Tag Archives: Organizational behavior

June 27, 2012 · 1:40 pm

Is Corporate DNA Toxic to Innovation?

True innovation is hard work and takes time.  It needs to be a part of a strategic plan, developed and launched in a deliberate manner.  There’s nothing new in that, and few would disagree.  But let’s look at some corporate reality.   There are two key factors that can essentially kill effective innovation; corporate culture and employee reality.

First let’s look at the corporate culture.  Private and publicly held companies are both under extreme pressure to deliver financial returns for the short run.  It’s hard to convince shareholders (or banks, or holding companies) to wait two years for something great to occur.  Expectations are set on a quarterly basis.  With such intense pressure to deliver in the short term, it’s much easier pursue incremental change than to embark on a longer term innovation strategy.  Companies will begin innovation efforts with the big picture in mind, but often succumb to the pressure and pursue only those ideas that can be knocked out quickly.

From an individual employee standpoint, the pressure is very similar.  Who in corporate America expects to be in their current job two years from now?  Even if an individual doesn’t change jobs, the reality is the organization will most likely change around them shifting all priorities and efforts accordingly.  What motivates a person to embark on an effort that lasts a long time?  The person that delivers a project seems to get the credit, not the one that does the hard work on the front end.  Over the course of a typical, strategic innovation project it’s not uncommon to see multiple people at the helm, each adding their own opinion and wanting to put their mark on the effort in case it happens to be successful.

It’s not lack of interest, its lack of vision beyond the immediate future.  Companies spend considerable time and effort creating one, three and five year plans.  But the initiatives that get pursued are those that can be delivered quickly to show an immediate impact on the bottom line.  Can anything be done to shift this mindset?  Or are we doomed to a culture of incrementalism?

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May 23, 2012 · 2:39 pm

Resourcing for Innovation

I have a good friend (Eduardo) from Brazil that shares my love of innovation.  We were talking the other day about our collective experiences with different companies.  One common theme that we both came across was the high level of disappointment many firms have in regards to their innovation output.  These companies express a need for innovation, and have multiple projects running at any given time, but looking back it never seems that their target revenues were achieved.  It doesn’t take an organizational design specialist to understand their key issue.  Anyone looking objectively at the organization can spot the problem.

Thanks to Eduardo for illustrating this point so beautifully in the following cartoon!

 

 

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Does this look familiar?  How are you really allocating your resources?  Are your “innovation people” protected from day to day firefighting?  Do you have a group is charged with seeing beyond the financial returns of the given quarter?  Innovation never just happens, and it is not painless.  It seems that most companies get what they organize for.

 

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April 17, 2012 · 12:29 pm

Innovation – a Gardening Analogy

In the last couple of years I have taken up vegetable gardening as a hobby.  I’ve now progressed to the point that I start my own seeds in the house, and raise them until I can transplant them in the garden once the risk of frost has passed.  Over the weekend as I was tending to these young tender plants, the realization of how this illustrates the fuzzy front end of innovation came to me.

Innovation requires high potential ideas (the seeds) and an organization that can nurture and support them as they develop (the soil).  Obviously, both are required; seeds in a packet are just untapped potential, the greatest soil without seeds is just inviting weeds.  While I could elaborate on this point further, let’s assume both of these items are in place and you have ideas that have sprouted.  What are the risks you face now?

In gardening, there are three key risks that young plants must be protected from: Weather, Weeds and Pests.  I think this analogy supports each of these same risks.  Think of it as the following…

Weather – It’s not the day to day sun and/or rain that you worry about, it’s the sudden changes that cause problems.  Unexpected frost, flooding, strong winds are all examples in nature of conditions that can wipe out young plants.  In the corporate world its also the unexpected that causes significant risk.  Sudden changes in priorities, funding, staffing will wipe out high potential ideas as quickly as a frost will kill a plant.  It is critical to protect your ideas from such conditions, where possible by isolating them from the unexpected situation.

Weeds – Any gardener knows that weeds left unchecked will take over a garden and rob the desirable plants of the nutrients that are required for them to grow.  Likewise, in a corporate setting weeds are the distractions that arise from the culture and slowly choke out a powerful idea by diverting the necessary resources to other areas.  This doesn’t happen overnight, but rather gradually over time.  A wise gardener will remove the weeds as they surface rather than letting them form a stronghold.  A wise innovation manager will do the same thing.

Pests – These come in many forms, but always come from outside the garden.  Their goal is to consume the plant for their own purposes, then leave when it is no longer of interest.  In the corporate world, these could be people that are outside the project team, that want to put their “stamp” on an idea so they can selfishly take credit later.  They are far less concerned about the health of the idea than being able to point to something they added.  This could be an individual or an entire department.  In either case, it is critical to be on the lookout for Pests, and repel them as efficiently as possible.

There are numerous additional analogies I could draw from this, from keeping the soil in prime condition, to harvesting at the right time.  But for now, I’ll leave it as it is.  In the meantime, my tomato plants have taken on a whole new meaning!

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March 22, 2012 · 9:48 am

Can you be a stand-alone innovator?

When we think of innovation, it typically brings a given personality to our minds.  Steve Jobs, as an example was an iconic innovator that brought many great products to life.  But a recent study by Forbes, show in fact that there are five different personality types required for successful innovation.  Their examples lead me to think of the work I used to do in forming high-performance work teams.  It is crucial to have diverse personalities involved to ensure that all perspectives are covered and the goals are met.  With innovation, there’s no difference.  For every dreamer, you need a realist.  For every big-picture visionary, you need a number-cruncher.  No one personality working in isolation, can bring successful innovation to the market.  I encourage you to read their article on this study “The Five Personalities of Innovators: Which One are You?”.   Is your organization well staffed to cover each of these areas?  If not, is this something you need to adjust in order to improve your percentage of successful launches?  I think this is well worth considering.

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March 7, 2012 · 4:46 pm

Peyton Manning – Innovation Litmus Test?

I live near Indianapolis, and all the news today is about the release of Peyton Manning from the Colts.  Twitter and Facebook posts are filled with opinions and consolations.  Most people saw this coming, but to look at the social media pages, you’d think this was a shock to everyone.

In glancing through the posts, I’ve noticed something unexpected, yet very interesting.  People seem to be falling into one of two distinct camps on this topic.  There are those that think Colt’s owner Jim Irsay is an idiot, and those that think that letting Peyton go (while saddening) was inevitable.  As I started to look at who was writing what (and knowing the backstory of many of those people) I started to see a correlation between their own lives and what they were writing.

One of the most notable “Irsay is an idiot” contributors was until recently one of the largest home builders in the city.  His comment was “Why would you ever let a proven winner go…?”.  Interestingly enough, this man’s company has gone into bankruptcy in the last year and is no longer around.  He himself had a “proven winner” in the form of a business model in this city… until the recession hit.  Even in the midst of the recession, he was passionately pursuing the largest development of his career.  Unfortunately, the world changed around him (in this case the economy).  What had always worked so well for him in the past was unable to sustain him in the present.  The sad result is that a good man and a good company went under.  Many of the other posters would fall into a similar (though less extreme) scenario.  ”You don’t let go of a winning approach”.  ”You don’t fix what’s not broken”.  You see it in their posts and you see it in their lives.

The other camp also fondly remembered and honored the past.  But they recognize that the situation has changed and it is time to move forward.  The Colts are not the Super Bowl team of a few years ago, they are admittedly in a rebuilding scenario.  Therefore, it doesn’t make sense to spend all of the team’s salary cap on bringing back a single player that will be rendered ineffective because of the lack of talent surrounding him.  Some of the people in this camp have proven to be highly resilient – even successful in spite of life’s circumstances.

In my mind, this is a perfect analogy that reflects many of the companies in our country today.  Highly innovative companies are continually rei

nventing themselves and pursuing their goals in bold new ways.  Ultra-conservative companies continue to hold onto tradition, and attempt to cost-reduce their way to success.  This worked in the 1990′s.  But it doesn’t work in 2012.  Yes we should honor the past.  We should take time to celebrate those that helped us in our past successes.  But we cannot afford to stay there as the world changes around us.  Innovation is the key to survival.  That’s true for the Colts, and that’s true for our businesses.

 

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November 8, 2011 · 1:30 pm

Innovation Fallacies

It’s commonly believed that the most innovative companies are those that have the best original ideas.  I don’t believe that.  If there was some way to formally test this, I would.  I imagine it would look something like this.  Choose ten well-established companies and give each of them an idea that would change their industry.  Put no strings on this idea, no obligations no risk of lawsuit (okay we’re suspending believability at this point, but stay with me).  Literally give each of them the holy grail of new ideas.  What do you think would happen?

My guess is this:

  • Four of the companies would table the idea, labeling it as a long-term objective that they could pursue once their near term (hopelessly incremental) ideas have been implemented.  The idea would never surface again
  • Three of the companies would indefinitely bat the idea around because they can’t decide which department should champion the idea
  • Two would reject the idea outright because they would not have the current distribution network to get the product to market
  • The final company would pursue the idea, but abandon it once they hit the first internal obstacle during the development process
Hmmm, have I really become so jaded as to think that no company can bring an innovative new company to market?  No.  But I do believe that less than 10% of corporations would really give the idea it’s due.   It’s not the competition that’s making life tough, it’s the inability to move forward in a bold way, even when a game-changing opportunity presents itself.  Take a close, honest look at your organization.  Could you bring this idea to market?  What barriers exist that would cause you to overlook the opportunity?  Who is the idea killer on your staff?
Before you begin your next innovation project, I’d suggest asking yourself these questions and addressing them in a proactive manner.  It will increase the return on your innovation investment exponentially!

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September 28, 2011 · 11:22 am

A toast to innovative rebels

We held our first Indiana Innovation Awards ceremony the other night, where we recognized ten different winners from around the state.  The diversity of the winners was impressive.  We recognized big companies such as Whirlpool Corporation and Delta Faucet, family companies like Jackson Systems,  start up companies like Courseload and My Farms and even an Indianapolis based non-profit; People for Urban Progress.   These organizations all serve different customers across diverse markets.  Their budgets and organizations vary dramatically.  Yet each winning team seemed to have one key element in common.  They’re all rebels.

If you stop and think about it, it makes perfect sense.  A person that is wired to be content with the status quo will probably never be an innovator.  It takes a person willing to swim upstream, to take some political risks, to venture into unexplored territory.  As each team’s story was unveiled it became clear that they were led by rebels.  Many of the teams told us that their project was nearly killed at some point, due to management pressure, lack of funding, or seemingly unsurpassable roadblocks.  Yet their perseverance saw them through to eventual success.

Isn’t it odd that in our culture we try to “correct” this trait out of people?  Starting in elementary school the child that views life differently is “encouraged” to conform.  I will never forget my early days of my corporate career.  I hired in out of college ready to set the world on fire.  For the first six months, I was basically told to sit down and shut up and learn to do my job the way my predecessor (and his before him) had always done it.  One of my earliest reviews actually stated that I did not work well with others and that I struggled to comply with established company procedures.  In my conversations with others, it seems this is not an unusual orientation to a new organization.  Sometimes I’m amazed that enough people stick it out to provide us with any innovation at all.

So with this blog, I give a virtual toast.  ”Here’s to the oddballs, the mis-fits, and the rebels that can’t be satisfied with the way things are.  May you always see life as an opportunity and your job responsibility as that of a change-agent.  It is people like you that make this country great and that ultimately drive our economy.  Cheers!”

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September 12, 2011 · 11:27 am

Size doesn’t always matter

The winners have been announced for the upcoming Indiana Innovation Awards.   In preparation for the upcoming ceremony on Sept. 26, we have been traveling to the offices of the winning companies to capture video that will be shown during the evening.  The winners range from non-profits to huge corporations to pure start up enterprises.  One fact fascinates me on this.  Regardless of the size of the company, the winning innovation came out of a small group of people that had a dedicated project leader.  Delta Faucet won with their highly successful touch faucet and Whirlpool Corporation won with a highly innovative new Side by Side Refrigerator.  Both of these mega-companies have literally hundreds of employees at their disposal.   However, when we went to do the interviews, it was a handful of people that came forward to be interviewed.  While the approval process and downstream portion of the projects involved a multitude of support functions, the core of each product came from a small entrepreneurial team.  In this regard, the culture and style of these groups was amazingly like their counterparts in the smaller companies (that may only have 4-5 employees).  Both companies alluded to the fact that for portions of their projects they needed to “fly under the radar” to keep the project moving smoothly and efficiently.  In some instances they had to “re-interpret” corporate policies and processes to be effective.  Bottom line, it took an individual willing to take some risks and stick their neck out for something they believe in.  They spoke of being innovative in spite of the large company wrapped around them.

The small firms we talked with spoke of “doing what it took” to be successful.  Be it all night white board sessions, or beer and pizza infused brainstorming efforts, they came up with ideas that were worthy of winning as well.  They spoke longingly of big companies and the resources available to them.  ”If only we had…” was not an uncommon mantra.  In reality, it was once again a leader with a vision that led to their success.

Just an amusing observation.  The big guys carve out groups to act like start ups.  The start ups, long to be big guys.  It seems to me that aptitude, determination and leadership were far more important to successful innovation than the size of the organization from which it came.

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August 31, 2011 · 10:53 am

Work is a game of strategy

I had an odd thought in the shower this morning…  I like playing board games.  I’m not obsessed with them, but I still find them an appealing diversion from time to time.  It hit me that being successful in the workplace is very similar to winning in a strategy board game.

Any given day is like a turn in the game.  You have a fixed number of hours to invest, and you must choose wisely how you do so.  I can envision a series of gauges, that measure where I stand at any given point.  These gauges could represent items like “Manage current business”, “Invest in Future Business”, “Network with Others”, “Increase Knowledge”, “Focus on Employee Morale” etc.  Each gauge could have a bright red line that indicates a dangerously low level, meaning that if your score in that area drops below a certain number, there will be dire consequences.  On any given day, it’s impossible to invest an ample amount of time in each category, but over the course of multiple days (turns), it is critical that no area be ignored.

Like any good game, life throws unexpected twists at us.  “Your project manager has appendicitis and will be out of the office for two weeks”, or “Your newest client just had their budget slashed, and is forced to cancel their current contract with you”.  The impact these events have on you are directly affected by your scores e.g. “Because your networking score is high, the cancelled contract has minimal effect on your long term cash flow”, or “Your Future Business Investment score is too low, the cancelled contract will force you to lay off two employees”.  Ignore other areas of your life, and you’ll also suffer consequences.  “Due to your excessive number of hours spent at the office, your wife has expressed high frustration with your marriage.  Take an unplanned four-day weekend to patch things up.”  Inevitably, there will be those that play this game as if everyone is an opponent, and there will be those that take a team-based approach.  Going it alone?  That’s a high-risk/high rewards path.  You might win, but watch your back.  Playing as a team?  Your progress might be a bit slower, but your odds of making it to the end are much greater.

We play this game every day.  How many of us are watching  to ensure we have some semblance of balance?  How often do we strive to win in one area only to find that we’ve sacrificed in others?  I think I’m going to build some gauges and put on my wall.

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January 11, 2011 · 9:48 am

Why Innovation Won’t Work in Your Company – Part 2, Positioning

Who’s in charge of innovation at your company?  The odds are, a group of people that fight it every step of the way.  Think about it…  Top executives at any company are charged with creating the Vision and direction for the organization.  They essentially blaze the trail for the organization to follow in the coming months and years.  But realistically, that trait cannot cascade down through the whole organization or nothing would ever be implemented.  Therefore, organizations have management tiers that are charged with execution of the plan.  These people are expected to be much more tactical in nature.  For the most part, that’s a good system.  Create the Vision at the top, and staff the organization to implement it.

But where does Innovation fall?  Most CEO’s will state that they want their company to be innovative.  That makes sense from a strategic and directional standpoint, but how does middle management implement said innovation?   While innovation may start as a strategy, it ultimately has to come to life in the form of new product or service ideas.  Those specific ideas may be the result of an innovation project.  And clearly once the word project is thrown about, it clearly resides in the realm of middle management, not executive management.  That’s where things fall apart.

Tactical project leaders have been trained to minimize risk.  People in these positions have been rewarded and promoted for “keeping their heads down” and delivering what’s been asked of them on a consistent basis – a model of self-preservation.  An innovation project could have incredibly high-potential ideas come out of it, but what happens next?  The odds are the concepts getting the most attention at this level will not be those that have the highest potential impact on the company but rather the simplest to implement and carry with them the lowest chance of failure.  Realistically, what tangible incentive does a manager have to pursue an idea that could transform the company?  They’d clearly be putting themselves (and their team) at considerable risk.  There’s probably no stated reward for success, but they certainly remember the last guy that screwed up a project – who by the way is no longer there…

Because of the project nature of this process, CEOs typically think this beneath them; a level of detail that they need not be involved with.  As a result, they  never see some of the top (potential) ideas that are generated.  Safe ideas are pursued with minimal impact on the market.  Executives get discouraged with the process.  Other strategies take the place of innovation.  Is it any wonder that there’s so much talk about innovation, and so few truly innovative products delivered?

 

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