For a client of ours, we recently compiled a special edition of The Working Report highlighting the best articles on leading innovation. I’ve selected a few key takeaways for leaders to consider.
According to the KPGM report on Benchmarking Innovation Impact 2018, the conventional wisdom of 70-20-10 (70% incremental, 20% adjacent, 10% transformational) has been shifting to more of a 50-30-20 ratio, with the largest companies spending even more on transformational work: 25 percent. Of course, in some industries, this trend does not apply, and the majority of innovation still happens at the incremental level, lead primarily by business units.
Additional insights from the KPGM Benchmarking Innovation Impact 2018 report:
When leaders talk about innovative cultures it’s generally about all the positive, fun characteristics: a tolerance for failure, willingness to experiment, psychological safety, highly collaborative. But a recent HBR article sheds light on “The Hard Truth About Innovation Cultures” with an important corollary:
“The easy-to-like behaviors that get so much attention are only one side of the coin. They must be counterbalanced by some tougher and frankly less fun behaviors. A tolerance for failure requires an intolerance for incompetence. A willingness to experiment requires rigorous discipline. Psychological safety requires comfort with brutal candor. Collaboration must be balanced with individual accountability. And flatness requires strong leadership. Innovative cultures are paradoxical. Unless the tensions created by this paradox are carefully managed, attempts to create an innovative culture will fail.”
|Easy-To-Like Behaviors||Less Fun Behaviors|
|A Willingness to Experiment||Rigorous Discipline|
|Psychological Safety||Brutal Candor|
|Tolerance for Failure||No Tolerance for Incompetence|
Google’s research on high-performing teams revealed the importance of psychological safety, the belief that you won’t be punished when you make a mistake.
“They found no evidence that the composition of the team was influential in the outcomes. What they found was this: psychological safety was clearly vital to a team’s success.”
For each type of psychological safety, leaders must apply a different set of skills or interventions.
|Type of Psychological Safety||Strategies|
Safe to be yourself: Employees have a need to feel free to express themselves authentically, without the need for “covering,” or the concealment of identity, to try to fit in.
Send the right signals: Leaders — and team members — can send rewarding signals to promote inclusion in meetings, check-ins, and while communicating about team projects.
Safe to speak up: People worry about retribution (against themselves or others), or being less liked or valued by the person they are challenging, and feel a paralyzing sense of uncertainty and helplessness.
Manage SCARF® threats: When employees need to challenge another person about their behavior or decision-making, pay attention to SCARF® threats — subtle signals of status, certainty, autonomy, relatedness, and fairness.
Safe to take risks and make mistakes: This sense of psychological safety enables employees to see challenges as opportunities, experiment more, and recognize that skills are improvable — not set in stone.
Promote a growth mindset: In a growth mindset organizational culture, risk-taking is encouraged since mistakes are seen as part of a larger learning and innovation trajectory.
In recent years, several in-depth articles have been published on how to create psychological safety. In 2017, the Harvard Business Review published, High-Performing Teams Need Psychological Safety. Here’s How to Create It, with six helpful tips:
The Gallup News article, “How to Create a Culture of Psychological Safety” includes a case study where the author shares four questions designed to create a culture of psychological safety:
The order is as important as the questions themselves. The first question speaks to strengths and is fundamental for establishing individual security before diving into the broader team challenges.
“Team and individual safety are both essential, but individual safety must come first in the process of building psychological safety. And it must come first for any hope of improved engagement and performance. That’s what the answers to the four questions gave to the individuals on the team — a safety net to trust and be open with each other. It allowed them to be vulnerable enough to be engaged. Exploring those four questions can do the same for any team or organization that wants to create a culture of psychological safety.”
The best innovation teams are also cognitively diverse. The Straight Talk survey is a helpful tool to assess the cognitive diversity of a team. It reveals the primary communication style for each individual, which influences how we think, prefer to work, and approach conflict.
Bottom line: Most innovation happens at the incremental level by teams. Leadership support is the biggest enabler of innovation. Leaders must balance the fun and less fun behaviors of an innovation culture. The most innovative teams are cognitively diverse and psychological safe.
Download the PDF — The Innovation Checklist: Organizing for Innovation
How do you build a leadership culture? My latest book, The Leadership Equation strives to answer this question with the ten best practices that build trust and spark innovation.