Of all the corporate buzzwords, “innovation” might be perhaps the most popular.

Its popularity doesn’t detract from its importance. Innovation is not only a value of corporate culture; it is a key ingredient to corporate success.

Over the years, innovation has evolved -- you might even say it’s been innovated itself. As corporate R&D has mushroomed in size and scope, and as time-saving technologies have become cheaper and more ubiquitous, corporations have devoted more of their time, talent, and resources to this incredibly important priority.

This article will address an important hurdle that many corporations face: What’s the most efficient way to cultivate innovation within existing corporate culture?

What is Innovation Culture?

First, it’s important to define what exactly innovation culture is.

Innovation can be defined in an infinite variety of ways. In fact, it seems that each corporation that espouses it as a value defines it uniquely. Yet, every definition has one common thread: innovation starts with people.

That means innovation culture is a workplace environment in which leaders nurture and encourage non-traditional modes of thinking and doing.

McKinsey & Company, the worldwide management consulting firm, likens innovation culture to good parenting. According to McKinsey, creating an innovation culture is all about striking the right balance between providing “roots” and “wings” for employees. Management -- and parents -- must dole out resources and restrictions in the appropriate proportion.

There’s a big difference between corporate and family environments though. In our increasingly connected world, ideas are shared and cross-pollinated extensively before they even leave the corporation. This seamless collaboration offers a critical opportunity for leaders and authorities in the corporate setting. By signalling trust and acceptance, corporate leadership figures promote an atmosphere of creativity and supported experimentation among employees. Those elements form the cornerstone of successful innovation culture.

The best corporate innovation leaders must “encourage the unreasonable”

This value is so important that it extends beyond mere trust. The best corporate innovation leaders must “encourage the unreasonable” -- that is, to promote and reward impractical ideas and approaches. As unorthodox as it may sound, this strategy is a promising way to foster the best “out-of-the-box” ideas.

How to Encourage Innovation Culture

In order for corporations to support innovation culture -- and not innovation theatre -- companies must be mindful of the behaviours that they reward and punish every single day.

There are five tried and true ways to achieve this.

Invest Resources

Simply put, corporations send a powerful message when they devote capital, talent, and resources toward innovation. Setting clearly defined goals, initiatives, and broad-based strategies can create an innovative environment and encourage creativity in teams. When a corporation announces that it will invest in innovation, that’s a powerful signal.

Innovation Strategy

An innovation thesis is a mission statement that covers the goals, strategies, and challenges asosciated with implementing an innovation strategy.

Innovation culture does not arise in a vacuum. Once it exists, it will not thrive unless there is a carefully coordinated support system in place. This framework is known as an “innovation strategy”. One key component of an innovation strategy is the innovation thesis -- a mission statement, of sorts, that covers the goals, strategies, and challenges associated with implementing this way of being.

Change is incremental. That’s why it’s vital for corporations to encourage employees to make small bets every day to see what new ideas might work. Bosses must be mindful that any proposals strategically align with innovation goals. But they shouldn’t hesitate to devote reasonable amounts of resources toward the cause of innovation.

Attracting Talent

When corporations go into the hiring process with the mindset that they’re looking for strategic, forward-thinking team members, it gives great momentum to the cause. The investment in human capital is just as significant as financial commitments -- though often, the two go hand-in-hand.

Partnering with Accelerators

Strategic partnerships can send existing innovation efforts into overdrive -- and that’s a great thing. Accelerator programs allow all involved parties to leverage their skills and resources in order to achieve success outcomes for all sides.

Plug and Play is one such organization -- see the section below for two case studies demonstrating the power of partnering with an accelerator.

Incentives and Rewards for Existing Employees

Just like devoting capital to innovation and hiring with that goal in mind -- creating incentives and awards around it can have an extreme boost effect.

Corporations are contextualized in terms of profits, bonuses and reviews. But it’s important for the innovation leaders inside each corporation to keep in mind that those priorities need to be relaxed or even rethought when considered within the “big picture” of innovation culture.

One way to do this? Corporations can build innovation milestones right into employee goals. This incentivizes the process cleanly, and it promotes the right mindset for sustained -- and sustainable -- change.

Examples of Successful Innovation Culture

Panasonic

Panasonic founder Konosuke Matsushita said: “Develop people before making products.”

It is that attitude that has allowed the electronics giant to move beyond its roots selling household appliances in order to focus on constantly innovating and improving customers’ lives. But how did they get there?

It hasn’t been cheap. Panasonic has devoted considerable capital toward its global strategy. The company has made key investments in R&D in Japan, North America, Europe and Asia. It has used those national nodes to maximize local talent and skills -- an innovative practice in and of itself.

Panasonic has also pivoted its innovation culture to focus on relevant contemporary fields like Internet of Things, artificial intelligence, and energy. The company offers a prime example of a very valuable corporate innovation strategy: partnering.

"Develop people before making products."

Through Plug and Play’s Travel & Hospitality innovation platform, Panasonic has teamed up with Locbit to dramatically reduce energy costs at the DoubleTree San Diego. As a startup accelerator, Plug and Play leverages its deep connections and extensive knowledge of the landscape to facilitate meaningful and highly productive partnerships. This particular effort was no different -- For Panasonic and Locbit’s collaboration, the outcome far exceeded the stated goal of 15 percent energy use reduction at the hotel. In fact, energy use was cut in half.

This is a prime example of the way that accelerators can identify, support and scale disruptive technologies that have the potential to positively impact the way we all travel in the future. Corporate innovation, as facilitated by accelerator-led partnerships, happens in nearly every vertical.

STARTUP AUTOBAHN

In another example, Plug and Play worked with Daimler, the University of Stuttgart and ARENA2036 to find creative solutions to the challenges of modern transportation. The collective effort, known as STARTUP AUTOBAHN, acts as an invaluable bridge, as it “unites global young tech companies with the unrivalled tech expertise of Silicon Valley and the best of German engineering.”

Why did these parties sync up? Stuttgart is a hotbed for automotive manufacture, and Silicon Valley is the leader in tech. By pooling resources, sharing ideas and asking provocative questions, all parties involved can help identify innovative processes. It’s truly a demonstration of the truism that “the sum is greater than its parts.”

To date, STARTUP AUTOBAHN has launched over 100 joint projects across four rounds of programs. Plug and Play acts as the moderator, handling the selection and vetting of participating startups, as well as coordinating hundreds of meetings between corporate partners and startups. Partnerships produced through the accelerator have focused on the innovation categories of e-mobility, human-machine interface, supply chain logistics as well related themes in field of vehicle tech (CASE), vehicle services (fintech/insurtech), enterprise processes (HR/Retail), energy, future of production and industry 4.0.

By matching corporate behemoths up with exciting startups, accelerators like Plug and Play create an invaluable interface where two seemingly dissimilar companies can explore complementary strategies and new revenue streams. It’s also a brilliant way for seemingly dissimilar corporations to share knowledge and resources in order to foster meaningful innovation.

The Future of Corporate Innovation

As technology evolves and connectivity increases exponentially, the need for corporate innovation will only grow stronger. As corporate capabilities become more impressive and involved, values like cohesion and sustainability become absolutely essential. The need for innovation culture isn’t going away any time soon.

Change is incremental. Corporate innovation is built upon countless choices that must be supported and encouraged at each step of the way. Therefore, it’s important for corporations to lay the groundwork for innovation early.

Along with a clearly stated vision and interdepartmental buy-in -- corporations benefit greatly from third-party assistance and partnerships, such as those provided by accelerators.