Creating a Culture that Inspires Innovation

2 years ago   •   5 min read

By Liam Fennelly

Incompetent leaders can be counterproductive and create a bad atmosphere. Two key traits of a competent leader are humility and integrity, says Liam Fennelly 

Culture is defined as “the ideas, customs and social behaviour” of a particular group. In the context of the wider community, culture is built up slowly over decades. Only rarely does it change significantly over a short period – maybe through a mass influx of immigrants into an area or, using a contemporary example, when a viral pandemic forces mass change in behaviours and customs (will the handshake ever return to western cultures?)

Within the context of a business though, culture is the product of the values and behaviours set by its leaders. Competent leaders inspire high levels of trust, engagement and productivity. Consider the culture nexus illustration below. While leaders and managers set the strategy and goals for the business, their values, behaviours and overall competence have a major effect on the culture. 

Competent leaders not only “talk the talk” but also “walk the walk” – that is, they practice what they preach.  

Consider the business where leaders:

  • Turn up routinely late for meetings
  • Take short cuts on health and safety
  • Communicate dishonestly
  • Don’t follow procedures 
  • Humiliate employees in front of their peers
  • Don’t encourage personal growth in employees
  • Create a bad atmosphere by denigrating everything and everyone

Who would want to work in such an environment? Is such a business likely to be innovative or profitable? 

Competent leadership is the single biggest factor in setting a culture that inspires innovation and supports intrapreneurial activities. 

What are the leadership traits that are key to an innovation-inspiring culture?

Competence versus confidence

Traditionally, people who are confident in their abilities tend to get further up the management ladder. This confidence trait is often cited as the reason more men are in management positions than women. Most people are over-confident and this can lead to arrogance. Confidence (how good you think you are) is only beneficial when it matches competence (how good you really are). Incompetent leaders can be counterproductive and create a bad atmosphere. Two key traits of a competent leader are humility and integrity. These are key to inspiring others to perform at their best.

Forward Thinkers

Forward-thinking leaders understand their customer needs and desires, the external trends affecting the business and have a passion for executing the company’s vision. Two questions dominate their thinking: 

  1. What will people/customers want next, and 
  2. What will new emerging technologies enable us to do?

These are key questions for the innovative company.


In her book – Multipliers – Liz Wiseman explains the difference between leaders and managers who are multipliers versus those who are diminishers. 

How many of the above traits do you recognise in your leaders and managers? 

Adaptability to a changing environment

The current COVID-19 pandemic has amplified the need for a new set of leadership skills particularly in relation to remote working. Prior to the pandemic, most businesses operated under one roof (or more, depending on the company size). As more and more staff work from home, leaders and managers must learn how to lead remotely as opposed to centrally. Creating and maintaining a strong culture, excellent communication skills, and new and comprehensive reporting and analysis will be key in this new environment.

Innovation Capital

In his book, Innovation Capital, Curtis Lefrandt outlines how leaders can develop a reputation for innovation or innovation capital, that affords them scope and latitude to change the organisation, change the products or change whatever needs to be changed. High-profile leaders with huge innovation capital include Jeff Bezos, Elon Musk, and Marc Benioff. This innovation capital gains them the respect of both employees and outside investors.

Keys to making your culture an innovative one 

Creating a culture starts at the top. Management must create an environment where employees feel psychologically safe in suggesting and testing new ideas, methods or products and services. Employees should know that it is okay to spend part of their day experimenting with new ideas. 

Continuous learning and nurturing of discovery skills should be encouraged and rewarded. Adopting an Innovation Management System (such as ISO 56002) will really only be successful if the company culture complements it.

Identifying the intrapreneurs

An intrapreneur is essentially an entrepreneur working within a company environment. The role of the intrapreneur is to find new and disruptive ways of doing business, deliver innovative products and services to market, and foster a culture of innovation that maintains or grows market share.

How do you identify these key staff? Below are nine characteristics of real intrapreneurs:

A Leader – prepared to carry the burden of a new product, idea, method etc. and lead a team in pursuit of success.

An Innovator – always looking for innovations and innovative ideas.

A Visionary – can see the end result and how to get there.

An Optimist – they not only motivate their team but also use this optimism to learn from mistakes.

Passionate Self-Starters – they set goals for themselves and are not afraid to take calculated risks or promote themselves. They may have side hustles or passion projects they are working on at home.

Not strictly money-motivated – they value having the ability to implement their ideas with full management support.

Thirst for knowledge – always learning new skills. The more employees learn the greater use they can put that knowledge to in your business.

The ability to nurture and develop innovative ideas – able to back up their ideas with research and solid plans.

Ready to pivot – not discouraged by failure and prepared to change course when circumstances dictate.

In order to develop these intrapreneurs we need to nurture the discovery skills of: Questioning, Observing, Networking, Experimenting and Associating.

Being smart in an innovation culture

Avoiding failure is not a sign that we’re smart. Being smart is not about knowing all the answers and performing flawlessly. Being smart is knowing what you don’t know, prioritizing what you need to know, and being very good at finding the best evidence-based answers. Being smart requires you to become comfortable saying, “I don’t know.” It means that you do not identify yourself by your ideas but by whether you are an open-minded, critical and innovative thinker and learner.

How failure is seen in an innovation culture

There is recognition at all levels that failure is inherent to the process of invention and should be seen as part of the learning curve. Employees should know that it is alright to make mistakes so long as something is learned and adds to the overall wisdom within the organisation.

The Culture Audit

A culture audit needs to be carried out by an outsider whom both management and staff can trust and treat as a confidant. It needs to be a 360o audit to get a true picture of the company’s culture. It would ideally comprise a series of questions with answers to be filled in on a Likert scale (typically offering a spectrum of answers). 

It should be an honest audit that identifies both competence and incompetence and senior management should be prepared to act on its results and not ignore sources of toxicity within the organisation.

In our next article we will look at Innovation in a business context. What are the real facts of innovation in business? Why it is not just R&D.  We will also look at the Innovation Source Map; Continuous innovation and why it is so important; open innovation and disruptive innovation.

We will look at de-risking innovation projects and getting to market using the BMAP process. 

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