Sustainable growth requires radical innovativeness – how to create a culture where innovations are born?

Sustainable development creates pressure for change in industrial sectors, as achieving sustainable growth requires organizations to have the ability to renew and create new, innovative products. Developing innovations may not be simple, but an organizational culture that fosters innovation is fundamentally within everyone’s reach. Studies on innovative companies have shown that they share a culture that is psychologically safe: it creates fertile ground for success and the development of innovations.

The adoption of circular and renewable economy models plays a critical role in achieving sustainable growth. Global sustainability challenges such as climate change, sustainable food production, and ensuring sufficient clean water and energy are challenging the prevailing ways of using resources. While legislation holds companies accountable, it is those at the forefront of development that are able to proactively renew, rather than simply adapt. Renewal requires companies to innovate so that, for example, fossil materials can be replaced with renewable raw materials, product carbon footprints can be reduced, processes can be streamlined, and new product and technology solutions can implement the principles of sustainable development and the circular economy.

Innovativeness creates sustainable competitive advantage

What is innovation, and what makes an innovation impactful? Over the years, I have delved into the inspiring and fascinating topic of growth leadership and innovation culture. At the core of innovation is often the idea that small improvements are crucial. However, innovations differ, and thus, they can be categorized into groups: incremental innovations and radical innovations, also known as super innovations.

Incremental innovation refers to small, step-by-step improvements or changes to existing products, services, or processes. Incremental innovation typically doesn’t revolutionize the industry but builds on previous solutions. It represents continuous development and evolution towards ever more efficient solutions.

Radical innovation, on the other hand, refers to significant and groundbreaking changes that break traditional boundaries and create entirely new products, services, or markets. Radical innovation can also be called super innovation, as its purpose is to generate significant change and revolutionize industries. All these types of innovation are needed. However, if the goal is to achieve a greater competitive advantage, the bar should be set high enough.

Radical innovativeness is the answer to global challenges

Radical innovativeness may be risky, but it has a great potential to generate immense value for both customers and businesses. One risk lies in the dynamics of innovation diffusion, and in people’s motivations, attitudes, and behavior patterns. Innovations need growth marketing mentality and sales support to reach a sufficiently large audience in the market.

Radical innovations can create a sustainable competitive advantage by enabling the development of entirely new products, services, and markets. Creating innovations, however, requires the courage to question prevailing models and to do things in new, unconventional ways. Radical innovations are usually not the result of traditional product development processes, but emerge when products, services, processes, or other solutions are developed from completely new perspectives.

Food production is a great example of an industry where the need for new solutions is high. Climate warming and population growth increase the need to find alternatives to meat and other proteins with a large carbon footprint. A technological breakthrough that enables protein production from air, thereby radically changing the methods of food production, demonstrates the potential that innovations can have. The Finnish company Solein has already developed the technology for this and is now on product development phase. (https://solarfoods.com/) It will be interesting to see how this radical innovation spreads.

Psychological safety is the foundation for innovativeness

How can we develop an innovation culture to see more sustainable innovations in the business field, akin to the legendary Nokias of the past? Research indicates that building psychological safety is at the core of fostering innovativeness —it’s the enabler of innovation creation.

According to Edmonson, Professor of Leadership and psychological safety researcher, psychological safety is “believing that the context is safe for interpersonal risk-taking—that talking about ideas, questions, concerns, or mistakes is welcomed and appreciated.”

Psychological safety is created when team members feel secure enough to express themselves freely without fear and shame, when they can safely ask “stupid and wild” questions or voice concerns, disagree with each other, and dare to fail or make mistakes.

Elements of an innovation-friendly culture

The eight elements of building a psychologically safe innovation culture describe the requirements for creating an innovation-friendly and secure environment. Leadership and attitude play a significant role in creating an innovation culture. Here are, in my opinion, the eight most important building blocks of an innovation culture to strive for.

1. Psychological safety is one of the most crucial factors in developing an innovation culture. People need an atmosphere where ideas and perspectives can be expressed openly without fear of negative consequences. Psychological safety encourages creativity and risk-taking.
2. Diversity, meaning different perspectives and backgrounds, promotes innovation. The organization should strive for diversity and ensure that everyone feels part of the company or teams, as this has been shown to enable success.
3. Leadership and support: The organization’s leadership and managers are responsible for creating and maintaining an innovation culture. They should lead by example, support innovation, and be willing to try new approaches.
4. Open and effective communication is at the heart of an innovation-friendly culture. All members of the organization should know that they have the opportunity to participate, share their ideas, and exchange information with others.
5. Rewarding and recognition play a crucial role in building an innovation culture. Innovative ideas and successes should be rewarded and acknowledged, encouraging people to participate more actively.
6. Resources and support: It is necessary to ensure that new innovations have sufficient support to develop and materialize. Resources and support can mean time for development work, funding, training, or a culture where different experiments are permitted.
7. Promoting a culture of experimentation means being open to try new ideas and concepts, even if they are not perfect right away. Allowing mistakes and learning from them is essential.
8. Long-term development of an innovation culture is a process that requires time and commitment. The organization must be consistent in building and supporting an innovation culture.