How to Reboot Your Innovation System

Having written several books over the past decade and contributed small snippets of thought leadership or entire chapters to over a dozen other books, I still return to the book I wrote with Derek Bishop and Jo Geraghty of Culture Consultancy fame. Despite the world of corporate innovation seemingly moving on from when we wrote it, the reality is that the basics still need to be implemented for many organisations.

The inconvenient truth is that the foundations need to be fully set before any company can drive innovation-led growth. However, the latest Boston Consulting Group report on Innovation Strategy & Delivery highlights the shocking reality that only 3% of companies are innovation-ready, yet 83% rank innovation as a top #3 priority. This is a shocking delta and what I refer to as an innovation growth gap!

With 70% of companies planning to update their innovation operating model, this delta will likely close over the coming years. However, in my experience, companies have always discussed grand plans to update their capability or embed innovation into corporate culture. But Boston's survey figures paint a different picture. In 2022, 20% of companies surveyed were 'innovation-ready', but in 2023, that figure had dropped to 9%, and in 2024, has dropped to a staggering 3%!

"Building a Culture of Innovation" became a bestseller and award-winning for one reason: it provides a practical framework for organisations to place innovation at the core of their business strategy and culture. To write the book, my co-authors and I combined years of expertise in innovation strategy, design thinking, culture change, employee engagement, and leadership development to create the six-stage approach for embedding innovation capability throughout an organisation.

At the time of writing, our core argument was this; "in today's global digital age, innovation has moved from being a "nice to have" to a strategic imperative for business success and survival. With increased competition, rapidly changing technology, and evolving customer expectations, organisations must become more agile, collaborative and adaptable. True innovation goes beyond developing new products - it requires a profound shift in organisational culture and mindset." Nothing has changed, yet the BCG report suggests innovation isn't at the point where it's addressing these challenges for most companies.

While writing the book, we distinguished between invention and innovation. While invention focuses on creating something new, innovation aims to deliver lasting solutions that solve real customer problems, add value, and drive growth. Therefore, building a culture of innovation requires organisation-wide changes in approach, thinking, attitudes and behaviours.

Here's a summary of the core framework outlined in Building a Culture of Innovation and an overview of how we broke down each stage one chapter at a time.

1. Kick Off With Why - Understand the current state and case for change
2. Assemble a Team - Build an innovation leadership team and internal change agents??
3. Agree on the Future - Design the future organisation and culture around innovation
4. Engage in Conversation - Communicate and engage people around innovation
5. Create a Roadmap - Develop innovation aptitude and a detailed implementation plan
6. Make it Happen - Embed the culture of innovation and make it stick

In the first stage, organisations need to build a clear strategy for innovation and how they will develop both capability and culture. To do that, they need to assess their current culture and level of innovation maturity. This provides a critical baseline understanding of the starting point. However, we caution against simply buying or importing innovation from outside. While external partnerships can be valuable, organisations must develop internal innovation capabilities.

The second stage focuses on building an innovation leadership team. We emphasise that if innovation is not a top priority for senior leadership, efforts to create an innovation culture will fail. Leaders need to embrace innovation principles and model the desired behaviours personally. Innovation champions should also be identified throughout all levels of the organisation.

The third stage involves designing the organisation's future vision, values, and innovation aptitudes. These need to align with the overall business strategy while being tailored to the organisation's unique context. You can't simply copy another company's innovation strategy.

The fourth stage centres on communication and engagement. We stressed that collaboration and empowerment are key to an innovation culture. Employees must actively shape how the innovation vision comes to life. The book recommends using a "4Es" methodology - educate, engage, empower and enable employees. Identifying and leveraging "i-agents" (innovation agents) throughout the organisation is also critical for cascading the change.

The fifth stage focuses on building innovation aptitude and developing a detailed implementation roadmap. This includes reviewing and adapting systems, processes, policies, and organisational structures to support innovation. The HR function plays a vital role in areas like recruitment, training, and performance management. We also discuss the importance of establishing innovation metrics while cautioning against measuring for the sake of measuring.

The final stage involves embedding a culture of innovation for the long term. However, we warn that many change efforts fail because the implementation is too short, sharp, and shallow. Sustained leadership commitment and role modelling are essential. As the organisation's innovation capabilities evolve, leaders need to shift to a more guiding and empowering role.

Throughout the book, we emphasise several critical principles for successfully building a culture of innovation:

1. There is no one-size-fits-all approach. Each organisation needs to tailor the framework to their unique context, strategy and goals.
2. Innovation requires a balanced portfolio across incremental, differentiated and radical innovation. Many organisations focus only on minor continuous improvements or unrealistic "moonshots".
3. Customer-centricity is critical. Innovation efforts should be driven by deep customer insights and solving real customer problems.
4. Collaboration is key, both internally and externally. Innovation thrives on diverse perspectives and partnerships.
5. Mindsets and behaviours matter as much as processes and tools. Building innovation aptitude requires shifting how people think and act.
6. Innovation is an ongoing journey, not a one-time initiative. It requires sustained commitment and continuous evolution.

The book provides numerous case studies and practical examples to illustrate how different organisations have applied these principles. It also includes templates, worksheets, and other resources to help readers implement the thinking, framework, and approaches we outline.

Some key takeaways and recommendations from the book include:

• The CEO and executive team must own and drive the innovation strategy. It cannot be delegated to a separate innovation department.
• Assess the current organisational culture and innovation maturity level before planning changes. This provides a critical baseline.
• Engage employees at all levels in shaping the innovation vision and strategy. Don't simply impose it from the top down.
• Review HR policies and practices, including recruitment, training, performance management, and rewards, to ensure they support innovation.
• Identify and empower innovation champions ("i-agents") throughout the organisation to help drive grassroots change.
• Establish clear innovation metrics and KPIs, but focus on measures that drive real value creation rather than activity for activity's sake.
• Build a balanced portfolio across incremental, differentiated and radical innovation initiatives.
• Foster a culture of experimentation, risk-taking and learning from failure. Innovation requires stepping out of your comfort zone.
• Leverage both internal and external partnerships to access diverse skills and perspectives.
• Make innovation central to the organisational purpose and strategy, not just an add-on initiative.
• Model desired innovation behaviours consistently at the leadership level. Walk the talk.
• Take a long-term view. Embedding innovation culture is an ongoing journey requiring sustained commitment.

When writing the book, our core aims were to demystify innovation and provide a practical roadmap for organisations to build innovation into their DNA. While acknowledging no easy solutions, we believe that any organisation can cultivate a culture where innovation thrives with the right approach.

In today's rapidly changing business environment, building a culture of innovation is not just lovely but essential for long-term success and survival. Organisations that need to innovate risk being disrupted and left behind.

By following the six-stage framework and embracing the fundamental principles outlined in the book, leaders can transform their organisations to become more agile, customer-centric and innovative. This, in turn, drives growth, competitiveness and long-term value creation.

We positioned the book as an essential practical guide for leaders looking beyond just talking about innovation to making it a reality throughout their organisations. By combining strategic insights with hands-on implementation advice, "Building a Culture of Innovation" aims to help organisations navigate the challenging but vital journey of embedding innovation into their cultural DNA. It's still absolutely on point now as it was in 2016!

Off the back of the success of "Building a Culture of Innovation", the team at OUTCOME has been building high-performing innovation systems and cultures with companies around the world for many years now.

If the results of the BCG survey resonate with you and you genuinely want to increase the innovation maturity of your company in a short timeframe, reach out for a discussion.