How to create an innovative organisational culture | Leadership Development Blog

In their book The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations, Jim Kouzes and Barry Posner write, 

“Leaders make risk safe, as paradoxical as that might sound. They turn experiments into learning opportunities. They don’t de ne boldness solely in terms of go-for-broke, giant-leap projects. 

“More often than not, they see change as starting small, using pilot projects, and gaining momentum. The vision may be grand and distant, but the way to reach it is by putting one foot in front of the other…

“Of course, when you experiment, not everything works out as intended. There are mistakes and false starts. They are part of the process of innovation. What’s critical, therefore, is that leaders promote learning from these experiences.”

The key word is “experiment.” Leaders aren’t used to thinking in terms of experiments. But if you want an innovative organisational culture, this mindset is vital.

I often ask leaders to tell me how many experiments they currently have going. They typically say none, or they don’t really even understand what I mean. 

But when I ask them how many initiatives they have going, that registers. They typically have five to ten “initiatives” on the go at any given time. 

But the psychology of shifting from initiatives to experiments is profound, and the tangible effect on organisational culture is drastic. 

With initiatives, we’re stuck in the paradox of wanting to innovate but being fearful of making mistakes. We feel the pressure to maximise shareholder value and profitability. We use terms like “best practices,” “benchmarking,” and “standards.” But there’s nothing new in best practices; they’re simply what has worked in the past. 

That’s not an innovative organisational culture. Initiatives are often subject to confirmation bias and sunk cost bias because of the pressure leaders feel to make them work, even when the feedback tells them that something needs to shift. 

Initiatives often devolve into forced attempts to prove an idea or strategy right. Leaders feel a responsibility to make them succeed, which often leads to a refusal to recognise when they are not going well. 

Initiatives are also often an attempt to create certainty in an uncertain world. In such an organisational culture, there is no beginner’s mind; there are only egos and experts who “know” and then deny and defend when things don’t turn out how they had predicted. 

But consider the fundamental mindset and organisational culture difference that occurs when we reframe initiatives as experiments. 

In an experiment, when something goes wrong we don’t immediately jump into blame and defensiveness mode. Experiments remove ego from the equation. We’re simply observing and analysing with beginner’s mind. 

The idea of an experiment isn’t to force anything to succeed, but rather simply to learn. When experiments don’t go as planned, we try to understand what this is telling us. Rather than imposing our ideas of what should be, we’re letting the reality of the experiment tell us what actually is. We’re playing around in a lab and watching what happens. 

Speaking of a lab, what makes failure safe in experiments is boundaries. Just as we would set up safe boundaries in a science lab, the best organisational cultures create safe boundaries in business experiments. 

Don’t do anything that has the potential to break your whole company. Make it safe to fail in your organisational culture. 

Get really objective about the risk you’re taking on. What’s the worst thing that could possibly happen? Quantify it. Ask yourself if you can live with that failure. If not, change the parameters and boundaries. If so, then you can relax and move forward, accepting that the worst-case scenario is a real possibility. When that worst case happens, no one will be blamed or punished — we’ll learn from it together. 

In fact, when we really understand the power of experimenting, we actually reward people for intelligent applications of failure. Getting the monkey of failure off your back gives you the space and mindset to learn. 

When we venture into the world of the unknown, we can make all the projections we want. But the truth is that it’s only through experimentation that reality can reveal itself to us. 

We can’t work out in our mind what will happen in unknown territory. But that’s exactly what we do with initiatives. We impose our expert’s mind on possibility and claim to know what will happen. We create a strategy and then execute it with the expectation that everything will go as planned because we’re the experts who know everything. 

Life simply does not happen this way. The vast majority of scientific discoveries have come about by accident—playing around with variables in a lab and learning from what emerges. 

When you experiment, failures are nothing but opportunities to learn. And successes may just open up opportunities that you haven’t seen before.