Innovate or die — everyone says it, but few organizations know how to make innovation happen.

CCL recently compared organizations that are effective at innovation with those that are not effective and found 5 key differences:

1. Leaders. Innovative organizations have leaders who encourage innovation. Nearly one-third of people surveyed from ineffective organizations selected “leaders don’t encourage innovation” as one of their three main roadblocks, compared to only 9 percent from effective organizations.

Tip: Leaders need to do more than just talking about innovation; they need to demonstrate behaviors that actively encourage innovation. A common issue is that leaders demand innovation, but then criticize and kill new solutions. By definition, innovation is strange and different, and without the risk tolerance to experiment, prototype, and pilot new concepts, the actions of leaders speak louder than any hollow words of encouragement.

2. Culture. Innovative organizations have cultures that foster innovation. More than one-half (56 percent) of respondents from ineffective organizations selected “culture that does not support innovation” as an innovation roadblock. In contrast, only 11 percent of respondents from effective organizations thought that organizational culture was a roadblock to innovation in their organizations.

Tip: A useful definition of organizational culture is “the ways that things really get done (versus official processes).” Culture change takes years, yet by looking at what’s working in the culture that can be leveraged — as well as what overtly blocks innovation — organizations can begin to create a culture that sustains innovation.

3. Strategy. Innovative organizations have a formal innovation strategy. When asked whether their organization had a formal approach to innovation, 66 percent of respondents from effective organizations said yes, while only 20 percent of respondents from ineffective organizations said the same.

Tip: While most organizations are trying to be innovative, many ineffective organizations are relying only on informal efforts and this may not be enough. Organizations that want to be more innovative should think about developing a formal strategy for innovation — unique to the organization — and the best ways to communicate the strategy to their employees.

4. Budget. Innovative organizations have a budget dedicated to innovation. Of the people surveyed, 90 percent of respondents from effective organizations said their organization has an innovation budget, while only 58 percent of respondents from ineffective organizations said the same.

Tip: Innovation requires resources. Creating and implementing something new that adds value is not cheap and should be viewed as a critical, long-term investment. Many organizations that are effective at innovation put in place innovation venture capital funds to build and run experiments to determine viability of concepts. Others choose the specific challenges that are open to suggestions and development by all people inside (and sometimes outside) the organization, with funds dedicated to testing concepts before the solutions are known.

5. Direction. Innovative organizations have a clear direction for innovation. While only 17 percent of respondents from effective organizations selected this issue, 39 percent of respondents from ineffective organizations selected “no clear direction” as a major roadblock.

Tip: Innovation is a means to an end, not the end itself. When the hype overtakes the need, organizations often lose sight of why innovation is important. Start with a clear statement of purpose for innovation, with objective measures of success. This helps to align efforts within the organization and ensure that the work being done is focused on the desired outcome.

Read the study and gain more insight in the white paper Navigating Innovation Roadblocks: Key Differences between Innovative and Non-Innovative Organizations, by Cathleen Clerkin and Kristin Cullen-Lester.

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