4 elements of organizational culture critical to innovation success
Recently I was talking with a manager in the financial sector who is in the process of setting up an innovation program in an Agile organization. His aim is to get more 2nd horizon innovations through the pipeline and into customers’ hands. Horizon 2 innovation is to me the most challenging and interesting space because one needs to expose the tensions and dilemmas between vision that requires paradigm shifts (horizon 3) and current reality that needs to run better (horizon 1).* Horizon 2 is the in-between space. It has to push toward horizon 3 without totally wrecking the status quo, for now.
Horizon 2 innovation is to me the most challenging and interesting space
This requires a lot of emotional maturity, curiosity, self-awareness, determination and inspiring leadership on the part of the innovators. In other words, innovation needs a particular ecosystem to thrive, otherwise known as “culture.” Building something from scratch is an exciting opportunity, and I was curious about the financial innovation manager’s vision.
As is often the case, the moment we can identify something crucial that’s missing is the moment we can articulate what we know to be true. In the process of talking to him, I was struck that his vision did not include emotional and personal development of the people innovating. It was almost solely focused on content, structure and technology. For example, he couldn’t say how the innovation efforts were connected to diversity, and how diversity is connected to the business strategy. In fact, I even got the classic limiting belief held up, “Honestly, we have a hard time finding qualified women.”
Innovation efforts typically focus on gaining insights about users or customer
Innovation efforts typically focus on gaining insights about users or customers, often with a focus on research & development, finding new ideas for how to use technology, dealing with compliance challenges, or serving some unmet need. It’s a good approach - it’s not about us, our opinions, preferences. We do research, we prototype and test. We get deeply curious about the customer. We listen. In fact, usually the innovation facilitator (a role I’ve often played) tries to be neutral, not intervene, take her/himself out of the equation, and let people make their own discoveries and solutions.
However, having facilitated innovation projects in various contexts, I’ve often seen that it’s emotional and interpersonal roadblocks that limit the impact of design thinking. Maybe this insight comes from my background in coaching, or the arts, or years of training leaders on behavioral change to support changes in strategy. Rarely does innovation practice dive deep into personal development of the leaders, developers or practitioners, or focus on developing skills like listening or emotional intelligence.
but innovation breakthroughs for customers are often paralleled by inner-journey breakthroughs by the innovators
I believe that meaningful innovation breakthroughs for customers are often paralleled by inner-journey breakthroughs by the innovators. This inner-journey happens at an individual level and an organizational level. It materializes at the customer level. This is what I call “holistic innovation.” All of this runs simultaneously and in parallel, as an interactive system, not a linear system of a then b then c.
What is holistic innovation?
Holistic innovation is what happens when we acknowledging we are in the picture. Do we make ourselves vulnerable, reflect, and ask how our limitations limit innovation, or how our unique perspective gives us insights? Do we look for how our organizational culture needs to align for innovation to thrive? I realized that I’d been coaching teams and leaders on this for some time, having already seen the connections between these factors. But this conversation provoked my own lightbulb moment, and a few days later I emerged with the term “holistic innovation.” Since then, I’ve identified many elements of culture that I find crucial for a innovation on horizon 2 and 3 to succeed. This is in addition to having resources, expertise, and creativity.
These are 4 elements that I find particularly essential:
Service to the Greater Good - aka Meaningful Purpose
I call these SCIL (“skills”) for short.
The four SCILs provide a framework for innovation-readiness on an organizational culture level.
By using them, you can expect to:
point our where leadership needs to develop
prompt leadership to proactively tie together vision, business outcomes, and values
identify blockades that need to be removed for teamwork to soar
gain insight into how to leverage your team’s cognitive diversity
develop communication that will maximize creative output of whatever processes you use (Agile, design thinking, Lean, etc.)
find answers that come from the inside-out, from the unique qualities of you and the people in your organization
create your own solutions and your own innovation culture that will lead to unique products and services
Holistic innovation requires us to connect to ourselves and a larger organizational purpose with sincerity, as well as the customer.
To tie well-tested innovation methods to the personal journey of the creators is a next step in innovation processes. How else can we get out of our conditioned habits and assumptions, overcome biases, and take strategic risks? Purpose, self-reflection on process, leaders with emotional maturity, inclusion, and growth mindset are all crucial factors. Yet traditional innovation processes almost never grapple with these aspects directly, much less integrate them into the innovation process. I believe it’s not only possible, but valuable to do so. It can lead to more original insights and social considerations in innovation efforts. Sound scary and exciting? Maybe impossible? I think that’s how you know you’re on to something.
When this kind of holistic vision is lacking, fear is usually present, often manifest in endless proving, busyness, or a pushy desperation. Or else there’s a kind of low-grade complacency that comes with privilege, often manifest in some version of mansplaining. I believe in developing a culture that is more loyal to possibility and process than to fear and force.
Without it, we get cynicism. With it, we can deliver a double-whammy of positive results - great products or services, and a great place to work.
Holistic innovation requires us to connect to ourselves, and a larger organizational purpose with sincerity. Without it, we get cynicism at worst, playing it safe at best. With it, we can deliver a double-whammy of positive results: cutting-edge products or services, and a great place to work. Holistic innovation creates the ecosystem in which the more risky ideas can emerge, be given voice and explored. It gives clarity to when an innovation problem is actually a diversity problem, which is actually a leadership problem. It gives us the personal development tools to choose courage and curiosity, to explore the unconventional, the truly original. Engagement becomes the default culture. This is how we shift into horizon 2 and 3. Self-awareness is crucial to user-empathy and empathy - truly feeling with - is crucial to create something original.
Notes and references:
If you are not familiar with the Three Horizons, it was developed by Mehrdad Baghai with Steve Coley and David White at McKinsey. https://www.executestrategy.net/blog/mckinseys-three-horizons-of-growth/ It is widely referred to now in innovation. See their book The Alchemy of Growth, Basic Books, July 2000.