystique built on the quality of Napa's wines, and collectively believe that everyone in the region needs to have a great product or the whole region suffers. Yes, they all assert their product as superior but the best, they differentiate themselves on their hospitality and member community. This, is the lesson that I feel the Retailer community needs to learn. As the community is fighting the new competitive forces hitting brick and mortar, now is the time for the greater retail community to bind together to help pull everyone else up. If for most, experiential retail falls flat, all brick and mortar will suffer. No one would vacation in Napa Valley simply for a single great winery.

For me, true scalable Innovation is rooted in collaboration and in core values aligned towards supporting a greater community. My open question to the retail community is "How can we as an industry get more collaborative" to raise the standard around speed of innovation and improved in store experiences.