At the end of the day, innovation is the life blood of a company. But if you’re a senior executive, how do you cultivate true innovation?

In my interactions with executives, this desire is often expressed in the following ways:

• “We need our leaders to be creative.”
• “We need our leaders to challenge the status quo.”
• “We need our leaders to be risk takers.”

And yet, when you talk to leaders and employees at the front lines of the organizations, these words seem empty. It’s not that they disagree with the need for innovation and risk-taking; rather, they doubt the sincerity of their senior leaders.

When I ask them why, these front-line leaders and employees will cite a long list of people whose careers were cut short when they failed at innovation, or took risks that didn’t pan out positively.

To these leaders and employees, all the talk is just that – empty talk.

It seems that the real test of whether or not you have a culture of innovation happens not when one is successful, but when one fails.  Do heads roll? Are employees fired? Is someone demoted or relegated to some deep and dark part of the company, never to be heard of or seen again?

Not all organizations react that way. Some organizations —  ones that truly embrace innovation and all of its consequences —  react differently to failures and set backs. Take the example of an innovation failure that happened at Microsoft.

Last year, the company launched a Twitter bot, Tay.ai, to mark its entry into the human-to-artificial intelligence market.  Unfortunately for Microsoft, hackers turned Tay into a “venom-spewing racist.”  The project was immediately shut down, and the company quickly issued an apology to the public.

Writing for USA Today, Marco della Cava noted  that in the old days of the company, heads would have rolled after such a failure.  But now, under the leadership of Microsoft CEO Satya Nadella, Microsoft is taking a different approach.

How did he respond? Well, Nadella sent a letter to the project team responsible for the embarassing failure.  In it, he asked them to “keep pushing and know that I am with you.”

The project team listened to their CEO. They did keep pushing, and this past December they released Zo, a new AI chatbot. There have been no issues with Zo to date.

In his interview with della Cava, Nadella said it was “so critical for leaders not to freak people out, but to give them air cover to solve the real problem. If people are doing things out of fear, it’s hard or impossible to actually drive any innovation.”

While many organizations talk about their desire to drive innovation, few are building a culture where true innovation can occur. The recipe, as demonstrated by Nadella, is pretty simple: replace fear with support; encourage, rather than threaten. And always have the backs of your employees.

Reflecting on his role as CEO, Nadella said that, three years into his job, he realizes that his number one job is to serve as the curator of the company’s culture.  “If you don’t focus on creating a culture that allows people to do their best work, then you’ve created nothing.”

This week’s gut check asks: do you really know how to create a culture of innovation?

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