5 Tips For Creating An Innovative Company Culture

Any innovation-oriented culture relies on a few fundamental characteristics. Here's how to foster them within your company.


Every modern company loves to tout its innovative methods. But what is innovation, and does it truly define the future for brands? Or is it just the latest buzzword?

To answer these questions, companies must understand the difference between invention and innovation: Businesses that build for the sake of building practice invention, while those that build to meet real market needs practice innovation. Only true innovation allows companies to create solutions that lead to meaningful growth and greater relevance.

But brands under constant pressure to innovate sometimes find themselves forced to invent instead. Skyrocketing tech growth seems to introduce new investment possibilities every week, and few companies have the resources to address each new advancement. When companies dedicate too many resources to keeping up with trends, they sacrifice their current product support in the process.

Rather than inventing for invention’s sake, then, brands should focus their research and development more tightly by identifying market gaps, creating buzz for a new product or service that aligns with their overall offering, and proving that development is worth the wait. In this way, brands enjoy all the benefits of innovation without succumbing to the pressure to change.

Elements of Innovative Companies

Ultimately, innovation must be rooted in a business's culture. Apart from being dictated by processes, handbooks, or even parties, that culture exists in the DNA of the company, guiding relationships both internally and externally. Every organization has a unique culture — it can be toxic, indifferent, or the driving force of employee engagement and company growth. But any innovation-oriented culture relies on these fundamental characteristics:

- Leadership: While this point may seem obvious, leadership teams must set the tone for innovative cultures. They define what innovation means and set end goals for managers and employees. Leaders who set these definitions clearly also get everyone else working toward the same goal and craft a shared value system.

- Intelligence: To ensure innovation rather than invention, companies should place intelligence at the heart of their cultures. Innovation efforts should be insight-driven, not anxiety-driven, and by focusing on a better understanding of markets, customers, products, tech, and data, companies can build sophisticated intelligence that renders a robust culture of innovation.

- Collaboration: The fewer organizational walls — teams, departments, regions, etc. — the more seamless innovation can be. Great ideas don’t always come from teams dedicated specifically to innovation, and organizational structures that allow anyone with a great idea to get that idea moving benefit much more than those inhibited by rigid silos.

How to Create a Culture of Innovation

Still, it’s one thing to understand what a company culture needs to become in order to foster innovation and yet another to implement the changes successfully. By following these tips, you can develop a more innovative company culture:

1. Understand the Current Situation

For all brands — even those with strong innovative cultures — occasional reviews of your cultural practices provide clarity on the effectiveness or lack of innovative efforts. Consider: What is your company's true innovation maturity? Because if you can’t measure where you are, you can’t measure where you want to be.

Beswick, Bishop, and Geraghty, in their book "Building a Culture of Innovation," developed an innovation maturity model to help brands objectively assess their innovative cultures. The model includes strategy, sponsorship, training, measurement, and historical context, all of which help brands create roadmaps to become innovative leaders.

2. Define Innovation for the Company

Innovation is a big word. It means something different for service-led brands than it does for consumer packaged goods companies. Define what innovation means within your specific industry to give employees a concrete goal. In addition, creating subcategories, such as radical, moderate, and incremental innovation, can make it easier for people to see how they can contribute.

3. Make Innovation Measurable

If innovation becomes nothing more than creative or tech exploration, your organization can never truly adopt an innovative approach. Create key metrics around innovation to measure the return on investment of research and testing. Consider the cost versus return, but also include qualitative metrics to develop a fair assessment of innovative success.

4. Create Employee-led Groups

Leadership culture sets the foundation for innovation, but employees drive its progress. Empower your employees to further your company's agenda by offering opportunities for engagement with innovative efforts. You can also offer personal development opportunities so that employees feel prepared to tackle new challenges.

5. Think Beyond Your Common Processes

All brands understand their primary competitors, such as American Airlines understanding Delta and vice versa. Today, however, brands often need to worry more about market disruptors than their biggest rivals. So challenge your company to think like a startup. Small companies can out-innovate big ones not because of what they do, but because of how they think. At our company, for example, we like to ask “What if?” — a simple, powerful question that guides us toward innovations with the biggest potential.

Moreover, considering how recent startups have changed the game in their industries can help give you a framework for your own innovations. For example, Lemonade now offers renter’s insurance after three clicks on a smartphone for $5 a month. Today, it's active all across the country, and big insurance companies are scrambling to keep up. And Airbnb owns no property but is one of the biggest vacation companies in the world. Large companies have to identify innovative opportunities as startups do in order to compete with them through innovation.

Innovative cultures and companies don’t happen on their own. The right leaders must implement the right priorities to get their companies on track. By understanding your current situation, defining innovation, leaning on leadership to create defined metrics, and leveraging employees to think more nimbly, you can prioritize innovation and push your company into tomorrow, today.

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