The days of thinking that innovation equals running around with post-its and sitting on bean bags in fancy offices are over.

We have started to realize that specific sets of company-wide capabilities and competencies are required for our companies to continuously innovate. So, how to build these capabilities and make innovation accessible to everyone across the organization?

At our recent Innov8rs Connect on Culture, Talent & Teams, we addressed these questions with Gilda Leicer Avila (Senior Manager Future Skills Development at Liberty Global), Steven Paladino (Global Director, Innovation and Continuous Improvement at Baltimore Aircoil Company), and Prapti Jha (Senior Design Strategist at Cisco) in conversation with Rocky Ozaki (Founder & CEO of the NoW of Work).

Here’s a summary of what we learned.

What Does “Building Capabilities For Innovation Company-Wide” Mean?

Building capabilities for innovation company-wide equals democratizing innovation, i.e., making it accessible to everyone across the organization. And it’s not just about allowing ideas to come from all organization sides; it’s about embedding innovation as part of the company's DNA.

“Democratizing innovation means giving employees an opportunity, not convincing them to be part of a journey”.

To explain these concepts, Steven brings in the perspective of an 84-year-old company. When Baltimore Aircoil Company started its journey of democratizing innovation five years ago, leaders set out to build an innovation ecosystem to educate, align, and empower all of their employees. And the main reason for this choice is that the company wants to delight its customers, provide them with valuable solutions- and also surprise and catch its competitors off guard.

And so, according to Steven, building capabilities for innovation company-wide means:

  • Educate on the “whys”: if the whole organization understands why innovation is key, they begin to engage. The more you expose employees to the "innovator mindset", the more they challenge orthodoxies, face challenges, and contribute.
  • Align: it’s crucial to align innovation with the strategic, operational objectives and not innovate for inventing sake.
  • Empower: a company-wide innovation needs to be supported by a “culture of try”. Leaders must not only allow innovation- they have to encourage it. This kind of culture is all about creating psychological safety, unfreezing the middle (and we'll talk more about this later in the article), celebrating learnings, and recognizing that ROI can't drive everything.

What Are The Most Important Company-Wide Capabilities To Innovation?

According to Steven, establishing and maintaining the innovation structure is an essential capability. You don’t need a bureaucratic structure, but you definitely need a leader, frameworks, and processes that give you sustainability and governance.

Another capability is the ability to finish. It might sound trivial, but if you're not capable of finishing the innovation process, if you're not capable of keeping your executive sponsors engaged, and if you don't have the accountability mechanisms to get you through the finish line, then innovation becomes almost a “dreamer exercise”.

At this point, Gilda introduces the “people capability” concept. According to her, you definitely need a structure and mindset in place for innovation to flow across the company. Yet people's capability is equally essential. And over her career, she has witnessed how organizations struggle to give their employees time and resources to innovate.

In short, when you really want to take your innovation capability to the next step, the "people capability" is extremely important. To this end, leaders should create a safe environment where people can spend time being creative.

Prapti echoes Gilda and adds that you need a collaborative mindset to create innovation capabilities. But if the organization doesn't make the systems, the process, and the opportunities, then that mindset rests alone. Accordingly, as a leader, provide the structure for your employees to collaborate cross-functionally.

Prapti states that whatever capability you're building and trying to introduce, it's very important to be able to unlearn and relearn the systems and processes your company has been implementing for decades. Easier said than done, but this will definitely help you move on faster.

If you don't allocate resources (time, talent, and even money) to your innovation, then it becomes purely theater. From cross-functional collaboration to knowing your whys to actually allocating resources to unlearn and relearn, these are some of the capabilities that we need to embed within organizations.

Unfortunately, company-wide innovation and building the needed capabilities is not a road free of hurdles.

What Is The Biggest Impediment To Organizations Achieving And Acquiring These Capabilities?

Gilda, Prapti, and Steven have no doubt: a culture that favors a disconnection between the different organizational layers impedes acquiring the capabilities necessary to innovate company-wide.

All too often, strategy and execution get lost and stuck in the middle layer. And a few things contribute to that:

· The innovation strategy is not well understood and translated into action.
· Lack of clarity on how to measure innovation success.
· The overall innovation strategy doesn't support people with the proper safe environment to actually create, experiment, and execute innovation.

The Frozen Middle- a Metaphor

The frozen middle is a hot topic in this context. And to explain this dilemma, Steven uses a metaphor:

“Think of the collective genius of your organization as the water on the high side of a dam. This is all of the potential energy of your ideas, your energy, and the actual potential of the organization. On the low side of the dam, there's the c-suite and your customers staring at this trickle of water that goes by”.

In this metaphor, the dam represents the company’s middle management. And they're frozen. They're stifling and blocking that potential energy from coming downstream.

Now, do you want to remove the dam? No- you'll drown your customer. Yet you can open the gates enough for that good flow of relevant stuff to pass by your customer and c-suite and delight them. To this end, you have to educate the middle management layer on why they have to create a strategic connection with the customer.

And then leaders also have to practice what they preach with this culture of try. You can't beat middle managers up when their team fails; you can't be punitive. Instead, you have to encourage them and praise them when their team does well. Whether, along with successes, you also celebrate learnings from failures, the culture of innovation will flow throughout the company.

Ultimately, if you want to get this collective genius to spread – if you want the water on the top of the dam to flow down the stream – look in the middle and start working there.

How To Gain (Learn And Adopt) These Capabilities?

There are several ways you can follow to acquire the capabilities you need. The most immediate one, as Gilda suggests, is to look externally and learn from others. For instance, companies like Google and Amazon share a lot of valuable materials about how they have actually built their own culture.

Of course, you can also acquire capabilities through partnerships.

In Prapti’s opinion, you should treat your innovation journey as an innovation itself. After all, looking internally and “learning by doing” can enable you and your company to gain all the key capabilities we've discussed.

Steven believes that a clear, powerful mandate from the organization and a good structure are paramount to the scope. Again, having a structured process doesn't mean being bureaucratic. Yet it definitely means speaking the same vernacular, understanding what everyone is doing, and what the tasks are. We all know that a lack of shared knowledge and language can slow innovation down.

“To start building up your capability, make sure you get the foundation built strong first”.

Eventually, the panelists agree that diversity – including but not limited to ideas, gender, and geography – is an irreplaceable ingredient in innovation. Of every element of diversity you can think of, the more you can bring, the better your solution will be.

In summary

Democratizing innovation and making it accessible to everyone in the organization requires key capabilities. To this end, educate your employees on why innovation matters and create safe spaces for them to experiment with innovation and learn from their attempts. In a nutshell, create an innovation culture, and embed it in your company's DNA.

However, when the strategy and execution are disconnected, it’s nearly impossible for innovation – and related mindsets and capabilities – to flow smoothly within the organization. To avoid that, educate middle managers to translate innovation goals and directives into actions. Otherwise, the middle layer can be a major hurdle between strategy and execution.