Do you lead a company, a division, or a team that seems to have a knack for solving problems—or do most of them end up on your desk? Do you have employees who come to you with their proposed solutions—or just their challenges? Do managers in your company celebrate their successes—or whine about failures (usually of someone else)?

The answers to those questions reveal a lot about how attuned your organization is to innovation, about how “smart” it is. Innovative people know how to analyze situations and respond to problems by drawing on their experience and expertise, yet always adapting it to each new situation. They’re flexible and creative. They resist the temptation to automatically default to what worked last time. They treat a problem as a challenge to be overcome, rather than an obstacle to be avoided

It’s exactly those same skills and attitudes, scaled up, that make an organization “smart,” and it doesn’t happen automatically. Culture will trump initiative every time, if you let it. You can have brilliantly innovative people, but if you don’t have mechanisms in place to allow those talents to blossom, they will die—because the people who have them will get the message. They’ll either put a self-imposed lid on that creativity, or they’ll leave for somewhere where they don’t have to.

When their ideas are ignored or co-opted, they’ll soon stop offering any. When their jobs are strictly prescribed for them, they won’t dare experiment. When failure attracts more attention than courage and initiative, they’ll stop taking risks.

Are you striving to make everything in your business fail safe? Or are you making it safe to fail? Frankly, the first approach is futile. The second is challenging and risky, but no riskier than standing still for very long while your customers and competitors pass you by.

Progress requires innovative thinking. Innovative thinking requires an innovation-friendly culture. You have people who are capable of thinking creatively, even if they don’t always realize it themselves. You don’t need to go find them; you need to create a culture that rewards that behavior.