How to build a culture of innovation

Every company wants to be innovative. Most approach this by trying to hire highly creative specialists or by spinning up a new “innovation” team. But companies that consistently innovate do something different: They build company-wide systems focused on customer solutions and make innovation part of everyday business.

Smart organizations focus on building reliable processes to understand customers, test assumptions, and scale what works. In my experience at Verra Mobility, the difference between companies that talk about innovation and companies that deliver it often comes down to a repeatable process that drives creativity.

QUESTION EVERYTHING YOU “KNOW”

The biggest innovation killer isn’t resistance to change; it’s the assumption that we already know the answer.

When someone says they “know” what customers want, we dig deeper. Who did you talk to? How long ago did you talk to them? In our business reviews, we’ve made it mandatory for every business review to include not only operational performance, but also market updates and competitive intelligence. We want to push people to ask more questions, not just review more slides.

This creates a culture where expertise is valued, assumptions are challenged, and customer insight drives decisions. When you force teams to back up their opinions with current data, they start questioning how they’ve worked and look for better solutions.

UNDERSTAND WHAT CUSTOMERS WANT TO ACCOMPLISH

Most innovation fails because we solve the wrong problems. Teams focus on how customers are using a product instead of understanding what they’re trying to achieve.

Take time to sit with customers and understand their complete workflows—which teams they interact with, how they’d be impacted by process changes, and identifying opportunities to improve. Go deeper than marketing personas to understand the decision makers who will ultimately sign off on new programs.

A few years ago, a car rental company client told us their biggest issue wasn’t reconciling $100 traffic violations, it was accounting for daily $10 tolls. We created a whole new business line for automated toll management. We started with one state, then expanded based on what worked.

MAKE EXPERIMENTATION PART OF THE PROCESS

Innovation requires observation, but success requires testing assumptions quickly and cheaply.

We’ve built experimentation into our standard improvement process. When teams create solutions, I ask them to identify their biggest assumptions upfront, then look at the probability that assumption is correct. If we’re not sure, we test it quickly with a pilot or single customer trial.

Take rough prototypes—even napkin drawings—directly to customers. The less finished it looks, the more honest the feedback you receive. When something looks polished, people don’t want to hurt your feelings. When it’s obviously a sketch, they’ll tell you exactly what’s wrong.

Rather than funding only well-developed ideas in annual planning cycles, we create ways to test concepts early and build our business on what succeeds.

MAKE INNOVATION EVERYONE’S JOB

Innovation isn’t a special team’s responsibility. Everyone needs the mindset that there’s always room for improvement, and that they play an active role in identifying solutions. When innovation is part of everyone’s daily work, it becomes sustainable.

This means regular forums where teams share customer insights and have clear processes for moving from hypothesis to experiment to implementation. It means bringing together product management, sales, and customer success to ensure new innovations don’t create support nightmares. Most experiments will fail—but they’ll fail fast and cheap, not slow and expensive.

THE INNOVATION DISCIPLINE

Here’s what most companies get wrong: They think innovation is about creativity and inspiration. While those are important, real success is driven by discipline and systems.

Companies that succeed long-term create processes where good ideas surface, get tested quickly, and spread when they work. Any organization can do that if they’re willing to watch, question, and pilot solutions quickly.

David Roberts is CEO of Verra Mobility.