The secret to innovation? Your workplace culture
Innovation equals survival. It’s well documented that in this age of widespread disruption, companies must innovate continuously, creating new markets, experiences, products, services, content or processes. So how can leaders encourage innovation? It’s more than recruiting the brightest minds. While having the best talent is clearly an asset, people need the right culture to flourish.
Accenture has found that a culture of equality—the same kind of workplace environment that helps everyone advance to higher positions—is a powerful multiplier of innovation and growth.
This means that building a culture of equality (measured by the 40 specific workplace factors Accenture research identified last year) is not just an ethical imperative, but a business priority. If organizations want to thrive, they have to “get to equal.”
The power of a workplace culture of equality to drive employees' innovation mindset—their willingness and ability to innovate—is strong. It has more impact than age or gender and leads to an increase in innovation mindset in all industries and all countries.
In fact, innovation mindset is six times higher in the most-equal cultures than in the least-equal ones.
Innovation also equals economic potential. Among the more than 18,000 employees in 27 countries surveyed, we found that people are more willing and able to innovate in faster-growing economies and in geographies with higher labor-productivity growth. And the stakes are enormous:
No matter who or where they are, if people feel a sense of belonging and are valued by their employers for their unique contributions, perspectives and circumstances, they are empowered to innovate more.
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Working as equals, we flourish as innovators.
What’s a Culture of Equality?
A culture of equality is one where most of the 40 factors [see the full list in the report appendix] that influence advancement at work are present. Where more of these are present, employees are more likely to advance and thrive. We’ve grouped these factors, which were identified in last year’s Getting to Equal research, When She Rises, We All Rise, into three pillars:
What’s an InnovationMindset?
Innovation mindset is a new way to measure an individual’s ability and willingness to innovate. It is enabled by six key elements that are based on extensive sources, including academic and business research and Accenture-owned diagnostic tools and thought leadership.
The Six Elements of an Innovation Mindset:
The Case for Culture
One example of a company committed to—and benefiting from—a culture of equality is Mastercard. Its stock soared over 35 percent last year, and the company is growing rapidly here and abroad as it ushers in a cashless society. Mastercard President and CEO Ajay Banga leads with a compelling metaphor:
I will create the feeling of my hand at your back, not in your face, and then you should run with it. When you’re on a level playing field, you can win what you’re capable of winning—and you deserve every single win that you get.”
“Diversity is built into the core of what we do,” Banga says. Indeed, the company boasts twice the number of women in leadership as other companies in the S&P 500. “We’re in an industry where technology and innovation flow around you all the time. If you surround yourself with people who look like you, walk like you, talk like you, went to the same schools as you and had the same experiences, you’ll have the very same blind spots as them. You’ll miss the same trends, curves in the road and opportunities.”
Banga cultivates a bright, diverse workforce, but he’s also looking for something he calls a high D.Q.—decency quotient.
We want a winning culture with decency at its core.”
For Banga, decency is about being there for employees and engendering trust among them. Trust, he says, breeds innovation: “If you want things to happen, everyone has got to be open and trusting.”
Banga’s leadership philosophy is validated by new Accenture research: When employees work in more-equal cultures, they’re much more likely to have an innovation mindset.
Innovation mindset is six times higher in the most-equal cultures than in the least-equal ones
But even companies that have some, but not most, of the culture-of-equality factors could gain a great deal from being more like the best: An innovation mindset is twice as high in the most-equal companies than in typical ones. It’s a powerful incentive for these organizations to take the leap from “ok” to “truly equal.”
What else do employees in most-equal cultures have in common with one another? For one thing, they see fewer barriers to innovating at work. And they’re also less afraid to fail.
Employees in the most-equal cultures see fewer barriers to innovating
Percent of respondents who answered “Nothing stops me from innovating.”
Employees in the most-equal cultures are less afraid to fail
Percent of respondents who answered “Agree” and “Strongly agree.”
Culture’s power to unleash innovation is blind to industry, country and various workforce demographics. Among those surveyed, people across all genders, sexual identities, ages and ethnicities show a stronger innovation mindset in more-equal workplace cultures.
Against every factor we tested, culture wins.
Diversity is a Critical Building Block,But Equality is a Multiplier
Organizations know that fostering diversity—the extent to which members of a company’s workforce, including the leadership team, differ from each other in terms of age, ability, ethnicity, gender, gender identity or expression, religion or sexual orientation—is important.
Diversity remains a critical building block to unleashing innovation. However, a culture of equality is an essential multiplier to help maximize innovation. While the impact of diversity factors alone on innovation mindset is significant, it is much higher when combined with a culture of equality. In the most-equal and diverse cultures, innovation mindset is 11 times greater than in the least-equal and diverse cultures. For the purposes of this research, we defined diversity factors as follows: A diverse leadership team as well as teams throughout the organization that are diverse across gender, age and industry/organizational/cultural backgrounds.
Diversity positively influences an innovation mindset, and equality is the multiplier
The combined effect of culture-of-equality and diversity factors on innovation mindset.
While companies might be hitting their “numbers” in terms of diversity, they might not be building a true culture of equality. A culture of equality, which offers Bold Leadership, Comprehensive Action and an Empowering Environment, enables people from all backgrounds to succeed.
That’s because in a culture of equality, people are truly valued for their differences and free to be who they are. They’re not just there to check a box—they’re empowered to contribute.
A Leader-Employee InnovationDisconnect
Accenture research shows the strength of the innovation-culture connection. But how are people perceiving the link between workplace environment and innovation today?
Nearly everyone wants—and needs—to innovate. Ninety-five percent of business leaders see innovation as vital to competitiveness and business viability, and 91 percent of employees want to be innovative.
But while 76 percent of leaders say they regularly empower employees to be innovative, only 42 percent of employees agree.
Business leaders say they empower employees to innovate—but employees are less likely to agree
Business leaders who say they empower
employees to innovate
Employees who feel empowered to innovate
Why such a disconnect? It seems that leaders mistakenly believe that some encourage innovation more than they actually do. For instance, they overestimate financial rewards (which are nevertheless still important) and underestimate purpose as a motivator to innovate.
In fact, the impact of improving culture on innovation mindset is 42 times greater than the impact of increasing salary.
When it comes to driving innovation, increasing pay is considerably less effective than bolstering a more-equal culture
Percent increase in innovation mindset of a 10% increase in pay vs. a 10% increase in workplace culture factors.
Having employees with an advanced degree or who have studied a STEM subject at college has a less-powerful impact on workers’ willingness and ability to innovate than culture factors do.
An Empowering Environment Is the Key Culture-of-Equality Component
What is it about a culture of equality that matters most to innovation?
Again, a culture of equality is anchored by three pillars: An Empowering Environment (one that trusts employees, respects individuals and offers freedom to be creative and to train and work flexibly), Bold Leadership (a diverse leadership team that sets, shares and measures equality targets openly), and Comprehensive Action (policies and practices that are family-friendly, support all genders and are biasfree in attracting and retaining people).
It turns out that of those three, an Empowering Environment is by far the most important when it comes to enabling innovation. In fact, eight of the 10 strongest factors underpinning innovation are about empowerment.
The impact of the top 10 workplace culture factors on an innovation mindset
8 of the 10 strongest drivers are about empowerment
Mastercard CEO Ajay Banga’s hand at the back is empowering. But he stresses that it’s a company-wide effort and shared sense of purpose that have helped Mastercard thrive as a more-equal culture and as a corporation.
Mastercard is innovating in the area of financial inclusion, helping to provide access and tools to 2 billion people in the world without a bank account. “We’ve reached 380 million people as of now. I think we have a line of sight to 500 million,” Banga says. “The idea is to make it happen everywhere, from Africa to Brazil to Eastern Europe.”
It’s a business priority that is perfectly aligned with, and driven by, Mastercard’s culture of equality.
If you wander around the corridors and ask people what excites them about this company, you will hear them say our social messaging, our financial inclusion, decency quotient—you’ll get all these answers in some form or other.”
When the right tone is set from the top and everyone in an organization is empowered, trusted and armed with a mission, together they can unlock unprecedented opportunity.
A Roadmap to Unleashing Innovation
Ready to build a culture of equality where people can thrive and create? Companies should have an inclusion and diversity (I&D) strategy in place, one that is aligned with the overall business plan. An I&D strategy will form a critical foundation on which leaders can take action and drive progress.
Here we’ve identified complementary drivers of a culture of equality and of an innovation mindset to help you focus your efforts. The three broad recommendations reinforce each other in a virtuous circle, meaning that their impact as a whole is greater than the sum of their parts. Leaders should keep in mind that some actions have a particularly strong effect on an innovation mindset.
+ Purpose + Autonomy
Training, greater flexibility and commitment to work-life balance are the most powerful drivers of an innovation mindset. This area is where there is the greatest opportunity for impact, as it accounts for 70 percent of innovation mindset gains. Employees are empowered by a shared sense of purpose, paired with autonomy, which helps them reach their individual potential.
+ Experimentation + Resources
Culture starts at the top. Setting and publishing diversity targets, holding the leadership team accountable and measuring progress are critical steps. Leaders must give employees the resources they need to innovate and the freedom to fail.
+ Inspiration + Collaboration
Forward-looking policies and practices are important, but they must also be evenly accessible to ensure that individuals or groups don’t feel singled out or held back. When employees are inspired by those inside and outside the organization, their commitment to living the company’s core values, and for collaborating with one another, grows.
About the research
The Accenture research program was built on three proprietary research initiatives:
An established methodology for measuring the culture of the workplace developed for our 2018 study, When She Rises, We All Rise.
An online workforce survey of 18,200 working professionals in 27 countries. Conducted in October 2018, the survey used quotas to ensure a good representation across companies of different sizes and across genders.
A phone survey of 152 C-suite executives, conducted by phone in eight countries in November and December 2018.