A culture of innovation

Principal consultant Peter Allanson hails the power of an innovation-friendly culture for public-purpose organisations

An organisation's attitude towards innovation is often the defining factor in its ability to adapt, thrive, and sustain long-term impact. Leaders can introduce new strategies, digital tools, or operational efficiencies, but without an open and receptive culture, these efforts are likely to stall. It’s not just about implementing new processes; it's about creating an environment where innovation is embraced as a core value.

Organisations that are willing to challenge the status quo, take calculated risks, and learn from failures are better positioned to weather financial pressures and rapidly changing environments. Conversely, a risk-averse culture that resists change can become a significant barrier, stifling creativity and preventing necessary evolution. That means fostering a positive attitude towards innovation is critical for leaders of public-purpose organisations seeking to navigate complex challenges. Others will also have attended research-driven meetings where the sheer brilliance of imagination and delivery is breathtaking—meeting the future is awe-inspiring.

One private sector health provider has based its whole strategy on a set of proposals that are built on the active participation of customers and staff in a range of initiatives based on healthier communities and people. This embraces a digital future, sustainable (and so healthier) communities, improved efficiencies and a focus on prevention using genomics to develop personalised health care.

By asking customers for ideas, they generated 57,000 calls, producing 24,000 ideas, which led to 8,000 improvements, including, from staff, a 30% efficiency gain in the use of imaging equipment. In commercial terms, this has also brought benefits in terms of improved net promoter scores—the number of people who will speak well of the organisation. In this instance, it is the cumulative impact of a strategy that is led and lived from the board into the organisation.

Encouraging a culture of innovation: leadership strategies

Cultivating an innovation-friendly culture should not be a one-off initiative but a continuous, intentional effort. For example:

1. Lead by example: Innovation must start at the top. Boards and senior teams that demonstrate openness to new ideas, take calculated risks, and are willing to pivot when necessary, inspire others to do the same. This involves showing a willingness to explore untested approaches and being transparent about the challenges and opportunities associated with them. Modelling this behaviour signals that innovation is valued, encouraged, and rewarded.
2. Empower and trust your teams: Innovation thrives when staff members feel trusted and empowered to experiment. Creating a safe space for creativity, where employees are not penalised for proposing unconventional ideas or for initiatives that don’t succeed as planned. This can be facilitated by implementing a ‘fail fast, learn faster’ mindset, where failures are seen as valuable learning opportunities rather than setbacks.

1. Reward curiosity and creativity: It is notable that often the initiative for innovation comes from within the organisation and not just—or even—at the top of it. The thirst to develop apps, harness artificial intelligence and find solutions seems limitless. There can be schemes to offer seed corn funding to support these types of development, perhaps within a Dragon’s Den-style competitive environment. There are examples of organisations offering their corporate structures to enable ideas to develop within a disciplined but entrepreneurial environment.
2. Invest in continuous learning and development: To nurture a culture of innovation, organisations must invest in the development of their workforce. This could include offering dedicated time and resources to explore new ideas without the pressure of immediate outcomes.
3. Create a clear innovation framework: While innovation requires creativity and flexibility, it also needs structure. Fostering innovation by establishing clear frameworks that guide the development of new ideas while aligning with the organisation’s strategic objectives—assuming they are not the strategy itself—should include defining the scope of innovation initiatives, setting realistic goals, and establishing metrics to measure progress. If people can see how their innovative efforts tie into the organisation's mission and strategy, they are more likely to engage and invest in the process. Making innovation inclusive helps—opportunities for all to contribute in their own way contribute to a sense of achievement.
4. Encourage external inspiration and partnerships: Often, the best ideas come from looking beyond the organisation. Seeking inspiration from other sectors, industries, or even competitors, collaborating with external partners—such as universities, research institutes, or social enterprises—can also introduce fresh perspectives and innovative practices that can be adapted.

The role of psychological safety

A key component of any innovation-friendly culture is psychological safety: the belief that people can speak up, take risks, and challenge the status quo without fear of retribution.

A learning organisation encourages the discussion of what went wrong as the key to improvement. Pitching improvement at the right level—every level—is one way of encouraging initiatives to develop and be adopted.

A problem arose in one NHS trust where the World Health Checklist to ensure all equipment used in a procedure was present at both the beginning and end of it failed because responsibility lay with the chief surgeon. Once a nurse took over the job, enduring problems disappeared! Creating psychological safety involves actively listening to staff, being open to dissenting opinions, encouraging constructive feedback, and being brave about decision-taking.

Innovation as a continuous commitment

In public-purpose organisations, the stakes are high. The services they provide are essential, and their ability to innovate effectively can mean the difference between sustaining their mission and failing to meet their goals.

Boards that prioritise fostering an innovation-friendly culture not only improve their organisation's resilience to financial pressures but also unlock the full potential of their teams.

Ultimately, embracing a culture of innovation is about seeing the reverse of any challenge as an opportunity for growth and transformation. A board that acknowledges the value of an open, collaborative, and adaptive culture will be better equipped to navigate the uncertainties of today’s world while driving meaningful, lasting change.