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This piece has been originally posted on Medium.

I’m amazed at our near obsession with the so-called culture of innovation, a topic whose popularity in business literature and social media can only match the extreme fuzziness of its meaning.

Have you ever heard about companies trying to establish a “culture of accounting”? Nope. They simply follow solid accounting practices. Have you ever heard about companies trying to establish a “culture of quality”? Nope. They adopt the Six Sigma methodology. And what about the “culture of sales,” “culture of marketing,” or “culture of talent management”? Nope, nope, and nope.

It’s only innovation that, in the minds of many, requires a “culture” to exist. Why?

I see two reasons. The first one is that we still don’t consider innovation a normal corporate process, on par with accounting, quality control, marketing, or talent management. We’re often even unsure of what corporate innovation is, as a surprisingly large number of firms don’t have a working definition of what innovation means for them. We hardly bother to understand the difference between incremental, adjacent, and radical innovation and believe that every innovation must be disruptive, while all other types are for losers.

A non-stop talk about the “culture of innovation” becomes a replacement for the lacking corporate innovation strategy.

The second reason is that while many CEOs have mastered the art of talking about innovation, by delivering polished answers to friendly interviewers, a frighteningly large number of them take a hands-off approach to developing innovation strategies and establishing innovation processes. Worse, too many CEOs don’t consider overseeing innovation part of their responsibilities, proudly claiming instead that “in our company, innovation is everyone’s job.”

A non-stop talk about the “culture of innovation” becomes a handy filling of the leadership void.

I believe that the very term “culture of innovation” is a misnomer, if not an oxymoron.

I believe it’s time to stop “failing fast and often” and “celebrating failures” — the two most popular components of building the “culture of innovation” — and begin to design and implement actionable corporate policies boosting innovation.

There is no need to reinvent the wheel; specific socio-economic factors affecting innovation have long been described in business literature. Here I present a list of some of them organized into two groups: innovation dos (boosting innovation) and innovation don’ts (obstructing innovation).

Innovation dos

· Stricter labor laws, such as the 1988 Worker Adjustment and Retraining Notification Act (Acharya et al., 2010); wrongful discharge laws (Acharya et al., 2013); and employments nondiscrimination acts (ENDAs) (Gao and Zang, 2016)

· Legalization of same-sex marriages and medical marijuana (Vakili and Zhang, 2016)

· Diverse workforce and pro-diversity corporate policies (Hewlett et al., 2013; Mayer et al., 2016)

· Family enterprise ownership (as opposed to public ownership) (Kammerlander and van Essen, 2017)

· Debtor-friendly (as opposed to creditor-friendly) bankruptcy laws (Acharya and Subramanian, 2009)

· Greater use of long-term financial incentives, such as stock-option grants, to compensate employees involved in innovation activities:

o At the CEO level (Francis et al., 2011)

o At the level of heads of corporate R&D (Lerner and Wulff, 2006)

o At the level of non-executive employees (Chang et al., 2015)

· Better treatment of employees, as measured by:

o The KLD Socrates database (Chen et al., 2016; Mao and Weathers, 2016)

o The MSCI ESG STATS database (Mayer et al., 2016)

Innovation don’ts

· Restrictions on abortions (Vakili and Zhang, 2016)

· Creditor-friendly (as opposed to debtor-friendly) bankruptcy laws (Acharya and Subramanian, 2009)

· Unionization (Bradley et al., 2015) (but see discussion in Doucouliagos, 2017 below)

· Income inequality (Doucouliagos, 2017)

· Initial public offerings (IPO) (Bernstein, 2017)

You could argue that some of the factors listed above, such as employment, bankruptcy, and abortion laws, are largely out of corporate control.

Yet, both corporations and policymakers should consider the local legal environment when choosing the location of future innovation centers. For example, an idea is floating to create up to 10 regional innovation centers in the Midwest metro areas of the United States with the infusion of about $100 billion of federal money in the form of direct R&D funding, tax benefits, and infrastructure support. Alarmingly, many of these prospective centers are planned to be built in the states that have recently adopted the most restrictive abortion laws in the country. Will these innovation centers be able to innovate?

Legal issues aside, companies can boost corporate innovation by modifying their termination and compensation policies, something that is entirely under their control. Here, I propose two specific recommendations based on a theoretical framework created by Gustavo Manso in 2011:

1. Place employees involved in strategic innovation projects on fixed-term employment contracts (as opposed to employment-at-will). Alternatively, tenure-like positions can be created for these employees. Whatever the arrangement, the employees should be assured that they have a fixed “window of opportunities” — say, three to five years — to make progress before any administrative decisions regarding their performance will be taken.

2. Make stock option grants the principal incentive for engagement in innovation projects — as opposed to cash bonuses or non-monetary rewards.

A larger point that I’d like to make is that corporate innovation begins not with a “culture,” but with structure and processes. And after you created the structure, implemented the processes, and spent years running various innovation programs, while communicating their results to the rest of the company, a habit of innovation may emerge.

And if you want to call this habit a culture, fine with me.