4 Steps to Build a Culture of Innovation

Lead photo: Tracie Sponenberg speaks during a Sept. 12 session at MDM’s 2024 SHIFT Conference in Denver. (MDM Photo)

Innovative organizations are fast, flat, nimble and creative.

During a main stage session at SHIFT 2024 | The Future of Distribution on Sept. 12 in Denver, human resource transformation consultant Tracie Sponenberg broke down four steps distributors can take to build a culture of innovation that nurtures top talent and increases revenue/profitability growth.

 1. Establish Leadership-Driven Innovation

As with most sweeping culture changes, innovation starts at the top.

“Your leadership needs to promote innovative thinking,” Sponenberg said.

If you lead by example, setting clear goals and expectations for what’s going to happen, and also personally embracing innovation, the culture of the organization will follow suit.

Part of setting that expectation also includes letting the leaders below you take charge on initiatives. Doing so avoids the need for micromanagement, one of the main “culture killers” which leads to decreased employee morale, innovation, creativity and productivity, creates turnover and increases stress and burnout, according to Sponenberg.

“If you are that person [a micromanager], or if you have that person in your organization, it will drive people out of your organization faster than almost anything else,” she said.

2. Create a Communication Strategy

Communication is critical to fostering both internal and external collaboration and partnerships.

Lack of communication about initiatives is another top culture killers, Sponenberg said.

“We used to have something at my former company called the truck driver test,” she explains. “We knew that an initiative was successful if … our truck drivers — who were out first thing in the morning and back at the end of the day — knew what going on.”

The drivers were the most connected to the company’s customers, but also the least connected to the organization.

“If they knew what was going on, then we were doing our jobs,” Sponenberg said.

Effective communication includes gaining perspective and knowledge, best done through partnerships, whether internally, or from software vendors, universities, consultants, or research sources like MDM or the National Association of Wholesaler-Distributors, she said.

3. Embrace Digital Transformation

The human resources department doesn’t own culture alone and is not responsible for cultural transformations, but it shouldn’t be looked at as a “back-office administrative function” either.

HR representatives can serve as the coaches, consultants and guides in helping people, and the business, grow by helping guide employees through use of the digital tools and technologies that support innovation.

 4. Invest in Skill Development 

“You can’t just expect innovation to happen,” Sponenberg said. “You can’t just expect anything to happen. You need to invest in it. You need to make sure that your people are bought into it. How do you do that? You train them, you educate them, you invest in that. You use those resources, you help upskill your team, and then you’ll drive transformation, empower your people and encourage risk-taking.”

Sponenberg said executives need to learn to let people fail in order to create an environment where people feel empowered to contribute ideas.

“Celebrate innovation efforts, regardless of the outcome, and encourage a culture of continuous learning and improvement,” she said.

Your Next Step?

In short,

1. Evaluate your leadership.
2. Support your people.

Culture is a mirror of the leadership, Sponenberg explains.

“You are part of the company. You are part of the culture,” she said, advising leaders to take a honest look at their role within the company as they look to implement lasting innovation.

“Whenever there was a problem on the team when I was in corporate, or if there’s a problem within one of the companies that I advise, I look at the leader first. Is there an issue? Is a person getting enough training? Are they getting enough support? Etc.”

Secondly, Sponenberg explains that the coaching model has mostly replaced the traditional leadership model.

“Your goal as a manager, a leader or a coach, is really to help support your people and to help them reach their goals,” she said.

More on this topic? Check out this relevant article from SHIFT 2023 sharing how three executives implement elements of a ‘good company culture’ in order to grow their business, attract new employees and keep existing employees invested.

And mark your calendars for next May 13-15 for SHIFT 2025, which will be held just outside of Denver in Centennial, CO!