Post by Dr. Diana Rus
In an economic environment fraught with uncertainty, many companies face intense pressures to innovate in order to capture more market share or gain new markets. In this quest for the holy grail of innovation, leaders find themselves grappling with the question of what they can do to spark innovation within their organizations. The deceivingly simple answer is: act in ways that enable rather than stifle innovation. But what does this mean?
Below, I will focus on two key points, underpinned by empirical research and practical experience, relevant for leaders trying to foster innovation. That being said, this is not meant to be a magic formula that can mindlessly be copied and applied. There is no blueprint for innovation that works across contexts, and those that claim otherwise should be eyed with some suspicion. As a leader, it is up to you to see whether any of these points resonate with you, and if so, how you can make them your own.
Provide a clear vision
“To the person that does not know where he wants to go there is no favorable wind.” – Seneca
Leaders that successfully spark innovation provide their employees with a clear long-term vision that focuses on who we are and what we are trying to achieve. This may sound mundane, and yet, it is key for innovation for at least two reasons. First, by providing a clear goal as to what we are trying to achieve, leaders create a guiding framework for action without restricting the flexibility necessary for execution. For instance, the vision Jeff Bezos had for Amazon to become “Earth’s most customer-centric company” provides employees with a clear sense of direction without prescribing how they should go about reaching the goal. Second, by creating a shared vision of who we are that is linked to the overarching goal, leaders bring a sense of continuity and certainty into a highly uncertain process. At Amazon, “a big piece of the story we tell ourselves about who we are is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards”(Jeff Bezos). Hence, by creating a clear sense of identity coupled with a clear sense of direction, Bezos has succeeded in building a framework that enables innovation. Not surprisingly, Amazon has consistently been ranked by Forbes in the top 5 of the World’s Most Innovative Companies.
“Innovation fails because most organizations are not equipped to handle failure.” – Matt Hunt
Innovation is an inherently uncertain, long-term process fraught with risk and repeated failures. Successfully innovative companies know that failure is unavoidable on the path to success. They build organizational cultures that embrace risk and failure, and are able to produce successful outcomes by learning from and capitalizing on these failures. Sadly, in many companies, failure is still a dirty word and something to be avoided at all costs. Quite tellingly, in a 2012 global survey by the Economist Intelligence Unit, 49% of more than 200 business leaders admitted that their companies had no system in place for capitalizing on failed innovations. Thus, about half of these companies systematically wasted resources by not learning from previous mistakes.
But what do successful leaders do in creating a culture that embraces risk-taking, failure and learning from mistakes? First, they understand that: ”The most successful people tend to be those with the most failures”(Dr. Dean Keith Simonton, creativity expert). Second, they actively encourage their employees to challenge the status quo, act on their ideas and take calculated risks. Third, they provide employees with the resources necessary to do so. Fourth, they align their reward systems to reflect this shift in attitudes. Instead of only rewarding people for successes, they start rewarding people for taking action and calculated risks, regardless of the outcome. For instance, Tor Myhren, President and Chief Creative Office at Grey Advertising, recognized by Fast Company as one of the 50 Most Innovative Companies in the World, has instituted a “Heroic Failure” Award. The award is given out on a quarterly basis to employees who take a big, edgy risk. This sends a clear signal throughout the organization that taking risks is encouraged and that failure is acceptable. Last but not least, successful leaders have learned to scrutinize their failed projects and incorporate the lessons learned from these mistakes into future projects. As Bill Gates aptly put it: “It’s fine to celebrate success, but it’s more important to heed the lessons of failure.”
If you want to spark innovation within your company, try to create a shared vision of who you are and what you are trying to achieve. More importantly though, create an environment where people can try out new things without fear of punishment and where learning from mistakes becomes embedded in your company’s cultural DNA.
“Make failure your teacher, not your undertaker.” –Zig Ziglar
The original article appeared on the blog of the AOG School of Management.