How to Successfully Innovate in Business

04/01/2015 08:29 am ET | Updated May 31, 2015

Forget innovation - focus on incentivization if you want to drive a radical shift in corporate culture instead. That was the key message from The Economist's star-studded annual Innovation Forum, held this past week in Chicago, at which industry leaders from Google, GE, Caterpillar and other top enterprises gathered to discuss what it takes to survive and thrive in today's fast-changing, ultra-competitive world. According to a veritable who's who of executives from Alcatel-Lucent, Honeywell, Autodesk and others, driving ongoing growth and success in business today isn't just about coming up with great ideas anymore. Rather, it's about empowering, rewarding and recognizing others for applying more elements of creativity and entrepreneurship. As a star-studded lineup of speakers, including celebrated industry insiders such as Vijay Vaitheeswaran, Matthew Bishop and Natasha Loder revealed, driving ideas, innovations and ongoing growth can be a natural outpouring when one creates a corporate culture that's genetically engineered for success up-front.

One of the year's most eye-opening conferences thus far, one presentation, panel and Oxford-style debate after the next only served to hammer home the point: Innovation isn't a one-time activity - it's a mindset, and series of ongoing activities that you must continually practice and embrace. As TrueCar founder Scott Painter noted early on, driving successful change starts not with research, but rewards - creating systems and processes that encourage professionals to continually reconsider approaches, recalibrate perspectives, and step outside of their comfort zone. Fortune 500 corporations could learn a lesson from Silicon Valley venture capitalists, he argues, who reward risk-takers and visionaries for having the guts and wherewithal to build things where they see voids in the marketplace, and not assume there's a void because that's simply the way things work. (Or assume that just because things have always been done a certain way they should continue to be.)

It's a message seconded by Sonny Garg, chief information and innovation officer for Exelon, one of the world's largest energy providers, who notes that if we want to create cultures of sustainable innovation in enterprises, we need to train workers to think differently than in the past. "An MBA is a masters in administration, not change" he notes, suggesting that people need to be given the latitude and freedom to experiment, reconsider, and constantly seek ways to do things differently than in the past - not simply default to historical solutions in a fast-changing business world. Just ask GE's Viv Goldstein-Wiltshire, global director of innovation acceleration for the company, who revealed that the business now conducts daily employee performance reviews, with an eye towards changing corporate culture, and the tasks workers prioritize to help champion these principles.

Senior leaders at consulting firms Deloitte and PwC, which work with many of the world's largest and most successful businesses to drive ongoing success, only further confirm these notions. As John Levis, head of Deloitte's innovation practice, reveals, even the firm itself - an expert in the field of change - must continually find ways to change and innovate its own operations to best serve clients. The way it does so: Giving employees more platforms and opportunities to connect, share ideas, and pilot new program and service trials, learning from each successive effort.

PwC's Kevin Schwartz and James So, also top experts in the field of change and innovation, even go one step further, suggesting that as they've learned through their consulting work, to succeed today, businesses must take more, not less risks, albeit smarter gambles. As they note, competition can now come from anywhere, anytime, even outside your core industry, and the only way to plan for unexpected challenges is to create a culture that's more flexible and adaptable to change, and encourages workers to react to unexpected changes in plans or events in more relentlessly practical. This requires giving workers the latitude to think more like owners and entrepreneurs, and the platforms that they need to continually be sharing and executing on changing strategies in changing environments.

This is crucially important, as operating pressures will only become more dramatic going forward argues Michael K. Stern, PhD, president and chief operating officer of The Climate Corporation. With the world needing to produce more food in the next 30 years than it did in the prior 10,000, his organization is already helping agriculture businesses to help embrace these principles by radically reimaging the shape of tomorrow's farm. (And farmer - imagine someone sitting in front of a NASA-style control room as opposed to a tractor years hence, he suggests.) As a result, Stern notes, businesses in every field will need to give workers more runway and support to be more effective - and that runway and support will include more room to think outside of the box going forward.

Luckily, when you create a culture that incentivizes creative thinking, rewards smart risk-taking, and celebrates change, say many of the world's most accomplished executives, evolution often tends to sort itself out naturally. Mehmood Khan, vice chairman and chief scientific officer of PepsiCo, actually goes so far as to reveal that the company is aggressively encouraging employees to come up with new ideas, pursuing partnerships with universities and outside vendors, and even giving workers the latitude to design entire product experiences end-to-end using computer simulations. Rewarding people for successful business administration is all well and good, he suggests. But once you begin to reward people for their actual hands-on work, and give them opportunities to share and experiment with new ideas that can make a meaningful difference, he suggests, great things tend to happen.

And even when they don't, let alone overnight? That's OK too, says Warren Harris, CEO of Tata Technologies, who revealed that even ventures that are unsuccessful immediately by typical commercial standards can still prove windfalls. For example: Technologies designed for one auto vehicle that fails to generate market buzz can still eventually find their way into others which prove to enjoy far greater commercial reception. As fellow panelist Shane Wall, SVP and CTO of HP's printing and personal systems summarizes, finding success all comes back to creating a culture that's able to think several steps ahead, learn from its mistakes, and constantly adapt and readjust to be more successful as it goes. Or, to put it simply, as a business leader (and business) learning to incentivize the right frame of thinking and behaviors needed to innovate - e.g. one of constant growth, open-mindedness, willingness to learn, and adapt your strategies and solutions based on ongoing feedback.