Britain is working/isn’t working. Our corporate governance is one of the best in the world/needs a complete overhaul. Our employees are valuable members of the team/command and control means they’re just there to do a job.

When it comes to reporting on British business it can sometimes be a case of ‘ya pays your money, ya takes your choice’. The truth is that the headlines more often focus on extremes but most businesses are really scrabbling around in the middle, trying to survive in the VUCA world.

But in parallel, the ever-changing society is one of the strengths of British business yet potentially one of its major weaknesses. Why, because whilst change and growth is necessary for a society to thrive unless those already in the system not only grow with the system but look to stay ahead of it they’ll become barriers to change.

Quite frankly, if you look at business in that light it’s pretty easy to see the makings of a divided society and why businesses are confused. And, if we’re being honest here, we also have executives whose leadership style was forged from the raw ingredients of command and control.

However, we also now have executives who are learning from the past and have clarity on the fact that the future needs a different approach, an approach that requires learning, experimenting, failing and innovation in order to thrive.

Leadership and culture

The fact is that leadership style translates directly into the culture of an organisation and the engagement of its employees. So, those who seek continuity may well preside over a culture which is somewhat vanilla whilst those who are more enlightened understand that their culture is a living being which has to change if it is to deliver the vision.

Now, you could argue that’s a little harsh when an EY report in June 2016 revealed that 86% of executives view culture as fundamental or very important to performance and strategy. On the face of it that stat indicates that the understanding of culture as a driver of results is relatively widespread but the trouble is that whilst the understanding is there, action is not!

In fact, the same report revealed that 58% had not changed their culture in the past five years. More worrying still are the numerous surveys looking at innovation culture, revealing that the real barriers to change include lack of board support, lack of change leadership, unwillingness to delegate and empower and even a lack of consensus at board level on what the culture should be.

79% of executives report their commitment to innovation is now very high or growing

The good news for the future strength of business is that the more polarised it becomes, the greater the impetus for change. Organisations which are stuck in the past with outdated and misaligned cultures are increasingly being left behind as innovation-led businesses forge ahead. So we have a BPI report revealing that 79% of executives report their commitment to innovation is now very high or growing with a BCG report revealing the same percentage see innovation as a top three priority.

Embracing the future

What does the future look like for those organisations which are looking to cast off the shackles of the past and embrace a more proactive and innovative culture? In our book, Building a Culture of Innovation, we call these businesses Next Generation Organisations.

Essentially, through embracing a culture of innovation and becoming more intelligent, collaborative and adaptable, Next Generation organisations create propositions that not only resonate with the changing marketplace but also deliver real solutions.

We’ve seen above how the incentive is there, but the rewards are there too. Across a range of reports, embedding an innovation-led culture is shown to improve profitability, customer experience, employee engagement and reputation; not to mention other benefits such as cost savings and an increased likelihood of attracting investment.

Transforming any business culture requires commitment and energy on the part of everyone in the organisation

But it has to be admitted that there may be an initial cost for those looking to become Next Generation Organisations. Transforming any business culture requires commitment and energy on the part of everyone in the organisation from the executive team to the newest recruit. And if the change is profound, building a culture of innovation may require a complete reappraisal of every aspect of the business from people and policies, beliefs and behaviours and systems and processes.

But, just as there is no one universal business setup which will guarantee success, there is no one universal way of building a culture of innovation within an organisation. The pathway which works for one business will lead to failure for another but if the ‘big bang’ method of across-the-board change is not suitable, there are other options:

• phasing innovation across departments or divisions;
• establishing a core innovation team which gradually draws in and influences the entire organisation;
• creating a dual operating system in which the core business activity carries on inside the box whilst innovation carries on around it.

Key to culture change

Whichever method or combination of methods you choose the key ingredients for culture change remain the same. The future has to be built on a deep understanding of the present, so taking time to analyse and assess current culture will pay dividends in terms of defining a robust future culture, strategy and values. As always, implementation has to be well thought out with strategies in place both for creating culture champions and swiftly overcoming barriers to change.

Even then, people are key to success. Leadership teams have to be united and prepared to demonstrate the new culture in their every action and decision. And steps have to be taken to engage employees in the new culture, with training given as appropriate; whether that be in listening and communication skills, overcoming attitude to risk, teamwork and collaboration and so on.

Leadership teams have to be united and prepared to demonstrate the new culture in their every action and decision.

It’s very easy to negatively stereotype businesses, to deliver headlines which denigrate leaders or employees or even entire sectors. And it has to be said that there are businesses which operate less than ideal practices. But it also has to be said that they are becoming increasingly beleaguered as great leadership allied to strong innovation cultures increasingly capture the market.

When culture is a factor in attracting great employees, when culture is a focus for 97% of shareholders and funders, when customers are increasingly looking for something more than simply a product; then the choice is clear. Take a breath, step up and build a culture of innovation; become a Next Generation Organisation and deliver something meaningful for investors, customers, employees and the wider world.