3 steps toward a more innovative business culture

For business leaders, few things are more critical to their overall success than nurturing and maintaining a culture of innovation. According to McKinsey’s latest Global Innovation Survey, while more than 80% of executives agree that innovation is an important aspect of their growth strategy, only 6% are anywhere near satisfied with innovation performance. That’s an enormous gap; one that’s become even harder to bridge following the events of the past 18 months.

The pandemic has pushed businesses to a technological tipping point, forcing them to accelerate their plans for digital transformation by several years. While this digital quantum leap can be viewed as a benefit, there’s a real risk that too much emphasis has been placed on maintaining day-to-day business operations, with other key performance metrics like innovation taking a back seat. Innovation is perhaps the best metric of future success, but one of the reasons many businesses find it so elusive is that it’s far more than a simple tick box exercise and it’s even harder to track and measure.

Capturing a culture of innovation in a post-pandemic landscape is perhaps one of the greatest challenges facing organizations in 2021. Like any company culture, this cannot happen passively. It requires careful and deliberate nurturing, the reinforcing of new mindsets, and the creation of real incentives to think well and truly outside of the box. So, what are some of the​​ practical ways to promote and capture a culture of innovation in the current working climate?

1. Reevaluate your key performance indicators

It’s perhaps too soon to say whether dispersed, distributed workforces will become the new normal, but one thing we know for sure is how misleading and unhelpful legacy metrics can be when it comes to assessing an agile, hybrid team.

A recent Bay Area Council survey of 200 Silicon Valley companies (cited by the Associated Press) said that, prior to the pandemic, 70% of respondents required their employees to be in the office full-time. As the landscape has shifted, the consensus was that two or three days would suffice – Apple and Google, for example, were adamant that they needed an on-site workforce to maintain not only “culture and innovation” but also because they believed that people needed a work/life balance. There is also an argument to be made that the number of hours that people are online will play a role – TechRadar cited data that showed people working for at least two to three hours longer every day, and it is reasonable to assume that the increased time at work will include virtual discussions about innovations that might have once been confined to the water cooler.

If your organization leans too heavily on the pre-pandemic notion of success, you’ll fail to capture much of the disjointed reality that is remote working – the good and the bad. Executives and other business leaders will need different insights, just as workers themselves will need more finely tuned feedback and encouragement to figure out how they’re doing. Recalibrating your KPIs to account for the new blurred distinctions between home and work life is going to be crucial to measuring innovation in a post-pandemic environment.

2. Lean into mindset transformation

For a lot of organizations, innovation will be their launchpad out of the COVID-19 crisis. But a business can’t simply innovate themselves out of a problem if they’re unable to make rapid-fire decisions or don’t have the autonomy to weigh up difficult choices.

Inertia leads to stale thinking, but the urgency of the pandemic could in itself unleash waves of creativity and innovation if businesses are willing to loosen their grip over their employees and inspire some alternative thinking. Instead of making flexible working a quick and temporary fix, why not reorganize around it and embed it into your operations? Instead of focusing purely on tasks and activities, turn your attention to outcomes and look for better ways to reach them. Move your business into the “now” and start to reassess every legacy decision your business made.

The disruption suffered within the various supply chains is a case in point. As COVID became a global problem, retailers and manufacturers were effectively caught off guard and forced to switch lanes in terms of their distribution and logistics requirements. That, as Supply Chain Management Review noted, was the catalyst for a wave of innovations that “forced employees to adapt quickly and learn while doing.”

Ecommerce was already accounting for around 10% of customer purchasing, but the pandemic pushed this to new levels – data shows that online grocery penetration will account for as much as 30% of all purchasing by 2024, as opposed to merely 4% in 2019. That increased adoption will force companies to seek out innovative ways to fulfill customer demand. And that responsibility is likely to fall squarely on how companies use the workforce resources that they have, both now and in the future.

3. Encourage and incentivize innovation

According to McKinsey, bold innovators tend to emerge from crises substantially ahead of their peers and competitors, but in order to achieve this, you need to ensure you bring your staff along with you. There are two crucial steps your organization needs to take when it comes to planting the seeds of cultural innovation.

First, you need to facilitate innovation by giving your employees the space and time they need to get creative. The famous “20% rule” that companies like 3M and Google have adopted, which encourages employees to spend 20% of their time innovating, is now well known yet rarely adopted. Second, innovation needs to be incentivized and rewarded. Publicly celebrate employees’ efforts to innovate, even if their new idea isn’t implemented by the business. Even ideas that don’t make it through to fruition can lay the groundwork for future change – this is the very foundation of innovation.

Small and deliberate changes

There is no silver bullet solution for innovation, which is perhaps why it still eludes so many CIOs and other business leaders. It’s not something you can throw money at, and it’s not a task you can ever truly “complete.” It’s about small but deliberate changes in how your business operates in order to allow ideas to grow. Some will blossom, some will fail, but all will be invaluable as we continue to navigate our way out of the pandemic.