The Hard Truth About Innovative Cultures


A culture conducive to innovation is not only good for a company’s bottom line. It also is something that both leaders and employees’ value in their organizations. But despite the fact that innovative cultures are desirable and that most leaders claim to understand what they entail, they are hard to create and sustain. How can practices apparently so universally loved—even fun—be so tricky to implement? The reason, I believe, is that innovative cultures are misunderstood. The easy-to-like behaviors that get so much attention are only one side of the coin. They must be counterbalanced by some tougher and frankly less fun behaviors. Unless the tensions created by this paradox are carefully managed, attempts to create an innovative culture will fail.

1. Tolerance for Failure but No Tolerance for Incompetence: Given that innovation involves the exploration of uncertain and unknown terrain, it is not surprising that a tolerance for failure is an important characteristic of innovative cultures.  “Failures” under these circumstances provide valuable lessons about paths forward. But failure can also result from poorly thought-out designs, flawed analyses, lack of transparency, and bad management.

2. Willingness to Experiment but Highly Disciplined: Without discipline, almost anything can be justified as an experiment. Discipline-oriented cultures select experiments carefully on the basis of their potential learning value, and they design them rigorously to yield as much information as possible relative to the costs.

3. Psychologically Safe but Brutally Candid: Psychological safety is an organizational climate in which individuals feel they can speak truthfully and openly about problems without fear of reprisal. Psychologically safe environments not only help organizations avoid catastrophic errors but also support learning and innovation.

4. Collaboration but with Individual Accountability: Someone has to make a decision and be accountable for it. An accountability culture is one where individuals are expected to make decisions and own the consequences.

5. Flat but Strong Leadership: In culturally flat organizations, people are given wide latitude to take actions, make decisions, and voice their opinions. Deference is granted on the basis of competence, not title. Flat organizations often devolve into chaos when leadership fails to set clear strategic priorities and directions.

Leading the journey of building and sustaining an innovative culture is particularly difficult, for three reasons. First, because innovative cultures require a combination of seemingly contradictory behaviors, they risk creating confusion. Second, while certain behaviors required for innovative cultures are relatively easy to embrace, others will be less palatable for some in the organization. Third, because innovative cultures are systems of interdependent behaviors, they cannot be implemented in a piecemeal fashion. Accountability makes it much easier to be flat—and flat organizations create a rapid flow of information, which leads to faster, smarter decision making. Finally, because innovative cultures can be unstable, and tension between the counterbalancing forces can easily be thrown out of whack, leaders need to be vigilant for signs of excess in any area and intervene to restore balance when necessary.

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