Robert Maier | Associate Partner

Culture - Key to innovative organisations

What is corporate culture and how is it perceived?

Corporate culture is a comprehensive term that describes the values, behavioral rules, beliefs and attitudes within a company. This culture provides orientation for the behavior of individuals and teams and is largely responsible for promoting commitment and innovative strength. Corporate culture is not static, but dynamic and is influenced by internal and external developments, such as increasing globalization.

Design elements of culture

Internal communication: The style and manner in which information is exchanged within the company.

Dealing with conflict, criticism and mistakes: error culture is a key element. Companies that deal constructively with criticism and mistakes promote a climate conducive to innovation.

Customer and supplier relationships: The way in which a company interacts with its customers and service providers reflects its values and culture to the outside world.

Behavior of top management: Managers act as role models and are crucial for the establishment and perception of the corporate culture.

Symbols and rituals: Elements such as clothing, status symbols, slogans or special rituals (e.g. onboarding new employees) characterize the everyday image of the corporate culture.

Formal and informal aspects of corporate culture are equally important. Formal aspects such as organizational charts and job descriptions determine the structure, while informal aspects such as personal relationships, distribution of power, values and attitudes make up the less tangible part of the corporate culture, but have a huge impact on employee motivation and commitment.

Characteristics of innovation-hostile organizations

Hostility to innovation in companies manifests itself in various aspects of the culture. Such characteristics not only prevent the emergence of new ideas, but also block their implementation and lead to the long-term stagnation of the company. The main characteristics include:

Departmental thinking: In innovation-hostile organizations, the focus is strongly on the goals of the individual departments or divisions, without considering the overarching corporate goals. There is hardly any cooperation between departments.
Risk aversion: New ideas are perceived as a threat and therefore have little chance of being put into practice. The fear of failure dominates and blocks the creative process.
Hierarchical thinking and awareness: In a hierarchical organization, there is little freedom for independent, innovative activities. Constant control and a lack of trust lead to a restriction of creativity.

These characteristics prevent the company from being innovative and make it difficult to adapt to new market requirements or technological developments.

Prerequisites for measures to promote innovation

In order to establish an innovation-friendly corporate culture, certain requirements must be met. Trust, cooperation and commitment are the cornerstones of such a culture.

Trust: Employees should be encouraged to contribute their own ideas and act independently. Management should entrust employees with sufficient authority and act as a supporter rather than a controlling authority. This creates a culture of trust that is characterized by a reduced need for control and fewer lengthy negotiation processes.
Cooperation: Trust goes hand in hand with cooperation across departmental boundaries. Results should not remain exclusive within individual teams, but should be shared openly. This is particularly important for the transfer of knowledge within the company and also promotes cooperation in less visible areas of the company.
Commitment: Arrangements and agreements must be binding. Cooperation is strengthened when there is clarity about goals and responsibilities within the company.

Another key element is the high value placed on innovation within the company. New ideas must be recognized and regularly appreciated by management, especially at the lower levels of the company. Security and trust are crucial to creating a culture of innovation in which ideas are developed in an environment that is not characterized by uncertainty and mistrust.

Recommendations for companies

In order to promote innovation and establish an innovation-friendly culture, companies should take the following measures:

Cooperative work and management concepts: Companies should involve their employees more in decision-making processes and create freedom for them to work independently. This freedom can take the form of additional time or flexible workplaces. The aim is to give employees the autonomy they need to fully develop their creativity.

Fault tolerance: Innovations are often associated with a high level of risk. Companies should therefore establish a culture in which failure is seen as part of the learning process. Budgeted fault tolerance ensures that experiments are allowed to fail without this being seen as a failure.

Agile working: Flexibility and adaptability in the work process are important elements in order to be able to react to rapidly changing market requirements. Agile working enables companies to iterate projects more quickly and achieve results faster.

Availability of information: Innovative companies succeed in specifically promoting the exchange of information across departmental and national boundaries.

Targeted communication: Companies should not only rely on formal communication channels, but also promote informal communication. Staff discussions or team meetings can lead to creative solutions and should therefore be actively supported.

Entrepreneurial freedom: Employees should be given the opportunity to devote time and resources to their own projects without this affecting their current work. Particularly promising projects should be promoted in order to prevent a backlog of innovation.

Conclusion

A corporate culture that promotes innovation requires trust, cooperation and clear communication between all levels of the company. Companies that build on these pillars can increase their innovative strength and are better able to respond to constantly changing market requirements. At the same time, it is important to establish a culture of fault tolerance and create scope for creative ideas. This is the only way for companies to remain innovative and successful in the long term.

If you would like to find out more about how to initiate a cultural change process, please contact us. 🚀

About eisbach partners

eisbach partners is a consulting firm specializing in sustainable growth, helping companies to generate long-term and renewable business growth without compromising the environment and quality of life. They work with innovation-oriented leaders of large corporations and successful mid-sized companies to identify new opportunities, generate initial revenues and deliver sustainable growth. eisbach partners takes an individual and tailored entrepreneurial approach, based on their experience as successful entrepreneurs and consultants, to work side-by-side with their clients to mobilize their untapped potential.