Innovative project teams are increasingly becoming an invaluable asset for corporations. Not only is it becoming vital that project teams make use of the latest technological advancements in the products and services that they’re developing; it’s also vital that teams continuously improve the way in which they work—and that they find new and innovative ways of cutting costs in order to stay competitive.

Not long ago I went to China to coach a team from a global electronics firm. They are market leaders, renowned for their quality and cutting-edge products. Still, this organization is facing strong competition on price from other players. Consequently, each year the head of product development challenges the teams to cut costs—sometimes by up to 20 percent—to stay competitive. When looking at how to cut costs, the teams have to be exceptionally innovative in the way they approach the design and production of their products.

Continuously coming up with new ways of working and developing products and services is a skill—a dynamic property that all successful teams will need to develop to lead the competition.

How do you create an innovative team, and encourage cutting edge ideas? Here are five ways to play the innovation game:

1. Seek inspiration from outside the team

Innovation isn’t necessarily about inventing something that’s totally unique and has never been done before. Instead, it could be leveraging an existing idea or technology from another industry and embedding it within the team’s products and procedures.

As the artist Pablo Picasso said, “Good artists copy; great artist steal.” Most industries are advancing at a faster pace than ever before, and there are lots of ideas that can be transferred if you keep your fingers on the pulse. Innovative teams keep abreast of what’s happening in the world around them. They read blogs and trade magazines, attend conferences and trade shows and spend time with other teams who they might learn from and get inspired by. If teams work in silos and rarely get exposed to other ways of working, they’re a lot less likely to come up with new ideas. Innovative teams and people look outside of themselves for inspiration.

2. Share information effectively inside the team

It’s not sufficient for teams to get inspired by new ideas from the outside world if the information isn’t shared with the rest of the team. It’s the team that has the power to collectively do something with an idea—from improving it to ultimately integrating it.

Every team member plays a pivotal role, and every team member is kept in the loop of the latest thinking so that they can be effective in their roles and further develop the ideas. Innovative teams are great communicators and have an effective way of disseminating information between its members. It’s been proven that one of the most efficient ways of encouraging the flow of information is by spending time face-to-face. And this is exactly what innovative teams do. They physically sit next to one another where possible; when it’s not possible, these teams spend time on video conference, sharing what they know.

3. Be a leader who stimulates creativity

Innovative teams are led by someone who recognizes that if you don’t enable people to innovate then it won’t happen. We could call such a leader a Multiplier. A Multiplier is skilled at getting the best from people and at creating an environment where the best ideas surface. These leaders stimulate creativity by asking why and what-if questions and by shifting the burden of thinking onto the team. Multipliers want to learn from people around them, so instead of providing the right answers they simply ask the right questions. In other words, they create debate and invite the team to fill in the blanks.

Teams who are led by the opposite type of leader – a Diminisher – will feel stifled. Diminishers tend to be controlling and want to take the credit for innovative ideas themselves.  Instead of shifting responsibility to the team, they stay in charge and tell others – in detail – how to do their job. Invariably, innovative teams would never be innovative if they were lead by a Diminisher.

4. Take time to experiment and play

Put a value on taking the time to come up with new ideas! Teams that work to a tight delivery schedule and who are frequently being monitored and controlled will tend to come up with fewer new ideas because there’s no time devoted to them. Innovative teams, on the other hand, create the time and the space to consider how something can be done differently. They take time out to experiment and to play; their physical work environments will often stimulate idea generation.

In some cases, innovative teams are given an amount of unstructured time where they can work on anything they like, as long as there are results to be shown—made famous by Google back in the day. When teams play and experiment, some ideas will invariably fail—something that innovative teams see as a necessary part of the process, which helps guide them in the right direction.

5. Hire a mix of skills and personality types

Innovative teams are made up of people with a range of personality types and a mix of skills. When teams become too uniform they don’t have enough breadth to fully develop and implement new ideas. An innovative team isn’t just composed of creative types, but also of people with deep technical knowledge who have a more pragmatic approach.

Generating new ideas is one thing, but choosing the best one and successfully implementing it is something entirely different. In spite of their diverse strengths and skills, innovative teams are exceptionally supportive of each other, and are what psychologists call, socially sensitive. This means that not only do team members respect each other and make space for each individual to contribute on equal terms, they are also sensitive to each other’s moods and behaviors. This sensitivity creates a safe space for people because they know that their thoughts and ideas will be encouraged and listened to.

Step bravely and uniquely into the future

Increased competition and technological advancements mean that it’s becoming more important for successful teams to be innovative. Forward-thinking teams are aware of the world around them and willing to take risks; they know how to move on from mistakes and keep executing until they hit on a new market need or improve on an existing one.

Put these five practices into action and you could be surprised what your team is capable of. This might be your best year ever!

The future of industry is changing. Innovative teams are turning to new dynamic processes and software to support the speed of doing business.