UK: How Do You Create A Culture Of Innovation In Your Business?

Last Updated: 16 November 2016
Article by Vimi Grewal-Carr and Katy Bentley

Most Read Contributor in UK, August 2017

Success is good. Failure is a bad. Synonyms for failure include breakdown, downfall and non-performance. Oddly the word lemon also features and I am reminded of the proverb "when life gives you lemons make lemonade". Can this also be applied to failure? To experiment and fail but take the lessons you have learnt to create a recipe for something greater than the sum of its parts, making failure a crucial part of success.

A common question we get asked when we are talking to our clients about innovation within a company is how we create a culture of innovation in our business, one that accepts experimentation, failure and all, and this is one that we ourselves come back to as a must have for any business that works with disruption on a daily basis.

Our clients are increasingly interested not only in how they identify and harness disruptive trends to benefit their own customers but also how they instil a beneficial culture of innovation and experimentation in their business. The premise is simple and is borne out by the data. Innovation has the potential to boost labour productivity by 40%. Whilst there are obvious other factors that need to be considered – such as the country – South Korea tops both the productivity and innovation charts – it is also clear that innovation has a part to play in a company's success

As such companies are looking internally to see what they can do to take advantage of the opportunities that innovation and an innovative culture can bring.

Practically, each company must look at how they reward and nurture innovation in a manner that works for their strategic business goals. This will be influenced by the industry the company operates in and where a company has decided that they need to focus. What is pervasive across industries is the need for an innovation mindset. Embedded in this is an acceptance of failure. You need to get the right recipe to accept failure and it isn't easy.

We have worked with many clients on projects across digital transformation, innovation and change and, importantly, we have brought innovation into the heart of our own 2020 strategy.

3 lessons we have learnt about failure as part of an innovation mindset

  1. Don't accept it in isolation. At Deloitte we recognise failure not in isolation but rather as a crucial part of "doing it right". We don't set out to fail, we set out to allow innovations to develop as part of a structured programme of business case development, proof of concept, build, scale and finally exit. Failure at any of these stages are simply a result of an honest assessment of that particular stage with the conclusion that it is not right for the business. This is the right thing to do. It prevents companies from spending increasing investment in an idea that is either not viable nor right for the market.
  2. Recognise it for what it tells you. We invested in incubating a business that used advanced technology to re-evaluate a traditional business model. The business case was sound and the proof of concept (POC) commenced. The business case was exciting and in our belief that the positive impact that this could have in a specific market we continued to invest. At that point, we didn't listen to what failure meant and in doing so, allowed the timelines and success factors to slip. Had we been more open to listening to what the failure was telling us we may have halted the project earlier, when clients delayed signing up and when the POC wasn't showing tangible results. In fact, stopping a project isn't failure – t is simply listening to our client's feedback and recognising empirical results – something that, ironically, is a core part of our DNA in delivering successful projects for clients across all of our products and services.
  3. Remember lessons learnt. Recently launched to the SME market, Propel focuses on delivering an insightful and dynamic accounting service to start-ups and SMEs. Innovation funded the business in its incubation phase, allowing it to test the market both with clients and with the business internally. Learning lessons from previous projects, the team ensured that they thoroughly tested the market with live clients and had milestones clearly set out in relation to going to market with the solution. At any stage we could have halted the project but through checking the business case and proof of concepts as we moved through to build, we were able to identify what really resonated with the market and tailor the solution accordingly.


Coming back to our core principles has been at the heart of how we have started to embed doing the right thing in our innovation approach. Recognising that, as with our core business strategy, clients must be front and centre of any decision, we introduced a clear process for early stage innovation. We kept close to our market and made the fundamental elements of a POC ratifying direct with clients in the market, as well as building a basic prototype to prove an element of the business case in practice. We also made sure that we had the right internal business sponsorship to ensure that we gathered feedback from the related market as we went through. We created a 'Lessons Learnt Bible' that reminded us of past failures, not for failures sake but for what the failure had told us - and the part that this would play in future successes.

We are hugely proud of the work that our people do to develop new businesses and products for the market. And through doing the right thing, allowing failure and supporting success, we are making a real impact in the overall success rate of our business ventures and ultimately bringing value to our clients through new solutions to solve their business problems. Beyond that, by practicing what we preach, we are able to share with clients' practical guidance and perspective, failure and all, to what it takes to innovate in a company and meet disruption and disruptive trends head on. We take lemons and make lemonade.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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