How to Build a Culture of Innovation: Part 1 – People
Technology is transforming the way we do business and the rate of change is accelerating—it took only a few years for half of the U.S. population to adopt smart phones versus nearly 50 years for landline phones. And we are inundated with countless examples of changes that may have been impossible to envision a couple of decades ago, such as: packages delivered by drone, thermostats that communicate with smoke detectors to reduce danger, and prosthetic limbs that surpass human capability.
If you expect your business to stay ahead, you cannot afford to wait and see what happens—when you compare the Fortune 500 companies in 1955 to those that appear in 2014, only 61 companies appear on both lists…this means only 12% of companies still remain at the top!
So, how can your organization keep up with the rapid pace of change? My advice: build a culture of innovation! In the coming weeks, I will share what it takes to develop an effective culture through a 3-part blog series. Today, I want to start with the first focus area—people.
Why are people key to innovation?
- Highly engaged employees are 3x as likely to do something good for the company (Source: Temkin Group, 2015)
- 50% of highly engaged employees are likely to make a recommendation for improvement versus 17% of their disgruntled peers (Source: Temkin Group, 2015)
From my personal experience, I have witnessed the impact of what passionate people can mean for a company’s success. This was especially evident to me on a recent trip to the EMC Egypt Center of Excellence (COE) in Cairo. The main thing that struck me about the Cairo team is its culture of innovation. In trying to understand why the team has been so successful, I identified three key people-centric factors that explain its leadership.
Where should you focus your efforts?
A Forbes study identifies workforce diversity and inclusion as a key driver of internal innovation and business growth. Diversity encompasses different perspectives, experiences, cultures, genders and age. Although research and experience indicates that diversity is important to business success, the technology industry continues to face difficulty in broadening how its talent base looks and thinks—Facebook, Apple and Google fare low when it comes to hiring women and many of the largest companies are comprised of mainly white and Asian employees. On the contrary, the Egypt COE’s strong innovation reputation can be attributed to its strong diversity emphasis—it has one of the best gender diversity ratios of all EMC offices, with strong female representation in technical and managerial roles. Given Egypt’s colonial history with the English, French, Italian, etc. it also is reflects tremendous global cultural influence (including many multi-lingual speakers). Furthermore, with several different functional teams (e.g. engineering, R&D, customer support) in the same location, cross-pollination of ideas and skills is more likely to occur—employees who move to a new functional group have a unique ability to suggest improvements between departments by better understanding challenges from the perspective of both sides.
2. Risk Acceptance
Not every idea can or should come to fruition. However, it is still essential to create an environment where employees feel comfortable to share ideas. Just because a decision is made not to pursue a given project, it doesn’t mean there was no value in exploring the suggestion. Perhaps it inspired a further idea that was implemented (don’t forget that microwave ovens and the discovery of penicillin were the result of accidents!). Organizations with a successful culture of innovation embrace failure and leverage this as an opportunity to learn and improve. Throughout my week in Cairo, I met with team members at all levels of the organization who were excited to share their proposals for new projects. The team has democratized innovation by developing a practice where employees can voice their ideas regardless of their hierarchical position or tenure with the company.
3. Recognition and Engagement
Creative thinking and collaboration must be encouraged and rewarded. Senior leaders must set the tone for organizations and provide opportunities to celebrate employees and their innovative projects. In Egypt, there is no question that taking time to recognize employee innovation is a fundamental part of the culture. Employee awards and live demonstrations were major aspects of the Egypt team’s Total Customer Experience Global Celebration.
The innovative spirit I experienced in Cairo is the culmination of a concerted effort to strengthen the culture over recent years. The impact is noticeable today and it has been clear for several years:
“In less than two years, the employees in Egypt have built a local innovation program which is as mature as any that I’ve seen within the company. They submit more ideas per capita than any geography, and increased their employee idea submission ratio by four times year over year”
– Steve Todd, EMC Vice President of Strategy and Innovation, 2013
If you expect your business to be around 50 years from now, you must invest in a culture of innovation. And this investment starts with a focus on your people. Successful companies will find ways to keep employees engaged, encourage experimentation, and actively solicit diversity. I hope to hear your ideas on what other people-centric strategies are working in your organization in the comments below.