Key Cultural Drivers for Innovation

Booz and Company annually publishes a “Glabal Innovation 1000” report, investigating the state of global R&D investment and innovation.  This year’s report was excellent as usual and worth the read if you have the time (report & summary video )

In the report they touch on a number of important topics, but I would like to focus on one aspect I found particularly interesting.  

The question often arises which culture traits are most important to help foster an innovative environment.  Booz&Co addressed this question by.  (i) Asking the top 1000 R&D spenders who they consider to be the most innovative companies.  Then (ii) asking these companies what culture they look to establish.  The results are shown below.  

Now you might say that there are no surprises here, but I found the following particularly interesting:

• Passion and pride for the company’s products and how they are perceived by the customer are off the charts.  In other words they want people whose passion and sense of worth is driven by whether the company is loved by its customers.
• The traits normally associated with a “nice” working environment (respect, openness, collaboration..) is considered important, but not nearly to the same level as identification with the company’s products.
• Tolerance for failure, which are often raised as excuse for poor performance in under performing companies, came dead last.  This shows that people do not innovate when they they feel secure in failing, they innovate because they have a personal interest to remain better than the competition.  

From this some practical ideas come to mind...

• Demonstrate to everyone that you love your products and you insist that everyone else in the organization does the same.  There is no room for accepting and releasing inferior products.
• Give everyone in your organization ample opportunity to interact with customers.  Whether it is sessions of praise or insult.  No-one should be isolated and thus allowed to become insensitive to customer needs and perceptions.  Being on the red carpet with your boss shouting at you or praising you is just not the same as seeing the expression of jubilation or disappointment in the face of a customer.
• If your organization is really passionate about meeting customer needs, there will not be time to go into the “post-mortem tailspin” when things go wrong.  People will hold themselves accountable and implement whatever is necessary to stop it from happening again.  They have personally lost something and don’t want it to happen again.
• When you have to choose between being a nice guy or shipping a good product, you now know which will have most impact on your company’s competitive edge.