Creating a Culture of Innovation

Steve Hodlin

Successful organization innovation is a multistep process that involves development and knowledge sharing, a decision to implement, implementation, evaluation and learning. Although innovation is often associated with technological innovation, it is applicable to all key organizational processes that would benefit from change, whether through breakthrough improvement or a change in approach or outputs. It could include fundamental changes in organizational structure or the business model to more effectively accomplish the organization’s work.

The question is, how do you create a culture that encourages innovation as the DNA of the organization? How do you create an environment that encourages this risk-taking and experimentation by all employees of the organization?

Cultural Change

Cultural change is not something you can just mandate. The culture of an organization is based upon the beliefs of the individuals. These beliefs lead to the actions that create the results. But these beliefs evolve from the experiences that people have with their leadership.

So if the leadership model deployed by the organization is the traditional model of command and control, the belief system tends to not be one of creativity and innovation. This is a model where the leaders just focus on results, and not the means to achieve them, leading to fragmented thinking. It is a model where failure is not allowed.


This experience results in the belief by employees that they need to always justify their actions, and there is a fear of experimenting due to the concern for failure and its repercussions. It is the environment where leaders manage from the safety of their offices, relying on just metrics and reports to guide their decision-making and actions. In this model, the manager is all-knowing and they provide blanket solutions. The belief system that results is that the employees leave their brains at the door. This model actually leads to complexity.

On the other hand, if the leadership model is that of the lean thinking leader, focused on continuous improvement, creativity and constant innovation, the belief system is entirely different. This model looks like this: leaders are process-focused, and are interested in the means to achieve great results. They utilize systems-thinking, and the people and the organization are aligned to achieve the organizational goals. Leaders are actively engaging with their employees, by going out to the process and teaching people to be problem solvers.

These leaders coach and remove obstacles for their employees. They get to know their employees and develop a strong level of trust with their employees, creating a safe environment for dialogue, debate and the development of new ideas. Experimentation is encouraged because any improvement or solution to a problem is really an experiment with a hypothesis, until proven to be effective as a solution. In this environment, it is OK to fail, because a level of learning results, leading to new innovations and ideas.

So, some long-standing ways may need to be changed. An organization may need to change its current assumptions and mindsets. Crucial conversations need to be the norm, as a means to exchange ideas honestly, thereby removing silos. New kinds of dialogues and debates need to occur, with an open mind to new ideas. The bar needs to be raised for the level of trust in the organization, the communication, the level of teamwork, experimentation and the willingness to learn from mistakes.

The Challenges

He who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who are better off under the new. - Niccolo Machiavelli

This quote is a reminder that it is important to plan very carefully the change to a culture of innovation. With change, there is resistance, as people who are comfortable with the status quo are reluctant to leave the past behind and take advantage of the future state opportunities. There is a period of transition in between, as people attempt to figure out what the change has in it for them. This results in a period of chaos. Leadership has to be aware of this phenomenon and build in systems to aid in the transition.

Also, the population of employees tend to form a normal distribution curve of attitudes towards the change. On the left tail are the resistors, who may or may not ever change. On the right tail are the pioneers, with all of the energy for the change. In the middle are the vast majority of the people, sitting on the fence and waiting to see which way the wind blows. Most leaders spend their time with the resistors, trying to win them over to the change. They should be spending their time on the pioneers, rewarding and supporting them. As the organization sees the attention these people are getting, the experience will begin to change their belief system and they will take action more in alignment with the changes.

Pay Attention to the ABC’s

Dr. Judy Johnson talks about the ABC’s of behavior change. A stands for antecedents, B represents behavior, and C portrays consequences. Antecedents trigger the behavior. It is the consequences you experience that influences whether you repeat that behavior. Many times, when attempting to create a cultural change, such as a culture of innovation, leadership only practices the antecedents, but fails to re-align the consequences. John Kotter, in his book Leading Change, addresses some antecedents in his eight-stage change process. These include:

Establishing a sense of urgency

Creating a guiding coalition

Developing a vision and strategy

Communicating the change vision

Antecedents would look like a memo coming from the senior leaders, or a speech, or a program.

Initially, behavior will change. However, if the consequences look like negative repercussions due to a failed experiment or idea, the behavior of innovation and creativity will not sustain. However, if the consequence is to recognize the attempt and learning, praising the individual for trying something to improve the situation, the desired behavior is reinforced for the organization. The experience of the employees is different and aligned with the antecedents expressed. This in turn will change the beliefs of the employees, which will change their behaviors, actions and ultimately the results. You will get more innovation. When working with consequences, positive reinforcement is more powerful than negative resources in getting people to model a behavior because they want to.

Making Innovation Work

In the book Making Innovation Work, by Devila, Epstein, Shelton, the rules of innovation rely on management exerting a strong leadership on innovation direction and decisions (A). Innovation is integrated into the business mentality (B and C). It is important to match innovation to the company strategy (Systems Thinking). Relative to the resistance, leaders need to neutralize organizational antibodies to the culture of innovation through supporting the pioneers, aligning the consequences to the desired behaviors, and ensuring a transition process is in place for the culture change.

This also helps to manage the natural tension in the organization. The right metrics need to be created to encourage an organization focused on experimentation with new ideas, learning from what doesn’t work, and ensuring the desired behaviors are being practiced and that those behaviors are what gets rewarded in the organization.