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The Top Four Culture of Innovation Best Practices

Innovation lends itself to success by provoking organizations to continuously push for improvement and always be on the lookout for new opportunities. Amazon, SpaceX, Apple, and Salesforce are far better at innovation than others, but this is not by chance. These companies have hardwired innovation into their framework and have ingrained innovation into their organization’s culture, but how exactly do you define a ‘culture of innovation’?

According to MaRS – North America’s largest urban innovation hub, “a culture of innovation is an environment that supports creative thinking and advances efforts to extract economic and social value from knowledge, and, in doing so, generates new or improved products, services or processes”.

Inspired by this, in this blog I will explore the best practices that today’s most successful companies are employing to successfully create a culture of innovation.

The Top 4 Innovation Culture Best Practices

1.    Amazon – Empower Every Employee to Innovate

Amazon have been declared as one of the best workplaces for innovators because they empower every employee to do so. Simply put, the organization creates an innovation culture by employing a unique idea submission framework that they call the PRFAQ format. The format is described as ‘a press release that outlines the vision for a product at launch, an FAQ that explains the customer benefits, and answers theoretical customer questions’. The ideas are continually evaluated and are also shared with other innovators at the company. Once an idea is fully formed and approved, it can then receive funding for launch. Some of Amazon’s most lucrative products have been created via this process, including Prime Now, Amazon Go, and Alexa.

Harvard Business Review has stated that ‘without discipline, almost anything can be justified as an experiment – discipline oriented cultures set clear criteria’. The existence of a well thought out and clearly communicated process makes it clear that there is a discipline to innovation and that ideas are expected, appreciated, and most importantly acted upon resulting in an innovative culture. However, providing a formal process alone won’t create a culture of innovation – management must still be the driver.

Amazon’s Founder, Jeff Bezos has famously said, ‘Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn’t work’ His attitude toward experimentation indicates a clear strategic view, one that has spread throughout Amazon. Management must continuously encourage innovation and treat it as one of the organization’s core values for it to truly become a part of an organization’s DNA.

Key Takeaway: A fundamental innovation culture best practice is empowering your employees to innovate and providing them with a process to share their ideas. You can discover a plethora of new ideas that could potentially be ground-breaking for your organization – just remember how Amazon Prime grew from an employee idea!

2. SpaceX & Tesla – Reward Innovative Thinking

Innovation is ranked as one of the ‘Big Nine Cultural Values’ cited by leading companies in the MIT’s Culture 500. Tesla and Space X, ranked second and third respectively, as Top Leaders in the Innovation category with employees citing innovation as the most positively discussed value at both organizations. It is recognized at both these companies that innovation is just as important to employees as it is to company success – and Elon Musk, CEO of SpaceX and Tesla, understands this too. Musk actively encourages and incentivizes innovative thinkers, previously stating, “Incentive structure is set up that innovation is rewarded but failure to try to innovate comes with a big penalty”.

An incentive scheme structured around innovation is beneficial for promoting an innovative culture, yet financial reward isn’t the only way to do so. Josh Boehm, a former employee at SpaceX shared that ‘the environment of working in a rocket factory is amazing on its own. We could watch camera feeds of the factory floor from our desks and were encouraged to explore’. The organization has been built with innovation in mind to facilitate creativity and curiosity at every turn.

“Incentive structure is set up that innovation is rewarded but failure to try to innovation comes with a big penalty” – Elon Musk

Taking inspiration from Musk and rewarding employees for innovative thinking is key to any successful innovation program. Incentives do not necessarily have to be financial, as Boehm stated the ‘freedom to explore’ was a perk in itself. But having an incentive scheme that encourages employees to share ideas and rewards them (not only for their ideas but for any innovative activity) will go a long way in establishing an innovative culture at your organization.

Key Takeaway: SpaceX and Tesla’s innovative culture comes from understanding that innovation needs to be nurtured, encouraged, and rewarded – Musk actively discourages behavior that doesn’t fit this need. Rewarding innovation as a best practice will go a long way in creating a culture of innovation and will ultimately pay off when innovating drives new success.

3.  Apple – Striving for Perfection

Apple’s success largely stems from their approach to innovation. The company continuously improve their existing products which eventually leads to disruptive innovation. Take for example, the iPhone; Apple’s most successful product came from taking their existing products (the iPod and iTunes) and combining them with a phone and camera which resulted in a product unlike any other at the time, causing huge market disruption.

Apple has maintained this approach by predicting their customers’ needs and upgrading their existing products to meet them. This has resulted in extremely customer centric products and high brand loyalty. A recent survey found that Apple ranks highest in customer satisfaction, at 82 out of 100, according to data compiled by the American Customer Satisfaction Index.

“Apple was unlike any other company, which chose to fragment and stretch their production through outsourcing” 

Creating a Culture of Innovation with Continuous Improvement

Yet Continuous Improvement is dependent on all internal processes working efficiently for incremental changes to be made to a product. According to 6Sigma, “Jobs himself worked on hardware design, software, operating systems, web services, consumer devices, as well as retail and always insisted on the seamless integration of all these features, holding to this strategy even when the industry he worked in shunned his ideas. Apple was unlike any other company, which chose to fragment and stretch their production through outsourcing”.

Much like establishing a system for ideation, Jobs gave employees the opportunity to improve and streamline their working processes, recognizing the importance of cooperation between closely knit departments in creating a seamless supply chain. It is with this effortless collaboration and streamlined internal processes that allowed for an innovative culture.

There is a huge amount of benefit to the Continuous Improvement method, including increased employee satisfaction and customer centricity, cost reduction, and efficiency. But like Apple, it also places your organization in better position to respond to opportunities and potentially lead to disruptive innovation.

Steve Jobs Blog Cover 1Apple’s innovative culture that focuses on customer experience and creating an efficient organization, has been vital to their success.

Key Takeaway: Apple’s focus on making small improvements to their existing products has paid dividends to their brand success and customer loyalty. By allowing employees to continuously improve their processes, not only is a culture of innovation cultivated but a streamlined and cohesive business.

4. Salesforce – Put Your Customer Needs First & Cultivate External Relationships

Described by The Fast Company as one of the most innovative companies, Salesforce’s innovation strategy has contributed to much of their success as a ‘one stop shop’ for their customers. Instead of developing new technologies to fit their customers needs, the organization actively scouts new tech and startups to merge with their existing offerings. The company’s strategy has certainly paid off as in 2020 they were named as a Leader in Gartner’s Magic Quadrant for CRM Customer Engagement Center for the 12th consecutive year.

Consistently developing new technologies takes time, resources, and funding. Scouting for new and existing technologies and services is not a cheap strategy, but it is far more efficient and takes less resources. Their approach ‘creates focused innovation and mitigates any disruption risks’. Most of their acquisitions have paid off as they are now widely considered the best CRM on the market and are highly competitive at providing a full suite of enterprise applications, which is undoubtedly their USP.

“One of the challenges is that people think that innovation is limited to product development. It actually starts much earlier, almost going right upstream to the customer’s need”  – Simon Mulcahy

Scouting for an Innovative Culture

Salesforce’s entire innovation strategy has become their most formidable asset and undoubtedly represents the culture at the company. Their customer needs do not only inform their acquisition strategy, but also their employees’ approach to their work. In an interview with Simon Mulcahy, Chief Innovation Officer at Salesforce, he said, “One of the challenges is that people think that innovation is limited to product development. It actually starts much earlier, almost going right upstream to the customer’s need. Do you understand who the customer is? Have you segmented the customer to really understand who they are, what their needs are, and how you as a company can solve them with your products? Your product is just one part of the whole system that you’re innovating”.

The culture of innovation at Salesforce revolves around understanding their customer needs and innovating to meet them. Placing your customer at heart of all your decisions is one of the most essential things that any organization that wants to innovate should do. Once you truly understand them you are in a fantastic position to scout for new technologies and services that can place you ahead of your competitors.

Key Takeaway: In any innovative culture customer needs should be front and center and inform every innovative activity your organization puts its hand to. Salesforce have become a leader in their space by adopting this approach and scouting for new technologies and services to provide their customers.

Propagate a Culture of Innovation with Qmarkets

Whilst each approach to innovation may seem daunting, here at Qmarkets we’ve created a portfolio of software that will allow you to easily implement these tactics at your organization.

  1. Q-Ideate – Like Amazon, empower your employees to innovate by providing a formal process whereby they can share, collaborate, evaluate, and ultimately implement new ideas all on one platform.
  2. Q-360 – Incentivize your employees to innovate like Elon Musk by measuring your employee engagement and user activity on the system and use our advanced gamification tools that feature on each of our products to motivate and reward them.
  3. Q-openContinuously Improve your organization like Apple by collecting the intelligence of your employees to amplifying performance excellence with our continuous improvement software that allows you to gather, evaluate, approve, and implement suggestions in one place.
  4. Q-Scout – Mitigate your competition like Salesforce by utilizing our ultimate M&A and technology scouting software solution to pinpointing lucrative opportunities and managing your strategic corporate scouting portfolio.

The Companies of Tomorrow Put Innovation First

Amazon, Apple, SpaceX, and Salesforce are some of the world’s most successful companies. It should not be taken for granted that they are also the world’s most innovative. Innovation has the potential to accelerate success for your organization, but it is not possible to truly innovate without cultivating a culture of innovation that your employees can adhere to everyday.

These innovative culture best practices should be viewed as a way to create an invaluable and engaged workforce, that drives continued success, seeks new opportunities, and beats competition so that your organization can reach new heights, no matter what tomorrow brings!

If you need help creating a culture of innovation at your organization, download our Corporate Innovation and Engagement toolkit now. Packed full of actionable tips and advice to help you encourage your organization to share their ideas.

Julie Hermans Author
Julie Hermans

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