Tag Archives: leading Innovation

An Innovation Committee?


There has been a lot written lately about the decline in innovation, or R&D productivity in the US and elsewhere. 

Flattened OutLabor rates (in the US in particular) have flattened out, and are now in decline.  (see as an example, the chart labeled “Flattened out”)  The argument is that we are not bringing out new technologies at a fast enough pace to sustain the growth in wages.  Declining wages reduces consumer spending which accounts for 70%ish of total GDP.   And thus, some economists argue that technological innovation is a key driving force in overall economic vitality and growth.

Often over recent history, evolutions in core technologies (the internal combustion engine, electric power, oil and gas, transportation, cellular communications, computer technology) have propelled economic growth.  In the US for example, when our “innovation engine” was running well, we saw a blistering economic growth rate of about 2.5% per year.  Since the turn of this century, that rate has fallen to about 1%.

While R&D spending hasn’t dried up, some argue that the significance of what is being invented today is less than in the past.  The Economist reported on one study suggesting that R&D workers 60 years ago contributed about 7X more to economic growth as compared with their successors who are in our laboratories and engineering departments today.   I am not sure of all the reasons why, but I have read articles suggesting that our fixation with lowering risk is forcing shorter time horizons and companies to focus on smaller non-game changing projects that have more certain chances for commercial success.

Peter Thiel, Silicon Valley visionary, and founder of PayPal puts it this way, “[we grew up dreaming about] flying cars, instead we got 140 characters [in 73 different type fonts].”

So how do we re-kindle that spark of innovation?

Here is a website that suggests that one effective way to accelerate innovation within your organization is to form your own innovation steering committee.  The idea is to create a band of senior executive leaders to discuss how they could instill innovation across the enterprise.   This may be a good idea . . . creating the so-called “guiding coalition” that drives innovation.

I’m not so sure.

Innovation is not top-down driven.  It must become an embedded element of organizational culture.   The leader’s role is to find ways to encourage a prudent amount of risk taking, where it is ok to stumble along the way – so long as we learn from and improve upon it.

In my MBA class the other night we were talking about how sometimes organizational structures create barriers and we started considering ways of getting around them.  One student talked about her company (in this case a highly regarded organization) which created an Innovation Committee to whom all ideas for new stuff flowed.  She told of an example where she came up with an idea to promote conversion of some forms of information into electronic formats, which she believed would save space, and improve worker productivity.  So, she dutifully filled out the requisite forms and submitted them to the Innovation Committee.   “I received a polite thank you note from them”, she said, “but nothing ever happened.”

How many times do you suppose that outcome needs to happen before employees stop sending information on through channels?   Now in her case, she had the determination not to accept silence as an answer, and pursued her idea anyway, which is awesome.  But what if she wasn’t quite that stubborn?

It felt, listening to her, that the purpose of the Innovation Committee was to “protect” the organization form a potentially “bad” idea rather than encourage more and more ideas from anywhere.

Linus Pauling, Nobel prize-winning biochemist, was once asked how he came up with a good idea.  His response was that “it helps if you start with a lot of them”.   It is a simple idea that divergent thinking generating lots of ideas increases the odds of finding the good one.  It is one key premise behind innovation and creativity.

If you want your organization to be a product development engine, then it helps to start by being an idea engine.  In my mind this isn’t about what you write down on forms for submission to the Innovation Committee. Instead, you want supervisors, managers, and leaders who:

  • Create environments around them where ideas are valued, respected, and appreciated.  We can do this especially by encouraging ideas that contradict our own.  We can do this by sometimes challenging our colleagues saying “I’d like to hear more ideas, the ones we have discussed so far aren’t bold enough”.  We can do this by restraining our teams from diving into solutions before they have thoughtfully explored what the problem really is.
  • Promote “smart” risk taking.  We need to drop our belief that there is only one solution to a problem.  If someone has an idea that seems reasonable, why not let them explore it.  It might surprise you and work!   If not, there is both a learning opportunity for your team and a coaching opportunity for you to gain something from each failure we can apply in the future.
  • Are bridge builders.  We all know that gaining cooperation from other departments (silos) can be a challenge.   When this is too hard, our natural tendency is to focus on solutions that are mostly or totally within our control.   We narrow our focus, when a broad solution might be far better.  We might implement something, but it will be less likely to be game changing.  So, our job as leaders is to form alliances with counterparts in other departments who can help us. We need to be sales persons.  We need to offer to help them (building a sense of obligation that you can use later when you need to ask them for help).  Or, by reframing problems so that the solution benefits both groups, causing resistance to melt away and making the job of your team members easier.

If you decide to have an Innovation Committee, then at least ask them to focus their energies promoting the ideas we have spoken of above.   Get them to promote company-wide competitions for teams that generate the “best” ideas.    The prize might be a tangible budget for implementing them.  Have special prizes for the ones that link together people from multiple departments.  Celebrate and communicate the success stories.   Make it seem valued by the organization to find clever new ways of doing things.  Disseminate the knowledge.  Mayo Clinic’s famous Transform Conference started as an internal best-practice sharing session within the clinic.  It has grown from that to a global program where people come annually to talk and think together about how they can make health care better.  Notice also that the way they named it speaks loudly to what they think the purpose of innovation is.

Make your organization a bubbling caldron of ideas.  When you do, you won’t likely need an Innovation Committee to choose the projects. Your teams will know which ones can best help them.  Let your committee be an enabler, rather than a screener of good ideas.   There is a big difference.

 

Other Resources:

Innovation Almost Dead. Perhaps Not So In Electricity, by Peter Kelly-Detwiler, Forbes Magazine.

Has the ideas machine broken down?, from the Economist

 

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Running the Gauntlet for Innovation


B787

If you Google the phrase “Boeing Stock Price and the 787”, you will find 1.7 million references.  Now I would have to say that I did not review every one, but all of the references on the first three pages were negative and critical of the company, its leaders, or the product.  Several bordered on being “alarmist”.

 

As reported in the article by Brad Stone and Susanna Ray, the Boeing 787 Dreamliner’s carbon-fiber body and new electrical system give it a reduced weight, which allows it to burn 20 percent less fuel than the 767 midsize airplanes it’s meant to replace. The interior cabin features cathedral-like archways to reduce the sense of claustrophobia and enlarged windows that dim at the touch of a button. Because of the new, stronger composite materials, the cabin can also be maintained at higher pressure and humidity, so travelers feel fresher at landing.   A remarkable piece of technology.  But this apparently isn’t what we like to read about. 

 

B787 InteriorAfter a battery caught fire after landing in Boston, and another one triggered a fault on a plane bound for Tokyo, the FAA grounded the entire fleet, casing Boeing and their customers some serious heartache.

 

The behavior by regulators, reactions by Wall Street analysts, and reporting by the world press just makes it that much easier to see how today’s CEO’s should act with more reserve, be less tolerant of risk, and more inclined to narrower visions.   There are considerable forces that seem to conspire to punish those who push the envelope.

 

I was thinking about Boeing this week after making a stop at Sarasota International Airport where the organization Freedom Flight landed three beautiful WWII bombers and fighters so that people like me could walk through them.  Events like this also brought out a number of veterans, many former pilots during that war, who were there with their hats on – pictures in hand – proud to tell their stories to the people they met.

 

I had the extreme pleasure to be standing in line with one of these veterans.  When he was 18 years old he was stationed in the Pacific as a part of the ground crew responsible for patching up the bombers after they returned from a mission – shot up, broken and limping.   He told me how excited they were in 1942 to receive the first of the new B29 Super fortresses from Boeing.  They were bigger, carried heavier bomb loads, were more heavily armed and flew farther than the B24’s, and B17’s they  were built to replace.

 

On one Sunday, he recalled vividly, we were all awakened at 0300 hours (that’s early) because of a crisis.    On one of the early missions, the hydraulic lines were found to be freezing so that the bombers could not retract their bomb-bay doors.  If you were ever a bomber pilot, you know how serious a problem this could be.   It turns out that Boeing had not anticipated that our pilots would fly these planes routinely at such high altitudes (which I imagine we all would do to avoid enemy anti-aircraft fire).   In the days when the cabins were not insulated or pressurized, the temperatures could drop below freezing pretty fast.

 

B17The maintenance crews worked around the clock to convert the hydraulic actuators to electrical ones far more impervious to the cold.  In this case, while the oversight by the aircraft engineers was serious, the attention of everyone was on “how to fix it” and move on.  That was the environment.

 

I don’t know for sure, but I imagine that was not the only engineering SNAFU to have happened on the various new versions of planes that were introduced during the Second World War.   Each one was introduced as an improvement on the ones that came before.   We always sought to learn from our prior air combat experiences and bombing runs so that we could innovate and improve on prior models.  In this way we steadily came to fly higher, faster, farther, and safer than ever before.

 

One thing is true about innovation.  Whenever you try something that you never have before, things do not always work as planned.  Innovation has risk, and without the acceptance of some risk, no innovation is likely.   Yes, we made mistakes, but we learned from them, quickly.   We fixed the defects and built onward from there.

 

In today’s world where we report on your mistakes, globally, within minutes, it is no wonder that CEO’s and their Boards get skittish.  This was especially so in 2003 for Boeing when the Dreamliner project was born.  The company had just been eclipsed by Airbus as the largest airplane manufacturer on the planet. After the 2001 terrorist attacks in New York, airlines were reluctant to make massive new investments in airplanes.  So perhaps while Boeings execs and their Board needed something big, they couldn’t stomach the risks associated with such a massive undertaking.  If they stumbled, so too would their stock price.

 

So, in addition to all the exciting new technologies introduced on the Boeing 787 Dreamliner, the company also conducted a bold experiment with regard to its business model.  Designing and introducing a new generation airliner is a big task, costing billions of dollars.   To reduce their own risk, Boeing decided to partner with key external suppliers who would be asked to take responsibility for large subsections of the plane which could be built by them and then shipped to Everett, Washington for final assembly.   The suppliers took on a share of the overall project risk and in return were entitled to a share of the net profits.   In total, Boeing outsourced about 70% of the components and systems comprising the Dreamliner – something never before attempted.

 

Coordinating the manufacture of the more than 6 million parts was no small task even if it is all happening in your own back yard.  Doing so on a global scale proved massively challenging.   Coordinating design and manufacturing in this way proved extremely complex and the project was fraught with cost overruns, technical problems, and delays.

 

To many this whole story is symptomatic of a larger problem – – how to create innovation in mature economies – as most Western ones are.  Venture capitalist Peter Thiel is one who has seen it coming.    In the Stone and Ray article, he is quoted as saying “There is so much incrementalism now. Even back in the ’90s there were companies like Amazon (AMZN) that were willing to do big things. That has gone out of fashion now.” Thiel points to SpaceX and the electric car company Tesla Motors (TSLA), both run by Elon Musk, as the rare examples of recent attempts to leap forward boldly. Yet Musk often gets portrayed as a quixotic dreamer. “I think this reflects the insanity of our country, that anything non-incremental is seen as insane,” Thiel says.

 

.  .  .  .  .  .  .  .  .  .  .

 

This situation at Boeing in 2013 all seems far removed (both physically and philosophically) from the bases in the Mariana Islands in 1943 where my veteran colleague spent his later teen age years fixing what needed to be fixed in order that we could do what needed to be done.   It didn’t matter who was to blame, only what needed to be done to fix it.  Too bad we are forgetting where we came from.

 

Leading into the headwind

 

Standing up against the kind of public pressure faced by Boeing can be a challenge, but research is now revealing that innovative companies are typically led by innovative CEO’s (see the reference article by Hal Gregersen).  These are people who have the courage to ignore the noise and act in a hands-on way that demonstrates to their organization that bold ideas are indeed welcomed and anticipated.

 

Innovative CEO’s are innovation researchers. They read, go to TED conferences, visit supplier and competitor companies and venture out into the front lines where customers and employees live.  They ask provocative questions, and are always making surprising observations.  They network with other creative thinkers who think it is fun to speculate about the future.  They encourage idea generators inside their own businesses.  They encourage experimentation and are genuinely excited to learn the outcomes.

 

Maybe Elon Musk is a California nut-job dreamer.  But without people like him, would we ever take steps forward?

 

Do you want to be an innovator CEO?

 

First, stop talking—start doing. Pick a problem that matters to you. Start asking better questions about it. Make surprising observations, build on the ideas of others, build prototypes and see if you can make them work.  Get your hands dirty in invention.

 

You just might surprise yourself by how far your organization can go.

 

Other Resources:

 

Stanford Study Finds Going Public Hurts Innovation,by  Bernhard Warner on January 17, 2013, Businessweek.com

 

Closing the Great Innovation Gap, by Hal Gregersen on June 06, 2012, Businessweek.com

 

Boeing’s 787 Dreamliner and the Decline of Innovation, by Brad Stone and Susanna Ray on January 24, 2013, Businessweek.com

 

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Innovation Tip: Design Your Failure System


I’ve written before about the importance of failure in organizations.   Well, not that our goal is to fail, but that innovation (trying anything new) has risk.   And without the willingness to accept some risk (and the possibility of failing), it is hard to imagine how any innovation can be possible.

Most of us can speak from experience (because most of us have plenty) that making mistakes, almost always creates a learning opportunity.  Anyone with kids can attest that when they make their own mistakes and have to live with an undesired consequence, they learn far better than from any lecture or lesson you could deliver.

So today, I want to explore this topic of failing in a little more depth.

If failure leads to learning, this is a GOOD thing.  So maybe . . . making mistakes is something we should be more deliberate about.    Maybe these are things we should showcase, talk about, and relish for the new insights they help us to see.   This seems hard in some organizations I see, where people feel they must hide them from view –engaging in their own mini cover-ups.

Why do we think mistakes are so bad, and failure is not a good thing?

It has to do with how we typically think about it.   Dictionary.com describes a mistake as “an error in action, calculation, opinion, or judgment caused by poor reasoning, carelessness, insufficient knowledge, etc.”      With that definition, why would it be permissible for anyone to make one?  Couldn’t we have been LESS careless?   If we had insufficient knowledge, weren’t we responsible for getting educated?

So we feel that failure is shameful, something to be dreaded. Over time, our fear of failing makes us so risk averse, that we only pursue small incremental changes and improvements, rather than reach for game-changing ones.  How unfortunate.

Wouldn’t it be better if we thought about failure in a different way?  When I speak to my son who works in Silicon Valley, he tells me he has met a number of people who have worked for a failed start-up venture, or perhaps have led one unsuccessfully.  Yet out there, there is no negative stigma attached to people who were in a failed business.  In fact it is kind of the opposite. These people who have experienced failure are highly sought after for the depth of their experience.

We need to think about, and manage failing in a more strategic way.

We need to make “Smart Failure” something we appreciate.

In most companies we recognize and reward those who succeed . . . as we should.  But why nor recognize smart failures as well.

In one story I read in the Wall Street Journal, an ad company executive took a bold risk when making a presentation to a client who made kitty litter.   She took a box of the company’s product and loaded it with droppings from her cat and pushed the litter box under the conference table without telling anyone.  When she finally pointed out what she had done, some of the client executives seemed “shocked” by the act, and actually stood up and walked out of the meeting.   Her employer, the ad firm Grey New York, awarded her their first quarterly “Heroic Failure” award—for taking a big, edgy risk.  In their case it seemed appropriate.   This firm talked often about their goal to always make a memorable experience.  Well, the litter box did this regardless of the outcome.

We need to stop thinking about innovation as a discrete event.

Engineers seem to like the idea that there is one “best” answer to any problem.  Perhaps we train MBA students to think similarly.   I don’t know if you think that even people like Steve Jobs just sit down and have an epiphany that produces an iPod that is a vast market success in one try.    It doesn’t really work that way.

Scott Anthony in his book The Little Black Book of Innovation describes that most good ideas come out of a process of trial and error.    If you read The Double Helix (story of the discovery of the DNA molecule) ,or saw  the movie The Social Network (the story of the creation of web tools that ultimately became what we know today as Facebook) you can see that innovation is more often messy, random, lucky, and filled with missteps and even near-death experiences.

Facebook didn’t start as Facebook. It started in October 2003 as Facemash, a simple tool that Harvard sophomore Mark Zuckerberg created to allow people to rate the relative attractiveness of pairs of students.  Then Zuckerberg created (or borrowed from the Winklevoss twins) the idea of a social network for Harvard students.  It expanded to other Ivy League universities and then other universities before finally branching out to a mass-market platform.  If you thought that Mark Zuckerberg and three of his best friends sat down one week and created it in one intense blitz you couldn’t be more wrong.

Sometimes successes are born from failures.   Consider the example of Sildenafil.    This was the result of a massive R&D effort by the pharma giant Pfizer that was seeking to develop a medication that could alleviate chest pains.  During clinical trials, in 1994, Nicholas Terrett and colleague Peter Ellis discovered that in many people, the drug had a very embarrassing and unanticipated side effect.   They were failing. Rats.   Four years later, Pfizer introduced the pill as the erectile dysfunction drug, Viagra.

The message here is that the failure wasn’t the story.   The real story was about what they learned from the failure and how they adapted.

Design little failures.

We need to think less about trying to prevent failure, and more learning to manage risk.  If our idea has risk, challenge your team to think about how to minimize the impact of a possible failure.  Don’t roll it out nationally.  Try a small test market first.   Built a prototype and test it, before committing to a full commercial version.  Try the idea in one work cell, not the entire operation. Then see what you learn, and plan your next phase based on how you now assess the remaining risk.

This is sort of the idea behind rapid prototyping.  Build a simple model. Test it. Improve it. Test again.

Reward BEHAVIORS as well as performance.

I am not generally a big fan of the performance management systems I see.  Often we focus heavily on results (generally metric driven), and that’s what gets recognized and rewarded.   At some point, of course, we all need to achieve intended business results.  But along the way, when you see employees ACT in ways that you want them to (like the ad agency litter box person) then why shouldn’t this be recognized as well.   The rewards don’t always need to be monetary, but if you want a culture in innovation, you have to accept that this sometimes involves experimentation, and sometimes failures. You want to send a strong message that “smart mistakes” are valuable and make sure your organization highlights them (in a positive way) and learns from them.

Other Related Articles

How to Encourage Learning By Making Smart Mistakes

Innovating Ones Approach to Failure can Reap Large Successes

Why Failure Drives Innovation

Better Ideas Through Failure

Here’s Richard Branson on Learning From Failure:

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That IS Your Day Job!


I happen to be working with a wonderful group of executives from a company who are deeply interested in fostering innovation within their company. So we have been jointly exploring the topics of what innovation is, how it works, how to launch an innovation initiative, how organizational culture can accelerate (or retard) it and how to sustain it.

We used many of the techniques that I have written about recently—the Marshmallow Challenge, Kill the Company, Kill a Stupid Rule, and Future Visioning—to stimulate thinking and to let them experience the power that some of these methods really have.

When we do the “kill the stupid rule” and “kill the company” exercises, we invite the participants to rank all the ideas on a grid according to how impactful they are to the organization and how easy they would be to actually implement.

Generally, when people do this, they are surprised at how many ideas they come up with that fit into the “High Impact”/“Easy to Do” quadrant. So as you can imagine, this then generates great discussion about – “so what’s stopping us from doing them?”

Here’s where the discussion can turn a little animated  and people can become frustrated as  they start to make a list of all the impediments they perceive they need to overcome.

The list from this week’s group looked like this:

1) We are not permitted to fail. (People are typically punished who do fail, so folks quickly become reluctant to try.)

2) We have historical mistrust.  (There is a lot of history—stormy union-management relations, prior shuffling in the executive suite, lots of changes in direction, coupled with loads of chaos and uncertainty.)

3) We have fear. (There are recurring rounds of cost cutting, which has everyone feeling a little uneasy and insecure about their jobs.)

4) We are drowning from the “never ending faucet.” (This metaphor—which I love—refers to the constant flow of new work that comes into their departments and requires attention. It seems almost insurmountable in the face of diminished resources, and causes stress because they still have to get it all done with less, and they are being constantly assessed based on various metrics.)

5) There is too much emphasis on the metrics.  (There was a lot of emotion connected to this one. Everyone knows that metrics are necessary, because they define the agenda. But a focus on metrics increases the amount of pressure that is placed on individuals, which is absolutely driving behaviors. For example, if the pressure is too little, managers fear under performance, but if it is too much, it creates a short-term mentality that causes people to operate from a place of fear.)

6) We have a sense of hopelessness.  (They feel like they have been to “the movie” before and already “know” how it’s going to end. They have learned from experience that their management won’t stick with it, won’t listen to their ideas or provide them with the resources they need to implement change. So they conclude it is futile to try – and the effort it would take only takes time away from their daily work (see item 4 above) and digs them into a deeper hole).

From what I see, people in most organizations we see, may use different words, but the themes seem to be recurring.

The Dilemma

It seems quite a dilemma. Out of the list above, I see item 4 (the never-ending faucet) as the main issue. We are always being asked to do more with less. Stop whining about it though, because THAT IS HOW IT IS SUPPOSED TO BE! That’s the whole point behind why you need innovation and change . . . to continually find ways of improving how you work, what you deliver, and how you service customers . . .while adding more value, with less waste.

Whatever is coming out of the metaphorical faucet every day, driving innovation and change, killing stupid rules, making your employees work lives better and reacting to emerging external threats IS YOUR DAY JOB! Your failure to embrace this fundamental idea only risks more problems down the road, some of which can be severe . . . even fatal.

But how do you do it? There are only so many hours in a day.

From where I sit, this is not mainly a problem with your employees, but one of your leadership. Leading strategically means you have to set priorities and make deliberate choices about what’s most important now. There’s no getting around it. You need to operate more like a field hospital that gets good at triage, than a team that never learns what matters most. Here are some points to keep in mind:

Be willing to let some fires smolder. In my experience it is impossible to turn off the faucet. So the only way to attack systemic problems is to let the backlog pile up. You may even need to let some fires smolder unattended for a time. But so long as the smoke doesn’t reach the smoke alarm, let them burn for a while. Just make sure that what you work on instead matters and ultimately will make the situation better. You may feel you need to make massive process improvements first (consider Lean or Six Sigma initiatives) to free up enough time to be able to divert resources.

Find a better balance between short and long-term. Your employees mainly live in the short-term. They have to because that faucet is always pouring down on their heads. Developing creative solutions to problems to solutions requires the ability to stand back, to think, to test and to research. There are no shortcuts I can think of. The only way you will get your people to focus on root causes, rather than Band-Aid solutions is if you encourage – even demand it. This may mean you have to take some heat from above to allow your people the time to do the work well.

Stand up to your boss. You need to manage your boss. Often bosses are busy with many other issues. Consider it your responsibility to educate them, condition their expectations, and enlist their support. Invite your boss to some of your team meetings, or present a convincing argument. Be willing to push back if you are convinced that a problem needs attention and the future benefits outweigh the cost to implementation. When your people see you advocating on THEIR behalf, it will do wonders to their morale and trust. If you want them to trust you, you must be trustworthy. No one likes to work for a wimp.

Focus your efforts. I see many organizations organize task forces that meet once a week for forever in an attempt to address systemic problems. This never worked well for me. (If in doubt, the next time you start a home improvement project, try limiting your work to one hour increments with at least a day in between. See how inefficient that really is.) For me, what always worked best was to lock people in a room, and tell them we aren’t going to leave until we figure this out. Keep their head in the problem for a concentrated amount of time drive toward success. You’d be amazed what a team can do in even one or two full days, when properly focused.

One of the surest ways I know to fail is to try a do everything and please everyone, all the time. You can’t. When you don’t learn to make choices, your team becomes overwhelmed, demoralized and their productivity and quality will surely start to suffer . . . making things even worse. It is a vicious cycle you can’t allow you people to enter. So stand up, and have the courage to choose.

Other Related Articles

If Innovation Is Everyone’s Job, Why Not Be a Leader?

 

 

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Innovation Takes More than Great Leadership . . . Great INNOVATION Leadership


Innovation is made possible when the environment inside an organization is structured to encourage, reward, and promote it.  It, not surprisingly, is a question of Leadership.  Many people teach leadership competencies and to me, there is often a lot of similarity among them.

In my Dimensions of Personal Leadership class, we tend to speak a lot about what behaviors and values we most appreciate in the best leaders we have encountered.  From the dozens of groups who have gone through it, here is a list of leadership skills and values we think are most important:

XLC Leadership Skills

  • Heroic, Courageous
  • Humble, Serving
  • Transparent, Authentic
  • Decisive, Confident
  • Competent Learner and Problem Solver
  • Moral, Ethical
  • Consistent, Trustworthy
  • Ingenious, Visionary

This omits common managing skills (involving planning, directing and controlling) which are important, but we view them differently from pure leadership traits.    I don’t know if you like this list, but I can say it does seem to resonate with a wide array of thoughtful program participants we have seen.  For my money, this is a pretty daunting list when you consider what it takes to truly live up to each and every one of them.

So, are these managing skills enough for your organization?  Not if building a culture of innovation is of vital importance to you.  Hiring smart people with the skills to creatively solve problems is not sufficient either.  We also need to create an environment where we have the right bias between status quo and new program creation, between short and long-term, and prudent risk-taking.   A culture of innovation demands a set of leadership skills, values and behaviors as well.   And here is my list:

Innovation Leadership Skills

  • Curiosity, Questioning.   People need to see their leaders as being unsatisfied with the status quo, constantly thinking about and asking why?  Is that the best we can do? How do others do this?  What if we tried another way?    The more they see you are curious, and questioning of yourself and the organization, the more willing they will be.
  • Bias Toward Risk-Taking. Innovation is about taking risks.   None of us want to do stupid things, but trying anything that hasn’t been done before involves risk.   You need to be willing to accept a certain level of it to permit new ideas to flow, and to be tried.  Sometimes trial-and-error is a reasonable aspect of the creation process (provided we learn from our failures and adapt).   We must also carefully consider how we manage reasonable failures –rewarding that can say a lot to your team about the importance of trying new things.
  • Infectious Optimism, Positivity.  Innovation leaders believe in themselves, their teams, and their ability to accomplish almost anything we set our minds to. Some of us are idea killers (especially when we start bringing up all the ways something might go wrong).   Others among us are so imbued with confidence; it can rub off on others.   Letting others see that we have faith in them is crucial to our kids.  It is also crucial to us as adults.
  • Passionate about what you do, rather than keeping score. When I look at or read about Steve Jobs, I am struck by how insanely focused he was about delivering an awesome consumer experience.  He never stopped talking about how it could be made better.   While I’m sure at some point he needed to pay attention to financial results, but you get the sense these were important, but did not control his drive to achieve better product features and benefits.   Founder Leaders (like Bill Hewlett and Dave Packard, Sergey Brin, and Jobs), take their business personally, and it shows. 
  • Willingness to Sacrifice Core Business.  We are often fearful about introducing new products, services, or technologies when it is possible these might cannibalize sales of current products – hurting our short-term financial picture.   This strategy is often problematic.  Just look at Blockbuster (that failed to introduce mail or on-line delivery because they competed with their traditional brick-and-mortar system) or Eastman Kodak (that developed early digital photography technology, but kept it on the shelf so as not to harm its lucrative photo finishing service).  Innovation Leaders are always willing to bring our something they feel is new and better in they believe that gains there will outweigh any losses elsewhere.   (Apple is a great example as they regularly bring out new versions of phone and MP3 devices that render prior versions obsolete.)       
  • Insatiable appetite for the new and better.  Never being comfortable with the status quo, like you were on fire if things weren’t changing fast enough is another aspect.    This impatience could be maddening for people inside the organization at times, but sets a tone that we need to always be moving, looking out over the horizon, and paying attention to different things.
  • Sees change as EXCITING, not feared.  For some of us, change is a problem (or it causes problems) and is something to be feared.  Innovation leaders LOVE it and see the chaos as invigorating.  They are energized when things are moving, and they are actively excited to hear about it in others.

Other Related Sources

Steve Jobs, by Walter Isaacson, Simon & Schuster, 2011, ISBN 978-1-4516-4855-3.

Podcast on Innovation Leadership, by Phil McKinney

These Days It Takes Innovation Leadership Skills If You Want to Have a Successful Career, by Phil McKinney

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Mind the (Innovation) Gap: Making Sure You Don’t Fall Short


I had a conversation with a colleague (VP of Operations) from a successful global pharma company a few days ago about what keeps him awake at night.  I was expecting him to speak about government regulations, instability of his global supply chain, or run-away costs. But, his response took me aback.

“The growing innovation gap,” he said quickly.

This kind of surprised me, but upon further looking, I found one analysis reporting that “the number of new drugs approved per billion US dollars spent on R&D has halved roughly every 9 years since 1950, falling around 80-fold in inflation-adjusted terms.”    Yikes!  No wonder he was focused on this problem.

According to my colleague, he felt that it was a pervasive problem going far beyond the R&D labs.   “How are we going to get good at developing game-changing ideas when we spend most of our time fixing what’s already broken?” he said in frustration.   He is not alone.

Another person I met with (an internal innovation consultant in another large corporation) said to me, “The increasing pressure for achieving near-term financial metrics is making it harder for anyone in my company to look past this year.”   He went on to say that from his experience, “The innovation teams I see are almost always capable of dreaming big and bold ideas, but when they take them back to senior managers, the ideas too often get killed.”

Despite innovation lagging behind, it is nevertheless perceived as integral, if not, vital to business growth and health. A 2010 McKinsey CEO Survey (that I have written about previously) found that 84 percent of global executives said they believed innovation is extremely important to their growth strategies, and 94 percent said they were unsatisfied with their innovation performance.  Another research effort by The Brookings Institution concluded that “the pace of American innovation has slowed during the past four decades,” even taking into account the advent of the PC, the Internet, Web 2.0, mobile technology and social media.

I can’t help but feel that we do know a lot about innovation, and about how to generate creative ideas.  But driving these through to successful implementation is where many companies fall through the cracks.  The corporation and its bureaucracy seem to get in the way.

That is a conclusion also reached in a recent study conducted by Forbes Magazine (aided by IPSOS and ACCA) called Nurturing Europe’s Spirit Of Enterprise: How Entrepreneurial Executives Mobilize Organizations To InnovateIPSOS  sent out a survey to 1,245 business executives across Europe, and then analyzed the results.   Whether you look at Europe or North America, I suspect the challenges are similar.
The study suggests that leadership behaviors and resulting company cultures greatly impact the effectiveness of innovation.   Let’s look first at the leadership styles.

Based on the responses, they categorized the executives and senior managers in the survey according to these five basic personality styles.  They are summarized in the table below.  As you might expect, some of these styles help encourage successful innovation, while others are more likely to get in the way.   I highlighted in yellow the personality types most nurturing of innovation.

 

 

As you can see, more than 60% of the managers and execs in this study are problematic.

Here are some of the overall conclusions to which these researchers came.

• Ideas are easier than execution. Not everyone is good at generating ideas, but generally there are few internal roadblocks to creative idea generation.  Execution, however, is a different problem.  With regard to execution, two personality types (Controllers and Hangers-on—see table) are obstacles to successful implementation of innovations.  “Corporate Management” was the single most commonly cited reason why innovations are blocked.

• Diversity of skills helps. Personality traits that are valuable in the conception of ideas may be irrelevant, or even a hindrance, when it comes to implementation.  So we need to forge diverse partnerships within our organizations to get even our best ideas to the finish line.  Sometimes those who may be the least creative during idea generations can offer the most help during implementation.  Innovation and the enterprise therefore benefit strongly from a diverse set of workforce skills.

• Small may be better. When it comes to innovation, bigger is not better. Organizations with 100 to 249 employees were best at generating innovative ideas. Those with revenues between $5 million and $100 million were best at executing them. Turning an idea into a product or process requires a certain level of scale and internal resources. But at some point size begets bureaucracy, which can interfere with successful execution.

• Resources matter.  Innovation is not cheap, let alone free; and it is more often firms themselves, rather than external finance providers, that fail to allocate resources to it. If strategic plans do not allow for the resources to pursue serendipitous innovation, then they can stifle it altogether.

• Corporate management can be an innovation killer.  Senior managers’ failure to buy into innovations was cited by survey participants as the biggest reason that innovations fail.

• Eyes on the big picture, ear of the C-suite. The function most strongly connected with successful execution of innovation is the corporate strategy office.  In many organizations, the strategy office may be seen as having both industry understanding and the a sense of objectivity that gives them more internal credibility with the CEO.

• Fear of death is a powerful incentive. The industry most likely to witness successful execution in this study by far was media.   Researches hypothesize that more than most sectors, the media industry has undergone a near-death experience—an “innovate or die” situation—over the past 15 years.   So, they seem to “get it” more than many of their colleagues in other markets or industries.

• Ideas from those without influence can lead to creativity without results.  Arguably, the corporateR&D department is the unit most capable of generating new ideas.  But engineers and scientists may lack the abilities to persuade, communicate and politically manuever to see their ideas through to commercialization.  Building alliances between R&D and others seems important.   Finding effective influential sponsors early on can greatly increase chances of success.

Other resources:

The Five Personalities of Innovators: Which One Are You?

The 8 Essentials of Innovation

The One Innovation Personality You Must Have On Board

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The Twelfth Pillar: Innovation


Some of you may have noticed that the World Economic Forum has issued the latest version of their highly regarded  Global Competitiveness Report.

The report ranks competitiveness out of 142 countries surveyed – as shown in the chart on the left.

While many people have been reporting mainly on the shifts in rank between 2010 and 2011, I think the important story is very different.  (who went up or down – and who is to blame – isn’t what we need to think about).

First, let me explain a little about how global competitiveness is measured.  While assessing competitive capacity is complex, the WEF measured countries along 12 different dimensions assessing basic capacity, elements that enhance efficiency, and innovation.   Here are the dimensions they used:

 Basic Dimensions

  • Institutions
  • Infrastructure
  • Macroeconomic environment
  • Health and primary education

 Efficiency enhancers

  • Higher education and training
  • Goods market efficiency
  • Labor market efficiency
  • Financial market development
  • Technological readiness
  • Market Size

 Innovation and sophistication factors

  • Business sophistication
  • Innovation

As it turns out, nations – like companies and people – go through different life stages.  Developing nations (like Haiti, Bolivia Bangladesh, and Nicaragua) are seeking to develop fundamental infrastructures that provide for health of the population, deliver utilities, create a banking and transportation systems,  establish formal market places, and so forth.   Without these, economic growth is almost impossible.

As nations mature, the drivers of economic vitality shift to what WEF calls “efficiency enhancers”.  Emerging economies (like Argentina, China, Turkey, and the Russian Federation) must focus on developing more sophisticated parts of their infrastructure that enhance efficiency, like training and education, financial markets, technology (like the internet) etc.

For the most developed nations, like those at the top of the rankings, the game is very different.   These nations already have pretty sophisticated infrastructures in place. What becomes a more important differentiator has more to do with what you do with these infrastructures.  So for these nations, the most important driver of economic vitality is INNOVATION.  Let me explain why.

The evidence is that while investing (to build infrastructure, reduce macroeconomic instability, or improve human capital ) almost always brings about some improvements in economic output, all these factors eventually seem to run into diminishing returns.   When we reach a point when we all have access to the same technology, equipment, information, etc., these no longer are a source of competitive advantage.  We are just like everyone else.

The more we advanced we become, the more competition becomes about people including how to harness their creativity, unleash their personal energy, and stimulate their ability to create and innovate.  The WEF report concludes that “In the long run, standards of living can be enhanced only by technological innovation.  Innovation is particularly important for economies as they approach the frontiers of knowledge and [face new possibilities] of integrating and adapting emerging technologies.”

Of course, this creates classic tension between short and long-term objectives.   The WEF report goes on to admonish  leaders, saying that “in light of the recent sluggish recovery and rising fiscal pressures faced by advanced economies, it is important that public and private sectors resist pressures to cut back on the R&D spending that will be so critical for sustainable growth going into the future”.   It takes courage to stay the course in the face of growing economic pressures (which is part of the debate still taking place in Washington, and European capitals where their countries are facing slow economic and job growth.

What Got You Here, Won’t Get You There

These ideas, to me, seem as true for companies, as they are for nations.

In most organizations, I wonder if we spend enough time thinking about what it takes to really drive innovation.  We intuitively know it matters, but few companies I know of have a deliberate way of accomplishing it.  Some see it narrowly as about making investments in R&D.  (We all wish that it could be that simple).

As we discussed in more detail in our post on the 7 Laws of Innovation, it is far more involved than funding R&D.  It requires a certain kind of leadership that is eager for change and experimentation, and a culture where challenging the status-quo is not seen as political back-stabbing but a healthy and normal curiosity about how we could be better.  It also requires  a culture where failure is reasonably tolerated.   I think it also helps immeasurably to have a deliberate innovation strategy.

One of the more interesting examples of an organization with such a deliberate strategy is the Mayo Clinic.  Here is a linkto a Yale School of Management case about how this admired health care institution worked (over many years) to infuse what they call “design thinking” into the practice of health care.

(Make sure you watch the video clips embedded in the case).  It’ll take you an hour or so to get through it – but if you are serious about developing an innovation strategy for your organization, it is worth it.

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