Leadership, Total Rewards
The Hidden Drivers of Innovation
Innovation is vital to both competitive advantage and long-term success. Does this statement surprise you? It shouldn’t!
Innovation is believed to be an important predictor of future growth, yet business leaders cite innovation as one of the top three global challenges they face. Transformational Innovation is the “house guest that never leaves” on a company’s strategic agenda.
What is surprising about innovation is that neither investments in R&D nor technology determine successful outcomes. Instead, studies strongly show that the most successful innovation strategies focus on people and human capital. To borrow a well-known phrase, “Culture is King.”
The question all business leaders should ask themselves is: how does my organization create a culture of innovation? Creating such a culture begins with two key concepts: Finding, engaging and incentivizing diverse talent is the foundation – i.e. diversity. Recognizing and promoting entrepreneurial spirit and risk taking by your key talent fosters the culture that drives results – i.e. inclusion. Organizations need to focus on both diversity and inclusion to be achieve transformational innovation.
In a recent study by Deloitte Consulting, it was reported that diversity and inclusion initiatives address some of an organization’s greatest business needs. These outcomes are eye-opening.
- 15x lift in revenue through activating a D&I strategy
- 83% increase in ability to innovate through identifying the right employees to tackle pressing problems
- 31% increased responsiveness to customer needs through the identification of new insights and guarding against group-think
- 33% increased effectiveness working across diverse groups by defining a culture of inclusion in the changing organizational environment
Two noteworthy best practices for organizational leaders to consider:
- Develop and foster cultures where innovation is seen as everyone’s responsibility. Create specific and measureable objectives for all employees, at all levels. Doing so provides the organization the opportunity to inspect progress toward its transformational goals on a day-to-day basis.
- Encourage employee experimentation without the fear of failure. Honest failure should be considered a learning experience. In February of 2016, HBR published an article: “Can Your Employees Really Speak Freely?” In this article, it was noted that when employees can voice their concerns freely, organizations see increased retention and stronger performance.
Finally, the role of the organizational leader is also critical in achieving a successful culture of innovation. So, what can our leaders do?
- Make feedback a recurring, routine exchange
- Be transparent
- Reach out
- Soften the power cues
- Avoid sending mixed messages
- Be a role model
- Act on the feedback
Linking talent to innovation is a winning formula!