How to build a culture of innovation

It’s the company that is synonymous with collaboration. A tech unicorn that underpins the communications of most other tech unicorns and established companies alike. With more than 10 million daily users across 150 countries, Slack keeps the wheels of task-based knowledge work in motion.

Slack recently hosted a Businesses of Tomorrow masterclass in innovation and the culture that creates it in a 2-hour session at the companies Fremont St headquarters in San Francisco.
 

Slack has conducted research into the top predictors for adapting and reacting positively to change determined that success in innovation are associated with three key factors;
 

• A growth mindset
• Curiosity, to build a broad repertoire of skills and interests and,
• Empathy for customers
   

These concepts were discussed in the session and expanded upon by Arturo Arrarte, Slack’s Head of Growth in the Asia Pacific region.
 

A growth mindset is about reframing a problem in terms of how you can succeed from change, rather than sticking with the status quo. “Without that ability to grow we're kind of stuck where we are in a fixed mindset,” Arrarte says. He recommends adding “yet” to the end of an inhibiting thought. Rather than saying, “‘I don’t know if I can build that business, or I don’t know if I can find the customers’, say ‘I don’t know if I can build that business, yet.’ It's much better to try something to see what happens than it is to avoid it,” he says.
 

Curiosity is essential because innovation is much more likely to be incremental than a big-bang event. “Most innovation is the application of existing techniques in new domains,” Arrarte says. “So the broader your repertoire of references that you can draw on, the more diverse ideas you can generate.”
 

Empathy for customers is about taking a problem and truly understanding it - not by looking at the data, Arrarte says, but by getting next to customers and feeling their pain.
 

Slack recognises that barriers to innovation can just as easily get in the way. They see three countervailing elements that need to be overcome in an organisation;
 

• The need for big ideas
• Obsession with analytics
• Growth gridlock
   

The need for a big idea is the desire for people in a company to go for the home run. Good, small ideas can often get knocked down for not being bold enough. Instead, Arrarte says firms need to be alive to the fact that “small ideas can become big ideas”. This is certainly true for Slack and its founder’s history. Slack was an internal tool built for Butterfield’s gaming startup. Flickr was a chat-room feature for another game Butterfield created in 2004.
 

Overcoming an obsession with analytics may seem counterintuitive for a tech firm, but Arrarte says that the data is only as good as how it is “instrumented”, is backward looking and most importantly, can become a bone of contention when trying to make decisions. “What if we're in one of those meetings and somebody says ‘show me the numbers’ and then they don't believe the numbers,” he says. “Oftentimes people are just dressing up fear of taking action with analysis.”
 

Growth gridlock can bog businesses down in just agreeing to incremental change rather than identify where future growth may come from. With so many potential decisions available, the path of least resistance tends to get priority, and opportunity gets missed.
 

So how can companies ensure they do more of the first three when it comes to innovation, and don’t fall at the hurdles?
 

Arrarte says that company culture is critical, and the key is getting the settings right, so all employees understand how they can move the company forward. “Start thinking about your culture as having habits. So the sign that you put at the door to your office becomes an important reminder to people of the habits that they have that day,” he says.
 

At Slack they optimise for five core settings to help the business continue to innovate;
 

• Risk
• Incentives
• Delegation
• Quality
• Authority
   

To mitigate risk Slack conducts a pre-mortem before beginning a project. Unlike a post-mortem where “everybody sits around and blames and tries to divert the blame,” Arrarte says, the pre-mortem is a powerful demystification tool “because it is no longer taboo to talk about all the things that could go wrong.” It also means that in the implementation stage, staff can recognise some of the dead-ends much earlier because they have already been identified.
 

Because Slack was spun out of a game company, they adopt an incentive structure that mirrors gameplay. “What are you doing to set the high score inside the organization?” is the challenge put to staff. Arrarte says that culture lives between “what you celebrate and what you tolerate,” so documenting how to celebrate “high-scoring” behaviour is incredibly powerful.
 

Delegation at Slack is about empowering staff to take the initiative, and encouraging employees to back ideas, even if there is not universal agreement. They use a philosophy called “disagree and commit”. It's incredibly powerful, particularly when the highest-status person in the meeting doesn’t agree with the idea, Arrarte says. “It gives them one phrase that they can fall back on when they don't want to exercise role power and when they want to prioritize going ahead above getting their way. As leaders it's an incredibly service oriented orientation that you can take to your team.”
 

By setting the metrics for quality before a project begins, Slack is able to apply just the right amount of resources and effort to a task. “We always ask what we are optimizing for. It's a very short question that's incredibly effective to clarify what we're focused on with an initiative,” Arrarte says. A project will be built differently if it is going to be seen by 4000 people or 400,000 people. Can they get by with 30 per cent done, or 90 per cent done?
 

Finally, Slack thinks about authority in terms of letting those at coalface really drive their and their team’s performance. “Delegating authority down to the people closest to the information helps us succeed in actually solving the problems that they're facing because they know the most about it,” Arrarte says. Daily standups identify those problems and, just as importantly, commit team members to solving them. It leverages innate, human biases toward being liked. “People are incredibly accountable to each other and the people they care about,” Arrarte says.