Innovation Culture in Organizations

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Innovation Culture in Organizations

Before discussing innovative culture in organizations, let us first understand the meaning of the term innovation. Innovation can be defined as the introduction of something new like a new method, knowledge, idea, etc.

In an organization, an innovative culture refers to an environment that promotes creative thinking and establishes new cultural values with an aim to generate new or improved products, services, and processes.

In today’s competitive business environment, innovation has become a requisite for organizational success. Most business leaders have recognized a need for a strong culture of innovation in order to succeed in the long run.

However, an innovative culture can be adopted in an organization only if all its stakeholders, too, recognize the significance of such a culture.

An innovative organizational culture depends on the flexibility level of an organization to adopt new ideas. In other words, an organization needs to evaluate how frequently and consistently it implements new ideas and develops new products and services.

Many renowned organizations, such as Toyota, Apple, and Cisco, have standardized their process of innovation. The leaders of these organizations have been successful in creating an innovative culture by encouraging and empowering employees to identify problems and take ownership to fix them.

An organization can have an innovative culture imbibed in its system if it:

Perceives Innovation as a Competency

An organization should consider innovation as a skill that needs to be developed consistently. Regular training programs can help in developing the skills of employees. Innovative organizations enforce innovation as a competency model and make it a part of their value systems.

Considers Innovation as a Competitive Tool

Innovative organisations consider innovation to be an aid to distinguish themselves from other players in the market. They do so by organizing idea-generation workshops and deploying innovative methods to analyze growth potential.

Recognises Innovation as a Process

For innovative organisations, innovation is one of the regular activities in their system. They do this by associating innovation with other key processes, experimenting with new concepts, and conducting workshops for enhancing the skillsets of employees.

Some organisations realize the need for innovation only in crisis when their standard procedures fail. Embracing new changes in such situations is more difficult as it may result in process failure. Thus, innovation should be practiced on a consistent and regular basis.

The table compares the attributes of organizations with status quo culture (traditional culture) with those of organizations with innovative culture:

Status Quo CultureInnovative Culture
Seek stabilitySeek novelty
Focus on core competenceFocus on edge competence
High success rateHigh failure rate
Reinforce organizationally
Reinforce organizationally
Fear of hierarchyFocus on developing creative
Avoid surprisesEmbrace surprises
Focus on inside knowledgeCombine both inside and
outside knowledge
Easy to live withHard to live with
Efficiency through standardizationEfficiency through innovation
Extend the status quoAbandon the status quo
Avoid changeEmbrace change
Measure stabilityMeasure innovation
Look for data to confirm the
existing management model
Look for data to contradict
existing management model
Less flexibleHighly flexible
Difference Between Status Quo Culture and Innovative Culture

Characteristics of Organisation With Innovative Culture

An organization with an innovative culture lays the foundation for innovation. It paves the way for inventions or new creations. However, realizing an innovative culture is possible only if an organization has the following characteristics:


It is not necessary that innovative ideas are generated only by experts. Sometimes new entrants may also provide valuable ideas. Therefore, an organization should remain open to accepting any idea that adds value to the organization, be it from an expert or a beginner. Organizations that show receptiveness to new ideas tend to be successful in the market in the long run.

Collaboration With External Sources

It is not necessary either that all innovative ideas come from within an organization. Therefore, an organization needs to be open to all external sources, such as consultants, government institutions, universities, and various research agencies, to bring in new perspectives and ideas.

Effective Communication

An organization should possess a system that ensures a smooth flow of communication. Organizations with multiple layers of hierarchy usually take a longer time to communicate information. This leads to unnecessary delays in work processes and adversely affects the efficiencies of the employees as well as the organization.

Risk Taking

Innovation comes with the risk of failure. An organization that wants to play safe cannot expect to be innovated. For creating an innovative culture, an organization needs to face certain risks in terms of changes happening in the business environment. In addition, it should cultivate a mindset to adapt to those changes.

Goal Oriented

An innovative organization sets challenging goals while making business strategies. These goals signify that innovation is highly desirable and motivate employees to bring novelty to work processes to achieve those goals.

Fair Reward System

To encourage creative thinking in its employees, an organization should recognize and reward them rightfully. This also motivates employees to build an innovative culture in the organization.

Diversified Workforce

Recruiting the right employees is necessary for any organization seeking to build an innovative culture. Therefore, an organization, when recruiting, must take into serious consideration the varied skills and experiences of candidates.

Selecting people with different backgrounds and skill sets helps to establish an innovative culture in an organization.

Generation of New Opportunities

An organization should provide its employees with opportunities to be innovative. It should not only encourage employees to try new things but also assure them that they would not be penalized for any adverse consequences.

Patient and Persistent

Initially, there is a possibility that a new idea may not work. Here the organization needs to give the new idea time to be materialized. It is as likely that, after a certain period of time, an originally less prospective idea may turn more feasible.

Innovation Culture Continuum

An organization undergoes three levels for developing an innovative culture, which described below:

Foundation Level

At this level, hierarchical and risk-focused organizations try to sell more products or services and keep costs in control. Such organizations focus on improving performance by working hard, developing skill sets, and targeting selected customers.

They often let employees leave their jobs in case their performance is not completely up to the mark.

Advanced Level

At this level, organizations try to improve productivity by encouraging employees at all levels to interact and work with each other. Moreover, at this level, organizations undertake forward integration with customers and backward integration with suppliers to create value for all.

Breakthrough Level

Innovation is the main driving force at this level. Organizations at this level are more adaptive and open to new ideas and learning cultures. With changes in the environment, organisations tend to gain a competitive advantage by introducing innovative products, services, and processes.

Ways to Create Innovative Culture

The first step towards creating an innovative culture in an organization is to assess the existing culture and skillsets of employees.

An organization generally struggles to maintain its innovation level over a period of time due to various reasons, such as a lack of employee motivation and ineffective communication channels. However, there are a number of ways to create and sustain innovative culture within an organization.

Building a Team of Innovators

Employees are the key component of any innovation process running in an organization. They can help to identify problems, suggest creative solutions, and implement innovative ideas to gain commercial success. Thus, it is paramount for an organization to build innovative teams.

While building an innovative team, an organization should select members from varying levels of experience and skill sets. This is because a diverse team generates unique ideas.

Employing a Positive and Enthusiastic Workforce

In order to create an innovative culture, it is important for an organization to recruit people who are optimistic and passionate about solving problems with creative solutions. Moreover, they should be confident to express their ideas and realize them too.

However, it is also important that people are selected on the basis of their capability to assess an idea from a realistic point of view and authentic opinion.

Learning From Mistakes and Taking Risks

An organization cannot create an innovative culture if it keeps repeating past mistakes or does not take any further actions due to the fear of those mistakes. It is important for an organization to understand that the implementation of any new idea involves a certain degree of risk.

Taking New Ideas Forward

Creativity and innovation are driven by how well an organization takes new ideas forward and turns them into real success. If an organization considers creative ideas given by employees at the initial level and neglects them afterward, it may demotivate employees.

As a result, employees may not provide any ideas in the future. However, every idea does not have potential, but identifying the right idea and implementing it may help an organization to develop an innovative culture.

Promoting Competitiveness

Encouraging employees to be a part of healthy competition can help in promoting creativity in the existing work culture. Employees should be encouraged to compete for making better products, services, and processes.

In addition, they can be encouraged to generate ideas that could improve the existing work culture.

Maintaining Strong Leadership

A good leader can motivate their team to work towards a specific outcome by promoting new ideas. In addition, a leader can also encourage a positive and creative work culture by setting challenges and inspiration.

Setting a Strategic Direction

An organization, keen to create an innovative culture, should set a strategic direction to decide where it wants to be in the future. Strategic direction is important to the innovation process as it focuses on a certain area having potential for improvement.

After identifying the area of improvement, it becomes easy to think and develop new ideas in that direction.

Role of Leaders in Creating Innovative Culture

In an organization, leaders are responsible for providing direction to employees and driving them to work collectively to achieve organizational goals and objectives.

In today’s dynamic business scenario, the long-term sustainability of an organization depends a great deal on effective leadership. A successful leader has the ability to motivate people to excel in their respective operational areas. Effective leadership not only helps to achieve goals and objectives but also assists in developing an innovative culture in the organization by letting teams work independently.

Some of the roles performed by leaders in an innovative work culture are:

Turning Vision Into a Reality

An innovative leader requires a number of skills and attributes to turn a vision into a reality. He/she should set a clear vision of where the organization would stand in the future. For this, he/she should be able to align organizational goals with individual goals.

In addition, an innovative leader needs to think creatively and analyze situations accordingly to meet objectives within the given timeframe and budget.

Overcoming Difficulties

Implementation of an innovative idea involves a number of difficulties. To overcome those difficulties, an innovative leader should analyze new ideas from different perspectives.

This is because an idea can be fruitful in one way and may not work in the other. Therefore, a leader should analyze the pros and cons of every idea, and communicate them timely to the team members.

Motivating and Inspiring Team Members

An innovative leader needs to constantly motivate his/her team to bring innovative ideas by recognizing and rewarding their efforts.

In addition, a leader should listen to the ideas given by team members patiently, give regular feedback and offer constructive criticism. This ultimately leads to a positive and creative work culture in an organization.

Establishing Boundaries for Innovation

There are several ethical concerns (like intellectual property rights) associated with the development of new ideas. If these concerns are not taken into account by a leader earnestly, this may lead to severe problems for the organization.

Differences Between Traditional and Collaborative Leaders

Different leaders follow different leadership styles to achieve pre-defined goals based on their attitudes, personalities, and working patterns. For example, leaders with the traditional style of leadership keep the authority of making decisions in their own hands, thus they lack creativity.

However, in today’s competitive business environment, leaders adopt the collaborative leadership style to promote innovation and stay ahead of competitors.

The table compares the traditional leadership style with the collaborative leadership style:

Leadership Style
Leadership Style
PowerPower is concentrated in
the hands of few authorities.
Equal participation of all
employees are encouraged
in decision-making.
InformationOwnership of information
is in the hands of leaders
to maintain authority and
control in decision-making.
Information is shared by all
employees to make independent decisions, solve
problems on their own and
generate new ideas.
Idea generationTraditional leaders are
not open to ideas from
their teams. Decisions
come from top executives only
Brainstorming and different
perspectives are used by
leaders as they believe in
the collaboration of teams
for bringing new ideas.
Problem-solvingSolutions defined by
top management is
delivered to the team members
Solutions are brainstormed
and facilitated by management.
Collaborative leaders recognize the power of the group approach to resolving a problem.
Rules and
A series of rules, regulations, and a hierarchy is formed, and employees are required to adhere to specific roles and responsibilities.Individuals are encouraged to work as teams. Resources and work are shared among individuals.
Problem resolutionIssues are resolved on an individual basis without focussing on the root cause of the problem.Team members and leaders are actively involved in resolving problems. They look for a root cause and address solutions promptly to keep things on track.
Differences Between Traditional and Collaborative Leaders

With an increase in competition, many organizations following traditional leadership culture are switching to the culture of collaboration, which unlocks the potential of organizations and promotes new ideas.

How Innovative Leaders Maintain Their Edge

Innovative leaders make strong decisions and inspire others to perform efficiently. They train and influence people having diverse abilities and skills to work in a coordinated manner and achieve organizational goals and objectives in an innovative manner.

Following are some leaders who have set an example in promoting an innovative culture:

Steve Jobs, Apple Inc.

Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The success story of Apple could not have been written without one man—Steve Jobs. Steve Jobs co-founded Apple in 1976 in his parent’s garage.

He was known for his ability to mesmerize the audience with his vast vision and appealing leadership style. He had profound knowledge and understanding of technologies combined with a visionary talent.

All of that helped him to efficiently communicate his dreams to his employees so that they could execute those dreams into realization.

Henry Ford, Ford Motor Company

Born on 30th July 1863 in Detroit, Michigan, Henry Ford founded the Ford Motor Company in 1903. He is also known for his invention of the modern-day assembly line method of production. In 1914, he introduced the concept of a moving conveyor belt, which increased the level of production of the organization.

He also focussed on the concept of all-in-one manufacturing, where the processing of raw materials, parts, and final output could be produced and assembled efficiently in a single place.

The impact of Henry Ford’s leadership on the world is almost immeasurable. He introduced automobiles into the mass market that transformed agricultural economies in the world, especially in the United States, into prosperous industrial ones.

In many ways, Ford Motor Company was inseparable from Henry Ford, and his constant exploration of new opportunities led the company into a variety of quests beyond just automobiles.

David Ogilvy, Ogilvy & Mather (O&M)

O&M is a global advertising, marketing, and public relations agency, which was founded in 1948 by David Ogilvy in Manhattan. It was the sole charm of Ogilvy that, in 1962, Time magazine called David Ogilvy “the most sought-after wizard in today’s advertising industry”.

According to Ogilvy, who is better known as the Father of Advertising, “It takes a big idea to attract the attention of consumers and get them to buy your product unless your advertising contains a big idea, it will pass like a ship in the night.”

Ogilvy believed that if an ad didn’t sell, it was because it wasn’t creative. According to him, people will buy a product only if the ad arouses their interest and curiosity and lures them to buy.

Ogilvy created some of the world’s most successful advertising campaigns for several well-known products. On the question of innovation and new ideas, he had a notion: “Big ideas come from the unconscious. This is true in art, science, and in advertising. But your unconscious has to be well informed, or your idea will be irrelevant.

Stuff your conscious mind with information, then unhook your rational thought process. You can help this process by going for a long walk, or taking a hot bath, or drinking half a pint of claret. Suddenly, if the telephone line from your unconscious is open, a big idea well up within you.”

Ogilvy always motivated his team to create content that is insightful and interesting for the target audience.

Article Source
  • Robbins, S., DeCenzo, D., & Coulter, M. (2011). Fundamentals of management. Upper Saddle River, N.J.: Pearson.

  • Robbins, S., Millett, B., & Waters-Marsh, T. (2004). Organisational behaviour. Frenchs Forest, NSW: Pearson/Prentice Hall.

  • Suri, R., Chhabra, T., Verma, S., & Sharma, P. (2007). International encyclopaedia of organisational behaviour. New Delhi, India: Pentagon Press.

  • (2023). Putting an Innovation Culture Into Practice Retrieved 1 April 2023, from

  • (2023). Leadership and innovation. Retrieved 1 April 2023, from

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