How important is culture for corporate innovation?

How important is culture for corporate innovation?

1 Expert Answer

Tony Ulwick

Founder & CEO,  Strategyn

I think a culture of corporate innovation as it’s typically conceived is pretty unimportant.

Many company managers believe, "Everyone's responsible for innovation,” and that “We need to create an environment that fosters innovation.” They talk about the need to encourage innovation by setting up a risk-free environment and making people feel that it's okay to fail. They're focused on trying to motivate people and encourage ideas.

This is misguided because people are already naturally innovative, they're inventive, they're problem-solvers. They're doing a great job at generating ideas and innovating—but maybe not around the challenges that are most important to their customers. This is the crux of the issue with innovation culture.

Building a culture of innovation, in my view, isn’t about providing an innovation-friendly environment. It's about providing the right customer insights—the right information and data—to the people who need it, when they need it.

Furthermore, this responsibility lies with management, not with “everybody.”

Management has to be responsible for providing employees with the information they need to innovate—and most of them don't recognize this responsibility.

What management often fails to realize is that the key ingredient for innovation is not ideas. The key ingredient for innovation is a clear and shared understanding of the customer's unmet needs. Most management teams do very little to make sure the organization has a shared, common understanding of customer needs. In fact, the biggest problem with innovation is that 95% of product teams have no agreement as to what a customer need even is—never mind what those customer needs are and which needs are unmet.

Why is this such a common situation? Many companies:

  • Employ failed innovation practices.
  • Fail to fund the type of customer research that is required to inform innovation.
  • Don't have the patience to obtain the required data before taking action.

Consequently, the customer research that is critical for ensuring success at innovation never takes place, leaving product teams uninformed—or worse yet, misinformed.

Traditional innovation culture is built around an ideas-first approach to innovation. People brainstorm, experiment, they fail fast, and they pivot. That might define innovation culture, but to me, that's just inefficiency that's been pushed down in the organization by a failure of management to recognize the real problem: lack of a shared understanding of customer needs across the organization.

And until an organization has that shared agreement, innovation is going to be chaotic and unpredictable.

My belief is that innovation would flourish if management would make a true commitment to their organization and say, "We are going to make sure that everyone and every product team has a shared, true understanding of its customer's needs.”

All the other mechanisms are already there. People are creative, people are motivated, people are risk-takers. This notion that “innovation culture” is about creating a safe environment for idea generation is wrongheaded. It’s time for managers to recognize the true issue with innovation—and resolve it.

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