What is an innovative culture?

As a business we have analysed the Harvard Business Review article by Gary P Pisano about innovative cultures and noted how it applies to us.

As a small creative business, we have the opportunity to work closely together, to design and then sell, our ideas for unique product solutions.

Without being totally aware, we have focussed on the following to achieve this.

“Culture conducive to innovation is not only good for a company’s bottom line. It also is something that both leaders and employees, value in their organizations

Characteristics Include: tolerance for failure, willingness to experiment, psychological safety, highly collaborative, and non-hierarchical. And research supports the idea that these behaviours translate into better innovative performance.

But despite the fact that innovative cultures are desirable and that most leaders claim to understand what they entail, they are hard to create and sustain. This is puzzling. How can practices apparently so universally loved—even fun—be so tricky to implement?

1. Tolerance for Failure but No Tolerance for Incompetence – Given that innovation involves the exploration of uncertain and unknown terrain, it is not surprising that a tolerance for failure is an important characteristic of innovative cultures. Some of the most highly touted innovators have had their share of failures. Remember Apple’s MobileMe, Google Glass, and the Amazon Fire Phone?

Everyone makes mistakes, but at what point does forgiveness slide into permissiveness? And at what point does setting high performance standards devolve into being cruel or failing to treat employees—regardless of their performance—with respect and dignity?

2. Willingness to Experiment but Highly Disciplined – Organizations that embrace experimentation are comfortable with uncertainty and ambiguity. They do not pretend to know all the answers up front or to be able to analyse their way to insight. They experiment to learn rather than to produce an immediately marketable product or service.

A willingness to experiment, though, does not mean working like some third-rate abstract painter who randomly throws paint at a canvas. Disciplined experimentation is a balancing act.

3. Psychologically Safe but Brutally Candid – Psychological safety is an organizational climate in which individuals feel they can speak truthfully and openly about problems without fear of reprisal.

Building a culture of candid debate is challenging in organizations where people tend to shy away from confrontation or where such debate is viewed as violating norms of civility. Senior leaders need to set the tone through their own behaviour. They must be willing (and able) to constructively critique others’ ideas without being abrasive. One way to encourage this type of culture is for them to demand criticism of their own ideas and proposals. A good blueprint for this can be found in General Dwight D. Eisenhower’s battle-plan briefing to top officers of the Allied forces three weeks before the invasion of Normandy. As recounted in Eisenhower, a biography by Geoffrey Perret, the general started the meeting by saying, “I consider it the duty of anyone who sees a flaw in this plan not to hesitate to say so. I have no sympathy with anyone, whatever his station, who will not brook criticism. We are here to get the best possible results.”

4. Collaboration but with Individual Accountability – Well-functioning innovation systems need information, input, and significant integration of effort from a diverse array of contributors. People who work in a collaborative culture view seeking help from colleagues as natural, regardless of whether providing such help is within their colleagues’ formal job descriptions. They have a sense of collective responsibility.

But too often, collaboration gets confused with consensus. And consensus is poison for rapid decision making and navigating the complex problems associated with transformational innovation. Ultimately, someone has to make a decision and be accountable for it. An accountability culture is one where individuals are expected to make decisions and own the consequences.

5. Flat but Strong Leadership – An organizational chart gives you a pretty good idea of the structural flatness of a company but reveals little about its cultural flatness—how people behave and interact regardless of official position. In culturally flat organizations, people are given wide latitude to take actions, make decisions, and voice their opinions. Deference is granted on the basis of competence, not title. Culturally flat organizations can typically respond more quickly to rapidly changing circumstances because decision making is decentralized and closer to the sources of relevant information. They tend to generate a richer diversity of ideas than hierarchical ones, because they tap the knowledge, expertise, and perspectives of a broader community of contributors. Lack of hierarchy, though, does not mean lack of leadership. Paradoxically, flat organizations require stronger leadership than hierarchical ones”

By Gary P. Pisano an abridged version.