Innovation is a key driver of business success. It allows companies to stay ahead of the curve, adapt to changing market conditions, and offer unique solutions to their customers – but cultivating a culture of innovation isn't easy. It requires a sustained effort to create the right environment for creativity and progress.

What is innovation?

Google would tell you innovation is “the process of making changes in something established, especially by introducing new methods, ideas, or products.” Simply put, innovation is the ability to think beyond the status quo and come up with creative solutions for challenging problems.

Innovators use technology and other tools to forge new and unique paths. Seeking to understand trends and use them as fuel for creative inspiration is a necessary piece of the puzzle. So is an internal creative mind that can be built and bolstered with practice.

Here are four strategies for building innovation into your company's culture:

1. Encourage a growth mindset

To foster innovation, leaders should focus on cultivating a growth mindset in their teams. A growth mindset is the belief that one's abilities and characteristics can be developed. This growth arises from effort, learning, and experience. Such a mindset is essential for innovation because it encourages employees to embrace challenges and take risks. No longer are they held back by fixed beliefs about their abilities.

There are so many ways to encourage a growth mindset in your organization. These include providing learning opportunities, such as training programs and workshops, and encouraging employees to take on new challenges and responsibilities. Regularly share new ideas and best practices and acknowledge employees who take the initiative to learn and grow.

At Differential, our Alliance Program encourages team members to carve out time monthly to solely focus on what areas they’d like to grow in the next few months, personally and professionally. Each team member sets objectives to work towards to meet their goals.

People react to the energy they’re given. If your company lives and breathes growth and learning, your employees will feel confident that they can improve their minds and creative abilities.

2. Foster collaboration and cross-functional teamwork

Innovation often emerges from the intersection of different disciplines. Thus, it's important to encourage collaboration and cross-functional teamwork. By bringing people from different departments and backgrounds together to work on a problem or project, you create a diverse range of perspectives that can lead to new and innovative solutions.

Promote collaboration by setting up regular cross-functional meetings. Encourage employees from all areas of the company to share ideas and work together on projects. This doubles as a great way to build strong intra-company communication!

Of course, it would be a bottleneck to have everyone work on all projects. That just isn't efficient. But there is a workaround that allows interdisciplinary collaboration: give everyone a say in the brainstorming phase of projects. More brain power means more (and better!) ideas will be brought to the surface. Best of all, asking for ideas is a quick and easy way to make work more fun and allow everyone to feel like they have a say in company projects.

3. Encourage creativity and experimentation

Innovation often requires taking risks and trying new approaches. This means creating a culture that encourages creativity and experimentation.

Set aside time for employees to work on creative projects, and provide inspiration for them to try new approaches to problem-solving. Encouraging employees to prototype and test new ideas, and acknowledging their creative thinking.

Differential hosts an annual “Hack Day” set aside for team members to work on a project that is unrelated to client or company projects. It’s paid time to explore a new technology or fix a problem that’s been nagging you. We added an extra layer to this. We made it a competition. The Hack Day project voted as the most “innovative” get bragging rights for the year. Thai competitive aspect rewards those who dream big and take (calculated) risk.

A company culture that supports and encourages its employees to think differently is the catalyst that illuminates the ideas that would otherwise stay dormant.

4. Understand that failing is normal

The challenge of creating a culture of innovation is that there's always a degree of uncertainty, so failure is inevitable. If you don't fail, you probably don't invent much. Fear is a major barrier to innovation, and while no one sets out to fail, it’s important to understand that it will happen and you'll be just fine when it does.

When an innovation failure does occur, it’s important to understand why. Gathering data will help you make more informed decisions for future projects. According to a survey conducted by Accenture, 60% of companies admitted they did not learn from past innovation project mistakes. It’s important to look back briefly to note what isn’t working before taking on a new project.

At Differential, each product and leadership team completes a Retrospective after an eight week work cycle. This provides a dedicated space to figure out what’s working and what’s not.

Building a culture of innovation

Managing director of Accenture Strategy, Adi Alon, noted, “A significant gap exists between what U.S. companies want to achieve in the innovation arena versus what they are able to do. They want to innovate yet they need to take different and bolder actions to achieve transformational, major revenue-generating innovation. True innovation requires aggressive changes in technologies, operating models and talent.”

Building innovation into the core of your company culture will undoubtedly unlock value for your teams. Innovation is the fundation for growth and a thriving company. Practice these four insights to build a strong culture of innovation for your company.