Rethink What it Takes to Innovate

Innovation inside big businesses requires a culture in which people feel relaxed, fairly rewarded, and valued. The same applies to small businesses, right? Recently, Charles Day, the CEO of Lookinglass, wrote an article for Fastcocreate on this truism as it relates to creative talent. He observes that, “Many creative businesses limit their talent recruitment and retention strategies to money and flattery.”

Day recommends the following 8 means to attract and retain top creative talent. Consider how many of these practices may be good human resources concepts that would apply across the board!

upside down worker

1. BUILD AN EVANGELICAL BUSINESS

Creative people yearn to make one thing more than any other. A difference. They want to solve problems they believe are important. Ten years ago, Netflix and Blockbuster were in the same business. The difference lay in their respective visions of the future of movie rentals. Internet-supplied delivery at your convenience? Or rainy Thursday nights staring at an empty shelf in a store? Which set of problems would you rather solve? 

2. AVOID THE DEFLATIONARY VALUE OF MONEY

In Daniel Pink’s excellent book, Drive, he explains that many creative people are in fact demotivated by money. In some cases it makes them perform worse, because when a task becomes “work,” creative people tend to feel restricted. As a manager, focus whenever you can on highlighting the intrinsic value of solving a client’s problem. And when your company decides it must “do it for the money”–an economic reality in virtually every business–be mindful of the impact this has on your most creative people.

3. PAY FAIRLY

There is a time to spend money. Paying “below the market” shatters trust. Many companies ignore this truth, underpaying early on when the company can, then overpaying later in order to keep talent locked in place. This builds suspicion and destroys loyalty. Instead be relentlessly pro-active in maintaining market-parity compensation, with bonuses for extraordinary results.

4. MEASURE PROGRESS

At Rosetta, one of the industry’s fastest growing interactive agencies, the rigor of the employee review program stands in stark contrast to most creative businesses. Employees are measured on a set of four published benchmarks that encourage both personal initiative and collaboration. The system is transparent and consistent. At the end of the year, everyone is evaluated and rated against their own peer group at their own level. This ensures that every employee has a clear understanding of how much progress they have made. According to a recent Harvard Business Review study, nothing matters more to ambitious people.

5. ENGINEER ENGAGEMENT

Gallup Organization research has shown that most people become less engaged with an organization over time. Nothing dilutes loyalty more than a company’s willingness to support under-performers. Be relentless about improving or firing the weakest links and raising standards and expectations. It attracts and unlocks greatness. 

6. INVEST IN INDIVIDUALITY

Google famously attributes its growth to the investment it’s made in allowing 20 percent of engineers’ time to be used for anything they want, so long as it makes Google a better company. Creative companies that charge by the hour can’t match this level of investment. But when you decide to invest zero in the possibility that your talent can create value in unpredictable ways, it suggests you think they are not capable of doing so.

7. BE OPEN. BE HONEST

Transparency is essential to attracting and retaining great talent. We define transparency as this: telling what you can and explaining what you can’t. Sharing openly encourages your people to give you the benefit of the doubt. Critical to building loyalty.

8. SAY THANK YOU

The artist in all of us needs to be recognized. So does the human being. And yet most companies are slow to praise or even to thank. Which is strange since each of us makes a choice every day about where we work. It need not, after all, be here. Saying thank you at the end of every day has always seemed to me to be a small acknowledgement that you take neither their talent nor their choice for granted.

 

Build Human Capital With Interpersonal Savvy

Relationships in business are super important. When tasks and goals are pursued without regard to the interpersonal collateral, it is tragic. Leaders who see human capital as their greatest asset are revered by those who serve alongside them. Those who run roughshod over others are despised–though they may see results from a Machiavellian style in the short run, they never get the voluntary commitment of others and, therefore, cannot take an organization as far.

Three person relationshipJeff Haden recommends the following best (business) relationship practices in an Inc article today:

1. Take the hit.

A customer gets mad. A vendor complains about poor service. Sometimes, whatever the issue and regardless of who is actually at fault, some people step in and take the hit. They’re willing to accept the criticism or abuse because they know they can handle it–and they know that maybe, just maybe, the other person can’t.

2. Step in without being asked.

It’s easy to help when you’re asked. Very few people offer help before they have been asked, even though most of the time that is when a little help will make the greatest impact. People who build extraordinary relationships pay close attention so they can tell when others are struggling. . .they come up with specific ways they can help. 

3. Answer the question that is not asked.

Where relationships are concerned, face value is usually without value. Often people will ask a different question than the one they really want answered. Behind many simple questions is often a larger question that goes unasked. People who build great relationships think about what lies underneath so they can answer that question, too.

4. Know when to dial it back.

Outgoing and charismatic people are usually a lot of fun… until they aren’t. People who build great relationships know when to have fun and when to be serious, when to be over the top and when to be invisible, and when to take charge and when to follow.

5. Prove they think of others.

People who build great relationships don’t just think about other people. They act on those thoughts. One easy way is to give unexpected praise. Take a little time every day to do something nice for someone you know, not because you’re expected to but simply because you can. 

6. Realize when they have acted poorly.

Very few people apologize before they are asked to–or even before anyone notices they should. People who take the blame, who say they are sorry and explain why they are sorry, who don’t try to push any of the blame back on the other person–those are people everyone wants in their lives, because they instantly turn a mistake into a bump in the road rather than a permanent roadblock.

7. Give consistently, receive occasionally.

In business terms that means connecting with people who can be mentors, who can share information, who can help create other connections. . .(also) The person who builds great relationships doesn’t think about what she wants; she starts by thinking about what she can give. 

8. Value the message by always valuing the messenger.

When someone speaks from a position of position of power or authority or fame it’s tempting to place greater emphasis on their input, advice, and ideas. People who build great relationships never automatically discount the message simply because they discount the messenger. They know good advice is good advice, regardless of where it comes from.

In short, taking the time to make much of relationships should be a priority. Doing so builds credibility with others that is huge when it comes time to pursue goals together. 

 

Help! Innovators Needed

One of the challenges of intrapreneurship is identifying key innovators within an organization. Despite efforts to instill a culture that champions everyone as an innovative thinker, we often find in consulting that executives want someone to whom they can look for innovation pace setting. The question often becomes how to determine who has the strongest innovation DNA. When I was enrolled in an MBA program at Elon, my instructor invited us to take a Creax assessment to analyze out ability to be creative in problem solving and idea commercialization. Last week, I ran across a blog post from my friend Jeffrey Phillips that discussed this very issue and how his firm, Ovo Innovation, approaches the challenge.

creative wordleJeffrey points out that many good innovators aren’t “mainstream” corporate types.  In fact, he argues that “they may occupy positions that aren’t exciting, or may be people who are interested in change and uncertainty, while the rest of the organization is fixated on efficiency.  In other words, some of your best innovators may be shunted to secondary positions because their insights and feedback seem like complaining about the status quo.” He then makes a series of observations about common misconceptions:

Good innovators aren’t necessarily:

  • The “Experts” – too often organizations assign innovation activities to the people who know the issue or problem exceptionally well.  But these individuals often rule out ideas and narrow the scope too quickly based on past experience.  Thecurse of knowledgeblinds many experts to opportunities, or the fact that knowledge of the past or expertise today doesn’t guarantee success tomorrow.
  • Prominent leaders.  Many good leaders achieved their roles through excellent financial prowess and are good at asking tough questions about profitability and cost.  Frequently these individuals struggle in innovation activities because the ROI is so uncertain, and they reduce the scope and possibilities to conform to their own financial models or expectations.
  • “Idea People”.  In any organization there are people who have ideas or who are very creative, but they may not be your best innovators.  Like Michael Keaton’s character in Night Shift they may record ideas (“feed the tuna fish mayonnaise”) but those ideas may not be valuable or practical or solve customer needs.

These observations are significant, because they demonstrate that there are number of desirable competencies that innovators have in common:

  • Deeply curious about how and why things work and how they can be better
  • Experimentive, willing to try things, make small tests
  • Comfortable with risk and ambiguity
  • Eager for change
  • Very empathetic to customer needs and market conditions
  • Not locked into the “way we do things”
  • Can look at problems from a new perspective or a “naive” viewpoint

In order to identify those key innovators, he recommends some different assessments:

The first we use is The Innovator’s DNA, an excellent book that calls out five characteristics of successful innovation leaders:  associating, questioning, experimenting, observing and networking.  

Next we use assessments like Foursight, which suggests that individuals have specific skills that are applicable at different phases in an innovation activity, from clarifying to ideating to developing and implementing.  This helps place the right people in the right task at the right time.

Next we assess the individual and their tolerance for risk, change and ambiguity.  Good innovators are comfortable with extending scope, doing new things, cannibalizing existing products, entering new markets. They are comfortable with ambiguity – not everything has to be perfectly understood or “black and white”.  They are often entrepreneurial, interested in new products or opportunities as opposed to supporting and sustaining the existing processes or products.

Hopefully, you can use these tools to help identify innovation talent in your organization!

 

Demand Leadership Innovation Like a SEAL

My son is a senior in high school. He has his mind made up on entering the special forces. His top choice would be the Navy SEALs. Many, many, many of our conversations are about the SEALs these days. Recently, I came across the Navy SEAL Creed: “We demand discipline. We expect innovation. The lives of my teammates and the success of our mission depend on me. My training is never complete.”  

Anyone who knows much about the Navy SEAL job requirements would not be surprised that the training required to be selected is extremely rigorous. Physical and mental training beyond compare prepares one a recruit to join the ranks of the “elite.” However, as former Navy SEAL Brent Gleeson writes, “you realize you are just another new guy in an already well-established organization. And it only gets tougher from there. The training never ends, and every single mission is rehearsed.”

Seal subWell-run businesses are very similar. A few months ago, I had the opportunity to attend a presentation by Dan Cathy, the current president of Chick-fil-A. Cathy discussed  the extensive training they provide every new hire and how they try to help the employees to anticipate needs rather than simply wait for them to be expressed. 

Gleeson described key characteristics of leaders:

1.     Leaders define the mission. A clearly defined mission starts with the leadership, is ingrained in the team, and is constantly reviewed. Mission success relies more on training than it does on planning. Rarely is a plan executed exactly as it has been laid out, because external forces prevent this. Thus the leadership and team must be ready to adapt. Adaptation requires ability, and ability comes from training.

2.     Leaders set, and reset, the vision. It’s up to leadership to know when shifts in a company’s vision must happen. The organization’s ultimate direction may not change but how you get there most certainly will. That means having a keen understanding of industry trends, economic cycles, and competitive movement. Leaders must be constantly acquiring knowledge and looking to the future.

3.     Leaders build the team. As a company grows it will require different types of talent. If you find the right people and train them accordingly, they will stick around and the business will thrive. It takes good leadership to identify who to hire and the roles to put those people in. This too requires ongoing knowledge development.

4.     Leaders embrace the necessity of growth, both personal and professional. If the mind and body are not in a constant state of growth, eventually things stagnate and progress stalls. Instilling the importance of learning in the team is one thing, but leadership has to embrace this first. Great leaders are always seeking knowledge, developing their minds, and maintaining their bodies. Mental and physical wellness is essential for optimal leadership.

5.     Leaders execute. An organization’s strategic plan means nothing without exceptional execution. As a company grows, the methods of mission execution will change. So will the way in which products and services are provided. The leadership has to build this into the culture, provide the team the proper resources, and remove obstacles. Companies that fail do not fail because the plan wasn’t good enough. They fail because the leaders didn’t execute.

All of these are great guidelines for leaders. What I want to return to from the SEAL Creed is the expectation of innovation. This expectation is something I’d like to see more businesses embrace. The fact that they don’t creates a need for great leaders to champion culture changes. 

 

 

Does Your Company Have an Innovation Identity Crisis?

 

Intrapreneurship – some would argue it to be a subcomponent of innovation; others, an outgrowth of; still others, a precursor to. Regardless your perspective, the concept that some organizations lack the culture to innovate effectively begets the question of how to change said culture. Many wonder what makes the greatest difference in an organization’s ability to innovate. Matthew May is a blogger on innovation and consultant at EDIT Innovation. He wrote recently of the”things that prevent a company from cultivating a companywide culture of innovation:”Corporate culture

1. Innovation identity crisis. If you assume that the consultants at Booz & Co are correct, there are perhaps three distinct approaches to innovation: needs-based, market-driven, and tech-centered. The first is the “humanist” approach good designers take.  The second is the “capitalist” approach…the fast followers that optimize…like a Hyundai, or in many respects Toyota. They capitalize on Clayton Christensen’s “innovator’s dilemma,” quickly copying and even improving on game-changing innovations as they hit the market. The third is the “technologist” approach, like an Apple. Many big companies simply don’t know or can’t easily conceptualize which of these categories they fall into, or should fall into, given their bench strength. 

2. Unclear innovation strategy. Roger Martin, dean of the Rotman School and coauthor of Playing to Win, likes to ask “given your chosen approach, where will you play and how will you win?.” It’s a question of focus, which is something different (albeit a nuanced difference) than prioritization. It’s the ability to identify what you’re going to say NO to. Steve Jobs was great at this, and you’re now seeing the clear picture under his rule become blurry. 

3. Inaccessible definition of innovation. People hear innovation and think: gizmo. Or app. Or code. Or product. Or service. Or feature. JetBlue’s founder David Neeleman said,  “Innovation is figuring how to do something better than it’s ever been done before.” 

4. No common methodology. We’re not taught in school to innovate. We lose our natural born capacity to learn and create new knowledge. Unlearn the ways of business execution and (learn to) define a problem by observing or experiencing it, guessing how to solve it, creating a solution based on that guess, and quickly seeing if what you assumed might work actually does. 

5. Methodology doesn’t feature experimentation. The mindset has to be “I think this may work so let me try it out.” Scientists work on hypotheses, which is a fancy term for guesswork. If people aren’t getting their hands dirty out in the field with users and customers, testing early low-fidelity prototypes and adjusting a solution, they won’t be able to truly innovate. 

6. Mismatched talent-to-task fit. Innovation is about divergence, rapid prototyping, testing and failure. Big outfits might go to school on Lockheed’s Skunk Works. Kelly Johnson, Lockheed’s maverick Chief Engineer (broke) away from the main operation, (stole) away the hip thinkers many consider the lunatic fringe, and set up shop in secrecy to essentially get back to the garage, with the charge being to design a working prototype under a few intelligent constraints. 

May’s points are well-taken. Companies that haven’t worked through their internal language of innovation find it hard to have productive conversations about how to go about improving their ability to “do something better than it’s ever been done.” Being able to have clear definitions provides the basis for shared goals, methodology, and talent strategies.  The sharing of desired outcomes, coupled with high level commitment to venturing, is the starting point for cultural fitness.