The executive team decided that the fastest way to create a culture of innovation would be to add “innovation” to the list of core values for the company. They announced the new values at the all-employees meeting, and they modified all the promotional and website materials to reflect the inclusion of the new value. They also found some examples of innovation in action and included those examples in their employee newsletters. Finally, they modified the performance management form to include a category on innovation.

However, after two years, this company was no more innovative than it was before. Employees did not really understand why innovation was a new value or what they were expected to do differently. They did not know how innovative thinking could help them solve problems or capitalize on the opportunities they encountered. On the rare occasions that innovation was a topic of discussion during performance reviews, the focus was often on how any attempts at innovation were undermined by the company's rigid approval processes and its lack of risk tolerance. The executives concluded that their approach to creating a culture of innovation was ineffective.

Let's begin by explaining why we use the phrase “culture of innovation” rather than “innovative culture.” An innovative culture assumes that the culture, in and of itself, is innovative—but cultures cannot innovate. A organizational culture of innovation supports and encourages the ...

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