Developing an Innovation Culture
The four secret aspects of game-changers
What’s innovation for you?
As a kid, I thought some people were geniuses because they could see what others didn’t. I felt that innovators had insights out of the blue that could transform the world. That was very naïve of me.
Innovation isn’t magic.
Innovation doesn’t depend on geniuses.
Innovation is the result of persistence and resilience.
In Brazil, we have a saying for successful people, “You only see the drinks they enjoy, but you miss the failures they endure.” Innovation is like that. It doesn’t happen from day to night because it results from several failed attempts, yet people will only see the innovative result.
If innovation is the result of numerous failures, can that be repeatable? Although you cannot predict outcomes, you can implement the aspects that maximize your innovation chances.
This post aims to clarify which aspects innovative companies have and how they continuously innovate and disrupt markets.
Innovation Culture
Let’s look at some companies to understand what innovation culture leads to.
Amazon started by selling books online. Today, it’s undisputed the biggest online shopping worldwide. Apart from that, it’s also steadily growing in cloud computing and space.
Apple started with computers, then disrupted the music and phone industry. Less than a decade ago, Apple joined the watch business, and today it sells more watches than all Swiss companies combined.
Apple and Amazon have an innovation culture, transforming them into invincible companies. How does that happen? Alexander Osterwalder describes their approach as Explore and Exploit:
Explore: Make small investments into micro initiatives, and increase the funds gradually as you gain evidence.
Exploit: Make the business grow and maximize the value collected.
The following image describes this approach:
Learn how to digest failures
Amazon and Apple aren’t successful all the time. They fail along the way, and they fail a lot. We don’t get to know all setbacks.
Innovation culture requires making several bets and understanding that many won’t create anything but losses.
Once, Jeff Bezos was asked how Amazon perceives failures, and he surprised the reporter by saying, “At Amazon, we don’t tolerate failures. We have an experimentation culture. Where experiments have an expected result, if that’s not achieved, we discard the initiative and move to the next one.”
Amazon learned how to digest failures, and they call it experiments. Over the last few years, Amazon faced many failures. One of the biggest was the Fire Phone, which went to the market and didn’t resonate. Amazon didn’t take a year to take it out of the market. You can find 60 other failures in this article.
Apple also had its share of failures, from PDAs to Game Consoles. And yet, they continue disrupting markets.
Innovation requires you to get comfortable with failure. It’s an intermediary step toward success.
Innovative companies double down on the winners and cut the losers.
Characteristics of Innovation Culture
What’s the difference between innovative companies and ordinary ones? How you hire, lead, collaborate, and focus determines how innovative you can be.
Let’s understand these characteristics at companies like Apple, Amazon, and Netflix.
#1 — Hiring
Ordinary companies search for the perfect match in terms of skill set and personality. They want the candidates to tick the boxes.
Innovative companies search for game changers. They want people who think differently and are willing to take high risks in exchange for high rewards.
Amazon, Apple, and Netflix interview processes are extensive. They ensure that only the most innovative people come on board. They don’t look only at what you know now but at how you think and what you could become.
#2 — Leading
Ordinary companies want people to follow the rules and execute tasks.
Innovative companies want people to solve problems and achieve goals.
“It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” — Steve Jobs
We’re in the knowledge age. People are highly educated and smart. We better give them meaningful problems to solve and empower them to search for the best solutions.
As Simon Sinek famously said, “Great leaders aren’t the ones coming up with all the great ideas, but the ones creating the space where great ideas can happen.”
Innovative companies require innovative leaders. Such leaders never tell their people what to do, but they make it clear where to land and provide whatever is necessary to support their teams to get there.
In innovative companies, the command & control approach has no space. On the contrary, leaders lead by context. They share what matters, goals, constraints, and conditions, and empower teams to play the game.