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Why are some organizations more innovative than others? Chances are they foster and reward creative thinking, and the development of new products or services and new ways of doing business. In some industries such as high technology, innovation can be critical to success. But in all types of businesses, being inventive can help companies gain a strong competitive edge, increase market share and win new customers.

How can organizations build a culture of innovation? One thing they can do to allow innovation to flourish is not to fear failure, says Patrick Gray, founder and president of the Prevoyance Group, which provides strategic IT consulting.

“Innovation is the child of risk and failure. If you have a culture where failure is not tolerated under any circumstance, you will stifle innovation, since innovation is largely a process of trial and error,” Gray says. But alleviating the fear of failure alone is not enough. “You need to cultivate a culture that allows and rewards conscientious risk-taking,” he says. “Obviously you do not want a company full of gamblers, but if people are free to take risks without worrying about their livelihood should they fail, innovation will follow.”

Organizations should determine their own definition of innovation, Gray says. “It is a word that is often thrown around, especially in IT circles where people routinely deal with the results of innovation, but oddly, are rarely innovative,” he says. “IT is quite capable of delivering innovative solutions to someone else’s problem, but true innovation is where you define and solve a problem no one even knew [existed].”

Gray says the Sony Walkman is a good example. “No one knew they needed a Walkman before it was invented, so its developers both identified a problem no one was articulating and solved it,” he says. “By defining innovation in this manner, you get out of a ‘solution’ mindset and start looking at your world in terms of possibilities, rather than being constrained by the problems someone else has defined for you.”

Clearly, IT can play a huge role in helping to develop an innovative culture. “IT is in a unique position in that it touches nearly every facet of a company,” Gray says. “IT also has a great deal of business process exposure and understanding, and often [perceives] the handoffs between business units better than [other functions].” IT is therefore in an excellent position to foster true innovation.

“IT should have a defined portion of its budget allocated to some form of innovation, whether it’s collaborative process design that has traditionally been outside IT’s purview, or tackling some portion of highly risky projects with the goal of learning from the experience rather than [achieving] a 100 percent completion rate,” Gray says. He says IT also needs to break out of what he calls a “customer service morass.”

“You don’t call up a customer service organization to foster innovation, and if IT wants to fill this [innovative] role, it needs to be seen as an equal partner by other business units,” Gray says.

Should an organization track its level of innovation? “There’s a fine line on measuring innovation, since too much formality reduces the desire to take risks and treats failure unfavorably,” Gray says. “However, you cannot sink money into innovation without expecting some return.” An organization “needs to decide in a general sense what it hopes to garner from its efforts to spur innovation, and measure against those objectives,” he says.

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