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Jan 13, 2022

Why innovation and creativity determine a company’s long-term success

How to create a culture of innovation that succeeds

Close up of a woman with glasses.

   

In this story, you will discover:

How do you encourage employees to proactively contribute with innovative ideas? Company founder and pioneer Fritz Henkel had an answer to this question more than 100 years ago: “You need employees who work and think independently, and you need to enable them to do so.” Fritz Henkel recognized early on how important innovation is for entrepreneurial success. Even today, successful management can be demonstrated through the use of innovation to realign one’s own business. But what does it mean to be innovative?

Thinking innovatively involves much more than simply looking for new ideas. It is also a matter of questioning the status quo again and again. The key question is: How can we create added value for society? In the past few years this question has become more pressing than ever. People’s awareness has changed, not least because of the pandemic and climate change. For a large part of the population, sustainable and responsible actions are becoming increasingly important. Companies will only succeed in the long term if they help to deal with the challenges of our time. A problem-solving approach creates innovations. But what does it take to be innovative as a company? A culture of innovation that promotes creativity. 

Company founder Fritz Henkel (1876)

   

You need employees who work and think independently, and you need to enable them to do so.

Innovation culture versus corporate culture?

The survey “Cultivate the new – Innovation for the long term,” implemented by Henkel and the Financial Times at the end of 2020, shows how important innovation, and therefore a culture of innovation, is. 500 employees in leading positions from 20 different industries around the world were asked how innovation is fostered and how it is integrated within their companies. More than half of the respondents say that innovation is more relevant than ever before. However, many still see a need for further action when it comes to implementing a culture that promotes innovative thinking and action. One key contributing factor here is a company’s corporate culture.

A corporate culture evolves over a long period of time and is shaped by the company’s history and experience. The culture reflects the values that guide all employees in their actions, decisions, and behavior. This also influences the impression the outside world has of the company. Potential values can include customer friendliness, digitalization, sustainability, or innovation. A culture of innovation is often an important part of the corporate culture as it ensures a sustainable competitive advantage and market success. However, in order to establish a culture that promotes innovation within a company, certain conditions must be met. Such a culture needs willingness, ability, and opportunities to innovate. The study shows that, while companies do struggle with these three points, they are aware of what they need to do to establish a culture that fosters innovation. Across all industries and regions, respondents agree that leadership, diversity and a willingness to take risks are the best means to promote innovation.

Infographic with survey results on how executives think about innovation.

Source: Survey “Cultivate the new – Innovation for the long term”, The Financial Times LTD & Henkel (2020)

A positive attitude towards failure encourages new ways of thinking

Those who think and act outside the box must plan for setbacks and failures. Maren Jekel, who is responsible for market research in Laundry & Home Care at Henkel, is convinced that “the willingness to fail is an essential aspect of trying things out.” According to her, it is important to maintain a positive error culture in which problems can be addressed openly. This is how you can learn from setbacks and are able to further develop yourself and your ideas. A solid foundation of trust and reassurance from management level that failure does not entail negative consequences also inspire a spirit of innovation. This aspect is also evident in the study: Nearly half of all respondents state that strong leadership is the most important component in nurturing innovation. And when courage and the spirit of innovation bear fruit, these successes need to be appreciated accordingly. Rik Strubel, Chief Marketing Officer at Henkel Beauty Care, argues that progress should be highlighted more: “It’s important to build a culture that celebrates this success.”

Diversity advances innovation

Just as relevant as a positive attitude towards failure and a good leadership style is a diverse team. People who come together from different hierarchies, fields of expertise and cultures develop new ideas more easily than they would in a homogeneous environment. The study confirms this hypothesis: 49 percent of respondents are convinced that innovation is more successful in diverse teams.

Employees work on large screens.

It is easier for heterogeneous teams to develop innovative solutions.

Michael Todd, Head of Innovation and New Business Development for Adhesive Technologies at Henkel, also agrees: “It is better to harness the creativity of thousands of people in our organization by giving them that entrepreneurial spirit, than to try to find the one Steve Jobs in that group.”

Motivating managers and a culture that promotes innovation increase employees’ willingness to innovate. But what is also often missing is the ability to innovate. Companies rely on different strategies to build up or further develop relevant skills among their employees. At Henkel, for example, there are training courses on tools and methods for finding ideas, evaluating these ideas and putting them into practice. However, the use of external knowledge from start-ups or business partners is also a key factor. In June 2021, Henkel defined a new Purpose to inspire the innovative spirit, describing what unites all Henkel employees: “Pioneers at heart for the good of generations.”

Bringing corporate values to life: A pioneering spirit and sustainable action lead to success

The new Henkel Purpose, “Pioneers at heart for the good of generations,” on the one hand shapes the ambitions for the future, and on the other hand provides guidance and describes the role Henkel plays in society. “Pioneers at heart” emphasizes the pioneering spirit that is firmly rooted in the company’s DNA. Fritz Henkel founded the successful business 145 years ago with his pioneering spirit. His vision was to create products that make people’s lives easier and, above all, better. With foresight and a great sense of responsibility, Fritz Henkel broke new ground. To this day, Henkel continues to uphold these corporate values and is committed to combining sustainable action with pioneering spirit and offering added value for society. The focus is not just on the well-being of the present generation, but also on that of future generations. The second part of the Purpose “for the good of generations” expresses this aspiration.

Progress through innovation experience

Henkel will continue to promote new, innovative ideas in the future, for example in an innovation hub in Berlin. Leading technology solutions and innovative business models are created here. “We brought together our IT, digital and process improvement teams, which were previously scattered around the enterprise,” says Michael Nilles, Chief Digital and Information Officer. Innovations are created through teamwork. And the last few months in particular have clearly demonstrated how easy team communication across different departments and locations can be. During the pandemic, a new way of working has developed. People can exchange and discuss new ideas more easily than ever before – anytime, anywhere in the world. New work makes it possible.

Reconciling innovation and tradition – that’s Henkel’s aspiration. Based on existing corporate values, Henkel has created a new guiding principle with the involvement of its employees. Because only a purpose supported by everyone will be integrated into everyday life. The message: Everyone can be a pioneer and contribute to the company’s success with creative ideas, the courage to take risks and solution-oriented concepts.

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