The Innovation Imperative: Four Things to Foster Innovation in Organizations

This post is an adaptation of remarks given at the International Pet Food Forum at an event hosted by Diana Pet Food

The forces of change surround us and are unrelenting. Back in 1965, Moore predicted that computing power would exponentially increase. Almost 60 years later that still holds true. Fiber optics allow us to move data at amazing speeds and the cost of storage has plummeted from a cool $300K for 1 gig in 1980, to virtually free today. In addition to the accelerating power of the internet, we see an explosion in the speed of change. It may be driven by technology but it touches all that we do.

So we find ourselves in an environment in which disruption is the steady state. All you must do is flip through your smart phone to see the casualties. Go to a movie theater? No just stream it. Buy a video camera? No thanks – I have my phone. Buy a flashlight for an emergency? Nope, just have your phone handy. If you were a flashlight manufacturer not that long ago, would you have guessed that AT&T and Apple were going to be competitive threats?

This it is NOT business as usual.

Examples abound. We know that 88% of the companies on the Fortune 500 list in 1955 no longer exist today: Blockbuster, Kodak, Borders, Sears (Sear’s Tower – the original mail order biz), Blackberry and more. 50 years ago, if you made it onto the Fortune 500 list, you were likely to stay there for 75 years. Now the average duration is 15 years and declining. And the big players today – Google, Uber and Facebook are barely teenagers in a human lifespan, yet they dominate.

The differentiator – an imperative to INNOVATE.

A quick look at Fast Companies Most Innovative Companies of 201list tells the tale.  The most innovative companies are also disproportionately the most profitable, the fastest growing, and the most likely to bump out a longstanding company from the Fortune 500 list. Leading the pack: Apple, followed by Netflix, Square, Amazon, Patagonia, CVS and Spotify. Certainly an interesting mix – with one common denominator: innovation as a core competency.

Today the race is being won by those who can rethink the market, ride these forces of exponential change – and create something nimble, agile, and adaptable. And in today’s world – that equates to sustainability. Blockbuster went bust – but Netflix is killing it. Borders is boarded up- but Amazon, which started as a book seller, now allows anyone to set up a storefront and sell virtually anything. Amazon Web Services, which grew out of the company’s own e-commerce infrastructure needs, has become a $13 billion business.

In the Industrial Era, organizations of the late 1800’s  through the 20th century, bigger was better. Stability was key. Companies competed by sheer size – the goal was to crush their competition. Bureaucracy flourished. Org charts calcified the organization into neat little boxes and standardization, consistency and minimizing disruption were the primary focus.

And now, here we are. In an entirely new world. We are in an age where our industrial era organizations simply don’t work. Where we need new models, new skills and new ways of working. Where small and nimble is a competitive advantage. Where tried and true products are passé. Where speed matters. Where it’s imperative to innovate.

Now, innovation is a HUGE topic – and a deep one. So for this post I’d like to share with you four ways organizations are fostering innovation.

Top performing organizations in the 21st century:

  • Treat innovation as a business process
  • Foster the skill of creativity
  • Connect with their customers
  •  Collaborate

Each of these are big topics, so for the sake of brevity I’ll provide a brief description and some questions to consider for each.

Innovation as a Business Process.

There is a process to innovation, in spite of the belief by some that innovating is a “loosey goosey” thing somebody does in R&D. Just ask IDEO. Smart companies know the process and incorporate it into all the other processes we know so well: Finance, Accounting, HR, Sales…  Innovation is not isolated nor the sole function of the forgotten folks in R&D. It is embedded in the organization, provided resources and a path from innovation to production.

We can no longer afford to sort the world into the “business types” (think rational, linear, predictable) and the “creatives” (think intuitive, edgy, and free flowing). Innovative companies don’t exhort their employees to innovate; they have structures in place, resources identified, and processes to follow. Just as accounting, HR, engineering and operations are defined – so can innovation.

You might ask:

  • Where does innovation happen in your company (if at all)?
  • Are there dedicated resources for innovation?
  • Who is your company is charged to innovate?
  • What was the last innovation your company implemented?
  • What is in your innovation pipeline?

CREATIVITY AS A SKILL

It took me 5 long years to get my MBA at the Krannert School of Management. I spent 14 years in a Fortune 200 company. And at no time in no way did the notion of creating something important in business get much attention. It was not taught, even though it is a process that can be taught. It was not encouraged, measured, or rewarded.

I think that we’d all agree that the many business geniuses are terribly creative – from Henry Ford to Steve Jobs to Elon Musk to Jeff Bezos. Our problem is not embracing creativity at the top. The problem is that we’ve driven creativity out of the middle ranks by such a strong focus on left-brained business management. Management by the numbers and a sole focus on short-term financials. We’re out of balance. We need to find ways to balance the creative with the effective management – and do it quickly.

We need to think of creativity as a business skill needed throughout the organization. Skills that are used every day by everyone, not just at the top. Not just when we are in crisis. Not just the folks in the R&D department. We need to learn the process of creating and create organizational structures that foster creativity. Period.

You might ask:

  • Who is charged to be creative in your organization?
  • Are the skills of creativity seen as a core competency? Taught? Supported?
  • What happens when creative ideas emerge?
  • Are there process in place to:
    • Generate many ideas, rather than a few
    • Test those ideas in the market
    • Vet those ideas thoroughly
    • Move the best ideas into your day-to-day operations
  • Diversity fuels creativity. How are diverse people, ideas, cultures and perspectives encouraged?
  • Creativity requires space, time, and freedom to dream. Is your organization so focused on productivity that there is no time to create?

CONNECT

It seems that the more high tech we become, the more high touch we crave. One size does not fit all any longer. Consumers want personalized. They want to be understood. To be connected with on an emotional level.

In all areas of business today – connecting with those that we provide goods and services to is critical. The creativity needed in today’s business world is not random, not just “edgy” for the sake of “edginess” – but creative innovations that speak to a need. It is not creativity for the sake of creating alone – but creating based on connection with your current customers, your future customers, and perhaps customers you can’t even imagine right now.

Great questions to ask about your ability to connect include:

  • How often do you interact with the people that use your goods and services?
  • Is that time spent merely trying to sell them (or service) what you already have or is it talking and listening and observing what they need?
  • How much do you use human centered design in your organization?
  • To what extent do you focus on your WHY rather than your features and benefits?
  • People connect emotionally. To what extent do you communicate and connect emotionally as well as rationally?
  • How “whole brained” are you? Do you rely on sheer left-brain (logical/rational/linear) or also use right-brained thinking (intuitive/non-linear/emergent).

COLLABORATE

If you recall, I mentioned that competition was the order of the day in industrial era organizations. As I worked for 13 + years in a Fortune 200 company – collaboration was at best frowned upon, and most often discouraged. It was discouraged both inside and outside the organization for fear of giving up information or ideas, or perhaps enabling someone else to take advantage of us or do better than us. Go to a conference? No way – we have training inside! Invite other departments to help solve a problem? No way – it will signal that we don’t have all the answers. Collaborate with a sister division with a new customer? Unheard of – what if their numbers are better than ours.

Now in hindsight, it seems a bit ridiculous. But it was real. And it IS real. In so many of the organizations I work with, people are tightly bound into their functional “silos”. Unable to see across the company as a bigger picture. Each functional area only out for the benefit of their own. Truly the parts more important than the whole.

21st century organizations know that even if they could be self-sustaining, that doing so would take way too long and would take too many resources. They know that knowledge is growing so quickly that they can’t be an expert in it all – so they find ways to collaborate with the expertise they need.

Emerging Networks

Networks are emerging much like the way we organize ourselves – a bit messier, a lot less linear, and a whole lot more powerful. A great case study is Airbnb, who has taken collaboration to an entirely new level. Tech innovation and the power of networks has propelled Airbnb to surpass the valuation of Hilton and Hyatt COMBINED. That valuation in spite of the fact that Airbnb owns no property or real estate. Airbnb’s valuation is based on its ability to innovate, its network, and its ability to connect with people who either have space to rent or need to rent space.

Questions about Collaboration

Collaboration fuels new ideas and it requires diversity. Collaboration can share the costs and rewards of bringing new products and services to market, yet requires discarding our ego’s desire to know it all and control it all. Collaboration can provide us quick access to resources and as such, shortens the time to do something innovative. But it also requires us to leave behind some of our old thinking about competition, control and certainty.

Some questions to ponder about collaboration:

  • Are employees in your organization encouraged to interact and collaborate across functions?
  • To what extent are employees encouraged to get outside the walls of the business and forge relationships with those outside?
  • Are there strategic partners you collaborate with?
  • How much internal competition exists? Within departments? Across departments and functional units?
  • How is collaboration nurtured? Supported? Encouraged?

Responding to today’s environment requires us to think about business in a different light. Where innovation exists alongside optimization. Where business skills and thinking are a blend of left and right brained activity. Where we get comfortable with the joy of creating, the emotion of connecting, and the powerful output of networks and collaborations.

These forces of change are not abating any time soon, so we are faced with the imperative choice to innovate or to stagnate. To change or die.

I know what side I’m on!

Creative Organizations Do These 3 Things Well

Creativity does not just “happen” in innovative organizations. Creative organizations have a very different culture than their less creative peers. In these organizations, creative teams focus on different things than their non-creative counterparts. And on those teams, creative people cultivate and practice the skill of innovation and creativity.

Creative organizations are a culmination of the right actions at these three levels:

  1. A creativity nurturing culture
  2. Leaders who encourage creativity
  3. Individuals with the skill and the will to create.

In today’s post, I’m going to share some actions you can take at all three levels to encourage, support and reap the rewards of creativity in their organizations.

While I’ll paint with a broad brush, what I hope to leave you with is the notion that creative organizations are the result of the interplay of a supporting culture, focused leaders and individuals with the skills to create. Remove one of these elements and your chances of reaping the rewards of creativity are diminished.

Creative Cultures

  1. Experiment often

Betting the farm on one BIG innovation is a risky strategy. Having a number of ideas in cultivation and then carefully weeding them out has a higher chance of yielding something of import. These experiments start small with the goal of learning fast. Those with promise move to the next stage. Those that don’t are abandoned in methodical ways, without fanfare or angst. And more take their place.

For example: a national retailer in big malls requires each store to conduct an “experiment” each month by dedicating a certain amount of display space to new merchandise. Sales are tracked and customer reaction quantified. Promising new ideas are pursued; less promising experiments are abandoned.

By the time something is launched nationally, it is tested and proven. And every month, thousands of new experiments are happening – all in the course of day to day business.

  1. Buffer those experiments

By its nature, innovation has none of the conditions it needs to flourish in most production environments. The demands of the current customers will always divert focus on what future customers might want. So innovation savvy organizations often create a buffer between the “day to day operations” and the “build the future” operations (or experiments).

As described in The Innovator’s Dilemma by Clayton Christensen, organizations often create separate divisions or operating units to bring new products and services to market. Even without a separate area, cultures of innovation recognize that experimenting is NOT efficient, predictable or a failsafe endeavor. That knowledge enables them to create different conditions for experimentation.

  1. Reframe failure

For many in large organizations, a failure is seen as a lacking on the part of the individual. Not enough smarts, analysis, leadership, or execution ability. In innovative organizations, failure is seen as a necessary step in getting to something big and a grand opportunity to learn.

Rather than sweeping failures under the rug or continuing to prop up products or services that are not working merely to save face, cultures that nurture creativity extract the learning and move on. They know that the individual experiencing the failure is much better positioned to succeed the next time. That is why tech CEOs with a failure in their portfolio are hot commodities. Here is how reframing failure helped Spanx CEO Sara Blakely take two years of rejection into a billion dollar business.

  1. Obsolete products and services by design

It is easy, but dangerous, to fall asleep at the wheel – to focus on the here and now without regard to forces that can quickly disrupt your market and customer base. The reality of today’s marketplace is that disruptive forces can come quickly and stealthily and from totally unexpected places.

So the process of intentionally obsoleting your products forces a company to continually coming up with the next iteration. In 10 years, we’ve had multiple versions of the iPhone. Some are smaller leaps than others. Yet this strategy has enabled Apple to grow sales year after year while at the same time continuing to innovate.

  1. Separate creating from commercializing

Innovating products and services is a much different game than taking them to market. Once commercialized, an organization’s focus shifts to scaling, efficiency, increasing margins and sales. Innovators are in search of a market, a workable business model and a viable prototype. Once they have proven they have all three – innovative organizations move the production, marketing, and scaling to parts of the organization that do that best.

Leaders who Foster Creativity

  1. Tap ideas at all levels

These leaders know that new ideas require new thinking. And, that new thinking may come from a customer, a new employee, an intern, a peer, someone in a totally different department or division or an outsider. For it is these individuals that have fresh eyes and a different perspective.

These leaders encourage and embrace discourse across functions that welcomes input and feedback. They want to know what is happening in another area that might work here. They ask about what these new eyes see that we, with jaded eyes, are missing. They know how different vantage points can be an advantage to coming up with new and better processes, services and offerings. Importantly, they are not threatened if a great idea comes from a subordinate or someone outside their span of control. In fact, they are delighted!

  1. Be a bureaucracy barrier buster

Innovative ideas often are not the most welcome in the organization. In fact, many organizations have carefully crafted policies, procedures and protocols designed for the express purpose of protecting the organization from disruption and ensuring consistency.

Leaders must discern which of these internal defense mechanisms is a valid checkpoint and help the innovator comply. The more difficult work is to determine which of these practices is a barrier to be removed, which can be worked around and at times, which must be sidestepped. Leaders who foster innovation develop skills in navigating the internal politics and procedures, exhibit the courage to step outside the established norms and provide innovators “air cover” to focus on the their work.

  1. Open the organization to diverse perspectives

These leaders encourage their people to “get out of the building” and to experience things well beyond their company or their industry. They support people joining groups, going to conferences, being in the community in meaningful ways to interact with people outside their normal day to day.

A simple example: the head of a manufacturing plant in my community is an avid supporter of the leadership development program we facilitate that brings emerging leaders across the community for an eight month experience. He knows the value of establishing relationships across diverse organizations and the ideas that can get sparked from getting outside your day to day in meaningful venues.

These leaders also bring the outside in. They invite speakers from a variety of disciplines. They encourage reading and exploring in broad topics.

  1. Understand and adapt to the phases of a creative project

Innovation has stages and phases – and what it takes to lead during the ideation phase is different than what it takes to lead in the executing phase. I outlined these phases in this previous blog. Here is a simple list of where leaders focus in each stage:

For more ideas on how leaders can encourage innovation, you’ll want to read this Harvard Business Review article.

Creative Employees

  1. Cultivate curiosity and the ideation muscle

Innovation is a skill that can be improved with practice. Its origin is in curiosity but it materializes in ideas and new ways of approaching a situation, solving a problem or creating a product. Creative people exercise their mind just as athletes exercise their body. They keep lists of new ideas. They stretch themselves to list 100 new ways to do something. They connect divergent ideas to see what happens. They school themselves in the ways that foster creativity and develop a habit of creative thinking.

  1. Goof around.

At least that’s how it appears to those with a strict Puritan work ethic. They day dream. They play. They tinker. They wander. They think. All of which does not seem like “work” by the strictest definition. But it is indeed the work of a creative mind. For when the mind is relaxed and playful is exactly when inspiration strikes. Remember Newton sitting under the apple tree?

  1. Ask big questions

Innovative people are great at asking big questions. Provocative questions. What if questions. Questions open us to possibility. They cause us to reach deep for our thoughts and can reframe situations. So my question to you is this: What is the biggest idea you’ve had in the last two days?

  1. People watch

If you are wanting to create new products or services for people, you must know people. There is no better way to know them than to observe them. For what people say is different than what they do, so if you are creating a new way to help people exercise – keenly observe the people you are designing for. In their natural element. At the gym and on the couch. Begin to see what motivates them. How they go about it. What gets in their way.

This IBM article on design thinking describes it well. In their words: Observing is immersing yourself in the real world in order to know users, uncover needs, understand context and listen for feedback

  1. Persist

Innovation is just plain hard work (except perhaps for the goofing around part). Once that creative idea gets ahold of you and you feel the compulsion to move from idea to execution – you face a long and arduous journey.

There will be false starts. You’ll fail again and again. A few might love your idea but many more will not. This is truly the hero’s journey – for there will be much wandering in the wilderness. As much as we’d like to believe the fairy tale of instant success, the non-fiction version of innovation is messier, harder, longer, and more work than you ever imagined.

For more ideas on how to be more individually creative, you can read this article from the Huffington Post.


A reminder of the key point – creative and innovative organizations don’t “just happen”. They are a result of the interplay and conscious nurturing of culture, leadership and individual capability. When all three work in concert, innovation thrives.

Want to learn more about bringing leadership and creativity to you organization? Contact me at kris@evergreenleadership.com


 

The Creative Process in Organizations

The creative process is truly a process. Whether creating a symphony, a piece of art, a new product or service or an organizational initiative; both the artist, the entrepreneur and the corporate leader take the same steps. That path from idea to implementation is a long and arduous one. A journey worth taking, but one that is not for the faint of heart.

I’ve articulated six steps in the creative process – and this process is the same if you are creating art or creating a new business. In this post, I’ll state those steps followed by a simple explanation. A very simple explanation!

The goal today is to provide an overview of the process – in later posts we’ll do deeper dives. And where possible, I’ve added links to past blog posts that provides some insights that you’ll find helpful.

The steps are:

1. Ideation

In this initial step, you start with a notion that something needs to be created. It may be that you are dissatisfied with the current situation or that you have an idea that you think would work. This is an exploratory step, one in which the idea begins to take shape, where you ask many questions and explore many possibilities. The primary issue to resolve in this step is to be very clear about your “WHY” or what it is that motivates you to embark on the creative process rather than a problem solving process.

There are many ways to ideate, both as an individual and as a team. More on that in a later post!

From General to Specific

Next you will go from a general notion to a specific picture of what it is that you wish to create. I call this casting vision and doing this inside an organization is a bit trickier than casting vision for a solo effort. You must have enough specificity in the vision that you and those around you can imagine the outcome and the results. While you will not know exactly what the path is to creating the outcome, you have a sense of clarity about the outcome and the results you are wanted to bring into being.

A quick example: You know that customers are lukewarm about your service delivery. You’ve reached the limits of what can be done by merely reacting to problems faster and optimizing smaller parts of it. You KNOW it is time to create a new delivery process. At this point you have some ideas of how to do it, but none flushed out fully. However, what you do know is your WHY – all about customer satisfaction. And, you can envision in broad swaths what you want to create. Perhaps a process that cuts delivery time to 2 days rather than 2 weeks. One in which the customer knows the status of the order at all times and customers who call to congratulate rather than to complain about your process.

2. Exploration and Testing

Many of us suffer from the delusion that great things were done by people who got it right the first time. The creative process is iterative – one of taking a step, evaluating, learning, correcting course and taking another step. And then repeating this process over and over and over again. The mantra is progress, not perfection.

This is the step in which your creation begins to take shape. You explore. You see what others do. You create a long list of possibilities, pick a few and prototype them. Think of this stage as what Edison did to test thousands of filaments to find just the right one for the incandescent bulb.

This is the stage of rough ideas turned into small experiments. This is the stage of trying twenty things to get to one. This is the stage of twists and turns (or pivots), attempts and failures and rapid learning. It is the evolution of taking a possibility to a proposal.

It is also the stage at which many individuals fail to move forward. Whether due to over planning, fear, distractions or inertia, many people just cannot manage to turn their idea into reality. Moving into this step takes courage, discipline and persistence. Taking that first step, even though it may be uncertain or scary, can lead to the next step and then the next step and once again the next step.

Making It Tangible

To get tangible, let’s use our service delivery vision – to cut delivery time to two days with total transparency for the customer. You might first expand your thinking by looking at others industries or delivery models. What can you learn from FedEx? From Amazon? From the pizza delivery guy? From 3-D printing? From an emergency room?

Then you might white board three different new processes to try and do some experiments. Once you learn from those, you might enlist a few customers in a pilot program with the most promising options from those experiments.

And you will learn. You will adjust. You will abandon some ideas and embrace others. And you will repeat and repeat again – until you have something that works.

3. Executing

Armed with everything you’ve learned in your pilots, prototypes and experiments, you are now ready to launch. In organizations that might be a full blown implementation or it may be a series of smaller implementations, building over time. No matter what the implementation approach is, this is the step in the process where this idea that you have nurtured and worked on and obsessed over hits the market, the shop floor or the workforce.

This step requires a host of logistical and managerial skills. It also requires courage. For as all creatives know, this is the step where you are subject to rejection. The process that you so painstakingly labored over is met with resistance. Your brilliant new service is greeted with skepticism. That new product takes a long time to get uptake.

And so, using our example of streamlining a service delivery process, you must have the courage to launch the process, the tenacity to stay with it in spite of resistance and push back and wherewithal to continue to work through all the details of a complex implementation.

4. Refining

I can guarantee, that no matter how much thought and planning went into your new product, service or process – that there will be something that was missed. Something that is not working as planned. Some unintended upstream or downstream consequence.

The more complex your creation and the more complex the organization you create it, the more likely it will happen. Just accept the fact that you will need to refine for a period of time after launch.

Not only accept, but plan for it. Designate ways to gather feedback early and often in the beginning stages. Have resources available so that you can react to what needs changed.

What happens in this phase, if done well, is that resistance drops as people are heard. Your creation gets better and better. All your hard work has a much better chance of sustainability as it becomes a living part of the fabric of the day to day workings.

Not refining endangers the entire effort. Forcing utilization of a creation with flaws results in cynicism and even greater efforts to derail the effort. Far better to listen hard, adjust quickly and then listen some more.

And so in our service delivery example, before launch you might engage some stakeholders who are candid and influential with their peers to be on your SWOT team.  Enlist them to find problems and empower them to fix the problems they uncover. Several things will happen – you’ll both improve quickly and create powerful advocates for your creation.

5. Completion

At some point, you must declare “done”.  This prevents the tendency to be pulled into long series of continual tweaks that begin to add diminishing value. It allows you to focus on the next creative project.  This is an especially important stage for the types of creative project that leaders embark on, as they will require engaging your team in their realization. Declaring a thing “done” and celebrating the progress does many things: frees energy to focus on other important outcomes, creates a sense of pride and accomplishment and reenergizes your team for ever greater accomplishments.

Perhaps in our service delivery example, you pull together key leaders and those that worked with you to make it happen. You walk them through the experience of the old way and then do the same with new one. You share data about the differences in delivery time and the resulting customer feedback and share creation stories about the trials and tribulations you encounter along the way. And then, you leave everyone with clear evidence that this creative journey has been one well worth taking.

Leaders as Creators

In this series on creativity within organizations, I am reposting this blog post from 2015. In it, I describe the role of leaders as creators.

An artist looks at their work in a totally different frame of mind than a mechanic does. The artist sees infinite possibility. The mechanic sees a problem to be solved. The artist has a vision. The mechanic has a job. The artist works in iterations, continuing to add to the creation what is needed. The mechanic works by elimination, until the source of the dysfunction is found. The artist creates, the mechanic fixes.

As a leader, you are often in the “mechanic mode”. People bring to you problems to be solved, work to be done, decisions to be made, dilemmas to be fixed, and that is a valuable and ever-present part of the role you play.

leaders-creators

The Role of Creator

But how often do you play the role of creator? Of someone who can envision a better future and then find a way to make that vision a reality? How often do you paint a new canvas, rather than making do with the old one, no matter how tattered? How often do you imagine? Experiment? Push the boundaries? Ask what “could be” rather than dealing with “what is”?

The notion that leaders can be creators is a head scratcher for many. What indeed do leaders create?

At the North American Leadership Academy for the Society of International Business Fellows, I taught a session on creating as a leader. That group came up with this list of things that leaders create:

  • Vision
  • Structure
  • Values
  • Culture
  • Opportunities
  • Environment
  • Positive outcomes
  • Processes
  • Strategies
  • Objectives
  • Boundaries
  • Incentives
  • Standards
  • Teams
  • Networks
  • Products
  • Services
  • New Markets
  • Customer Experiences

If you recognize your power as a leader/creator, you approach your work differently. When you are in the “leader as creator” mode, you ask what you want to create. You shape, with intention and purpose, things like culture and values and team. You remain open to possibility and the power it brings. You take ownership and accountability for creating something of value – rather than playing victim to your circumstances.

Creating as a leader is infinitely more difficult than creating as a solitary artist, as there are people and processes and systems to navigate. But it is also infinitely more rewarding – as any leader who has created a compelling vision, a vibrant and healthy culture, or a strong set of core values knows.

If you are interested in learning how to create as a leader, you’ll want to read Chapters 4 to 7 in my book, The Leader’s Guide to Turbulent Times or book my workshop: A Seven Step Process for Organizational Creativity.

So I’m curious – what have you created as leader? What would you like to create?


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