The secret to innovation? Your workplace culture!
Innovation equals survival. Those who are agile and adaptive survive. Those who see the threats before they arrive thrive.
It’s well documented that in this age of widespread disruption, companies must innovate continuously, creating new markets, experiences, products, services, content or processes. So how can leaders encourage innovation? It’s more than recruiting the brightest minds. While having the best talent is clearly an asset, people need the right culture to flourish.
A culture of equality—the same kind of workplace environment that helps everyone advance to higher positions—is a powerful multiplier of innovation and growth. This means that building a culture of equality is not just an ethical imperative, but a business priority. If organisations want to thrive, they have to “get to equal.”
The power of a workplace culture of equality to drive employees’ innovation mindset—their willingness and ability to innovate—is strong. It has more impact than age or gender and leads to an increase in innovation mindset in all industries and all countries. In fact, innovation mindset is six times higher in the most-equal cultures than in the least-equal ones.
Innovation also equals economic potential. Among the more than 18,000 employees in 27 countries surveyed, we found that people are more willing and able to innovate in faster-growing economies and in geographies with higher labour-productivity growth. And the stakes are enormous:
It’s calculated that global gross domestic product would increase by up to US$8 trillion by 2028 if innovation mindset in all countries were raised by 10 percent.
No matter who or where they are, if people feel a sense of belonging and are valued by their employers for their unique contributions, perspectives and circumstances, they are empowered to innovate more.
What does a culture of feel like?
Bold Leadership = A diverse leadership team that sets, shares and measures equality targets openly.
Empowering Environment = One that trusts employees, respects individuals and offers freedom to be creative and to train and work flexibly.
Comprehensive Action = Policies and practices that are family-friendly, support all genders and are bias-free in attracting and retaining people.
What is an innovation mindset?
Innovation mindset is a new way to measure an individual’s ability and willingness to innovate. It is enabled by six key elements. The more strongly a person agrees that these elements apply, the higher their innovation mindset score.
As culture improves, innovation mindset improves. For every 10 percent improvement in culture factors, innovation mindset increases by 10.6 percent. The change is underpinned by all three pillars of our workplace culture-of-equality factors, but it’s the empowerment factors that have the strongest impact.
Innovation mindset is six times higher in the most-equal cultures than in the least-equal ones. The six elements of an innovation mindset are:
Alignment around and support for the purpose of the organisation.
Being shown a clear mandate for change—and being trusted to follow through.
Having the tools, time and incentives necessary to innovate.
Tapping into inspiration from beyond the organisation.
Working with other departments or in fluid, cross-function teams.
Experimenting with new ideas quickly without fear of failure.
Nearly everyone wants—and needs—to innovate. Ninety-five percent of business leaders see innovation as vital to competitiveness and business viability, and 91 percent of employees want to be innovative.
But while 76 percent of leaders say they regularly empower employees to be innovative, only 42 percent of employees agree.
Why such a disconnect? It seems that leaders mistakenly believe that some encourage innovation more than they actually do. For instance, they overestimate financial rewards (which are nevertheless still important) and underestimate purpose as a motivator to innovate.
In fact, the impact of improving culture on innovation mindset is 42 times greater than the impact of increasing salary.
When it comes to driving innovation, increasing pay is considerably less effective than bolstering a more-equal culture. Percent increase in innovation mindset of a 10% increase in pay vs. a 10% increase in workplace culture factors.
Having employees with an advanced degree or who have studied a STEM subject at college has a less-powerful impact on workers’ willingness and ability to innovate than culture factors do.
What is it about a culture of equality that matters most to innovation?
Again, a culture of equality is anchored by three pillars: An Empowering Environment (one that trusts employees, respects individuals and offers freedom to be creative and to train and work flexibly), Bold Leadership (a diverse leadership team that sets, shares and measures equality targets openly), and Comprehensive Action (policies and practices that are family-friendly, support all genders and are biasfree in attracting and retaining people).
It turns out that of those three, an Empowering Environment is by far the most important when it comes to enabling innovation. In fact, eight of the 10 strongest factors underpinning innovation are about empowerment.
Ready to build a culture of equality where people can thrive and create? Companies should have an inclusion and diversity (I&D) strategy in place, one that is aligned with the overall business plan. An I&D strategy will form a critical foundation on which leaders can take action and drive progress.
Here we’ve identified complementary drivers of a culture of equality and of an innovation mindset to help you focus your efforts. The three broad recommendations reinforce each other in a virtuous circle, meaning that their impact as a whole is greater than the sum of their parts. Leaders should keep in mind that some actions have a particularly strong effect on an innovation mindset.
Training, greater flexibility and commitment to work-life balance are the most powerful drivers of an innovation mindset. This area is where there is the greatest opportunity for impact, as it accounts for 70 percent of innovation mindset gains. Employees are empowered by a shared sense of purpose, paired with autonomy, which helps them reach their individual potential.
- Get clear on purpose:
Ensure that employees know the purpose of their organisation and how their work aligns with it.
- Fiercely promote flexible working:
Have the leadership team set a positive example around work-life balance. Use technology to enable people to have more say over where, when and how they work.
- Train effectively:
Offer employees engaging and flexible training programs so they can acquire skills for the future.
- Let people be themselves:
Don’t ask them to conform when it comes to appearance; encourage inclusion in every way.
Bold Leadership + Experimentation + Resources
Culture starts at the top. Setting and publishing diversity targets, holding the leadership team accountable and measuring progress are critical steps. Leaders must give employees the resources they need to innovate and the freedom to fail.
- Prioritise diversity and equality:
Establish diversity, equal pay and advancement goals.
- Encourage risk-taking:
Ensure that employees know they have the freedom to experiment and help them learn from their failures.
- Set up to innovate:
Design in the necessary time, space, resource and technologies needed to innovate and continually encourage and reward innovation.
- Make leaders accountable:
Track progress, make leaders accountable.
The 40 factors that create a culture of equality:
- Gender diversity is a priority for management
- A diversity target or goal is shared outside the organisation
- The organisation clearly states gender pay gap goals and ambitions
- Progress on gender diversity is measured and shared with employees
- Leaders are held accountable for improving gender diversity
- A diversity target or goal is shared inside the organisation
- The leadership team is diverse
- Progress has been made in attracting, retaining and progressing women
- The company has a women’s network open only to women
- The company has a women’s network that is open to both women and men
- Men are encouraged to take parental leave
- Employees trust that the organisation pays women and men equally for the same work
- The proportion of women in senior leadership has increased over the last five years
- The organisation is fully committed to hiring, progressing and retaining women
- Progress has been made in improving gender equality in senior leadership
- There is a clear maternity policy in place
- Women are encouraged to take maternity leave
- There is a clear parental policy in place
- The organisation hires people from a variety of backgrounds
- Leaders take action to get more women into senior roles
- Employees have never been asked to change their appearance to conform to company culture
- Employees have the freedom to be creative and innovative
- Virtual/remote working is widely available and is common practice
- The organisation provides training to keep its employees’ skills relevant
- Employees can avoid overseas or long-distance travel via virtual meetings
- Employees can work from home on a day when they have a personal commitment
- Employees are comfortable reporting sexual discrimination/harassment incident(s) to the company
- Employees feel trusted and are given responsibility
- Employees have the freedom to be themselves at work
- Leadership has a positive attitude toward failure
- Leaders set a positive example around work-life balance
- Networking events with company leaders take place during office hours
- Employees can decline a request to work late without negative consequences
- Employees can decline a request to attend early morning/late-evening meetings without negative consequences
- Sexual discrimination/harassment is not tolerated
- The company has made progress in reducing tolerance of sex discrimination or gender-biased language
- Company training times and formats are flexible
- Supervisors respond favourably to flexible working requests
- The organisation respects employees’ needs to balance work with other commitments
- The organisation has made progress on building a workplace where no one feels excluded