Business Innovation

Creating a Culture Rich in Innovative Product Development and Creative Problem Solving

Thirty years ago, when you had a unique product, you knew you were probably going to be safe from a competitive price war for two or three years. Today, the time it takes a competitor to figure out what you are doing, copy your product or service, and have it on the market competing head to head with you at a lower price has dropped to days, not months or years. And when everyone has basically the same products and services, it may seem that the only way you can differentiate your products from a competitor’s, is on price. When the only differentiator is price, eventually margins erode and everyone loses.

If a low price doesn’t make you stand out, what will? Innovation. Exactly what is involved in innovation depends on several factors, such as your desired company culture, mission statement, vision etc. For example, Zappos‘ mission is to provide excellent customer service. It is mandatory for all new employees, even executives, to spend four weeks as a customer service representative and one week in the Kentucky warehouse prior to entering their position. Also, Zappos handles a great deal of customer service through their Twitter page and YouTube Channel. They even pay (bribe) their employees to quit in order to ensure that every employee’s interest really is in serving the customers! Watch the video below for more details.

While Zappos’ zainy company culture may not be perfect for every organization, they serve as a great example of how encouraging employees to think out of the box benefits everyone: the employees, the organization and the customers. Recently, we have partnered with clients to create a customized survey that specifically measures their company culture’s ability to produce and market innovative products and services. How does your organization rate in ability to build a culture vibrant in creating innovative products and services?

The following 10 tips will help you build a culture that thrives on innovation and continuous improvement rather than lowering prices to beat out competitors. Competing in a price war is a losing battle. Instead, compete with continuous innovation.

1. Set and communicate clear goals. In many organizations, innovation is considered important, but not urgent, and tends to get postponed into next year’s strategic plan. Ensure that everyone in the company knows that the organization has made a bold decision to out-innovate the competition. Employees need to know what percentage of revenue is coming from existing products that compete solely on price, as well as the predicted revenue percentage derived from new products the organization hopes to produce in the next one, three and five years.

2. Make innovation everyone’s responsibility! For an organization’s brand to prosper, innovation and continuous improvement needs to be everyone’s responsibility. To be a competitor, or better yet, a pioneer in the organization’s industry, innovation should be the responsibility of every employee. As a leader, it is important to remember that each employee, regardless of job title, will have a unique view and valuable feedback about the company’s products or services. Make it part of everyone’s job description to provide constructive feedback and participation in brainstorming, complete with performance goals for each area of influence. Every employee needs to be thinking of how to improve a product or service and better yet, how to create a product or service that is currently not on the market.

3. Provide training and resources. The more innovative an organization is, the more change it creates. Change creates the need for people to learn as well as to create new relationships, principles, policies, programs, processes, practices, products and services. Are you providing your employees with the necessary training and resources to cultivate innovation?

4. Promote cross-functional teamwork. In one department or division, people tend to think alike. It is only when multiple departments, divisions, suppliers, customers, cultures and multi-generations work together, that something truly innovative can be created. The old adage applies here, “If two people in the same room think identically, then one of them is not necessary.”

5. Celebrate mistakes! To create anything new, there will be mistakes. Even when you upgrade software or your cell phone, there are always mistakes as you try to learn the new ways of making the product or service work. When people in your organization try to implement new or innovative ideas and a mistake happens, how do the leaders in your organization respond? Do we publicly blame the employee, or do we praise the employee for taking the risk to improve something, knowing there will be missteps and that not every innovation will be a success? Just ask Apple’s former CEO, John Sculley. After he fired Steve Jobs, he made his pet project, Apple’s first PDA, the Newton, which Sculley believed would define the digital age. It flopped. Even Apple has a list of mistakes… but they continue to out-innovate their competitors.

6. Learn to love ambiguity. When it comes to innovation and continuous improvement, there is no guaranteed success. Waiting for all the data to come trickling in to guarantee that decisions will be correct, only leads to analysis paralysis and offers a great window of opportunity for your competitors who are willing to take a leap on guts and faith.

7. Do not focus on growth! Growth and profits is an outcome of innovative products being in high demand from customers. Focus on innovation now and growth will come later.

8. Gain senior leadership buy-in. It is important to gain as much buy in as you can from senior leaders. But remember, very seldom does the great innovative idea start with the executive team. Most often the idea percolates up from strong willed employees who will not let their great idea be cast aside. Almost always, game changing revolutions start from within, not from the top.

9. Make decisions quickly. The most innovative companies drive decision making down to the lowest possible level and realize that innovative ideas and products are resource generators, not resource detractors. Remove whatever obstacles that may stop people from communicating new ideas to senior leadership in your organization.

10. Reward team success. Many creative people are focused on how many ideas they can get trademarked or patented and approved under their name. As fast as the world is moving, recognizing that it took a cross-functional team to take this innovative product or service to market and beat the competition, will generate more speed and synergy than recognizing individuals. Can individuals still be heroes? You bet. But over time, creative, high functioning teams will almost always out produce any one individual. Place your recognition on the team.