Innovate or Die: Cultivating a Culture of Problem-Solvers

Innovation is vital for two key reasons. First, it significantly boosts your chances of long-term success. Take a look at the most valuable companies in the U.S., like Amazon, Apple, Microsoft, Tesla, and Google. These companies constantly challenge the norm and adapt to market changes, consumer preferences, and economic shifts. Their relentless pursuit of new ways to create value keeps them at the top. Innovation is crucial for establishing and maintaining market leadership.

In contrast, look at the turnover on the S&P 500. According to Innosight, the average tenure of companies on the S&P 500 has decreased from thirty-three years in 1965 to less than twenty years. Companies that fail to continuously innovate end up stagnating, eventually dying, or being acquired by competitors. Innovation is necessary for survival and growth.

The second reason is that innovation helps attract and retain top talent. The best minds want to tackle big challenges and work in environments that foster creativity and innovation. Companies like Netflix thrive on this by attracting individuals who are driven to solve significant problems. What kind of talent does your organization attract?

Investing in an innovation-driven culture pays off in the long run. Your business strategy is essential, but it’s your culture that fuels the engine of innovation. By creating an environment that encourages new ideas, you cultivate fearless leaders who will drive your organization forward. Without innovation, your business is at risk of becoming obsolete. An innovation-friendly culture excites and motivates teams, as most people crave continuous learning and creativity. This is why fostering innovation is a core component of supporting your people. You can implement the following principles to establish innovation as a core part of your culture.

1. Communicate the importance of innovation often and continuously. You can’t expect innovation without talking about it. The first step in generating a mindset of continuous improvement within your organization begins with stating its importance. Encourage your team to continually think outside the box. Avoid the trap of making innovation a flavor-of-the-week initiative. Instead, make it stick through continuous communication.?
2. Encourage new ideas from everyone across your organization. Remember: The best ideas can come from anywhere in your organization, so seek diverse perspectives. Engage creative people from all levels, functional areas, and tenures across your organization. One of the keys to innovation is open collaboration across functions. You may have experienced a situation where the marketing team rolls out a new campaign, but the sales team does not jump on board. Engaging cross-functional teams throughout the organization helps solve this kind of problem. I also love pulling new team members into projects. Even the most creative people fall into the trap of knowledge bias because, oftentimes, they have so much experience, they can only see a problem through the lens of their own background. The beauty of having someone on your team who possesses less experience is that he or she can offer completely unbiased ideas.?
3. Focus on properly framing the question on which to innovate. Frame the problem from the perspective of the customer. Whether that customer is your end customer or an internal customer, include customers in the problem framing. By including them, you ensure that you tackle the correct problem. I’ve seen companies invest months of resources to create a solution they think will solve the customer’s problem, but once released, the customer never adopts it. Avoid this by framing the problem with the customer from the very beginning.
4. Recognize all attempts to innovate, including those you do not implement. When a company successfully implements an innovation, most recognize the people involved. However, when a person or team takes a swing at an innovation, and it doesn’t succeed, most organizations don’t talk about it. They act like it never happened. This is a huge mistake. Take time to recognize the effort the big swing took. Acknowledge: Yes, we missed it, but thank you for taking a risk and sharing what you’ve learned from this experience. This may sound unnecessary, but trust me, your people are watching. You want your people to volunteer for new innovation projects rather that being fearful of failure.??
5. Test vigorously. Build testing into your DNA. Whether it is the way you market to your customers, how you price, or what products or services you offer, employ simple tests to continually improve. For example, at most of my companies, we run subtle pricing tests a few times a year for new customers. We keep a control group on the old pricing, and we test new pricing with another group. We set very clear goals for the pricing tests, such as revenue per customer, sales close rate, and retention rate. We run the test, and once we collect enough information, we decide on the winning pricing formula. Make testing part of your innovation culture.
6. Set bold goals. One of the best ways to support an environment of innovation involves creating bold goals. It is very difficult to avoid innovation when you must do something big to achieve those goals. With easy goals, you can make incremental improvements. With bold goals, you must innovate. Whenever I start working with a new company, I encourage the team to create one new revenue-generating product or service every quarter. This bold goal prevents the team from becoming complacent. It creates an expectation of constant innovation.
7. Build innovation into your annual planning and budget. We’ve all worked with brilliant people who are amazing at generating ideas. Coming up with ideas is relatively easy and inexpensive, but then those ideas need to be executed and turned into innovations. This is where I’ve seen companies struggle the most. You must provide the required level of time, people, and money to transform a great idea into a viable solution.
8. Establish a framework for ideation and innovation. Whatever framework you use for ideation, I highly recommend that you ideate individually before holding a group session. This circumvents the problem of groupthink, and it generates more ideas. Some people just don’t think as quickly and need some alone time to be creative. Some people are naturally quieter or may be intimidated by a group ideation session. Group ideation at the onset will likely result in fewer, and lower-quality, ideas. The goal of ideation involves gathering as many ideas as possible. Some may be good, some will be bad, and some will be absurd. However, evaluating and discussing these ideas may trigger new thoughts and variations, resulting in a great idea. Avoid the trap of being too analytical up front and killing ideas before discussion. Two half ideas may lead to your final idea. Once you’ve captured all the ideas from individuals, then it is much more practical to move into a group session for discussion, riffing, and further brainstorming.?

For more insights and practical strategies on cultivating a culture of innovation and leading your organization to greater success, check out my book, "Love Your People." It’s a comprehensive guide for entrepreneurial leaders seeking to innovate, grow, and create thriving business environments.