The Innovative Brain Archive
How To Cook Up Innovation In Your Organization
A white paper from New & Improved®, LLC
What’s the culture of innovation in your organization? Does your company obsessively focus on new products that make your old ones obsolete, like Intel? Are your people constantly being developed as a competitive advantage like G.E.? Is your organization reinventing the processes that allow innovation from inside and out like at Procter & Gamble? How about the environment where you work, is your company as innovative as Google?
If you can answer “yes” to all four of the questions above, then you’ve got a winning recipe! Give yourself a gold star and move to the next article on your reading pile. If there was a “no” to one or more above, then add yourself to a list of the 99.4% of companies that are still trying to get the mix right, and are wrestling with creating the growth engine that we know as a “culture of innovation.”
You know that your organization must grow and improve. You know that you need to innovate steadily over time, but that you cannot do it alone. So you need other folks helping you remove the barriers to innovation in your organization and together doing all that can be done to speed, strengthen and sustain growth. This is critical in supporting the enterprise’s investments in innovation (R&D, consumer research, new product development, etc).
And while it may feel impossible, you can do it. It is possible to surround yourself with the minds that feed the innovation pipeline. It is possible to nurture your own mind with the good thinking and experience of those around you.
But if you want more of a culture of innovation around you than you currently have, something will need to change. In this article, we’ll show you the most effective things to focus on to drive that change.
The Four Key Ingredients
There are four key elements to consider as you prepare an organization to steadily drive growth:
- Offerings: Focusing on new offerings is important in growing the innovation capacity of an organization, and the point where most organizations start, as it’s an important measure of growth: the percentage of revenue derived from new products. Yet it’s not enough.
- Example: Most people think of Intel as the chip in their computer. But Intel is constantly working to create chips that work in all sorts of electronic devices, and are constantly working to make their current products obsolete so that they can stay at the top of the technology heap in an incredibly fast–moving category. They are innovating not only on their core offering, but in the range of areas that their core offering might be utilized.
- Process: Innovation can’t be random, accidental or ad hoc if you want it to be sustainable. It requires that you understand, follow and constantly improve the innovation processes you and your organization use to move potential solutions from rough concepts to the point it is providing value, to both your internal and external customers. Innovation requires that you look at the processes that support your real innovation engine — your people — to live up to their individual creative potentials so that in the aggregate; they are innovating at every level in your organization.
- Example: Procter & Gamble’s former CEO turned the company on its ear by demanding an open innovation process that ensured that 50% of their innovative ideas would come from outside the company, from vendors, other companies, even consumers. This was a radical shift from a company that prided itself on its R&D and internal NPD processes.
- Example #2: Many organizations have reworked their performance appraisal system to include metrics related to the behaviors, attitudes and development experiences known to be related to fostering innovation via human behavior. One CEO of a GE division added to his exec teams performance evaluations the behavioral measure, “finds the value in all new ideas”. Read more about what inspired this approach here: Get the POINt
- Environment: The organization doesn’t exist in a vacuum, so it’s critical to energize and sustain a work context that supports the constant learning, experimentation and improvement that is a prerequisite of all innovation. This context consists of the physical environment, the organizational climate, and the culture that surrounds you.
- Example: Google is legendary for the creative environment they’ve built, both in the physical campus with the “mental support systems” for employees (e.g. day care, gyms, games, etc.), and the support and encouragement they provide for new ideas. When you’re “surrounded by cool” that is regularly refreshed, your mind is freshened as well. And when the company takes care of you, you’re more likely to take care of the company.
- People: At its most fundamental level, innovation is fueled and driven by people! It’s critical to constantly increase the ability of people to think creatively and use that creativity to collaborate and produce innovation in their area of responsibility.
- Example: TE Connectivity (formerly Tyco Electronics) is intensely engaged in training its engineers, managers, senior leaders and even their Six Sigma Black Belts — all over the world — in creative thinking, creative process, and individual skills for great collaboration. Their programs meet the diverse needs of their people in different functions and levels to ensure that everyone can take what they’ve learned and implement it in their work.
Scaling the Recipe for the Occasion
As you engage in the activities designed to build an organization that sustains innovation, it’s also necessary to develop distinct strategies that are focused on three levels:
- Individual: Things happen at the individual level. Whether it’s a single offering, a process for one person, or the space in which an individual works, the building block of a large enterprise is the individual human being. Certainly we work with other individuals, but if a single person doesn’t initiate, by sharing a creative thought or taking a small specific action, nothing happens. Things are relatively simple at this level. And critical! Big ideas can come from individuals, but moving things forward requires the involvement of others...
- Group/Team: At the group/team level, change begins happening that is more meaningful (value–creating) for the enterprise. Innovation, the launch of something new and valuable, almost always happens with a group or team driving it. Whether it’s the group’s process, the offering they’re responsible for, or the environment in which they work, teams bring the many skill–sets that are required to go from “brilliant idea’ to “successful launch.”At its essence, innovation is a team sport.
- Organization/Enterprise: When many teams are creatively and productively working towards similar growth goals, we see an organization or an enterprise that supports them. Mars, Inc. is focused on chocolate, gum, pet foods, rice, and coffee. The enterprise supports the teams with internal governance processes and creates the environment that holds all the teams together and keeps an eye on the big picture (e.g. food items) so that the teams can focus on their targets (e.g. pet supply stores) and the individuals can pay attention to their responsibilities (e.g. tracking sales in their region).
By looking at each of the four key elements (“ingredients”) and looking at them at the three levels (“scaling”), we can see how the mechanisms fit together that drive innovation (and continuous improvement) in the organization.
Recipe for Successful Innovation
People: You need creative people to fuel organic growth through innovation and to continuously improve what’s happening in the organization. It’s been well demonstrated that you can strengthen the innovation–producing creative thinking of individuals through training and coaching. While all that can be done is beyond the scope of this article, here are a few key moves:
- Individual: As you strengthen five key values — all of which can be developed — people produce more innovation. The values are 1) Humility, 2) Curiosity, 3) Courage, 4) Tenacity, and 5) Integrity. Ask yourself: What might be all of the things I can do to understand and strengthen these qualities in myself, my team, and my organization. For a deeper dive in this area read: The Way of the Innovation Leader
- Group: Studies of reading habits of highly innovative people find that they search for inspiration in a wide variety of places. Yes, they read their industry trade magazines AND they go beyond to hungrily search for new connections with a steady diet of outside reading and training, both technical and general. Encourage people to network internally and externally. Change up the teams, do job swaps and facilitate more cross–collaboration. Ask yourself: What might be all the things I could do to get our people interacting such that they are learning from each other and creating a higher frequency of creative “aha’s” that drive our business forward?
- Organization: When you have in place a training and development system that people experience as helping them to make their unique creative contribution to innovation, they will feel that innovation behavior as a performance expectation is fair. Since everybody has different needs in their development, a one–size–fits–all approach to development isn’t enough. Make sure that the system incorporates different programs for different needs, different levels, and different functions, or is flexible enough that people can make the training fit their needs. Ask yourself: What might be all of the things we could do at the organizational level to unleash the creative potential of our people?
Processes: A lot has been learned in the last 60 years about how to organize our natural creative thinking into discrete steps that increase the likelihood of successful outcomes. There are many good process methods to assist you. The most useful and universal, which we call the Creative Process, is non–proprietary. Some of our most powerful insights in this area:
- Individual: No matter how you organize your processes for innovation, being well–versed in the Creative Process will allow you to apply your natural creative thinking abilities and your innovation tools and techniques to work on your toughest challenges. Having a broad (and common) process framework saves time and makes your efforts more focused and effective.
- Group: Understand that experimentation must happen for innovation. So failure will happen. You will need to encourage experimentation anyway, and find ways to make sure that those who “fail” at well–intentioned experiments have a process to share lessons learned, and are acknowledged (in a positive way) for both the experiment and (especially) sharing key learnings.
- Organization: You must look at the policies, procedures, systems, metrics, accountabilities and organizational structures that influence all of the people in your organization and then ask: Are these helping or hindering our ability to be a sustained innovation organization? Do you have a way of collecting, reviewing and providing feedback on new ideas? Is there a “venture capital” fund to try new ideas? Remember, you get what you measure. How are you measuring your innovation pipeline? What is your system of accountability for managers and individual contributors with respect to innovation? Is your Board holding your CEO accountable only to quick returns in the market (you’re in trouble) or do they want to see a business that grows organically over time?
Offerings: Whether your focus is on an offering that is a product, service, process, or concept, it can become the focus and symbol of innovation. Think about the iPhone and remember that there’s much that works behind the sleek object to make it successful. The software, the apps, the wireless carriers, the supply chain, etc. A few important insights about offerings:
- Individual: When you really understand the users of your offering, big breakthroughs happen. Just because a competitor is already in the space, doesn’t mean that you can’t blow open the market by providing the same product/service in a way that is more meaningful and/or compelling to the user. The users of your offering are an incredible and often poorly–accessed source of creative input. Get creative about getting them involved, and they’ll invent your new offerings for you.
- Group: There are many value–creating ideas and concepts already floating around your organization. Look for opportunities to team up with other groups that have done the work to create solutions you need. Partner up with others so that both groups win. Remember, without iTunes, the iPod is just another MP3 player, many of which were on the market before the Apple product, and which the customer largely ignored. Creative ideas come from the connection of previously unconnected thoughts, and creative business models are often the connection of previously unconnected business groups. Keep mixing seemingly unrelated businesses and internal functional groups together, and the natural creativity of people in groups will lead you down productive pathways that have previously been unseen.
- Organization: Large organizations have a love/hate relationship with new offerings. Institutions hate the disruption to status quo, yet love the potential for the markets they create! Be prepared to win supporters one person at a time by helping them to see the brilliance of the offering and how it can benefit them. Rather than letting the offering speak for itself, provide a rationale in the terms the listener is interested in (i.e. technology, finance, efficiency, share, etc.). Ask them questions about the challenges or problems that the offering answers in order to help them discover its beauty. Your first “sale” for any offering must always be within your organization, yet most of our “what’s in it for me” thinking is focused on external customers. Many great products were blocked by internal resistance because the internal sell didn’t happen. Cars in colors other than black, Post–its®, and Listerine® Pocketpaks® all were initially resisted by the very enterprises that ultimately bragged about these things as proof of their organizational innovation (see “tenacity” above).
Environment: You’ll also need to understand the way things really get done in your organization, based on the shared beliefs, knowledge and norms that influence your people’s behavior. The organizational culture shapes what we see, feel and recognize as valuable. Examine whether it is hindering or assisting your quest for innovation. Some useful focal points:
- Individual: How people think about what is going on in the organization creates their reality. Two people can work side–by–side in an organization doing the same task with the same resources with the same physical space. One may say the organization is VERY innovative, and the other may see the opposite. Our own story of what is true, is true. For us. And we can change that story. Ask yourself: Does your view of the organization support your goals? Is there a more productive way to see this organization? How might we create an emotional and physical environment that energizes individual contributors to be passionate about the creative potential of their job?
- Group: Leadership behavior research by Goran Eckvall tells us that the statistical variance for a climate of creativity that can be attributed to the behavior of the leader ranges from 20 – 67%. This applies to the team leader level all the way up to the CEO. The characteristics of humility, curiosity, courage, tenacity and integrity are an excellent way to frame a leadership development program in this regard. It is also critically important for leaders to pay attention to how they treat new ideas. The non–natural — yet incredibly effective — innovation–fostering habit is to look for the value in an idea before looking for the dangers (as mentioned with the GE example earlier). Again, for more specific techniques to help with this, read: Get the POINt?
- Organization: There are two cultural norms that must be established to sustain a climate of innovation: 1) There must be an expectation that your people will constantly strive to improve the ability to leverage their life and learning for creativity, and 2) there must be a steady imperative that everyone constantly improves their ability to collaborate well with people who see the world differently than they do in order to create the “friction of ideas” that sparks innovation. Ask yourself: What might be all of the ways to embed and steadily reinforce these norms of thinking and behaving?
Some Tasty Dessert:
In the end, humans are most happy, motivated and fulfilled when they are surrounded by people who nurture their growth, are able to do the same for others and believe they are making a positive contribution to their organization or even the broader world. The work of creating a sustainably innovative organization is exactly the same work you would do if you wanted to help people feel happy, motivated and fulfilled. It is perhaps the most mutually–beneficial proposition that can exist between an individual and the enterprise that employs them. In that, we see a major positive opportunity for you, your work, and your quality of life. But you must decide to act. We think you’ll find it worth it, and so will the bottom–line of your organization.