10 ways to foster innovation in your company

Drake Editorial Team

The last recession taught smart companies a valuable lesson – while poorly managed companies bunkered down in survival mode, innovative companies snuck up and took the hibernating companies’ market share. RMIT University in Melbourne, Australia studied 92 fast growing companies. Here are the top 10 ways they foster an innovative culture:

1. Vision & Core Business Values Set the Tone

Innovation starts with key leadership qualities. Research found that innovative leaders are:passionate about their work,have a positive and optimistic outlook,do not allow setbacks to hinder their drive and vision,are forward thinkers, determined, thrive on difference and change, surround themselves with like-minded individuals, concentrate on team culture, learn from their mistakes, and aim to resolve problems quickly. Great leaders have excellent long-term vision and a clear business mission that is innovative, such as “to revolutionize the marketplace globally”. They make sure they share this inspirational thinking with everyone in the company.

2. Organizational Culture is Key

Innovative companies have distinctive cultures that are reflected in their recruitment practices and they place an emphasis on training and learning. They devolve power down to employees to innovate, to think outside the box and they encourage them to help chart the direction of the firm. Business units have a well-defined vision, and staff are empowered and rewarded for their performance.

3. Take a Team Approach

They establish a team approach to innovation by creating a platform to share information and to provide members with a sense of ownership and camaraderie.Teams are encouraged to have regular team meetings to review processes and projects, to question traditional methods and embrace new technologies and marketing initiatives.

4. Encourage Open Communication

Innovative leaders ensure there is communication both top-down and bottom-up. They encourage informal feedback during projects and formal feedback at the completion of assignments. They seek views and feedback and work towards implementing sound ideas. They welcome free speech, debate, and open contribution about any subject from team members. They also encourage regular brainstorming sessions between different business units. Communication is focused on creating new products and services as well as on building the business.

5. Recruit & Reward Innovative People

They spend time in the recruiting process looking for innovators and lateral thinkers. They employ people from other industries that can bring new ways of thinking to their business and they reward initiative and creativity by creating specific and measurable ways for innovators to benefit from their work.

6. Take a Customer Focus/Orientation

They encourage staff to understand customer requirements and wish lists, to create opportunities to listen closely to clients, to take ownership of problems presented by clients and to identify the new products they want.

7. Benchmark to Encourage Further Innovation

Innovative companies know what their competitors are doing. They are avid scanners of the marketplace and travel regularly to trade fairs and conferences. They also benchmark their products and processes against global best practices.

8. Investing in & Adopting State-of-the-Art Technology

Innovative companies are early adapters. They have a genuine interest in new technology and encourage employees to review and report on new technologies as a way of educating staff on innovation.

9. Flat Management Structure

The management structure of innovative companies tends to be flat, enabling opportunities for open communication and encouraging confidence. They foster a no-blame culture and encourage all staff to contribute ideas.

10. Involve Others Outside the Business in their Vision

Innovative companies work hard to make sure all stakeholders, from suppliers to bankers, understand their need to lead the market and constantly change.  

Article reprinted from The Drake Business Review, a quarterly publication helping high performing managers and executives meet the challenges in their businesses now.

This article first appeared on SmartCompany.com.au, a completely free business news, information and resource site for Australia’s entrepreneurs, small and medium business owners and business managers to help keep them ahead of their competition.