Why Innovation is a Function of Mindset
Why Innovation is a Function of Mindset

 

More evidence is emerging that an innovation mindset is a prerequisite for sustainability and success for any company today. This means that culture is no longer a concern only for HR, but is becoming a business priority. As a result, HR and L&D executives can have a new, vital role in transforming their organisations and cultivating a mindset of innovation.

Ninety percent of start-up companies fail. But this should not make larger corporations feel safe and secure in their position: they fail, too. The average lifespan of a Fortune 500 company is now only 15 years. The companies that survive, large and small, will be the ones that innovate, according to Jeremie Brecheisen, Senior Managing Consultant at Gallup. And the ones that innovate will be the ones whose culture allows it.

As Jeremie said in a MERIT interview, it is a mistake to designate innovation as “an R&D thing”. To be effective, innovation should come organically from people across the company, and it should be part of a shared identity. Another misconception is that a lack of innovation is due to a lack of ideas. As a rule, ideas are abundant in every business; it is often a problematic culture that stifles them.

 

The barriers to an innovation mindset

Getting employees to speak up is only the first step to an innovation mindset. Other challenges lie ahead. One of them is “innovation theatre”, said Guillermo Cisneros, Professor of Strategy and General Management at ESADE Business School (Spain), in an interview with MERIT. Many businesses launch initiatives such as hackathons or focus groups in order to generate ideas. While this leads to a spike in enthusiasm, if these efforts do not yield tangible results, they may cause cynicism in the longer run. Great ideas become innovations only once they are implemented, understood by all employees, and ultimately integrated into day-to-day work.

Another danger is using technology as a shortcut to creating an innovation mindset. This shortcut does not work. “Technology doesn’t drive agility on its own,” said Jeremie of Gallup – and yet that is where companies spend a substantial part of their budgets, while “almost no money goes into culture.” New platforms, apps, wikis, and so on will not have the desired impact if they are not integrated with existing processes, if employees are not educated about them, and if leaders and managers do not model the desired new behaviours. Without an accompanying shift in culture, new technology may actually add another layer to existing bureaucracy rather than promoting innovation.

Once we lay out the innovation equation, we see that culture is the big unknown: not ideas, which are an abundant, renewable resource, and not technology, which is comparatively easy to implement. “Cultural change is the underlying essential for innovation”, according to a 2019 Deloitte survey. It is culture that ensures digital solutions become an asset rather than a new chore, and it is culture that allows original ideas to not only surface, but also come to fruition.

The power of an innovation mindset is strikingly demonstrated by an experiment cited in the Harvard Business Review. Tasked with building the tallest possible structure out of spaghetti and tape, children who had only finished infant school outperformed MBA graduates. The MBA grads were smarter – but, it turns out, they were less innovative. As we adapt to restrictive cultures at school and at work, we unlearn our natural capacity for innovation. This is why we need organisational cultures that actively nurture this capacity.

Every company has a culture – unfortunately, in many cases it is one of inertia and uncritical loyalty to established processes or, at worst, of fear and blame. At a time when most businesses are still not responding quickly enough to change, an open, agile, and innovative mindset can significantly improve performance.

 

How can we foster a mindset of innovation?

The research is inconclusive when it comes to a universally applicable method of promoting innovation. Lisa Danels of Human Edge emphasises that there is no one-size-fits-all solution. Different actors and approaches may be effective, depending on the company. Experts like Jeremie of Gallup and practitioners like Addie van Rooij of HPE maintain that HR is a key site where innovation takes root. Therefore, HR needs to be “disrupted”, according to Jeremie. For his part, Addie believes that HR executives should adopt a new, authentic leadership style and act as intrapreneurs within the organisation.

Other thought leaders say that an innovation mindset can only develop if top executives lead by example. Margarita Mayo, Professor of Leadership at IE Business School and 2019 Business Book Award winner for Yours Truly: Staying Authentic in Leadership and Life, argues that­ seeding an innovation mindset is a question of leadership development. Entrepreneur and public intellectual Idriss Aberkane has also found that a positive, “love can do” attitude in leaders can dramatically enhance performance.

While experts disagree on the best way to bring about a mindset of innovation, and whether a similar method could work across different companies, they do agree on what such a mindset looks like once we get there. It means a culture where which risk-taking and dissent are not only tolerated, but rewarded; mistakes are used as learning opportunities; connections are made across divisions of the organisation; and innovations are not isolated experiments, but make their way into essential processes. Whether an innovation mindset begins with leadership development, with the disruption of HR, or with individual intrapreneurs, it is a prerequisite for a competitive, sustainable business.

As the debate continues, it is up to each of us to follow emerging research, benchmark peers, and reflect on our own organisations so we understand our specific barriers to innovation. Then, we can determine what interventions will make us most innovative and future-ready.

 

To get up to date with the latest research, connect with colleagues who are fostering innovation, and find new solutions to your challenges, join top HR and L&D executives at the MERIT Annual Summit in Seville on 5-6 February 2020.

 

By Ani Kodjabasheva