Three Requirements for Creating an Innovative Culture

Thursday, August 1, 2013

Crowdsourcing, ideation sessions, reinvention, brainstorming, blue sky thinking, and visioning are all parts of the innovation process. But they are only a small part—and certainly not the most important part. While the business world is littered with innovations from these methods, only a few ever get anywhere. Why? They do not fulfill three vital requirements for success.

#1: Know your customer

According to Steve Dadoly, a serial IT entrepreneur and chief operating officer of Infragistics, “The first thing is to know what the customer wants! If you don’t thoroughly know your key customers, don’t start any innovation process! Why? Because you risk coming up with wonderful ideas that have little or nothing to do with the business you are in.”

We recommend following four steps to make your innovation customer focused.

  1. Create one index card for each of your key customers (or customer groups) answering these questions

    • What are each customer’s main products/services?
    • How do they each differentiate themselves from their competition?
    • How can you help them maintain their differentiation?

    If you don’t know all the answers, ask your boss. Don’t rest until you know and understand. Also, if you are dealing with only internal customers, most questions also apply to them.

  2. Bring these cards to each meeting. When you are struggling about how to proceed or with a problem that has multiple solutions, pull out the cards and use them to guide you.
  3. Include these cards during orientation for new employees or interns.
  4. Hang them in highly visible places—at your water cooler, coffee maker, in your cubicle or your meeting room.

#2: Create a culture of trust and constructive conflict

Trust is key to unlocking the full potential of a team, yet it is so difficult to build and maintain a high trust level in a team.  Our global research results found that senior leaders often start out facing distrust, and therefore have to earn trust over time.  According to our data, only 8 percent of leaders receive automatic buy-in for change from employees.

More important, trust is a very fragile asset that can be destroyed easily by an un-careful comment, exclusion from critical discussions, not being given credit for an achievement, or being wrongly blamed for something.


For example, the leadership team of an 85-person division was mired in conflict. The new leader was trying to push performance to the next level. The effort was partly driven by her strong, stubborn personality. Partly it was a response to their rapid growth. The scope and pace of the change put a lot of stress and strain on this executive as well as her team. 

When we first spoke to her, she told us that the team “wasn’t stepping up to the plate,” “wasn’t taking responsibility for getting things done,” and “wasn’t offering any new ideas.” Our interviews with the team told us a different story: They were acting this way because they didn’t trust her. She had been pushing them very hard to move forward at a fast pace.

In the process, she would lose her patience with them. Sometimes yell. Sometimes insult. This paralyzed the team.  The leader made a fatal mistake. She assumed that her team would automatically buy into her plans because she was their boss. During times of change, which in this case consisted of both growth and new leadership, her team was waiting to be led, not commanded. The team was not going to offer new ideas because they feared they would get attacked.

Trust will allow your team to have constructive conflict, which is critical for an efficient innovation process. Innovation is about creating a culture of trust and risk-taking, which enables new ideas to be born and grow. This includes eliminating ideas and attitudes that block innovative thinking and its implementation.

#3: Allow for mistakes

In our work, we have witnessed a wide range of corporate attitudes toward mistakes. In one of Antoine’s first jobs, the CEO and founder of the company used to say: “Only people who do not work, don’t make mistakes!” What a contrast to a later job Antoine held in “big pharma,” when his boss complained bitterly about an email he had sent that included an apology. His boss said: “Never apologize! Then they will think we made a mistake.”

The truth is that as you are trying new things, as you are pushing your limits, you will make mistakes. Martin Huber, CFO at Fisba, a high-tech manufacturing company based in St. Gallen, Switzerland, says: “Our company depends on innovation. We succeed by bringing the best high-tech optical device solutions to our customers in the medical, defense, aerospace, and other industries. We allow people to make mistakes! Not the same mistake twice of course. But mistakes are part of the learning curve.”

Fisba has an institutionalized “after-action review” so that top management can review risks they took. They ask themselves after a reorganization or investing into new production infrastructure, “What did we do right; what did we do wrong?” This only works because there is trust and willingness to acknowledge successes and mistakes. The candid feedback helps them to learn as a team and as individuals.

Jamie Gallagher, president and CEO of Faber-Castell USA, summarizes it best: “Understand that innovation and out-of-the-box thinking is not primarily about creative thinking methods—it’s also a way to behave. Assert yourself, dare to fail, and be resilient. Be willing to take risks and try new things and new approaches. The foundation of success across all organizational levels is set by the way you talk to people, assign jobs, and deal with mistakes and failures.”  

About the Author
Mr. Polsky spent 20 years in OD & Learning, teaching more than 10,000 professionals worldwide before co-founding Teams of Distinction. With a Masters in Organization Development and a lifelong education in human behavior (beginning at the age of 9 at the kitchen table) Mr. Polsky has been a life-long student of human behavior in and out of the workplace and prides himself on bringing his kitchen table wisdom to boardroom roundtables.
About the Author
Before co-founding Teams of Distinction, Mr. Gerschel was the COO of a $17 million multi-media learning company in Europe and the Director of global leadership development and e-learning for Sanofi-Aventis Pharmacuetical. Mr. Gerschel speaks globally on a regular basis and is fluent in five languages. Fusing his diverse corporate career and international knowledge, Mr. Gerschel offers clients a unique expert’s take on raising the bar on their productivity. Since 2008 he has educated and inspired more than 30,000 leaders on five continents through his speeches, coaching, training, and books;
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