How to cultivate a healthy culture of innovation

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This story was created by Fast Company for Grant Thornton as a part of a content series that explores the impact of innovation and technology.
Innovate or die. It’s a binary choice for businesses in an environment where few things are black and white. But while business leaders understand that innovation is a crucial tool for survival, they’re often stymied by exactly how to apply the mechanics of creativity at their organization. In short, who owns innovation? Whose job is it to ensure that innovation is supported and nurtured? In many organizations, the chief information officer becomes the de facto steward of innovation. But is that the right choice?

FastCo Works spoke with LaVerne H. Council, a former CIO for the United States Department of Veterans Affairs and Johnson and Johnson, who is now the national managing principal for Enterprise Technology Strategy and Innovation at Grant Thornton. She discussed whether innovation truly can be owned, why companies need to be flexible, and how digital dexterity can help companies survive and thrive in today’s hypercompetitive environment.

In the corporate ranks, who owns innovation? LAVERNE H. COUNCIL: The answer is nobody. No one person or group should own innovation. The idea of owning innovation is a real misnomer, because that suggests that one set of people can innovate while another one can’t. Instead, innovation is something that every executive — and every leader at every level — needs to support. It must be part of the organization’s culture, part of its DNA, and it should be happening anywhere in the organization that people are tasked with coming up with better ways of doing what they did yesterday, and better ways of thinking about what they're going to do tomorrow.

It makes sense for innovation to be decentralized. But does there need to be someone making sure that innovation is happening the “right way”? LHC: The first question to ask is whether innovation is core to who we are as a company. If it is, the next questions are whether we know what we’re doing around innovation, and whether we’re giving it the kind of support it needs. What makes an innovative idea come alive is the willingness of somebody to step up and say, “I’ll sponsor this and make sure it has the resources it needs to be successful.”

We need to ask whether we’re really supporting innovation. Are we just talking about it, or do we have key leadership that can commit the dollars and the people to make this happen? When leaders are willing to support ideas with budgets, that’s when you really start to see innovation happen.

All leaders in today’s world need to play a role in setting that culture. And often, chief information officers can play an important role because they’re the ambassadors of technology. Technology isn’t the only place where innovation happens, of course, but technology can certainly enable innovation. CIOs oversee a function that is evolving every day, and every minute. And those fast-paced changes put them in a natural state of innovation and adoption.

What tells you that an organization isn’t really supporting innovation? LHC: Every company thinks it’s innovative. But if an organization is truly innovative, they don’t try to make innovation work using all of their old processes and their old standards. For instance, let’s say there’s a great new idea at a high-tech company for a new product in a new market. The person who came up with the idea says, “I want to run with this!” The leadership says, “Sure! But when you do, make sure we know the ROI, and make sure it meets this minimum hurdle rate. Make sure you leverage our manufacturing folks and also figure out how long it’ll take for this new product to turn a profit.”

Using the same measurements for everything is problematic. This person may have come up with an idea where the traditional metrics may not apply. But if you insist on applying those measurements, the idea may fall short and you may be forced to say that this new product isn’t viable.

Instead, people need to stop and ask why it needs to be measured now, and what they’re trying to understand by measuring it. Are we always driven by the financial outcome, or are we helping people understand how to leverage their creativity and their insights?

So what does that look like when it’s done the right way? LHC: Well, that’s the issue: There is no right way to do it — if you think there’s a right way to approach innovation, then you’re wrong already. You’ve already established a framework by deciding what’s right and what’s wrong. And as a result, you’ve already put creativity on a set of rails, and we all know that railroad tracks only go where you lay them.

Instead, start by asking what outcome you expect. What difference will this deliver to the user or the patient or the customer? What problem is being solved? Whatever that is, that’s what you’re measuring.

That sounds like the scientific method: Ask a question, come up with a hypothesis and keep testing that hypothesis. LHC: Yes, I think that’s right. Look at Edison. How many times did he fail when he was inventing the light bulb? Thousands. Not hundreds, but thousands. He knew what he wanted to create — light. He didn’t know how he’d get there, but he knew that when he got light, then he had the right bulb. That was the measurement.

But sometimes the result you end up with isn’t the result you were thinking you might find. Take drug companies: They may create a drug that aims to treat one thing, only to find out during clinical trials that it’s effective at treating something else. But in those cases, they’re not closing themselves off to an unexpected result. They’re opening their aperture to see other opportunities that might present themselves.

Are CIOs good at opening their aperture? LHC: Yes, I think they are. The CIO often plays three key roles: the trusted operator, the co-creator and the change instigator. The trusted operator is the traditional CIO role, keeping the organization’s technology systems running. As a co-creator, the CIO bands with other C-suite executives to figure out how to create growth at the company, and how to focus the organization on getting to the next level. They are an important voice in that conversation because they know what’s new and what’s changing in science and technology. And because of that, CIOs are uniquely positioned to be change instigators — they have the digital dexterity that can help push innovation forward in all sorts of ways.

What do you mean by “digital dexterity”? LHC: When people talk about digital dexterity, what they’re really saying is how ready an organization is for change. Are people ready to move to where new digital and technological capabilities are going? In many organizations, the answer is no. But companies — and especially their IT leaders — need to have that dexterity to adapt and adopt new technologies and digital capabilities. They need to be able to learn and engage in a new digital way so they can take advantage of a new capability that could change their market or their product or their engagement with the customer.

What advice would you give to companies that want to change their approach to innovation? LHC: I’d tell them that they have to stop making innovation a function of a group of people, and start making innovation work as a part of their cultural fabric. And the quicker they can do that, the more likely they’ll be around in 10 years. These days, innovation isn’t a “nice to have” — it’s a must have.

This FastCo Works article was created for and commissioned by Grant Thornton.