Innovation is about creating business value out of new ideas, whether it’s new ways of doing things, new products, or new services.

Organizations must continually innovate to remain competitive, let alone grow. Failure to do so inevitably causes organizational malaise and invites the competition to come and take market share. Straight forward, right? Not so for many organizations.

As companies grow, many migrate from being the challenger attacker to being challenged and attacked. The problem usually lies in inadvertently allowing a culture to emerge that doesn’t foster innovation. Strict policies, procedures, and product/project-management styles that are put in place in the name of consistency and best practices, often lead to a culture of risk aversion and dampened creativity.

In 1948, William L. McKnight, then president of Minnesota Mining & Manufacturing, directed the management of his company as follows: “As our business grows, it becomes increasingly necessary to delegate responsibility. This will require considerable tolerance and mistakes will be made. Management that is destructively critical when mistakes are made will kill initiative. It’s essential that we have many people with initiative if we are to continue to grow.” While many turn to the latest best-selling business books and industry gurus for advice on just about everything, McKnight’s wisdom still makes good common sense 60 years later.

Later renamed 3M, Minnesota Mining & Manufacturing’s innovative culture is now the envy of companies around the world. From Post-it Notes, to Scotch tape, to health care and highway safety, to office products and optical films for LCD displays, 3M’s annual revenue tops $24.5 billion (U.S.) and its market capitalization is $52.72 billion. McKnight’s focus on creating and maintaining a culture of innovation is core to 3M’s continued success.

Businesses of all sizes need to enable a culture where innovation is encouraged, continuous, and recognized. And an innovative culture is one in which risk is managed, mistakes are learned from, customer and supplier input is welcome, and management is open minded to changes to established business models. To some this might sound like anarchy, but it simply describes a business culture where progress, positive change, and innovation are embraced.

Management must encourage and harness innovation across the entire organization. Processes, policies, and procedures should be constantly evolved to ensure relevancy, competitiveness, and increased value-add. Organizations can effectively leverage innovation and attract and retain top talent.

Whether you are trying to increase yield, decrease costs, increase customer loyalty, diversify into new market sectors, or all of the above and more, having a culture of innovation will help position you for success.

Dan MacDonald is the president and CEO of InNOVAcorp based in Halifax. www.innovacorp.ca