How significant is corporate culture, a seemingly intangible asset, for building an innovative organization?
In a landmark study , researchers analyzed 759 companies in 17 countries and found that corporate culture was a more important driver of radical innovation than labor, capital, government regulation or national culture. The finding, though counterintuitive, seems to resonate with the practices of the world’s leading innovative companies.
Susan Wojcicki, CEO of You Tube and formerly Google’s Senior Vice President of Advertising, unravels Google’s approach to innovation: “Nurturing a culture that allows innovation is the key.” In fact, from famous Bell Labs to Google, innovation has always been a result of bright minds working in an “enabling environment”. However, what is essence of an innovative culture?
Quite simply, any organization where working on, experimenting with and constantly creating new products, services, features, or processes is a way of life is having what is known as innovating culture. Innovation is thus central to an innovative organization’s values. It’s a core value.
Five pillars of building innovative culture
A pattern emerges when one analyses the culture of the world’s leading innovative companies like Google, 3M, Apple and Pixar. At the very foundation, the innovative culture of these organizations stands on the following five pillars:
People innovate not because they are mandated to do so but because they are driven by a mission--a positive impact or contribution they almost feel compelled to make.
Susan adds, “Work can be more than a job when it stands for something you care about.” Google’s mission of “organizing world’s information and making it universally accessible and useful” is a powerful motivator. In Google’s story, Google Street View, Google Maps, Google books, etc. all have flowered out of this mission.
At 3M, people are inspired to solve problems that would help consumers and businesses in unique ways, using a wide array of new technologies. 3M’s corporate goal of ensuring 30% of the sales from the products introduced in the last four years keeps the employees challenged and mission-oriented.
At Pixar, people dream stories (movies) that would enthrall the target audiences and add an enriching and memorable experience to their lives.
Allowing people to live the mission is the cornerstone of creating innovative culture.
Innovative organizations systematically build a big talent pool spanning variety of expertise and diversity.
Given the right environment, exceptional people pursue exceptional ideas and convert them into tangible products. 3M, Pixar, Google, Apple, etc., all do whatever it takes to attract and retain outstanding people.
While recruiting, Google, for instance, looks for what it calls “Googleyness,” a quality described as someone having fun, intellectual humility, conscientiousness and who is comfortable with ambiguity.
3M’s philosophy of “Hire good people and let them do their job in their own ways and tolerate mistakes” has enabled the company to be among the top innovators for over a century now.
3M has a tolerance for tinkerers and a pattern of experimentation that led to our broadly based, diversified company today. To borrow a line from “Finian’s Rainbow”, you might say we learned to “follow the fellow who follows a dream.”
3M pioneered the idea of allowing employees 15% of their time to pursue projects of their own choice. Google reset the benchmark to 20%, which is now followed at Facebook, LinkedIn and many other tech companies.
Google has actually created an environment of experimentation, a sort of a giant laboratory: The company regularly runs thousands of experiments internally by continuously trying new things to test what works and what doesn’t. For example, the company studies and analyses the length of queues in the cafes (to allow people to strike conversations); location of placement of foods on shelves (for healthy eating); and design of performance management system and rewards.
In such an innovative environment, failures and course corrections are bound to occur. Lew Lehr, retired chairman & CEO, 3M, pointed out, “60% of our product programs never make it. When this happens, the important thing is not to punish people involved.” Laszlo Bock, SVP People Operations at Google, recounts  how they treated the failure of Google Wave in 2010, a product that was to eclipse
e-mail. Many of the team members of Wave went on to do many outstanding things later.
Ed Catmull, President of Pixar & Disney Animation, explains his philosophy: ‘There is a real palpable aura of danger around failure”; that’s why he has tried to create “safe environment” for its directors and animators, who need resilience in face of ideas or part finished products requiring major course corrections in the face of frank peer review. Pixar uses organizational forums like “Brain Trust” (a forum of art directors) or “Dailies” (a daily forum to review unfinished work and ask for peer feedback) to accomplish this.
Creative people seem to thrive in cultures where there is a mutual respect for ideas, creativity and knowledge. Catmull explains, “What we can do is construct an environment that nurtures trusting and respectful relationships…if we get that right, the result is a vibrant community where talented people are loyal to one another and their collective work, everyone feels that they are part of something extraordinary, and their passion and accomplishments make the community a magnet for talented people.”
Google nurtures this sense of collaboration and community through its all-hands forum called TGIF or Tech Talks (inviting accomplished people from different walks of life to give talks) or even the way its cafes and micro-kitchens have been laid out. Laszlo Bock adds, “When people get together in unexpected ways, it inevitably spurs innovation.” No wonder Google has over 2000 e-mail lists, groups and clubs.
In fact, research by Ronald Burt , at the University of Chicago, shows that innovation tends to occur in the structural holes (overlapping spaces) between social groups. Thus the people who operate in the space between groups (“group” means functional units or teams, for example) have a higher probability of coming up with good ideas. They are in a much better position to cross-pollinate ideas.
No wonder Steve Jobs kept “chance encounters” in mind while designing Pixar’s headquarters as well as Apple new headquarters, a line of thinking also followed by Google and other tech companies.
Good and inspiring rewards for innovative accomplishments send powerful signals to all employees. Similarly the way careers are managed in an innovative company is equally crucial to manage creative thinking.
At 3M, for instance, researchers can continue to move up without becoming managers, a huge liberation from the pressure of joining the managerial race, which is desisted by many creative people. In fact, it honors hundreds of employees, nominated and selected by their peers, for scientific achievements every year.
Google, similarly, rewards its outstanding teams through “Founder’s Award” and in many more ways.
The key here is to recognize hard work as well as impact that an innovation creates for the business, in an unambiguous manner.
To conclude, innovative organizations systematically nurture a culture that enables talented people to pursue an inspiring mission, feel free to pursue innovative ideas, collaborate, and enjoy rewards honoring their courage and contributions. Once such a culture is in place, it puts an organization in a vantage position to not only innovate but lead through innovation.