The Secret to Creating and Sustaining a Culture of Innovation

When innovation is a buzzword, it can be challenging for companies to go from talking the talk to walking the walk. Many companies, across industries, struggle with fostering and maintaining a true culture of innovation, beyond inspirational slogans and mission statements.

Part of that struggle is rooted in overcoming the misperception that only certain types of companies can be innovative and that innovation has a singular definition. Often, “innovation” is synonymous with technology companies and startups, since these companies are on the forefront of new technology and software. Startups are by nature more nimble and flexible, often free of cumbersome processes and procedures that might slow down innovation.

But, there's more to innovation than Silicon Valley and startups. All companies must be innovative to stay competitive and continue to meet changing and growing customer needs and expectations. This is especially true in today's environment where disruption is occurring at an accelerated pace across all industries.

At DHL Supply Chain, we take great pride in the culture of continuous innovation we have created. As a large and sometimes complex company, we understood that our path to success was to think like a small startup while honoring and utilizing our corporate structure. And while the journey hasn't always been easy, it has given us insight into what works.

The centerpiece of this effort is our DHL Start-up Lab, which supports employees in testing and scaling new ideas and technologies to spur innovation throughout the company. The program, through a series of stages, offers funding, coaching, lean processes and a network of experts for the ideas. Applicants who make it to the core incubation program are given a budget and limited timeframe of six months to test their riskiest assumptions and develop a first working prototype. At the end of the timeframe, our board of directors decides on the viability of the idea and whether it should be terminated, incorporated into the company or spun off as a separate company.

Based on our experience building and growing this program, here are five considerations for companies that want to successfully create a culture of innovation.

1. Accept that failure is okay
While this piece of advice has become cliché, it is still an important step to becoming innovative. It is also where many companies struggle. Being open to failure develops perseverance and emboldens employees to think beyond what exists today and to explore new ideas. Basketball legend Michael Jordan once said that he succeeded because he failed over and over again, missing more than 9,000 shots and losing almost 300 games. Failure itself should never be the goal, but it needs to be an acceptable outcome of trying new things, enabling people to experiment and learn.

In the DHL Start-up Lab, failure is a teachable moment. Applicants who do not make it to the final round are given instructive feedback and encouraged to rework their ideas or submit completely new ones next time.

2. Separate innovation from technology
Innovation is not just about technology. It is about people who have the ability and support to be innovative. It is about having an idea or seeing a piece of technology and understanding how it can solve an issue or be repurposed for a completely new application. Take the red and green lights in parking garages. Someone had the innovative idea to take existing technology (light bulbs and sensors) and use it to help people easily find open parking spaces.

Many of the ideas submitted to the Start-up Lab do not even require the development of new technology. Rather, they leverage existing or emerging technologies for new applications within the logistics and supply chain industries.

3. Secure top-down and bottom-up buy-in
Efforts to create a culture of innovation often fail because they don't have the support of the right groups or individuals within the company. You need company leadership to commit resources toward the effort. You also need employees who will submit ideas, support the program and offer counsel to budding innovators.

At DHL, supervisors and co-workers make an effort to support applicants as they divert some of their attention to workshopping their ideas. We've also created a pool of experts within the company who offer counsel. Senior leadership, including board members, judge the entries and act as mentors and advisors. Everyone is involved.

4. Put corporate culture in its place
There are aspects of corporate culture that many perceive as hindering innovation (e.g., bureaucracy, approval by committee). But there are also aspects that can help foster and strengthen innovation efforts (e.g., focus, discipline, process-driven). The trick is understanding and identifying when and where an organization's corporate culture can help or hurt innovation, and then structuring efforts accordingly. For instance, combining the execution of established business models (corporate focus) with the search for new business models of the future (startup focused).

Our DHL Start-up Lab heavily relies on the structure and processes our corporate culture provides. However, there are times when we realize that certain ideas would benefit from being workshopped and developed with a certain level of freedom, outside of our corporate culture.

5. Foster friendly competition
Friendly competition can be the gasoline that fuels a culture of innovation. It can increase engagement, spur motivation and comradery, and give everyone involved a common goal to rally around; in this case, being an innovative company.

This idea was a big factor in the success of our DHL Start-up Lab. We live-stream the ideas presentation, giving employees the opportunity to root for their favorite idea or applicant. We also allow employees to vote, the results of which are considered in the final judging. Friendly competition even develops among different departments and business units when it comes to submitting ideas and incorporating winning ideas.

Creating and sustaining a culture of innovation requires more than just words. It requires action, and sometimes even a mindset shift. But having a plan that incorporates these five ideas will help an organization overcome the hurdles of innovation, positioning it for further growth and increased benefits for customers.

Adrian Kumar is Vice President, Solutions Design, North America for DHL Supply Chain. He can be reached at [email protected].

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