How to Build an Innovation Culture

Launching new products or services?  Whether it’s another evolution of your current products, something completely new, or part of an acquisition, you and your competitors are feverishly working to get exciting new products to market.  To achieve the results for your business that you really want though, you need to focus your resources on innovating for your customer and making their business successful!


‘You need a very product-oriented culture.  Lots of companies have great engineers and smart people.  There needs to be some gravitational force that pulls it all together.’

Steve Jobs


In my four President/CEO roles over the past 17 years, we successfully launched 62 new products!  We did this by being aggressive, creative, and involving everyone in the company in the process.  From my experience, when I see teams that appear to know their Customer but cannot get products out the door successfully, it is usually because they have not built an innovation culture.


As we enter the new year, Apple continues to be a model of how to innovate new products.  In recent years, the iPod, iPad, iPhone and iWatch have all revolutionized their markets.  Products like the iWatch are a prestige item.  To me, Apple has built a culture that includes an unmatched intrigue and interest in their Customer and how they can develop cool products to help them.  Take a look at what they emphasize on their website. They lead with their products.   It’s the first thing they talk about and what they focus on.  Why?  Because they want to be a company that has awesome products!  And it has succeeded so far.  Apple hires curious people and they encourage them to think differently.  Consequently, they create unique products!

Those of you in a smaller business may be thinking, ‘How can I do what Apple does?”  But you can.  First, start by moving your innovative culture forward by revisiting your strategy.  What problem are you helping your Customers solve?  Where is your Customer’s business headed and how can you help them get positioned for success?  Also, you should investigate this hole: I have found in some companies that there is a disconnect between the CEO-driven business strategy, and the products being developed in the company technical ranks.  You cannot let this happen!

Start spending time, effort and energy on these areas with your staff, and devoting your personal time as the leader toward innovation.  You will find your organization will follow your lead and give even more attention to creating products that help your Customers!


When it comes to the ideas on your road map and getting them out the door, the product manager is shouldering a major part of the leadership pressure.   The product manager should be a thought leader in their industry, market focused, and work closely with sales, marketing and others on your internal team.  The product manager for each product owns the forecast and is most likely bonused on the financial performance of their product.  So start your Road Map by breaking down your product categories/families, with the goal that each product will have its own plan and targets.  What are your current revenues and performance by product, and what can we do to improve the performance and growth of each product line?  With this information, you can now begin to shift from a list of product ideas to priorities by product, and key areas of investment.


 ‘Don’t find Customers for your products; Find products for your Customers.’
 Seth Godin


New product development is expensive. There are a lot of people in your company who will spend time analyzing, evaluating and developing the new products you decide to target.  One of the steps I have taken in the past is to dedicate a targeted % of revenues at my companies toward new product development.  At my last two companies, we spent 5% and 16% of revenues respectively on new product development.  Most companies are between 2% and 10%.  And although there is much debate among experts on what this % should be, the more important point is that the 5-10% you spend gets managed effectively and that something successful comes out to your Customers.

By success, I mean revenue.  A key metric to show here is the amount of revenues we are generating from products developed in the past 5 years.  In one of my companies we pushed this number to 35% – showing that not only did we launch a lot of products, but we were successful in getting financial results.


The bottom line is this: Create a great product or service, and  the Customer will want more of everything else you produce!  It starts with building an innovation culture that encourages and involves your people in new product development.  And it’s backed up by an innovation process and resources that enables your team to build awesome products that will take your business all the way to the top!

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