How To Build a Culture of Innovation in Your Organization

Were we ready to build a culture of innovation?

“They shut it down.”

He whispered the phrase to me reverently, with a touch of sadness. My colleague just met with me over lunch to tell me that they had decided to shutter the innovation lab. It had only been around for two years and had done some awesomely interesting stuff, but for some reason, its time was up.

“Why?” I asked. Of course, I knew the answer but was curious about what was the straw that broke the camel’s back. I’d heard about the issues that the Lab had since its founding.

I thought back to the announcement of the Lab by the new CEO. This was the beginning of a new, more innovative company, he said. We will build an innovation lab and stock it with the best and brightest. We will even put it somewhere else physically, far away from us here on the traditional campus. We will give them the leeway to innovate, to come up with new, disruptive ideas and innovations. We would use the Lab to spearhead a culture of innovation throughout the organization. I could still remember him on the stage at the all-hands meeting – he’d brought the new director of the new Lab on stage with him, and they were sharing the limelight. He introduced the new director, and the director went right into it. He went into a very passionate speech, speckled profusely with phrases like:

  • Disruption! Innovation! Disruptive Innovation!
  • Out-of-the-box Thinking! Break out of our current mindset!
  • Everything is on the table! No holds barred!

In the end, he smiled, and everyone applauded. Yes, we thought we’ll be cool again! This Lab will create some excellent new products and show the world that we can kick ass too! Hey, thought about half of the crowd, I wonder if I can get a job in the Lab! The other half resented the Lab, wondering why we couldn’t just innovate on our own. But at least, together, right now, we thought, don’t we work for a cool company? What a culture of innovation!

That was two years ago. Since then, the innovation lab HAD been on a winning streak. They quickly settled in and hired both outside innovators and transferred people from other groups. They moved into a new, super cool office space in SOMA San Francisco. The place was a vast, open-plan, lots of exposed brick. Just being in the space made you feel more creative – just escaping from the cube farm of the rest of the company made you feel great. There were whiteboards everywhere, desks and table strewn around in random space, no straight lines everywhere – everything strategically placed for maximum collaboration and creativity generation.

Did you know that they did a study where they asked two sets of college students to solve a problem? They gave both sets of students the same problem, but before they were told to sit down and solve it, they ask one group to walk up and down the room in straight lines, and they asked the other group to walk randomly around the room and in curves. Once they’d done that for a bit, they asked them to sit down and figure out the problem. Guess which groups came up with more creative solutions?

The Lab was an impressive, innovative space. Once they opened, they quickly decided that they wanted to move faster than the rest of the company, so they decided to develop things in the most modern, rapid application development languages and frameworks available. They would do super agile work in quick iterations with everyone in the room. They came up with and generated tons of prototypes, using the rapid pace of agile development, coupled with the ease of using the new frameworks, they were able to develop a whole new raft of software prototypes in no time. Of course, they weren’t scalable, but they were able to place them in front of both internal and external focus groups to a great response.

The press loved it as well – here is a venerable company, finally looking like it was going to generate some cool, new, innovative new products. Not only was the Lab a hit with the press, but they and other innovation pundits were also actively promoting this vision that the company that they had created as the new model for innovation.

“This is what innovative companies need,” they all said, “Don’t wait to be disrupted by your competitors, build your internal lab and disrupt yourself.”

They trucked on like this for what seemed like a long time, receiving accolade after accolade, mostly from external sources. But there was trouble brewing.

I wasn’t in the group, but I kept an eye on them since I’ve always been interested in innovation and building new products and services, thinking that they just might be the group to get our company out of the funk it’s been in.

This group wasn’t quiet about its successes, and it talked openly about the fresh new products it was building right out on its blog (but only after provisional patent applications were filed on them). One of the first applications to come out of the group was a location finding service, something that would likely become a keystone platform service in the world, which was becoming increasingly more mobile. They put a small prototype on the web, and everyone loved it. The president of our company praised the product as well, both internally and in the press, and talked about how it would be the first of many new products to come out of the new Lab.

The product was a hit all around, but as I mentioned, they didn’t have the coders to make it a real scalable product, it was a very cool, proof-of-concept prototype, which, as far as everyone concerned, proved the concept. The go-ahead was given to launch the product, once it was made scalable.

So the product was handed back to the company proper to build into a scalable, launchable version. They took one look at the code and said, “This is crap. We can’t use this. Not only is this not written in our preferred language and framework, but we also don’t have the time or budget to rewrite it from scratch. We will have to try and fit it in with all of the other work we are doing.” A few months later, all of the chatter around the product was gone, and it was never heard from again.

This was just the first battle. The valiant director of the Lab kept going – they kept developing prototypes of the coolest, most exciting stuff. Some of it moved forward, others didn’t, but as time went by, its seemed inevitable that no matter what the group generated, no matter how cool or interesting or innovative the product was, no matter how much innovation cred the company got from the outside, nothing that the groups built was ever going to launch.

That was last few years. The day was finally here when they had decided that the grand experiment was over.

What happened? Simple. The corporate immune system killed it. It detected a disturbance in the Force and sent its midichlorians to destroy it, or something like that. When they finally shuttered the Lab, the new president (yes, we’d lost the guy who launched the Lab, but it wasn’t his fault it failed, I guess) announced that it was a great experiment. They learned a lot from it, but we didn’t need to “lock-up” innovation in a small, forward-thinking group, “innovation was everywhere, and that it was all of our jobs to be innovative.” I think our stock price dropped that day too.

Ah, corporate culture. On bad days, sometimes you think, as Sartre did at the end of “No Exit” that “hell is other people” on other days, you think, hmm, they are not so bad. So much for building a culture of innovation.

Are you ready to innovate?

I do feel that innovation is everyone’s responsibility. Just like growth shouldn’t only remain in the hands of the sales and marketing folks, everyone can and should innovate. But the question really should be – are you interested in innovation? Is innovation in your DNA?

Typically, companies who began via an innovation, start with a highly innovative culture. All bets are off, out-of-the-box thinking is what built the firm, and it’s what kept it steady at the beginning. This is one of the reasons why startups have very few issues innovating – well, I guess it depends on the startup. There are plenty of businesses that don’t need to be innovative; they do perfectly well and are profitably serving the current niche that they are in.

Think of the hundreds of thousands of businesses in the small to medium-size enterprise space. Many of them have defined their market space, be it by demographic, location or other factors, and do quite well in that space, without really innovating because they don’t have to: you don’t need to innovate to be successful: you just need to have a product-market fit – which is a fancy way of saying you are creating or providing something that someone wants to buy.

Whether you are or not, either way, you need to keep moving forward and innovating, but how do you do it in a company like the one I’ve described above – how do you innovate when the corporate immune system is continually trying to shut you down? You have to take culture into account.

Don’t Fight It from Without.

In the example above, that company made a massive show of creating a new Lab, which gave the company some cache and made it look attractive, at least for a while to the outside world. But it showed a perfect example of not taking in internal corporate culture into account. While the new head of the innovation lab was well-meaning, what did he think the rest of the company was going to feel like when he came in, all guns blazing, trying to pull the company culture forward forcibly. Of course, he would feel like an invading force, trying to change what seemed to be working well (or at least well enough) for a long time.

People had spent a lot of time and effort putting together communications structure to keep the hierarchy in place, to keep those lines of communications in place. It came in like a threat to the system, so it is no surprise that it ended that way.

Let me give you another example. I came into a company to restart a moribund innovation program which had launched a few months earlier and had some excellent initial traction, but now was just sort of stalling. There were many problems with the program, some of which had to do with the software that they have selected to run the program – and the company that they chose to assist them with the program simply installed the software and left the guy in charge to take it the rest of the way – and he based the application on the way the software operated. The problem here was twofold – one, the software not a fit for the organization (it was focused on a phased approach, with very little transparency between those who submitted the idea and those who voted and commented on the idea). I’m sure that the software and the process the software used might have been great for a manufacturing company or maybe a medical device company. Still, for a freewheeling, more fun, and open company, it was wrong. That was one of the problems.

The other was the way the program itself was structured. There were little feedback and communication, and the prizes awarded were, in some quarters, considered unworthy. Why give out free iPads when most of your people already have them?

Culture will kill any program if you don’t get it right. So spend some time at the very beginning of the process determining what will work within the system. Run some focus groups within the company to decide what is going wrong and what people need. Hit those pain points when to kick off or revise the program.

We ended up rewriting the software to the company’s specifications – it went from a dull-looking web-based version of Windows software to a cool, Reddit style web app, allowing anyone, anywhere to submit, vote and comment on ideas. We revised the prizes to be more experiential – we gave the top inventors the opportunity to lunch with the president and gave the rest of the inventors what they considered the best award of all: RECOGNITION.

That’s what it was like for this specific company. It may be different for yours – I can help you with what will or will not work. You need to work within your corporate culture and see where it can bend and don’t push too hard. Otherwise, it will break.

Be prepared for things not to move as quickly as you’d like, or get the results you want right away. It takes time.

One day though, you will see the results of your efforts – maybe it’s that call from a remote office thanking you profusely for allowing them to have a voice at HQ, or the CEO stopping by your table at lunch to give you a pat on the back, or maybe one of the ideas generated was sent to the team for implementation.

Finally, make sure that if you have a lab that builds prototypes, try and maintain the same or similar framework to what is currently the standard at your company. I’ve seen many situations when the labs use the latest and great agile tech to create phenomenal products, which everyone gives the go-ahead to build and scale, but then they die for lack of support after the fact. Make sure that you have a place for these ideas to go – even if you have to split off some of the team from the Lab to go and shepherd them to reality.

This is an excerpt from INNOVATION MASTERY: The Definitive Guide To Running The Ultimate Innovation Program available on Amazon today.