A culture of innovation helps set companies apart in a digital-first economy

Mark Hickman is the managing director for Sage in North America, a leader in accounting, financial, HR and payroll technology for small and medium-sized businesses.
Innovation can be a critical competitive differentiator in the digital-first economy. The pace of business is continuing to accelerate as organizations around the world are looking for a competitive edge. Embracing an innovation-first mindset can help organizations navigate the ever-changing economic landscape and drive growth through increased efficiencies, greater resiliency and adaptability to rapid changes in the market.
An innovation culture is defined as a work environment that values out-of-the-box thinking and its application and can come from anyone across an organization. A culture of innovation prioritizes creativity and discovery, whether that’s by embracing new technologies to modernize key processes, developing new products and services or re-envisioning a company’s go-to-market strategy. Workplaces that are agile and can adapt quickly will be the winners in today’s fast-paced environment.
As a result, more and more companies are recognizing that the status quo is no longer viable, and that innovation needs to become a top priority for growth. According to a recent study from Boston Consulting Group, almost four out of five companies (79 per cent) ranked innovation among their top three goals in 2023, with almost half (42 per cent) expecting to significantly increase spending this year.
In addition to the operational benefits, innovative cultures can help businesses attract and retain top talent. Unfortunately, fostering an innovation-first culture can be difficult for many organizations. Cultivating a culture of innovation through programs that empower workers with digital fundamentals is a good place to start.
Breaking down barriers to drive greater collaboration
To set your organization on the journey to building an innovative culture, it is critical for businesses to create an optimal environment to foster and empower creativity. Our mission at Sage is to help SMBs break down barriers to thrive. In a similar way, breaking down barriers and removing friction is a foundational process to enabling collaboration across different business units.
Think of an organization like a puzzle. By bringing together seemingly disparate pieces with different shapes and views in an integrated way, you begin to see a clearer picture.
Consider taking a step back to understand the business dynamics and seeing how different teams can fit together to help bring the larger picture to life. Once you have this top-down view, teams can begin to collaborate and dive into new areas together.
For example, at Sage we approach product development through the lens of ‘Marketecture’, which involves taking solutions and adapting them to meet market- or vertical-specific challenges. We do this to bring together multiple perspectives from across our teams, as well as our customers, to understand how we can help businesses within a specific market address their distinct situations.
Removing barriers through improving and automating processes
For many employees, their days are consumed by tedious and repetitive administrative processes. According to Asana’s Anatomy of Work Global Index, knowledge workers estimate that 4.9 hours a week would be saved if they had improved processes.
Embracing new technologies and processes is a crucial driver for improving teams’ responsiveness and agility to adapt to market changes, as well as address perennial talent shortages by giving them the most precious resource available – time. According to Sage’s 2023 Small Business, Big Opportunity survey, the majority of Canadian SMBs (53 per cent) are adopting technologies to save time on key processes; followed by streamlining their tech stack for solutions to work more seamlessly together (36 per cent), cutting costs (36 per cent) and increasing productivity (31 per cent).
Incorporating automation into administrative processes can significantly increase agility, lower costs, improve productivity, minimize errors and give teams more time to focus on ideation. Technology can also help enable collaboration across regions and time zones, bringing together different cultural perspectives when developing new ideas.
Turning ideas into reality
The key building blocks to an innovative culture are formed through creating an optimal environment that enables collaboration and re-envisioning processes to provide employees with more time. That said, organizations need guardrails and systems to help bring this to life. A clear process where employees can capture and develop concepts across an organization and turn them into practical solutions is therefore vital for making an innovative culture a reality.
Businesses should consider implementing clear guardrails that lay out roles and responsibilities across teams and simplify the ideation and approval process to move ideas to the next stage of development. Likewise, teams should adopt in-person or digital forums where employees can share feedback and brainstorm ideas to accelerate the development of innovative ideas and solutions.
Additionally, employees will feel more empowered in the decision-making process if they have greater autonomy. Setting individual goals that ladder back up to company-wide goals as well as having regular check-ins give employees a greater sense of ownership over their ideas. Regular check-ins also provide an opportunity to see where employees are in the development process, and to adapt ideas quickly if market conditions suddenly shift.
Celebrating success
Employees are at the centre of innovation culture. Employees who feel empowered, motivated and understand how their ideas tie directly into the business’ success are more likely to be more invested in the company and open to sharing ideas.
According to Great Place to Work 2023 discretionary effort study, when each employee stands an equal chance of being recognized for their efforts, they are 2.2 times more likely to flex their discretionary muscles and go above and beyond their regular duties. Additionally, 37 per cent of respondents said more personal recognition would encourage them to produce better work more often.
Creating a transparent reward system that recognizes individual and team contribution to innovation is a great way to motivate employees and recognize those who have been involved in new projects. Employee recognition is also an invaluable tool for attracting and retaining top talent, increasing employee engagement and encouraging creativity and high performance.
Cultural change in an organization takes time and doesn’t happen overnight. Nurturing innovation means breaking down barriers by giving employees the time, resources and autonomy for their best ideas to flourish.
Rapid change has become a key factor in today’s digital-first economy and businesses that can’t adapt, will lose ground to more agile businesses. Adopting an innovation culture that emphasizes agility, adaptability, resiliency and creativity is essential for business success.
This column is part of Globe Careers’ Leadership Lab series, where executives and experts share their views and advice about the world of work. Find all Leadership Lab stories at tgam.ca/leadershiplab and guidelines for how to contribute to the column here.