The Global Innovation 1000: Why Culture Is Key
From Strategy + Busines
This article describes the result of an annual study published by Booz & Company about innovation in the corporate world. The study shows that corporate culture is more important than “a winning overall business strategy, deep customer insight, great talent, and the right set of capabilities to achieve successful execution.” However, only 50% of the companies surveyed in the study admit that they consider culture one of their top priorities. A “superior product performance” and “superior product quality”, are the most cited preferred strategic goals.
The study in fact shows that a “Need Seeker model” is the most likely to deliver superior differentiation, profitability, and growth in enterprise value because “it is the model most able to get to market first with products that address unarticulated customer needs through superior customer understanding and the most likely to have the cultural attributes and cross-organizational alignment that can sustain its success.”
Although many companies are aware of the higher probability of success of this approach, the issue seems to be the need for consistency and focus over time. As the CEO of 3M admits “That’s the thing about cultures — they’re built up a brick at a time, a point at a time, over decades. You need consistency; you need persistence; and you need gentle, behind-the-scenes encouragement in addition to top-down support. And you can lose it very quickly.”
However, it is crucial for companies that seek to be successful to make sure that that the company’s culture supports innovation and also actually accelerates its execution. The key is to develop an innovation strategy which is clearly articulated, and communicated throughout the organization from the top down. Make sure that the technical community within the firm communicate with the top management, and have a real seat at the executive table. Create tight connections between strategy, culture, and innovation, because it will help converting innovation spending into marketplace results and superior long-term financial performance.