Best Practices in Fostering and Maintaining a Culture of Innovation

May 30th, 2013

In my recent book, Harvesting Intangible Assets (AMACOM, 2011), I address strategies for CEO’s, boards and company leaders to jumpstart our tepid economy by driving new revenue streams and market opportunities from our intellectual properties. Over the years, I have developed and observed a wide variety of best practices for fostering and establishing on a sustainable basis a genuine culture of innovation. These must be embraced at all levels of the organization to be effective. They include:

  1. Innovation, like the spreading of fertilizer, is messy, lumpy, smelly, expensive, and unpredictable. Innovation rarely happens in a neat and sequential fashion. Imposing too many rules or protocols will retard or overly restart the process. And there must be a commitment to spread the fertilizer frequently, consistently, and across the entire field, not just once in a while to “pet” projects. And the results are not always what you would predict or expect. If you create processes that are appropriate for the levels of innovation and creativity goals that have been set, you create an environment that supports this process. If you are overly process oriented budget driven or linear in your thinking, you may be putting too many walls around a process that needs room to breathe.
  2. Embrace the headless tiger. Many great companies accomplish innovation objectives under the leadership of household-name visionary leaders such as Bill Gates and Andy Grove. But we all know that people don’t stay with companies forever, and the culture must be prepared to innovate with or without their day-to-day presence. Companies that are overly dependent on the physical presence of their founders cannot be sustained. The marketplace seems to be confident, for example, that Apple® will continue to thrive without the dynamic leadership of Steve Jobs, may he rest in peace, because he established a genuine and sustainable culture of innovation. Team-driven innovation will create leaders at all levels that can sustain, perpetuate, and strengthen the founder’s vision long after he or she steps down from the helm of the company. Investments in training, commitments to empowerment and delegation, and the development of meaningful succession plans are all critical elements of this process.
  3. The only thing that is certain is change. In our volatile economy and fast-paced, technology-driven world, the unknown has become the only real thing we can count on as known. As soon as we become comfortable with something, we can be assured that something new will replace it sooner rather than later. New versions, new editions, new models, new flavors, new packaging, new styles, new pricing models, and new distribution channels are coming out so fast that many of us are afraid that our newest gadget will become obsolete before we even leave the mall.
  4. Leave the safety of the cave. Our primal ancestors understood that there were real predators waiting for them outside the safety of their caves. Many of us still live our lives the same way; we want to know what is around the corner, what comes next. Life is not as sequential and as predictable as we would like it to be, and this is certainly the case with innovation and creativity. New missions and new goals bring out that hard-wired DNA memory of the initial fear of the unknown.
  5. Avoid cynics and naysayers. There is a major difference between cynics and skeptics, between Doubting Dora and Debbie Downer. Dora, the skeptic, is a healthy contributor to the innovation process because she asks all the right questions, even if they are with a negative bias. Debbie Downer is driven by her own insecurities and will find something wrong with anything and everything. Creativity needs both a yin and a yang to make a perfect circle, but it does not need anyone throwing cold water on the process just to protect her seat in the sun.
  6. Blaze new trails.  Ralph Waldo Emerson wrote, “Do not go where the path may lead, instead go where there is no path at all and leave a trail.”  Emerson understood the core precepts of innovation.  It is not just the willingness to travel where no one has gone before; it is the value added by creating a new trail that others can follow.  Trailblazing is not just about the process of discovery; it is about the outputs of invention.  Edison was guided by this principle in all of his toils in the laboratory and his bold willingness to defy convention in order to accomplish invention.
  7. Trust in yourself and your coworkers.  People don’t innovate without self-confidence, and teams can’t perform without trust.  Trust in your ability to make a significant contribution in your own way to your organization, and trust in your team and the system to respect and embrace your contributions.  Trust must exist at the peer-to-peer level, at the cross-departmental level, and at the supervisor-subordinate level.  Nothing is more inspiring than praise that is earned and the feeling that those who evaluate your performance believe deeply in the quality and integrity of your work.  Trust is a type of fuel and an empowering and liberating energy force that inspires creativity and innovation.
  8. Empower people to let down their guards.  Nobody can innovate while putting out fires or living in the present tense.  Innovation by its very nature requires conditions where team members can clear away enough of the muck on their daily windshields to sense and explore new possibilities and envision new realities.  There must be a “safe” environment where the outputs of the visioning can be exposed, explored, and discussed without ridicule or too much negativity.  Once the idea has been massaged, shaped, and restated, the more burdensome tasks of execution, adoption, and sustainability begin.  Participants in the process must understand the critical differences between simple ideation or invention and the more complex tasks of sustainable innovation and value creation, but you can’t have one without the other.
  9. Hey, who interrupted my disruption? Sometimes creativity and innovation can grow within the four walls of an organization over a long period of time on a gradual basis.  But, in most cases, they need to be jumpstarted by an executive at a high level who is not afraid to disrupt or creatively destroy the culture and the status quo.  The change can be radical or transformational or just a reset and reboot of top priorities and budget allocations and reward systems.  But, like all momentum, pauses, fits, and starts or any other interruption to the disruption can derail the disruption, and, with CEOs and leaders playing musical chairs on what seems like a constant basis, it has been challenging for those responsible for innovation to determine a clear direction or gain any real innovation momentum.
  10. World Series are won with singles and doubles.  Baseball historians will explain that, as exciting as home runs may be to watch from the fans’ seats, most batting titles, RBI leaders, and World Series team winners are determined by the nine men who can consistently hit singles and doubles, especially at clutch points in the game when runners are in scoring positions.  The same holds true for innovation. Many CEOs swing for the fences with the hopes of breakthrough innovation, but most innovative growth companies succeed through lots of smaller projects and incremental innovations.  CEOs must be careful not to demonstrate or marginalize those who are working on hitting singles and doubles; that will only frustrate the process and virtually ensure that no games are won.

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Andrew J. Sherman is a Partner in the Washington, D.C. office of Jones Day, with over 2,700 attorneys worldwide.  Mr. Sherman is a recognized international authority on the legal and strategic issues affecting small and growing companies.  Mr. Sherman is an Adjunct Professor in the Masters of Business Administration (MBA) program at the University of Maryland and Georgetown University where he has taught courses on business growth, capital formation and entrepreneurship for over twenty-three (23) years and won numerous teaching awards at both schools..  Mr. Sherman is the author of twenty-six (26) books on the legal and strategic aspects of business growth and capital formation.  Other recent titles include the best-selling Mergers and Acquisitions from A to Z, 3rd edition which was published by AMACOM in 2010.  His twenty-third (23rd) book, Harvesting Intangible Assets, Uncover Hidden Revenue in Your Company’s Intellectual Property, (AMACOM) was published in October of 2011.  His twenty-fourth (24th) book, Raising Capital, 3rd edition was published in the Spring of 2012, his twenty-fifth (25th) book, Essays on Governance published in late Spring of 2012.  His twenty-sixth (26th) book, co-authored with Elizabeth Vazquez, Buying For Impact:  How Buying From Women Will Change the World, was published in February of 2013.  Mr. Sherman can be reached at 202-879-3686 or e-mail


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