Corporate Innovation/Analysis/ Seven myths and missteps of innovation culture These are the most common reasons culture change goes wrong. We talk to experts from Stanford, Deloitte Ventures and Strategyzer in part two of #FutureProofonculture By Thomas Brown 16 November 2021 \Sustainability IKEA is backing more climate hardware than most VCs By Freya Pratty 8 December 2022 Corporate Innovation/Analysis/ Seven myths and missteps of innovation culture These are the most common reasons culture change goes wrong. We talk to experts from Stanford, Deloitte Ventures and Strategyzer in part two of #FutureProofonculture By Thomas Brown 16 November 2021 Here’s the basic thesis behind our #FutureProofonculture series: if your organisation’s leaders invest their attention, time and energy into evolving your company culture, your innovation ambitions will stand a greater chance of success. This isn’t a new idea, and there is some fundamental logic to it. But while innovation and culture aren’t new bedfellows, they’re still not exactly comfortable ones either. Efforts at cultural change often fail, in part because “innovation culture” has become a cliché, with ideas and tactics presented as a panacea or easy path to change. Cultural change is, in fact, often more complex and nuanced than the proponents of these tactics would have us believe. So, SIfted spoke to three experts — an academic, a consultant and a corporate venture leader — to capture the more common myths and missteps of innovation culture. Misstep: Failing to define the innovation aspiration Before leaping into plans for culture change projects, there’s a question that is often overlooked. What does your organisation need to be successful in the future — and what role does innovation play in this? “You may be setting out to change your organisational culture, but ultimately the whole point of doing so is, eventually, to deliver increasing returns,” says Yossi Feinberg, professor of management at Stanford University. “People can get distracted by what an innovative culture might look or feel like without first being clear on how innovation will enable their organisation to be successful in a sustainable way.” Feinberg argues that decoupling culture change and innovation from an organisation’s objectives, strategy and performance risks landing people in a territory of innovation for innovation’s sake. “If the aspiration is for innovation to be a repeatable process, then culture matters” Tendayi Viki, associate partner at Strategyzer, agrees, arguing that if the aspiration is to land the occasional innovation project here or there and you’re willing to navigate around corporate politics, you probably don’t need to focus on changing your culture. It probably wouldn’t yield the benefit given the scale of your ambition. “If the aspiration is for innovation to be a repeatable process that can be sustained over time and form a material part of your growth strategies, then culture matters. The moment you decide, from a strategic standpoint, that you want to innovate as a repeatable process, it immediately begs the question: which things do we need to create to enable that process, and which things do we need to attenuate that are blockers of that process?” Myth: a seat at the top table solves all Whenever change or transformation is on the cards, or a function is charged with upping its game, the same clamour/demand can be heard: innovation leaders need to be part of the C-suite. The standard argument seems to be that the more steps removed from the CEO’s committee an individual (and their function) sits, the less importance is truly placed upon it, the less influence they can hope to have and the less successful they’re likely to be in meeting their ambitions or the demands of the organisation. Is elevation to the C-suite, therefore, a pre-requisite to innovation success? Can a chief innovation officer make something work better than a mere head of innovation? Is it that simple? “The CEO [has to] spend at least 20-30% of their time thinking about innovation” According to Viki, innovation succeeds when the individual leading it has both power and influence. But a top-table seat alone isn’t necessarily a silver bullet. “Connected to that power and influence, there also has to be a definitive interest from the CEO”, he cautions. “Where they spend at least 20-30% of their time thinking about innovation, talking about innovation and working with whomever they’ve invited to the C-suite to lead that role.” Without this active involvement, then, the CEO risks sending a dangerous message to the rest of the executives: innovation is important, just not that important. In the best-case scenario this will look like delegation. Worst case, an abdication of responsibility or interest. And if that’s the behaviour modelled by the CEO, you can bet that others around the top-table will follow suit. Misstep: Lifting and shifting someone else’s culture Over the last 10-15 years, the idea of innovation culture has become synonymous with the tech and startup world. And it’s become commonplace for large, established, legacy organisations to look upon these successful disruptive upstarts with envy, often fabling their cultures as enviable or aspirational. Startup culture is often seen as the significant determinant of their success, despite the fact that luck and timing have played just as significant a role for some. This envy leads many large enterprises to directly transplant a culture from another organisation into their own. Whether through studying others’ practices, poaching their talent or simply stitching together the stories and fables from whatever public sources offer. This approach, however, is unlikely to deliver the desired result. “You can’t lift and shift someone else’s culture,” says Catherine Wallwork, head of innovation engagement and mindset at Deloitte Ventures. “There are lots of stories about the quirky things that startups do, the routines they have, the entrepreneurial figure who leads them. But context is key — what works for company X or brand Y won’t necessarily work for you straight away, or indeed at all.” “Mimicking a culture isn’t the same as having it” Wallwork counsels that instead of copying and pasting what you think you know about another firm’s culture, company’s should instead design experiments. To identify the cultural code or characteristics of one or more organisations which you believe could deliver a positive impact for your own, and then to undertake an intentional experiment that also takes into account the existing culture of your organisation. “Experiments start with hypotheses, end with knowledge, and are always time-bound,” she adds. “When you’re looking to learn from other organisations, thinking of experiments is a great way to add some discipline and remove some of the risk inherent in taking inspiration from others.” Feinberg agrees, adding: “Mimicking a culture isn’t the same as having it.” Myth: Innovation is for everyone (hint: it’s not) It’s widely recognised that an organisation’s employee base has a great deal to contribute to its innovation ambitions. To a greater or lesser extent, depending on the type of business, your middle management and front-line employees are often closer to the realities of customer needs and problems (and therefore opportunities) than senior leadership. Open innovation offers great potential, especially with the scale which modern technology and workforce engagement platforms offer. People assigned to innovation projects need to be properly supported But the mantra that ‘everyone has a role to play in innovation’ is perhaps overly simplistic. Deloitte’s Wallwork cautions that while diversity of ideas and experience is critically important, those people assigned to innovation projects need to be properly supported. “Innovation requires a range of technical, design and commercial knowledge,” she says, “not to mention an ability to make things happen in large, complex organisations. Bringing diverse groups together offers real value, but participants need also to be selected on the skills they bring, and given training and support on how they’re expected to work together. Without this, you risk taking an inclusive approach with good intent, but perhaps not setting teams up with the ingredients for success.” Misstep: Running an innovation ‘Hunger Games’ Without doubt, celebrating success is a positive thing. Showcases, case studies, internal awards. They all have a role to play in nurturing, rewarding and reinforcing behaviour change. And that can play an important role in supporting an innovative culture. It’s important to be careful, however, that such activities are celebrating success because of the organisation’s efforts to build an innovative culture, not in spite of them. “Instead of celebrating rule-breaking, why not just change the rules?” There are organisations out there that know they need to innovate and know they have a problem with culture. But they are too focused on delivering the core business, or simply don’t know how to create the momentum behind the need for change. For these such organisations, successful innovation can begin to feel like a Hunger Games of sorts. “That’s where you find innovation awards with names like ‘The Contrarian Award’ or ‘The Rebel Award’,” says Viki. “They’ll find the innovator who’s finally managed to get something out to market, bring them up onto stage, have them tell the story of the challenges they faced and their battle with adversity. They’ll lay bare how difficult it was to work around the barriers to land something with a customer, and showcase their creativity and ingenuity in making it through.” These organisations aren’t celebrating innovation — they’re celebrating the innovator that lived the struggle. The creative one, the persistent one, the rule-breaker. “Instead of celebrating rule-breaking,” asks Viki, “why not just change the rules?” Myth: Innovation will ‘just happen’ Much weight is given to the role of the CEO in nurturing innovation and a culture that enables it. Without their active and vocal support, participation and advocacy for the organisation’s innovation priorities and the behaviours and norms that are important to these, most people will tell you that you’re fighting a losing battle. With the CEO as an active champion and role model for the behaviours that underpin a desired culture, however, the stage is generally considered to be set for success. “Teams won’t magically form and start to work in new or different ways” Wallwork issues a cautionary note, however. “Even with a CEO’s mandate, businesses can’t assume innovation will somehow ‘just happen’. Teams won’t magically form and start to work in new or different ways, and innovation can risk being little more than a rallying cry.” She points to three factors that have proven critical to making Deloitte Ventures’ own innovation agenda a reality, and similarly among clients. “People need purpose, time and skill,” she adds. “The purpose answers the ‘why?’ and gives people direction. Time is about giving people the autonomy to work on the right things, in the right way. And skill is about the ‘how?’ of innovation.” Misstep: Seeing culture as static Defining what constitutes an innovation culture is an important early step for anyone looking to bring about change. After all, you can’t lead people to a destination you’ve not yet determined. And while much work will, rightly, go into agreeing upon the desired characteristics, mindset, behaviours, norms, and all of the other elements which make up “culture”, there’s an inherent risk: change is constant. “What an innovation needs to succeed changes over time” “What an innovation needs to succeed changes over time,” says Feinberg. “In the initial stages, you’ll want a culture that supports ideation — being open, creative, highly-empathetic to customer needs, exploratory of potential opportunities. But over time, you’ll need that culture to evolve to support experimentation, iterating and agile working and a laser-focus on ensuring product/market fit. And then again you’ll need to evolve for execution — being able to build teams, manage resources, be aggressive on timetables and delivery. And then beyond that it will continue to evolve — each time, without losing the benefits and learnings from the prior stage, but evolving nonetheless.” A culture to enable innovation cannot be seen as a static beast, defined once and then embedded. It will evolve organically, as innovation itself evolves, and as change (both internally and in your markets) continues. *** This isn’t intended to be an exhaustive collection, nor is it in a particular order. It’s intended to start a discussion — and that’s where you come in. We’d love to hear from you on… 🤦🏻♂️ Examples of how you’ve encountered the myths and missteps above ⚠️ Any missing myths or missteps from your experience that need to be highlighted Share your examples and ideas in the comments below, or on LinkedIn or Twitter using the hashtag #FutureProofonculture. Thomas Brown is Sifted’s corporate innovation reporter, and a freelance journalist, award-winning author and consultant, specialising in digital transformation, innovation, organisational culture and consumer behaviour. You’ll find him tweeting from @ThinkStuff Related Articles How bold leaders get their teams to speak the truth By David Kidder Click here to read more “You need to know where the bodies are buried” By Kimberly Eynon Click here to read more How to support employees during mergers and acquisitions By Miriam Partington in Berlin Click here to read more How artificial intelligence is changing the game for banks By Maija Palmer Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? 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