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Faculty Perspective

EX-Factors for Designing an Innovative Organizational Culture

group of business people talking

The Elusive “Culture of Innovation” 

“Every company is in a grow or die situation,” says John Danner, a senior member of UC Berkeley-Haas’ professional faculty, focused on innovation, leadership and entrepreneurship. The billion-dollar question is: “how do you grow, and how do you grow in a way that adds value?” Danner trains executives how to launch successful new ventures within corporate environments. He says that in some circumstances, growth for growth’s sake doesn’t always lead to success, that some growth might actually destroy value. The key to value-added growth is having an innovative business culture -- a culture of full engagement and involvement from your people. 
Every manager wants the elusive culture of innovation in the workplace, but consciously implementing one is where managers struggle, says Danner. “The leaders of companies today, at whatever stage or scale, need to pay attention to how they both build the talent and sustain the type of culture that accommodates both the unpredictability of innovation with the kind of decisive agility that it takes to be a successful entrepreneur.” 

The Path to an Innovative Culture Begins with Leadership

It’s ultimately the leader’s job to advance the innovation agenda within the company. Danner’s research and consulting spans decades and dozens of companies around the world, studying success factors across a broad spectrum of industry settings. He has uncovered seven “EX-factors” critical for leaders implementing and sustaining an innovative culture -- here are three key ones: 
  1. Explaining. Your people need to understand why growth and innovation are so important to the company’s future. “You can’t assume that people understand it until you explain and interpret it to them in terms that are meaningful to them,” says Danner. “Maybe growth is important because it opens up job opportunities, or affords salary increases, or it might allow you to reach more customers -- what’s the fundamental reason that matters to your organization?” Explaining the growth goals in relatable terms helps the team feel more inspired and motivated, and more involved in the process of innovating toward those goals.
  2. Expecting. Innovative cultures invite ideas from all over the organization, often from people you wouldn’t expect. Leaders must convey that they expect and welcome innovative ideas from all sides. “The question I always ask my clients is ‘how many of your people think they can be the next great innovator?’” says Danner. “Create a culture that expects and invites everyone’s involvement in the innovation process,” says Danner.
  3. Exploring. It’s critical for leaders to begin looking at their business from the outside. “Think about your business from the point of view of your customers, your suppliers, and competitors,” says Danner. This will help you understand potentially new ways of defining the scope and footprint of your business. “Innovation and entrepreneurship always exist in that no-man’s-land between execution of today’s business and exploration for tomorrow’s business.”
Hear more of John Danner’s advice for executives by watching the UC Berkeley Executive Education InFocus podcast.