Culture of innovation: 4 attributes and 3 kinds of evidence

Last month I got an opportunity to conduct a session on “Fostering a culture of innovation” for Small and Medium Enterprise (SME) business owners in Bangalore organized by Essae Chandran Institute. We began by exploring the following question. “Assume there is a magic wand that has created a culture of innovation in your organization today. What new stuff will you notice when you go back?” It took some time before participants started responding with “passion”, “curiosity”, “ideas”, etc. Culture is a fluffy stuff and it helps to have something more tangible in recognizing whether it is innovative. In this article, I would like to present four attributes and three kinds of evidence that may give an indication of an innovative culture.

1. Curiosity: Curiosity is perhaps the most underappreciated attribute of innovative culture. Are people raising questions in meetings? Are questions appreciated? For a complex challenge, is there collaboration to frame it with sufficient depth? 
2. Creativity: This is the most visible aspect of innovative culture. Idea portals, idea walls, brainstorms, off-sites, if there is idea generation, it is generally visible.
3. Experimentation: In manufacturing and hardware-centric businesses, experimentation may be happening only in laboratories. In software, it could happen anywhere. It could also be visible in prototyping events such as hackathons. Appreciation of good experiments despite failures is an uncommon but crucial aspect of the maturity of the culture.
4. Demo & Review: Innovation review is, in my opinion, the defining characteristic of innovative culture. Who participates in the review? What kind of questions are asked? Are resources (people, budget) allocated? Do demos happen in the review or just slide show?

Some of these characteristics like creativity are visible on the walls as one walks around in the organization or perhaps on the walls of the intranet. Some others like reviews and experimentation happen in conference rooms and labs.  For some of the SME business owners I interacted with last month, experimentation was the most challenging aspect as it involves investment in tools and expertise in designing and executing experiments. And I agree. However, I feel that a culture of continuous improvement is a good place to start the journey as it doesn’t involve major investment. Many times business leaders want to focus only on big bets.

It takes years to build a culture as evident in Toyota's idea management system dashboard. It took five years for the participation to cross ten percent and almost fifteen years for it to reach thirty percent. In contrast, destroying a culture doesn’t take that long. Imagine a CEO sending a curt message saying that failure will not be tolerated. It won’t be surprising if people stop experimenting due to fear of failure.

Appreciation is a tricky lever. If you decide to appreciate every idea, then appreciation loses its significance. And if you decide to appreciate only the successful innovations, then smart failures remain unappreciated. In a place where only success matters, people will avoid risk so as not to fail. One needs to find the right balance between efforts (giving ideas, doing experiments, making a business case) and outcomes.

I feel an innovation review is a powerful lever, especially for senior management. A lot can be communicated through the decisions and feedback given during a review. For example, a review that emphasizes a demo vs just a slideshow sends a message that prototyping matters.

Hope this characterization helps in deriving a basic assessment of the culture of innovation in small and big organizations and gives direction on possible plans of action.