To Innovate, Know The Culture You Want

‘Know the culture you want’ is one of the headline conclusions from a new report into company culture. Complied by The Association of Chartered Certified Accountants (ACCA) and the Economic and Social Research Council (ESRC) the report seeks to…

“describe the critical role that a boardroom plays in setting the ethical compass of its organization.”

The report, which you can read here should be essential reading for all those who are looking to review or change their organizational culture, especially to an innovation-focused one. Whilst some of the advice reflects current thinking on culture change for me one of the more interesting aspects of the report is the section, which looks at cultural trade-offs and links directly with the behaviors and environment required to drive innovation. These include:

• Openness to mistakes versus zero tolerance
• Conformity versus challenge
• Innovation versus control
• Risk-seeking versus risk-avoiding
• Independence versus involvement

When the report delves further into these areas it comes up with a number of statements which on the face of it are obvious but which as a strategic adviser on innovation I have seen organizations struggle with. For example, take the comment that…

“Innovation is a good thing but innovation involves risk, so control is required.”

One of the perennial objections to moving towards an innovation culture is that it opens up the organization to chaos. But the reality is that for innovation to thrive there has to be structure. Yes it is true that innovation can mean the end of silos, the end of ‘jobs-worths’ and a move towards a more collaborative ethos in which empowerment and initiative play their part but that is a far cry from unfettered chaos.

Organizations still need an element of control, structure and boundaries but the nature of that control and the ‘framework’ changes. Instead of strict ‘you will do’ instructions, employees who are engaged in the aims of the organization and who understand the vision and values of the organization go out of their way to further those aims. For example, where once you may have targeted employees to answer X number of phone calls, now employees go out of their way to help customers to find a solution. Where once you may have measured customer interactions in terms of products sold now you measure in terms of customer care, of positive recommendations or of returning customers. Your focus is about the experience.

And when it comes to risk, once you stop treating risk as a failure point and instead use it as a learning point then self-regulation can reduce the risk factors to a lower level than that seen when risk equaled blame. The FCA understood that when its Chief Executive commented that further regulation would not necessarily reduce harmful customer interactions and that what was needed was the adoption of the ethics of care. So when it comes to looking to build the future and to create an innovative organizational culture, to the comment ‘know the culture you want’ I would add the rider ‘be open to the possibilities which an engaged workforce can bring’.

As the report says…

“An organization that does not take risk will struggle to innovate. An organization that struggles to innovate will find it difficult to grow.”