Building and sustaining a culture that supports innovation.

In today's fast-paced business environment, innovation is a prerequisite for success--perhaps even for survival. That is why innovation has found its way to the top of the agenda at organizations around the world. In the Innovation Survey conducted by HRI in November and December 2005, more

than no-thirds of the 1,356 global respondents considered innovation either "extremely important" or "highly important" to their organizations today. Those impressive numbers seem modest when compared to respondents' predictions about the future. About half of respondents think innovation will be "extremely important" to their organizations in 10 years, and 35 percent say it will be "highly important."

Once considered primarily an output of R&D labs, innovation has become a corporate priority that touches every facet of an organization. External constituents, too--customers, academia, the government, vendors, even competitors--are playing a growing role in companies' creative processes. Yet the survey results showed a gap in the way US firms and their counterparts abroad approach innovation.

In this article, we look in depth at what is driving innovation and how companies view it and analyze the components of an organizational culture that supports innovation.

Nearly three quarters (71.4%) of US respondents viewed their companies as moderately successful at innovating. At face value, this statistic indicates that US companies enjoy a degree of comfort in their abilities to drive the kinds of breakthrough ideas that have historically defined them as leaders in their respective fields. Although US executives say they value innovation, only a third put systems in place to foster and reward innovation in the workplace. On the other hand, more than half of companies in Europe and Asia have formal structures in place to review and. evaluate innovative ideas.

This may result from an overly conservative attitude towards risk at these companies in the United States. Only 5.2 percent of US companies polled said that risk taking is rewarded within their companies, implying that companies are hedging their bets on innovation. Nobody likes risk, least of all corporate managers. Still, without risk there is no innovation. A recent survey of businesses revealed a painfully conservative approach towards risk, and a correspondingly lackadaisical approach towards fostering innovation.