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Innovation is not a new concept per se. Maybe that's why it’s so hard to imagine a successful business in modern realities without them. Or at least a business that could last long enough to become renowned on a global scale. However, an innovative approach in a large corporations doesn’t always go as smooth as expected. This is mainly due to the minimization of risks. This can be easily explained by the fact, that as the business finds out how to solve the problems of its customers, then organizational structures and processes appear for company to work more efficiently. But they also hinder the emergence and implementation of innovation.
What can help large companies not to give up their market? Properly built innovative culture - that's what! According to research by the consulting firm Bain&Company, companies with a developed innovative culture, such as Apple, Netflix, Google and Dell, are 40% more productive than average companies in the market. So, what is an innovative culture?
An innovative culture is first of all the style of thinking of all company’s employees, because if all their thoughts are aimed at creating the future, then cool ideas will appear shortly after. An innovative culture of the enterprise is formed in the course of all its activities and focused on maintaining the dynamic unity of the old, modern and new and is made up of the innovative culture of each individual employee, in particular:
- their curiosity;
- creative interests;
- desire for leadership;
- self-improvement;
- ability to generate ideas;
- attitude to innovation;
- innovative values;
- education;
- professional knowledge;
- employee relationships;
- corporate culture level;
- technical, technological and financial capabilities of the enterprise;
- the list may go on for a long time.
First of all, it is necessary to create a corporate culture that will not only encourage innovation, but also will be tolerant of the inevitable trials and errors approach. And although a mistake in a large corporation is an expensive deal, a specialist who is in progress of development won’t do everything right from the very first try. Therefore, even bigger mistake will be the unwillingness to create all the necessary conditions so that employees can bring their ideas to life. Today we will talk about those who didn’t make such a mistake, presenting you with 5 examples of outstanding companies that not only managed to introduce an innovative culture, but also can be considered as a remarkable example for everyone else.
.1 Toyota
The success of Toyota's cross-functional collaboration approach is hard to overestimate. The essence of this approach is the joint work of employees from different departments, to ensure that they work more autonomously and ultimately receive many different views on the problem. Eventually, it helped it one day to become the world’s sixth largest firm in terms of revenue. Toyota implements cross-functional team collaboration in all areas, starting from product design up to all other aspects of doing business. Cross-functional groups are designed to provide flexibility and expertise in many different areas. Ultimately, this gives the company best-in-class capabilities in manufacturing processes, product design, and lean manufacturing.
The basic principles of cross-functional cooperation can be described as follows:
- Work in cross-functional teams, allowing to get new points of view and share original ideas.
- Communication with friends, colleagues, managers about their thoughts and points of concern about the work.
- Collaboration with people from different social classes who have different skills to spur the creative process.
Toyota is able to maintain a spirit of freshness and innovation and educates leaders within the organization. One of the characteristics by which they are selected and which they are expected to develop is the ability to constantly question their beliefs and think outside the box. The main person in the company is actually the team of managers. The president becomes vice chairman, then chairman, and then senior adviser. Decisions are made by achieving consensus, although the president is in the most difficult situation and annually formulates goals according to the principle of hoshin planning.
Hoshin planning (Hoshin Kanri) is a method aimed at ensuring that strategic goals provide real improvements in the company's operations at all levels. It eliminates losses resulting from inconsistencies in management and poor communications. Hoshin Kanri provides a consistent movement of all employees in one direction. This is achieved by coordinating the goals of the company (Strategic level) with the plans of mid-level managers (Tactical level) and actions performed directly by all employees (Operational level). It is a logical continuation of the management by objectives (MBO).
Ultimately, competent planning and organization culture, focused on supporting challenging tasks and creative abilities, shows good results on a company-scale basis. Remove from Toyota any top manager or even two, and the firm will continue to function normally. Even when a new president arrives, he has his own program, but he continues to create a culture based on Toyota principles.
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.2 Etsy
In case someone doesn’t know yet - Etsy is a highly successful e-commerce platform specializing in selling handmade products, antiques and unique limited-edition products. To make a long story short, Etsy's innovative culture can be perfectly described by Bear Grylls words: “Improvise, adapt, overcome.”
By taking small steps and constantly playing with scaling, the company ensures a stress-free innovation process at high speed. Thus, the organization minimizes the risks associated with changes, and opens up opportunities for further innovation.
As Etsy’s senior technical director, John Gula, explained during his speech, the frequent and continuous changes in the site’s performance allow Etsy to quickly iterate and experiment with new features.
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.3 Activision Blizzard
Ok, maybe it’s not the best time to include Blizzard in any type tops. After a series of unsuccessful announcements of Overwatch 2, Diablo Immortal and the crippling failure of Warcraft 3: Reforged, it is generally seems to be a bad tone to say anything positive about the company. But come on, let's give credit where it should be given. Until the recent series of setbacks, Blizzard was one of the icons in the gaming industry and we still remember more good than bad about this guys. The Activision Blizzard policy regarding the formation of an innovative culture is also quite curious.
One of the world's largest video game publishers is betting on a competitive spirit to solve the company's pressing problems. The key idea of the entire competition is to create the conditions for solving the real problems of the firm, such as the development of major franchises, their completion and expansion, and in the future, the creation of the basis for new projects. In particular, Activision Blizzard encourages employees to participate in semi-annual competitions called the 5×5 Innovation Challenge. This competition is a tournament in which several teams consisting of five people participate. Participants are given five weeks and a research budget of $5,000.
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.4 Nike
Nike has been on the market for 56 years and the secret of their success lies not only in a successful logo. These guys never rested on their laurels, on the contrary, they were always consistent, moving forward and striving to introduce innovations. Over the entire period of its existence, the firm has managed to form a successful innovative culture, consisting of 4 basic principles:
Destroy the old. After all, that’s how new ideas appear. Nike doesn’t ask its engineers to make the product better, but encourages a change in the manufacturing process and a rethinking of the product itself.
Prepare for change in advance. An original idea or prototype is rarely quite successful immediately. Nike understands this and doesn’t rush their engineers, as sometimes you need to make a thousand prototypes before everything will be done right.
Partner with the best. Considering the fact that you don’t know everything is a decisive step towards creating something great. Collaboration with other innovators and organizations can provide unexpected ideas that will help you get the best result.
Corporate culture is sacred. The history of the company is sacred, and new projects are considered with a degree of secrecy, inherent only to government intelligence services. This approach helps motivate employees to take the process seriously and subsequently be proud of their contribution to the common cause.
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.5 Duolingo
If you ever installed this application on your phone, then you know this feeling of guilt for an unlearned lesson following viewing a notification with a reminder from this ubiquitous owl.
Nevertheless, the hallmark of Duolingo is not only intrusiveness, but also an innovative culture, tied to the active involvement of the community in the process. This language learning platform has a section of the website called Duolingo Labs that allows employees and 300 million users around the world to offer ideas for improving services and finalizing developing projects. Among the examples is the Spanish podcast, which has been downloaded over 8 million times. By the way, at some point he even entered the Top in the education category at Apple Podcasts.
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There is a 30% rule, which states that a dynamic firm should spend 30% of its turnover on new products. If this does not happen, the business becomes obsolete, lags behind the market. The logic of production is to constantly generate innovation. This is a risky but exciting process that can bring moral satisfaction and material profit. And building great innovative culture is the key to the success of this process. Remember the main thing, you also need to know how to handle innovative ideas, but read more about this in our article Idea Development: How to Create and Implement Innovative Ideas.
