The Five Habits of Highly Innovative Organizations

Posted by

Steve Graham

October 3 2018

I was recently asked what I thought the five key ingredients were to setting up an innovation/idea driven organization. My response to the question was rhetorical, “How engaged is your staff?” According to The Gallop Poll (an international research and benchmarking organization that assesses global workforce engagement) the majority of companies typically have somewhere between 20-30% of their staff who are actively engaged. Therefore it is my hunch that the cultural engagement piece has to be the #1 driver. From my experience the five essentials to driving an innovation/idea led firm are:

1. Culture of engagement

Develop a process to capture the voice of staff and gather insight from the people dispersed throughout the hierarchical structure, blocked in functional silos. I met with an executive team recently and the CFO asked me, “Where do we find the good ideas and innovation.” My response was, “Asking the staff sitting on the 13 floors beneath you would be a good starting point.”

Creating a culture of innovation is critically important, however it is a long game and must contain the requisite habits for long term productivity gains: individuals empowered to create new ideas and an organiztational ethos that encourages challenge solving participation must be part of the performance conversation, aligned to goals, and KPIs. As they say, “If it‘s not measured it’s not managed.” Establish goals, train staff and be transparent.

2. Frame the future for focused innovation and ideation

Frame key aspects of the future state in order to create context and constraints for innovation. Determining and exposing the critical drivers (Social, Technological, Economic, Competitive and Marketplace) is an important process for developing context. Understanding plausible future state scenarios will shape, align and help focus the firm on the critical challenges that are emerging.

Developing a list of key drivers, highlighting assumptions, and creating awareness of evolving disruptors, will enable employees to more confidently invest in the future.

3. Resource to act on insights

Development of a systematic end to end innovation process with the capacity and capability to test, develop and implement new ideas will serve your firm well. Creating a framework to take new ideas and innovative concepts through a framing, ideating, developing, testing and implementing framework is critical.

A company must establish a pathway for new ideas to see the light of day. This is one of the biggest obstacles in many organizations today. When senior management ask front-line staff for ideas, there is an expectation that the company will either commit resource to a future implementation program - or provide key personnel with time to focus on a future project. Doing nothing with ideas is disaster waiting to happen. Read about the Walmart experience!

4. Leadership and executive sponsorship

Today, most successful companies label themselves as change organizations. We are in the throes of a VUCA era where volatility, uncertainty, complexity and ambiguity are the norm. This means change, and successful change is best led with courage. Business pundits talk of transformational program failure rates of 70% – 80% and the most common caue attributed to failure is inadequate leadership.

For effective innovation/idea led organizations there should be sponsorship and engagement from the executive team. Innovation and new ideas are plagued with uncertainty and ambiguity, however with excellent leadership, progressive companies will develop the wisdom to listen, the courage to change and the acceptance of failure…all byproducts of an innovation/idea led company.

5. Communication

Create a communication plan. Although the four previous points are incredibly important the single biggest factor that usually separates those who develop a successful innovation culture from the firms that struggle, is directly correlated to the effectiveness of the communication plan. Excellent communication enables people to understand the innovation/idea gathering approach and leverages the early adopter’s voice of passion, helps to persuade the early majority pragmatists to participate, and get the entire org involved. Good communication ensures visibility and helps to build participation, momentum, acknowledgement and collaboration.


Developing a culture of innovation and idea led change is hard work, and there is so much more than the 5 points raised above. However if you are looking for key areas of focused intervention, you will certainly reap the benefits by addressing the highlighted areas. Harnessing the ideas of your engaged staff in a well communicated, end to end innovation process with resource to execute, sponsored by a leadership team that understands the volatile emergent future is an excellent setting to build organizational relevance.