Establishing a Culture of Innovation in Business

– by Sarah Daren –

The business landscape is always changing. Leading companies thrive by embracing and cultivating a culture of innovation that leads to evolved and improved operations, strategies, product offerings, service offerings, and processes.

American business leaders that acknowledge and encourage innovation find themselves ahead of the competition that refuses to establish a culture of innovation. Businesses across the country spend significant amounts of money in an attempt to foster the type of innovation that leads to success. In just one year the United States spends $499 billion in total on research and development.

There are four types of business innovation that are widely recognized. Here is a brief description of each.

This type of innovation occurs when smaller companies utilize existing technology to compete in their industry. They do so by recognizing and targeting overlooked segments in the market. For example, companies like AirBnB and Uber set a new standard for businesses across the globe with the sharing economy. More than 9,829 companies are a part of the sharing economy operating in 133 countries and 25 categories.

Architectural innovation relies on introducing new technology to the industry. An example of architectural innovation occurred with the invention of the iPhone. The iPhone emerged with an abundance of new features that the Blackberry couldn’t match and took over the market.

Many times companies will inject innovation into their systems that already exist. This often happens at regular intervals to existing technologies and business models. Intel is an example. They routinely innovate by launching more powerful microprocessors that allow the company to retain its high margins.

Radical innovations can be as drastic as they sound. With this type of innovation, the company disrupts existing industries by combining new technology with a traditional business approach. This is precisely the type of change Amazon used when they brought an internet-based approach to selling books.

Why Should Companies Innovate?

There are several compelling reasons for companies to take innovation seriously. Here are some of the top reasons that companies embrace change.

Global Competition
Companies must compete with more than just their rival down the street. Globalization means that companies are competing with others all over the world. Innovation can mean the difference in staying ahead of the competition. Successful companies are learning ways to leverage global innovation to grow their businesses.

Digital Age
More and more people are spending time connecting digitally. Companies looking to reach consumers digitally should put marketing efforts into the digital space and constantly update their websites to reach younger consumers.

Consumer Voices
Innovation gives companies a way to give their consumers a voice and a way to connect. Customers can provide fresh ideas and different ways of looking at products and services.

IT Companies
Challenging traditional work models can pave the way toward launching a successful IT company. Investors and potential employees will follow innovators that streamline operations, improve strategies and processes, and evolve product lines.

Innovation Spurs Innovation
Companies that innovate are always looking at how to do things better. By cultivating a culture of innovation businesses can constantly improve technology and learn new ways to meet the needs of their customers.

Learning from Innovative Companies

We can learn how to establish a culture of innovation by looking at companies that are successfully doing it themselves. For example, Amazon is well-known for its innovative infrastructure. It starts with hiring great people with a passion for inventing. The company also uses an innovative process that develops people’s skills and ambitions.

Here are a few ways that companies can support and create innovation with their employees similar to the way that top companies are:

  • Invest time in defining innovation.
  • Use project management and seasoned project leaders.
  • Allocate resources based on capability and not availability.
  • Limit the number of partners and subcontractors.
  • Don’t rely solely on technology to communicate.


Sarah Daren has been a consultant for startups in business innovation and marketing. She implements her knowledge into every aspect of her life with a focus on driving innovation and helping companies create better work environments.


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