Productivity

How to foster a culture of innovation

Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

The best innovations often come from frontline staff, who deal with day-to-day operations and have great ideas about how incremental improvements can transform the business.

It’s up to businesses to develop a culture in their operations that genuinely supports innovative thinking.

We’re in the middle of an ideas boom, with almost every business focused on innovation. The federal government has announced various funding initiatives for innovation including $36 million towards a global innovation strategy, $15m towards CSIRO’s innovation fund for early stage ventures and $19m for a business research and innovation initiative.

However, while the government is doing a lot of innovation heavy lifting, it’s also up to businesses to develop a culture in their operations that genuinely supports innovative thinking. 

It’s important to understand what innovation is. As the Department of Industry, Innovation and Science explains, it’s more than just inventing or coming up with ideas. Innovation is about rethinking processes so they are more effective, designing new products and services to meet new market needs, or changing your business model to embrace new digital technologies. Innovation means different things to every business, but the outcome is the same: to help the business adapt and grow so it can embrace and even lead new commercial trends.

Innovation can’t be imposed from the top. The best innovations often come from frontline staff, who deal with day-to-day operations and have great ideas about how incremental improvements can transform the business.

five hands put together to form star shape

Innovation comes from within

Phil Morle is CEO of Pollenizer, which helps businesses to be as innovative as possible. He says everyone in a company needs to be involved in innovation.

“Ideas are best when they come from inside sources. Our journey at Pollenizer started with Coca-Cola, working with people in a  massive diversity of roles across the company, from forklift truck drivers to call centre operators to marketing managers. The best ideas come from that mix of people who are not only looking at the business from different perspectives, but close to the customer in different ways.”

Innovation happens so quickly, it’s essential for every business to find some way of being and staying truly unique. A way that might help businesses foster innovation is to include as many people as possible in the innovation process.

Bottom-up approach

Businesses that can decouple innovation from the leadership team, and instil clear processes to realise and monetise innovation are the ones that will be the most successful at innovating. Above all, team members need clarity about what to do when they have an idea, how to share that idea and how to produce evidence that it should be funded and taken to the next level. 

“These are really important processes that companies need to articulate because there is a secret for successful innovation,” Morle says. “If people know what happens next at every stage of the innovation process and don’t have to involve senior people in decision-making, which might take a long time, that will drive momentum into an innovation program.”

Aside from the right processes, the recipe for successful innovation needs a number of important ingredients. One is the commitment of the leadership team, without undue interference. If innovation is not supported and protected by the CEO, senior leadership and the board, it won’t succeed. It will be viewed as a side project or distraction, and won’t deliver the vast potential benefits.

Culture counts

The second essential ingredient is culture. Morle says this is the game-changer. “You can have all the tools, processes, funding and leadership support in the world, but without a culture reinforced and fostered day-in/day-out, which allows people to take risks, it's not going to work.” 

Morle gives an example of how culture must support innovation. “If the team in charge of an innovation project isn’t allowed to change the direction of that project, the whole thing might fall over. You can't do innovation unless you are able to change. The art of innovation is to try things, measure what happens, then make it better in the next cycle.

“So many big companies say, ‘Here's $500,000. Make a widget that looks like this.’ Then the team discovers they can do it a better way or it's not going to work or no-one will buy it. But they don't have permission to change [the brief] – they might get fired if they change it. Fear in that culture stops innovation. There may be the illusion of innovation, but they're not actually doing it. They're pretending.”

The right tools

The third key ingredient is using tools and processes to demystify innovation so everyone can make it part of their work. Morle says that when it comes to using tools to help innovate, the cutting edge is identifying collaboration technologies with permeable edges to allow the business to work in partnership across and outside the business. “A problem that can occur in mid- to large-scale enterprises is communication systems that make it impossible to collaborate, but recently we’ve seen great examples of companies using tools like Slack communities that really do have permeable edges.” 

Slack is a near real-time messaging app, which allows people to communicate across organisations by creating chat groups. “It allows people in the company to communicate with customers freely,” says Morle. “It’s been super-powerful to see how this encourages collaboration, as opposed to containing communication in Outlook threads.”

Morle nominates Trello as a project-management app that some innovative companies are using. “It allows users to quickly swarm around an idea, share tests, put them into a system and drive traction for a project in a startup-like way.”

Other good collaboration technologies include Yammer, a fantastic tool to empower communication between project members and Spark, which helps simplifies teamwork.

Ultimately, innovation must be owned and championed by every member of the business. While it’s essential for it to have the support of management, often innovation is something that must be powered by frontline staff. The idea is to build a culture that encourages action around innovation so that the business is constantly evolving to survive and thrive in an increasingly competitive world. 

Innovation starts with a great digital transformation strategy.

Here’s why you need one.

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