By Dave Hengartner, Co-Founder/CEO of rready, SaaS startup supporting companies to unleash the biggest asset for innovation: its employees.
You are probably familiar with success stories like Google’s Gmail, Nespresso, Apple Macintosh, Amazon Web Services and the iconic McDonald’s Happy Meal. These are all ideas, pioneered by employees, that ended up being adopted by the company and have, in many cases, opened entirely new markets or created alternative revenue streams for such organizations. They’re proof that employee-led innovation can drive organizational success. Yet, so many companies tend to think of these examples as singularities.
Why do so many organizations struggle to harness the intelligence and expertise of their most valuable assets—their employees? The ones who know the product or service best and interact with it daily? And why is it so difficult for innovation to thrive in companies where employees are restricted to operating within the constraints of their job descriptions?
Here are six reasons why many organizations have environments that are stifling employee-led innovation efforts.
1. No Risk Appetite
The word “innovation” is rooted in the Latin word “innovare,” combining the prefix “in,” meaning “into,” with “novus,” meaning “new.” In the very literal sense, this describes the very essence of the concept of innovation: “stepping into the new.”
However, venturing into the new also brings risks. Innovation is accompanied by uncertainty: As you explore new ideas, technologies, or markets, the outcomes of these endeavors are often unpredictable, and there is never a clear roadmap for guaranteed success. Consequently, in companies that propagate a risk-averse mindset, it is rare to find employees who produce groundbreaking ideas.
Risk-taking is essential to the innovation process and should not hinder corporate innovation efforts. While it might be intimidating, it is important to recognize and differentiate the types of risks that exist since not all risks hold the same weight. Successful innovation requires a balance between calculated risks and managing potential negative outcomes. By conducting thorough research and analysis and engaging in careful decision-making processes, it is possible to minimize risks while maximizing the potential for successful outcomes.
2. A Siloed Organizational Structure
In many large organizations, poor internal communication and collaboration often lead to the development of a silo mentality. This mentality creates barriers between departments or groups, hindering the sharing of information or ideas beyond company borders. Unfortunately, instead of fueling innovation and creativity, this isolation tends to stifle it. Employees may perceive that innovation practices are confined to specific departments only and not embraced by everyone. In such situations, employees often become more reluctant to share their ideas.
3. Poor Innovation Culture
The organizational culture of a company speaks volumes about its perspective and whether it fosters a culture of innovation or not. This is because the company’s stance on innovation influences its approach to introducing new ideas and promoting creativity. A culture that values continuous learning, rewards creativity and encourages open communication is more likely to cultivate an environment conducive to innovation. Conversely, a rigid, hierarchical or risk-averse culture may indicate a lack of emphasis on innovation. As a result, employees do not feel confident sharing their ideas and thoughts openly, hindering their overall motivation to contribute.
4. A No Mistake Mindset
A poor innovation culture goes hand-in-hand with the “no mistake mindset” that many leaders still propagate throughout their companies today. In order to see company-wide innovation flourish, it is instead crucial that people understand that making mistakes is an integral part of the learning process. No great innovation ever arose without a process of trial and error preceding it.
Cultivating this type of mindset helps employees to take the plunge and pursue their ideas with confidence instead of worrying about potential failures from the onset. While it is important to approach this in a structured and risk-aware manner, it comes down to a choice: whether to “risk it for the biscuit” or play it safe. A little hint though: Very few of history’s greatest innovations ever emerged from exercising the latter.
5. No Structured Innovation Processes
There is a common narrative suggesting that a structured process for corporate innovation contradicts the intended outcome since many think it can confine creativity. On the contrary: Implementing a structured innovation process provides a framework that enables employees to identify, prioritize and execute innovation initiatives in an orderly way without getting side-tracked. It can provide the necessary guidelines to help ensure innovation efforts are aligned with the organization’s goals and strategy. Beyond this, it also helps to steer focus and productivity, create an accountability and ownership framework and allow for efficient resource allocation in terms of time, talent, budget and other resources.
6. Leadership That Is Resistant To Change
In a world where digitalization and modern technologies are evolving at a faster pace than ever before, the importance of embracing change cannot be overstated. As creatures of comfort, humans naturally gravitate towards familiarity. However, for a forward-thinking business model to thrive, it must align with a leadership mindset that embraces and adapts to these advancements. Drawing from my personal experience in helping companies unlock innovation across their company, there have been numerous times when organizations with incredible potential turned us away because they were simply not ready for the changes that would accompany an organizational structure that empowers decision makers at all levels and nurtures a culture of bottom-up innovation, as opposed to the traditional top-down approach.
If you are reading this as a company owner, I encourage you to dig a little deeper and consider the points above in relation to your organization and leadership style. Take a moment to reflect and ask yourself whether any of these six points resonate with you. If your answer is yes, it is time to take a calculated risk and unlock the innovation power of your workforce with the right innovation program to help guide your efforts.
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