How To Create An Innovative Company Culture

When the leaders of some of the nation’s top firms met for the spring 2012 Innovators’ Roundtable, their message was clear: High-performing companies must achieve a balance between the daily execution of prescribed processes and the flexibility to pivot in response to market changes if they are to remain competitive.

The roundtable, an initiative of Darden’s Batten Institute for Entrepreneurship and Innovation, brought together executives from Corning, Siemens, Northrop Grumman, MeadWestvaco and CSC. The conversation among these senior leaders from some of the world’s largest and most innovative firms centered on workforce agility, strategies for managing global research and development, and the challenges of remaining innovative in a sluggish economy.

Here’s their advice on how to master resilience, stability and operational agility.

How to Be Agile

To succeed, global companies must be, in effect, both large corporations and nimble, innovative startups. There are three essential components that allow for this kind of environment to thrive:

Couple technical expertise with imagination
Place the right people with the right expertise in the right positions
Empower your employees to take risks without fear of failure

As with most things, too much depth in one area can be detrimental. Technical experts, for instance, may not be fully attuned to changing customer needs, which could impede a company’s flexibility.

Ensuring that the right people with the right expertise are in the right place is also vital to an agile environment. Sometimes that requires finding the right position for employees to use their expertise. This allows a company to remain sustainable in the long term.

A supportive organization is also crucial to promote corporate agility. Designing workspaces conducive to collaboration and the cross-pollination of ideas may be beneficial. At Siemens, management knocked down barriers to communication by turning two-person offices into larger ones that can accommodate 10 employees. It also introduced height-flexible “sit-to-stand workstations — a move that compelled employees to be flexible in their work habits and created an environment in which people would interact more than they did when they were sedentary. After a couple of weeks, 80 percent of the people were standing at their desks.

Darden Professor Jeanne M. Liedtka pointed out that there’s an interesting effect to the architecture of people placement. She discussed Thomas Jefferson’s design for the Academical Village at U.Va., where students and faculty are housed closely together. It was an outside-the-box thought at the time, but there was a mutually beneficial relationship for professors and students when it came to learning.

Be Sustainable With Research and Development

Few companies are able to achieve continual growth. The ones that do share two common traits: They are stable and agile.

To aid with the innovation culture, many companies boast robust Research and Development (R&D) networks that include internal and external laboratories, universities and entrepreneurial ventures. Some are overseen by a central function, others are completely decentralized.

There are many benefits to R&D. They include:

Access to new information
Collaborative opportunities
Learning how to realize success through failure

When it comes to spreading R&D networks across the globe, companies facilitate access to new markets and customer bases.

Although there are many benefits to globalizing R&D efforts, the nature of the networks can create challenges. The threat of intellectual property theft when collaborating with others is a chief concern for many company executives.

Cross-border R&D functions are complex, and they become only more so when they include globally dispersed professionals from diverse cultures who speak different languages. Internal websites may help bridge geographic distance, foster collaboration and rapid problem solving, and serve as expertise locators.

One organization successfully implemented Jive technology, and another uses Microsoft’s MySite to exchange ideas across locations. Internal crowdsourcing has been successful in some cases, as have external crowdsourcing initiatives. The biggest challenge is to interact meaningfully with a crowd.

Creating a Successful Environment and Preparing for the Future

Distributing knowledge is critical to agility and fostering innovation, but building up lines of communication across large organizations is easier said than done.

Successful innovation depends on a culture that does not inhibit risk taking and punish failure. Apple and 3M are examples of companies known to support a “trial and error” approach to innovation, even at the cost of potential disasters.

One way to deal with failure is for individuals to work on multiple teams simultaneously. If you’re working on multiple projects, you will not lose face with the company if one fails.

Tolerance for failure is good, up to a point. Encourage experimentation, but also know when to cut your losses and move on.

To remain competitive, companies must learn to be nimble giants, maintaining the efficiency of their daily executions while encouraging their employees to problem solve creatively.

This article was adapted from Symphonic Improvisation: Creating a Culture of Innovation Competency, a summary report of the spring 2012 Innovators’ Roundtable, which was held at the U.Va. Rotunda, and featured in the August 2012 Batten Briefings issue, published by the Darden School of Business Batten Institute for Entrepreneurship and Innovation.