Often spoken of in rarified terms, the word "innovation" makesears perk up and eyes roll.

But innovation is attainable and desirable for everycompany, because it means only to create a new way of doingthings. Every organization and every employee can innovate, even ifthey are not tasked with something as daunting as creating the nextiPhone.

Rather than being a project, innovation can become a part of howan organization functions, to the benefit of customers andemployees. This is particularly poignant for insuranceorganizations. Homeowners' insurance and business owners' packagesmay not change too much from year to year, but how employees handlepolicies, communicate with insureds and execute small tasks is ripefor innovation.

This puts innovation within the reach of insurance organizationsof all sizes. But for that to be true, it is not enough to make"innovation" a vague goal; it must be a part of the culture.

Here are four steps that set up a culture of innovation:

What are the intangible assets that make up innovation atyour company? (Photo: iStock)

1. Get in the right mindset

To become an innovative company, you must first establish thisculture of innovation. That is different and distinct from beinginnovative. A company with an innovative culture looks for ways toinnovate every step of the way; it brings innovation to everyactivity, no matter how small. We have to move beyond fixed ideasabout what innovation means.

For example, often innovation is thought of as buying newtechnology solutions or developing new products. These are biginvestments usually made by a small group of senior managers or aproject team. Creating an innovative culture means giving thetools, training, support and encouragement to every person in thecompany, especially the front line talent to improve the process orimplement new ideas.

Organizations cannot build a culture of innovation from theperspective of monetization. Instead, they need to first build theculture and identify the skills employees need. Later, they candetermine how this fits into your pricing model. This helps aligninnovation, employee motivation and the customer's best interest,ensuring the model is effective before the customer must assume anyrelated costs.

There can be a tension between production and productivity — youget paid for what you produce, not how you produce it. But toincrease productivity in delivering to customers, organizationsmust find a way to value productivity internally. You can work withyour clients directly to build better models of production thatemphasize productivity. Everyone benefits, from the customer to theemployee to the company as a whole.

Let's look at an insurance example of that. There are frequentlyaddress mistakes on insurance documents, from ZIP codes to streetmispellings. One employee in our company found a way to check theaddress on the Internet, and they shared this with a group ofemployees. Subsequently, another employee found a way to pulladdresses into a database from PDF files, and our tech team helpedautomate the checking of address in Excel with the website. Eachstep had a small improvement, but the integration of the threesteps had a much larger impact.

Related: Verisk CEO: Here's what it takes to encourageinnovation

The middle ground allows intentional growth and developmentrather than constant reactions to small shifts inmarkets. (Photo: Shutterstock)

2. Find the balance between disruptive and incrementalinnovation

As insurance professionals, we are embedded in an industry notthought of as innovative. In many ways, innovation does not seemlike something that would be rewarded in insurance, but it isnecessary for the future of the industry. Organizations can empoweremployees to think outside the box even when working within thebox.

In management thinking, there is a war between people whobelieve continuous improvement can be innovative and those who donot. But this is a false dichotomy; there is a middle groundbetween disruptive and incremental innovation. With incrementalinnovation, we do not see any of the big wins we see in disruptiveinnovation (e.g., the development of the affordable, personalcomputer). But there is a great deal of diversity in what is beingchanged.

The power of incremental innovation is in how it scales. Middlemanagers can communicate with employees to develop niche productsbased on conversations, or an employee may change how one piece ofinformation is collected from insureds. But if you take thatemployee's one little improvement and combine it with all of thelittle improvements made by their colleagues, the scale can beamazing. Small wins may be creating a new process that shaves 30minutes off a 90-minute task. But this mindset snowballs throughthe ranks of employees.

The middle ground between disruptive and incremental innovationallows intentional growth and development rather than constantreactions to small shifts in markets and technology. Most companieswant to create stable careers for employees, but they also need toturn a healthy profit. The culture of innovation can help yourstaff make the small changes that add up to cost savings, justifyprice increases or uncover new revenue streams.

Related: Differences between 'innovation' and'transformation' in insurance

By emphasizing productivity alongside production, managerscan get out of the way and allow employees to come up withideas. (Photo: iStock)

3. Fostering a culture of innovation with ongoingengagement

A culture of innovation is built slowly but deliberately. Tobegin, management must include all employees in conversations oninnovation and set up channels of communication just for discussinginnovative ideas. Employees may need training to support theirparticipation in the culture.

Though it sounds paradoxical, you can think of this asstandardizing innovation. Companies identify best practices for areason; the explanation is in the name. But best practices andcompany standards should be challenged from time to time. To dothis efficiently, you need to create a mechanism to encouragepeople to argue against best practices and provide support fortheir arguments. This helps people understand why management ismaking decisions, but does so from the perspective of buildingsolutions.

Sometimes managers can be an obstacle to innovation. They aretasked with ensuring employees are producing. But they can also beempowered to free up resources for changing how things get done. Byemphasizing productivity alongside production, they can get out ofthe way and allow employees to come up with ideas. Eighty percentof an employee's average workday may be occupied with assignedtasks, but with the rest of their time they can put their minds towork on innovation.

This is not a one-time initiative, to be introduced andforgotten. It requires ongoing engagement from various levels ofmanagement. Managers can provide incentives for innovation andcreate regular opportunities for sharing ideas. They can alsoroutinely observe and report back on whether or not the culture istranslated into innovation — looking for opportunities andrestraints on innovation.

This all doesn't mean breaking up any teams working ondisruptive innovation — those employees have a unique skill set.But people can be regularly rotated out of and into these workinggroups to bring in fresh ideas.

Eighty percent of an employee'saverage workday can be assigned tasks, but the rest of their timeshould be put to work on innovation. (Photo:Shutterstock)

4. Know that innovation motivates, excites andsells

I think what is fascinating about this process is the sense ofexcitement it brings to an organization. In my experience,employees usually engaged in repetitive or clerical tasks are moreenergized to come to work when innovation becomes a part of theirjob descriptions.

Customers, too, are blown away by the results. They do notexpect innovation from an insurance organization. But if you canmake it happen, the customer is excited and that empowers yourteam. If the model is right, employees and clients can share in thevalue created by innovation, and your company can invest in thatvalue.

It is not all smooth sailing, and my thinking on innovationchanges constantly. In trying to create this culture, we may comeup against as many questions as answers, but it is those questionsthat define a truly innovative company.

Matthew Bruno is chief operations officer and founder of NewYork City-based ReSource Pro.

Related: Innovations with ACORD