If you want to be successful in business, you must be successful at creating a culture of innovation. It is innovation that drive the value of your business.

What determines the value of a company? The value of a company can be divided into two parts: the tangible value and the intangible value. The tangible value is the sum of things you can touch such as buildings, equipment, etc. This is commonly listed as book value on the accounting balance sheet. The other part, intangible value, is more difficult to define. From an accounting standpoint, intangible value would be listed as goodwill on the balance sheet and would include items such any past business acquisitions and brand value. However, it is easy to argue that the greatest contributor to intangible value is innovation.

In business, it is innovation that leads to advancement in product offerings and customer service. Many confuse innovation with the implementation of technology. Innovation is best defined as identifying the optimal solution or idea regarding a product or service. Getting back to value, it is the added value that the customer experiences with your product or service that creates the growing sales and profits in your business. You will achieve a higher business value with a culture of innovation as a core component of your business model.

How do you create a culture of innovation? It starts with ideas, teamwork and rewarding efforts. Ideas can come from anywhere such as customers, employees, management and even competitors. You can create interaction with your existing customers to solicit their feedback on what they really want. In the office, allow your company culture to be open to ideas across all departments. There is no bad idea only some ideas are more applicable than others. Another important part of gathering ideas is through competitor intelligence which is learning what your competition is doing.

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It does take talented personnel to be successful with innovation. Most companies recruit for brains, leadership and past accomplishments. There is nothing wrong with this approach to identify talent. But if you want to create a culture of innovation, you must add innovation as a requirement of new talent. Innovation talent is better characterized as having a high emotional intelligence. Simply, emotional intelligence is self-awareness and empathy. A person with high emotional intelligence is open to new ideas and can perform in a team environment without dominating other employees. This creates a more effective team environment that can brainstorm ideas without any one employee dominated the conversation.

When you find the right talent for an innovative culture, you must reward their efforts. Your company must have a strong employee retention program that rewards and recognizes those employees that are high achievers and leaders of innovation.

Failure is a fact of life in business. Smart companies learn from their failures and create innovative solutions to keep their talent energized and comfortable taking on new challenges. It is innovation that converts ideas into new products and services that can lead to success in business.