Inclusive Innovation Results in 5.5 Times More Revenue Growth
Where do the best new ideas come from? And how can you ensure you actually hear about them? For leaders at companies of all sizes and types, these questions are of paramount importance. Technologies and methods of doing business are being invented and disrupted seemingly overnight. To compete in a global marketplace, more speed and agility is demanded. To that end, establishing and maintaining a culture that encourages innovative thinking has become a must.
New research from global people analytics and consulting firm Great Place to Work sheds light on the answers to these questions. After studying nearly 800 companies across a wide range of industries and roughly 500,000 employees, they found that “organizations in which everyone participates in generating new ideas, products, and services speed past their rivals and adjust rapidly to changing market conditions.” The authors coin this ‘innovation by all.’
The implications for your business are serious, because companies that build an innovation by all culture generate better ideas, implement them more quickly, and respond to changing markets better — resulting in 5.5 times the revenue growth of peers that are less inclusive!
When was the last time someone in your organization volunteered a novel suggestion that was promptly followed up on and implemented? Did it fall outside of his or her explicit responsibilities? Were other team members required to participate? Potential solutions and opportunities derived from them rarely come to fruition on their own — or, worse, are never even put forth to begin with.
Inclusive Innovation in Practice
At Nvidia, which is based in Santa Clara, California, revenue skyrocketed last year by 41 percent to nearly $10 billion. What was once a small computer gaming company is now leading the field in artificial intelligence, self-driving cars, virtual reality, and advanced robotics.
One reason why? The company does not maintain divisions. Its innovations come from throughout the organization, not just the 200 scientists in its research department tasked with working on breakthroughs.
At Quicken Loans, a user experience specialist named Olya Kenney imagined a tool that would help team members create products that people with disabilities can more easily use. (About 20 percent of Internet users in the U.S. have a disability.) Kenney was encouraged to gather and lead a team of employees to flesh out her initial concept.
The “Empathy Generator,” as it is now known, is not only the right thing to do, Kenney explained. “If we can engage that huge market segment, it’s an investment for the company.”
How to Measure the Innovation Capacity of Your Company
There’s a simple way to analyze the degree to which your company is practicing innovation by all. Compare the number of employees who “consistently experience meaningful opportunities to innovate” versus those who “find these opportunities lacking, absent, or even threatening.”
Companies that experience accelerated innovation have a ratio of 11:2.
And companies that experience primarily friction are nearly split at 3:2.
How Innovation By All Companies Set Themselves Apart
They highly value and cultivate authenticity in everything they do. Authenticity begets trust, which is essential to the creation of an environment in which employees feel safe enough to volunteer their ideas.
“Creating a culture where everyone feels they can share their best ideas is no small feat. Mechanisms for hearing employees’ great ideas must be in place, naturally. But fostering a climate where people are inspired to generate those great ideas in the first place, feel able to share them with leadership, and then execute them in practice, are other questions entirely,” the authors of the report explain.
Their leaders lead from behind. Executive-level support and knowledge for innovative ideas is crucial, no doubt. But so is cultivating ownership and agency among individual employees and groups. Leaders should provide guidance via values and an inspiring vision — less so, by executing. Which only makes sense. Think of how much more productive your company would be if employees at all levels were inspired to ideate and empowered to take action.
They have a system for prioritizing and acting on the best ideas. For example, Quicken Loans hosts an event similar to Shark Tank in which hundreds of employees that have voluntarily formed groups come together to present what they’re passionate about.
“We have millions of ideas. Leaders play the role of looking at those that make the most sense for the business, and making sure they have the resources to make it happen,” explained Patrick Hartford, vice president of emerging technology at Quicken Loans.
They actively encourage the contributions of employees at all levels. Passively stating something is so won’t cut it. Systems must be put in place, such as the explicit allotment of time for creative brainstorming.
They don’t value the creative potential of one department or group of employees more than others. Traditional research and development practices — in which creativity is tightly corralled and limited to a select few — are falling by the wayside. Open innovation, for example, is now the most popular model of bringing new products and services to market.
New communication technologies mean employees have the opportunity to analyze and respond to more data than ever before. Are you tapping the full innovative potential of your employees? That requires intention. As the research makes clear, it’s worth it.