Value creation starts with people.

With so much talk of innovation right now, one of the newsletters I really look forward to receiving is the JPB Report 103 bi-weekly newsletter. I like it because this knowledge thick newsletter always has some good nuggets of information in all things creativity and innovation.

Innovation has to be nurtured and it starts with people, and so here are a dozen ingredients for a culture of innovation from the March Report 103 newsletter…enjoy!

1. Top Management Buy-In

A culture of innovation has to start at the very top of an organization. If top management do not embrace innovation, they can hardly expect their employees to do so either. If you are not top management and your firm does not have a culture of innovation, forward this article to the CEO now!

2. Trust

Several surveys into innovation, including one by PWC earlier this millennium(1), cite trust as being one of the most crucial ingredients to a culture of innovation. This is not surprising. Being creative, particularly in a corporate environment, is risky. Sharing a creative idea with your colleagues might well result in your being ridiculed. Worse, if the idea conflicts with the pet project of another employee, especially if she is your senior, it could easily get you in trouble. Even in firms that value creative ideas, there is the danger that a manager might steal your idea and present it to top management as her own in order to get credit for the idea.

However, if people trust top management, their colleagues and the firm itself, they can be more comfortable about sharing ideas without fear of unpleasant consequences.

3. Priority of Innovation (Often Confused with Time)

Several surveys I have seen, including one published here in Report 103 (2) have indicated that lack of time is a major hurdle to innovation. But a moment’s thought suggests that this is nonsense. Every full time employee in Europe works at least a 35 hour week. Most work more. Americans and Japanese tend to work much more. Clearly people who say that they do not have time to innovate are wrong. They have time. But, in their firms, innovation is of a very low priority. They give priority to other tasks ahead of creative problem solving, creative thinking, experimentation and the implementation of innovative ideas.

But bear in mind that employees in very innovative firms do not have access to a time warp device that gives them more time in a day. No. Their firms simply give innovation a top priority.

If you want a culture of innovation in your firm, creativity and innovation have to take priority over excessive reporting, PowerPoint slide making, long meetings, reading irrelevant e-mails and other tasks that take priority in non-innovative firms.

4. Freedom to Take Action

In many firms, especially large bureaucratic ones, taking action on any idea requires following complex procedures, obtaining multiple approvals and often trial by ultra-conservative-thinking committees. Getting an unusual idea (most creative ideas are unusual ideas, otherwise they would have been thought up long ago) past all of these hurdles is nearly impossible. In a culture of innovation, it should be dead easy for employees to take action on creative ideas. Of course safeguards should exist; but not to avoid risk at all cost. Rather to identify when an idea is not working and stopping its implementation so that another creative idea can be tried out.

In a culture of innovation, employees should constantly be experimenting with new ideas and reporting on results whether negative or positive.

5. Freedom to Make Mistakes

Of course if employees have the freedom to take action (as described in point 4), they will make mistakes. In many firms, mistakes lead to consequences ranging from reprimand to dismissal. In a culture of innovation, on the other hand, employees must have the freedom to make mistakes, the opportunity to learn from them and the means to share what they have learned without fear of consequences.

6. Rewarding Rather than Stifling Creative Thinking

If an employee shares with you a crazy idea that you know top management would never approve and for which you could not possibly get the budget, how do you react? Most people, of course, would immediately say to the employee: “that’s crazy! Management would never approve an idea like that and we don’t have the budget anyway.” But such a response is highly detrimental to creative thinking. It tells the idea-sharer that you won’t even consider highly creative ideas.

A much better response would be to pause for a moment, think about the idea and reply: “That’s brilliant! I love the fact that you are thinking creatively. But you know management will have some problems with your idea, not least of which will be budget. How might we convince management to give it a try?”

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This time, you have verbally rewarded the idea sharer with a complement and by giving her a creative challenge to improve her idea even further. That shows respect for her thinking.

In a culture of innovation, creative ideas are always recognized and rewarded and creative thinkers are challenged to improve their ideas so that they are more likely to become profitable innovations.

7. Collaboration Tools

A key to organizational innovation is collaboration. Great ideas are seldom the exclusive work of a lonely, but brilliant scientist toiling away in the laboratory. Rather they are the result of collaborative development of ideas by multiple individuals and teams. Implementing those ideas requires further collaboration, bringing in people to help in the various stages of developing the idea.

In small innovative companies, collaboration is easy. People simply meet up in various corners to share ideas. They e-mail and telephone each other and discuss their thoughts over lunch. But, once a firm has 100 or more employees, collaborative tools such as innovation process management applications, wikis, on-line conferencing applications, document sharing facilities and other tools foster collaboration. Particularly important is to encourage the development of diverse teams of people from different locations, divisions and backgrounds. In large organizations, people tend to know their closest colleagues – usually others in their divisions – best. This makes it harder to develop collaborative relationships with people in remote locations and completely different divisions. Tools to help find expertise and encourage networking across the enterprise as well as outside the enterprise can help tremendously.

8. Places and Opportunities to Talk

In order to collaborate, people do not only need collaboration tools. They need places they can meet up and talk. Ideally, you should have lots of places in your firm where people can sit down and share ideas. These should range from large conference rooms, for structured meetings, to small clusters of chairs around tables where people can simply meet and talk. In a culture of innovation, creative collaboration is a daily activity.

9. Places and Opportunities to Work in Isolation

While collaboration is critical for innovative thinking, people also sometimes need to be able to work in isolation, undistracted by colleagues. They may need quiet or the opportunity simply to sit and think without fear that they will look like zombies. In open plan offices where people face each other and work in crowds all day long, employees do not have the opportunity for quiet thought and meditation. If your office is an open plan one, be sure there are not only places for people to meet up, but also places for people to go in order to be alone!

10. Access to Information

In order to develop and analyze creative ideas, people need access to information. Fortunately, Google makes it easier than ever to find data. But information does not come only from web pages. Being able to call contacts in other firms, participate in web forum, go to professional events and even visit the library is important in the development of ideas.

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11. Transparency

Employees should also be able to access internal information of all kinds. Thus, in a culture of innovation, the organization should operate with maximum transparency, sharing not only ideas, but information on the evaluation and implementation of those ideas. Management should keep employees informed of new strategies, anticipated change and more. The more employees know and understand about the operations of their firm, the better they are able to help the firm innovate. Moreover, transparency leads to trust. And we have already learned about how important that is to a culture of innovation!

12. Humor

Humor and creativity go hand in hand, particularly in the business world. In the most innovative companies, you will regularly hear people laughing. Employees share jokes and appreciate jokes. There are two reasons for this. Firstly, humor is very similar to creativity. It is about bringing together disparate concepts in unusual ways – ways that are funny in the case of humor. Secondly, if people are in a comfortable, trusting environment, they are more likely to relax and laugh. And this is important for creativity too. When people relax and joke about ideas, they become increasingly likely to come up with really crazy ideas. And every now and again, one of those really crazy ideas becomes the basis for a breakthrough innovation.