Main content

Innovation! What does that even mean?

Cath Everett Profile picture for user catheverett May 13, 2024
Every enterprise ever has made claims to have a ‘culture of innovation’. But what does it really mean, why does it matter, and how do you go about creating one that works?


There are a host of words in the tech sector lexicon that are so overused as to become almost meaningless – and ‘innovation’ certainly ranks up there with the best of them.

But despite this, both tech companies and IT leaders alike continue to claim that it as their MO [modus operandi]. So, what actually is innovation and why does the tech industry hold it in such high esteem? Alex Alvarez, Lead People Scientist at Employee Experience platform provider Culture Amp, explains:

At its core, innovation is a mindset leading to certain behaviours that create something new or improve something that already exists. And this matters, especially for tech. Tech is constantly changing and evolving, and if companies here don’t innovate and change, they may not exist in future. If they keep doing things in the same way, it could potentially lead to them disappearing.

The perception of being innovative is also important for start-ups keen to get hold of funding. Research Alvarez undertook in 2021 found a link between such financing and three factors: employee engagement, a positive perception of leadership and a focus on innovation being part of the culture. As he points out:

This indicates innovation is commercially important. It’s also about creating competitive advantage. If a company develops something first, it often becomes market leader, so having an innovative culture can help you outperform rivals.

How to boost workplace creativity

A key element of innovation, meanwhile, is creativity. Emily Rose McRae is Senior Director Analyst at research and advisory firm Gartner. She investigated the most important factors that lead to workplace creativity and came up with some unexpected findings.

Organizational characteristics, such as size and industry, were found to increase creativity by no more than one percent. The maximum impact of job levels and functions was 8%, while an individual’s innate creativity shifted the dial by only 12%.

Instead, the biggest single factor behind boosting workplace creativity, at 25%, was organizational actions. As McRae says:

You don’t need to hire creative superstars and creativity isn’t just the remit of a few organizations. It’s about certain actions you need to take. This includes organizations and managers actively encouraging creative thinking and rewarding new ideas even if they fail.

She also points to the three key components of which creativity consists beyond inherent talent. These are imagination, knowledge and expertise for context purposes, and the ability to “overcome the stickiness of prior knowledge”. McRae explains:

You have to get past what you already know about something to get to the good ideas. It’s also about feeling safe enough to get something wrong and not be punished, and feeling you can say, ‘What about these other things?’

Alvarez agrees:

Ask yourself, what happens if someone fails? Do we have a blame culture or one where we see what’s been learned and how things could be done differently in future? A key part of innovation is about taking risks and trying again if things don’t work. So, it’s important to build psychological safety. If you’re in that kind of environment, you don’t fear being humiliated or punished if you speak up, share ideas, ask questions, raise concerns, or make mistakes. It also reduces groupthink, where everyone just falls into line and there aren’t any contrary opinions.

How to support innovation

Another important consideration here is finding ways to tap into employees’ intrinsic motivation because “if people are motivated, they’re more likely to innovate”, Alavarez says.

According to management expert Daniel Pink, intrinsic motivation consists of three pillars: autonomy (a desire to direct our own lives), mastery (a desire to continually improve), and purpose (a desire to do things in service to something larger than yourself). As Alvarez points out:

At the core of all this is mindset, and that can be influenced by the behavior of both peers and leaders. So, the most important thing leaders can do is to lead by example and be a role model for the behaviour they want to see in their employees. This means setting the tone but also being clear about your expectations, that is holding respectful conversations in which others can disagree. It also means putting resources behind your words. So, if you’re talking about innovation, think about if you’re giving people time to dedicate to it, or are they so stressed there’s no room for it?

This last point is crucial, believes McRae, because in her view, the real enemy of creativity is stress:

The more stressed you get, the harder it is to overcome the stickiness of prior knowledge. The problem is the whole world feels stressed at the moment, period. In fact, our research shows that self-reported stress levels were higher in 2022 than they were in 2020 at the start of the pandemic.

To help alleviate this stress in groups before innovation brainstorming sessions, she recommends leading participants in breathing and relaxation exercises, which may include guided meditations:

The act of participating lowers stress and opens up conversations as it helps remove blocks. It marks the meeting out as different by breaking norms and so makes a big difference.

Other simple activities that also make a difference include encouraging people to do new things:

A major driver of imagination is novelty, which means it’s important that people are exposed to different inputs and sensory experiences. Managers can encourage this by simply asking if anyone went to a different place to eat this week or went somewhere new on a walk. Having more, novel experiences and expectations drives up your ability to think outside the box. So, if the stickiness of prior knowledge slows you down, imagination is the gas that drives you forward. Doing things like playing different kinds of music at different points in the meeting also creates opportunities for more connection and increases imagination.

Innovation in practice

Another challenge in enabling innovation, meanwhile, is the apparent disconnect between employers supporting people to come out with innovative ideas and actually implementing them.

According to Alvarez’s research, a higher than average eight out of 10 tech workers (compared to seven out of 10 across all industries) say they are encouraged to be innovative. But in terms of their ideas being acted upon, this figure drops 10 percentage points to 70% (compared to 68% across all industries). As Alvarez points out:

You may encourage people to come up with ideas, but do you have the channels in place to implement them? They may feel safe in sharing an idea, but if the processes aren’t there to set a budget, for example, you’ll face obstacles in making the idea a reality. In some companies, there’s also an element of risk-aversion due to the potential commercial implications of losing money if it doesn’t work. But really it shouldn’t be about avoiding risk. It should be about managing it.

Bill Pappas is Executive Vice President and Head of Global Technology and Operations at MetLife, which provides insurance, annuities and employee benefit programs. His take on the issue is that:

A culture of innovation must be deeply rooted in a company’s DNA. When I first joined MetLife, there was one ‘innovation team’. Now, it’s an entire culture. Innovation doesn’t happen in a silo – everyone is responsible. It’s our job as leaders to make sure employees understand that, are inspired to contribute, and have the tools to do so. Led by our CEO Michel Khalaf, our executive leadership team ensure there’s alignment across organizations in terms of innovation being reflective of business priorities and goals.

Some of the initiatives the company has launched to support the innovation process include a Global Hackathon and an Experimentation Fund. The Fund not only provides financing but also has a swift approval process for ideas submitted by employees for low-cost innovation-based experiments.

So far, the firm has developed more than 100 ideas based on over 360 submissions from around the world. Pappas explains:

These initiatives help instil the message that everyone – no matter the level, region or function – can and should contribute to innovation at MetLife. They’re designed to give employees confidence in bringing ideas to the table as well as provide opportunities for generating new skills. We also host annual Employee Recognition Programs that award employees for their collaboration, experimentation, and customer-focused achievements. We aim to ensure that employees’ ideas are heard, valued and executed across the business.

My take

‘Innovation’ may be a relatively simple word, but it is decidedly less simple to create a company culture based around it. Key to success, as ever, is ensuring your people are in the right state of mind to make it happen – and that takes consistent effort, resources, and time.

A grey colored placeholder image