How to Create an Innovative Culture despite the Hard Truth

Innovative cultures are greatly valued because they are not only good for a company’s bottom line, but also largely depicted as fun and characterized by easy-to-like behaviors such as tolerance for failure, willingness to experiment, etc. As desirable as it is, a sustainable innovative culture is nonetheless hard to create, because the fun behaviors are only one side of the picture, the tougher and less fun side must also be well understood and appropriately managed to make things work.

1. Tolerance for Failure but No Tolerance for Incompetence

An innovative culture naturally entails tolerance for failure, but it must not be accompanied by tolerance for incompetence, since it requires extremely competent people to make tolerance for failure work. In innovative companies, failures as a result of exploring risky ideas to draw valuable lessons are welcome, but failures due to mediocre skills, sloppy thinking, lousy work habits and poor management are not acceptable; people who don’t meet expectations are either switched to roles better suited for them or simply let go — sometimes including those whose skills have been rendered obsolete due to shifting technologies or business models.

To create a culture that simultaneously values learning through failure and outstanding performance, senior leaders…