Transparency and Trust: Fuelling Innovation in the Workplace
Companies in every sector and market have to face the constant but healthy challenge of increased competition.
In fact, competition allows companies to constantly reinvent their products, services and business models so they can stay competitive in the market where they operate. But such competitiveness requires a substantial innovation effort that should, technically, trickle down from leadership.
Innovation is such a key element to every organisation. It is a value that stands at the core of many companies. Yet in many cases employees are not provided with the right environment to allow them to foster innovative thinking where required.
Matt Marsh, Founder of Matt Marsh Consulting, argues that the term innovation is used widely, but often ends up meaning different things to different people within different organisations.
Matt says that to be successful it is critical for those leading businesses to know the difference between ‘business improvement’ and ‘business innovation’.
Not being clear can lead to chaos and cultural meltdown.
According to Dr Paul Hunter, Founder of Strategic Management Institute, innovation is integral to a corporate culture. It promotes positive morale, continual improvement, an imperative to adapt to change and an ambition to build points of differentiation through deliberate, sometimes disruptive, invention.
What promotes innovation?
For innovation to transform into real company value it needs to be transparent to become part of the workplace culture. Companies should understand that transparency is an ongoing process that requires the same amount of effort every time.
Transparency shouldn’t be limited to why the company needs innovation. It should traverse employee engagement, so that they become part of the problem-solving equation, each one at their own level. The truth is, there is no ‘innovation department’ in organisations, and innovation may emerge from anyone at any level within the company, even in the most improbable places. If, however, information and context are being disregarded, innovation efforts may not be focused on the right direction – and may even be duplicated.
When leaders are more transparent with their teams, they are engaging them beyond their basic responsibilities and they can then expect pertinent, transformative solutions from their employees.
Moreover, transparency creates purpose. Employees will know the reason why they are asked to do something, as opposed to the simple ‘what and how’ of their jobs. And the ‘why’ is the reason for giving their utmost – because it is purpose-driven and holds a higher value.
Paul Hunter compares organisations to a living system, in which they survive through continual responses in the form of adaptation. To him, in such a system the attribute of transparency engenders the voluntary sharing of ideas, a capacity to listen as much as to talk, a willingness to credit ideas directly to those who create them, and an acknowledgement and expression of gratitude for all contributions made, good or bad.
Matt Marsh explains that when companies are in ‘business improvement mode’ – which is about discovering ways to incrementally optimise the current status quo – it becomes a place where everyone can, and should, be encouraged to get involved. Hence transparency is key.
When companies are in ‘business innovation mode’, it is when colleagues are expected to fundamentally reinvent businesses-as-usual, Matt says. This is about challenging the business: to push the business to come up with totally new ways to do something radical. And this is usually risky: financially, culturally, technologically.
He concludes that this type of change work requires embracing uncertainty. And this needs leadership that offers a special kind of organisational, management and leadership support. So a form of opacity here can help provide a protective shield for the people who have to deal with the emotional burden of being trail-blazers.
According to Paul: “Well designed and open communications, through regular updates and stories about the success of innovative ideas, can make heroes of some individuals. This generates enthusiasm for others and increases morale overall. Everybody wins, even when some of the ideas don’t pan out too well. When treated as lessons learned, failure often is a precursor to success. The overriding element of the administrators of an innovation function therefore is transparency. It is the glue that binds the links within an adaptive living system.”
Steve Jobs once said: “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
Employees are as innovative as leaders will trust and allow them to be. This means that leaders should allow employees and teams to operate autonomously without the need to micro-manage them. In fact, there is no point in asking for innovative thinking if every presented idea will be questioned, disregarded or blocked.
Kriti Jain, Associate Professor (with tenure) in Organisational Behaviour and Human Resources at IE Business School, states that managers must trust workers enough to give them the freedom to decide ‘where’, ‘when’ and ‘how’ they do their work. The leader’s role is to provide the ‘why’.
Paul states that all forms of change and, indeed, all forms of culture can only be successful when there is an acceptance of failure and a mutual recognition of trust between all parties when engaged in decision making. When communicated correctly, expressions of trust can be used as a tool to ‘dare’ employees to engage in innovative programmes.
Beyond fostering innovation: acting on ideas
An organisation that encourages a culture of innovation will only evolve if leaders act on the innovative ideas they foster within their teams. It is one thing to keep promoting a sense of innovation, and another to put in the needed time, effort and resources to develop and execute the ideas that are worth acting upon. But it is essential to show employees that not only are they free and trusted to think and come up with solutions, but that these solutions have been valued and implemented.
There is nothing more discouraging than asking employees to come up with new, fresh ideas that only stay as ideas. With time, employees will simply stop thinking of ways to improve and will stick strictly to doing their minimum job.
However, Matt offers one caveat. He explains that while people love to be working for a company that has an aspiration to be innovative, not everyone wants to be personally chasing the somewhat nebulous ambition of being seen to be innovative.
And this is especially true if individuals are being personally assessed and evaluated on much shorter-term ‘taking care of business’ measures. Asking them to simultaneously think five or ten years ahead just causes confusion, conflict and contradiction. This for him does not help maintain a stable business culture.
Moreover, organisations need to be willing to experiment and try new things without the fear of failure, even when failure is an option. The most dangerous expression businesses use is ‘we’ve always done it this way’. Such a statement is the nemesis of innovation and companies should always work on finding ways to reinvent how they do things, at every level and in every department.
This, however, does come with a downside. According to Matt, there is always a strong risk of messing up when an organisation sets out to disrupt things.
While people talk about innovative businesses being ‘forgiving’, the truth is, these days not being successful at business innovation comes with significant personal risk.
Matt states that the reality of the 2020s is very different from that of the 90s and 00s. Back in those days, there was a prevalent forgiving culture that is no longer a reality in today’s business landscape. To him, when people stick their necks out to try to radically change a business culture, positioning or purpose, and then it doesn’t work out, too often these days they get fired instead of being celebrated for having tried.
“This is definitely something progressive leaders of the 2020s can work on if they want to retain their best innovation talent,” he concludes.
Accordingly, organisations that expect to act on their employees’ ideas need to be ready to embrace failure if and when it happens, without it affecting its people. But it doesn’t stop there. They need to demonstrate an honest capacity to learn, so that their people are better guided through the expectations of innovation, whether this means at a business improvement level or a business innovation one.