Blog: Ten steps to creating an innovation culture in your organisation

According to Boston Consulting Group, innovation is the number one priority for 72 per cent of companies, and EY predicts that 50 per cent of a company’s revenue in five years will come from sources that do not yet exist.

With this in mind, utility businesses need innovative solutions to meet the expected electrical, gas and water demand, as well as ensuring a positive customer experience.

Becoming a utilities company that can react faster to its ever-changing environment is essential, given the regulatory uncertainty in the industry and the drive for organisations to revise their business model to reflect these changes. To remain competitive, part of the new approach of utilities organisations must be to embrace a culture of innovation and provide the structure required to support innovation.

Utilities professionals face a business environment in which they are challenged to do more with less, or do more with the same. Innovation is the answer, but it needs effective management. Using the factors outlined in this article will help create your organisation’s innovation management framework and create a strategic advantage, differentiating yourself from your competitors.

Innovation can be complicated, and many companies hope it will “just happen” if they have the right people. As they will realise, this isn’t the case. Luckily, there is a growing field of research that shows companies which factors are particularly important when they want to innovate.

Creating an innovative culture isn’t about getting beanbags and pot plants. First and foremost, it’s about understanding what an innovative culture actually is. There has been a lot of research in this area, much of which has concluded that innovation culture has many different elements to it and the companies that encourage these elements are more likely to deliver innovation.

1. An innovative culture is taking risks

Fear of the unknown is one of the main reasons why companies don’t engage in innovation wholeheartedly. It is not possible to create something new without an element of the unknown and uncertainty, and therefore risk. Employees need to understand that their organisation accepts this inherent risk, and the organisation may find it more manageable to consider the different types of risks that the company has, and which are more easily averted than others.

2. An innovative culture is saying thank you

Does your manager recognise when you engage in innovation or have a new idea? Do they reward you? Part of creating a culture of innovation is giving people positive feedback when they behave in the desired way. Managers who say “we haven’t got time to look at new ways of doing things” are killing innovation.

3. An innovative culture is building trusting teams

Does your team trust each other? Innovation starts with an idea (or many ideas), and usually needs other people to refine and develop it. This is where the team’s culture is crucial, and whether its members feel comfortable sharing ideas with each other.

4. An innovative culture is giving people control

Generally speaking, people are happier when they have a degree of control over the work they do and how they do it. Employees with more control over their work are more innovative, more satisfied and perform better. Try to give freedom where you can: let employees work from 10-6 if it suits them better, and remove paperwork/bureaucracy that adds no value.

5. An innovative culture is having clear goals

Individuals and teams are more likely to think differently if they know what they are working towards. This doesn’t mean giving step by step instructions, but making sure that people know what they are working towards and then letting them get on with it (see number 4).

6. An innovative culture is giving resources

It sounds obvious, but people need resources to innovate. This doesn’t necessarily mean lots of money though – look at the amazing innovation in the developing world. Closer to home, organisations such as 3M are famous for giving their employees 15% of their time to work on personal projects. Giving employees time, and money where appropriate, to engage in innovation builds a culture that tells people innovation is supported.

7. An innovative culture is having formal processes

Would you like to improve your business’ performance or customer’s experience? Assuming the answer is yes, do you know where to go when you have an idea? And where does it go after that? Innovation benefits from some structure. As counter-intuitive as that might sound, it makes sense when you consider that it can be a long, complex process involving many people. However, be mindful of not constraining thinking when ideas are being generated.

8. An innovative culture is collaborating across teams

Collaborating across teams leads to greater diversity, which leads to more varied and potentially better ideas. Often you don’t have to be an expert in a something to think of how it could be done better or differently – you’re less constrained by what might be practical or feasible, and with some development those impractical ideas can become entirely possible. Can you get two teams to collaborate for an idea generation session?

9. An innovative culture is bringing in external experts

As customer expectations change and technology gets more complex, it is likely that a company will need to engage with a number of different experts when developing a new service. You might not have these experts in-house, and why should you? Bring them in when you need to: engage in open innovation and avoid the ‘not invented here’ mentality. Look at your customers, suppliers and other organisations as potential collaborators.

10. An innovative culture is knowing different people across a company

Collaboration is a spectrum and it can be difficult to engage in projects with a diverse set of collaborators from within and outside an organisation. Start small. Hold informal sessions for people from different teams to talk to one another; research has shown that simply knowing people from different parts of an organisation leads to more creativity and innovation. Diversity of personalities, skills and abilities are key to creating a culture of innovation.

Dr Anna Walker is a business psychologist specialising in innovation and organisational culture and the creator of Creative and Innovative Climate Scale (CICS). She is developing an innovation management and measurement approach for Amey, as part of a Knowledge Transfer Partnership project with University College London and Innovate UK.