Professor Hayagreeva Rao Stanford Graduate School of Business Creating the Innovation Mindset: Knowledge Sharing in CUs
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Professor Hayagreeva Rao Stanford Graduate School of Business
Creating the Innovation Mindset: Knowledge Sharing in CUs
McKinsey (2007) study on innovation
What is the greatest predictor of innovation performance?
McKinsey Findings
Metrics & Measures Clear criteria
Success metrics
Go/no go decisions
Ability to discontinue
projects
Idea Generation
Multiple inputs
External sources
Deep consumer insights
Climate & People
Quick execution
Right people
Experimentation
Risk taking
Knowledge sharing
Leadership
Clear priorities
Active involvement
Communication
Protect innovation
Leadership and Innovation Focus
Channels
Superior ability to… • Generate
• Select
Valuable Innovations
Collaborators
Customers Competitors
TOOLS
Employees
IDEAS
WILL
• Implement
The Emotional Sources of Will Emotions Will
Safety
Confidence
Fun
Trust
To Ask Questions
To Share
To Take Risks
To Borrow & Learn
Drives Innovation
Will, Risk and Innovation: Rewarding Failure
In the early days of MTV, Steve Ross, used to fire people…
for not failing enough.
Prototype Early: Learn from Interactions
A High Trial Rate
At Algasco, the CEO gives out visiting cards to employees
when he visits them. One side of the card has the CEO’s name
and other details. The other side says “get out of jail” and
people can turn it in after they have tried something, and it
has not worked.
A High Trial Rate
Jeff Bezos of Amazon has a monthly reward
for employees who act without getting
permission first.
The Whirlpool Pipeline
Capital
Internal Venture Capital
Risk (ß)
Valuation
Idea is Feasible
Technology Works
A Customer Buys
Seed Funding
R&D Capital
Go-to-Market Capital
Expansion Capital
Source: Lou Mazzucchelli, Ridgewood Capital
P(success) = 30% Req’d IRR = 100%
P(success) = 40% Req’d IRR = 70%
P(success) = 50% Req’d IRR = 50%
P(success) = 80% Req’d IRR = 30%
Pass Through Bubble Assignments & Sabbaticals
Kokai (cross-functional teams) to watch task force
Center for Army Lessons Learned
Chief Learning Officer (CLO) to identify best practices. CLO as 911.
CLO to make hoarding and not giving credit into integrity violations
T-Shaped Managers (10-15% of time sharing with peers & cross-pollination of ideas into proposals)
Reliance Retail and video-based sharing every week
Project Eureka at Xerox and sharing of knowledge
Will, Borrowing & Innovation: Rewarding Borrowing
Innovation is an export-import business. So borrowing and knowledge sharing critical.
The Emotional Foundations of Ideas Emotions Ideas
Safety
Confidence
Fun
Trust
Generation
Combination
Selection
Execution
Drives Innovation
CEO and COO want to unleash collective genius. Don’t think of themselves as the smartest guys in the firm!
Stock Market for Collective Genius: Mutual Fun
Computer Visualization Company Based in Rhode Island
Bringing Will, Ideas, and Tools Together: Rite Solutions
Every employee given $10,000 of “opinion money” to buy savings bonds and stocks.
Originators of ideas encouraged to develop “expect-us”, and get “prophets” to get stock listed.
Others can buy stocks, offer suggestions, and volunteer time!
Mutual Fun
Stock Headlines
Personal Impression
Sum of Impressions
Employee Participation
Growth of Stocks
Rite-Solutions: Puzzle
Where to Start: “Bug Finding”
“The Curse Method” Where people are cursing, there is a need for something better.
“When I lie in bed, I try to think of things that suck.”
David Levy, Inventor
Closing Thoughts
Role of management is to create conditions for innovation – they have to put will, ideas and tools in place. Managers often overestimate the value of their involvement – it can cause distraction, and damage First do no harm is the first rule – get out of the way! Managers of the most innovative teams let others act without seeking their permission, and don’t’ enforce rules as consistently as others. “After you plant a seed, you don’t dig it up every week to see how it is doing”, William Coyne, 3M
Our agenda: How can we improve knowledge sharing in CU’s?
And providing a space for its evaluation: Fail earlier, learn faster.
Knowledge Sharing is activating the urge to help: Traditional approaches emphasize financial incentives, we want to prime their prosocial engagement.
While making it safe for unusual ideas to flourish: The importance of safety and innovation.
Our Knowledge Sharing Platform
Make sure management responds to the ideas: KS begins with voice; less useful if it isn’t heard.
Allow people to post anonymously: No user names aren’t present on the page.
Allow people to comment and evaluate ideas: Every idea can be commented on and prioritized.
Piloting the Platform with a Filene Affiliated CU
Key Lessons: 1. The importance of local networks and friendships.
CU Admins activated their internal networks
Piloting the Platform with a Filene Affiliated CU
Key Lessons: 1. The importance of local networks and friendships. 2. People have ideas.
Piloting the Platform with a Filene Affiliated CU
Key Lessons: 1. The importance of local networks and friendships. 2. People have ideas. 3. Management models the behavior.
Try it out yourselves!
https://filene.passagewaysonline.com
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