Innovation culture

Copyright © 2010 John Wiley & Sons, Inc. 15-1

Improve top line, bottom line or market share

Strengthen balance sheet

Strengthen brand/reputation

Increase workforce retention (incent stakeholders)

Enhance community engagement

Improve environmental performance

Attract investors/acquirers

"Discovery consists of seeing what everybody has seen and thinking what nobody

has thought.” — Albert von Szent-Gyorgy

Joseph Schumpter (1936)

Introduction of a new good, or a

new quality of good

Introduction of a new method of

production - need not include new

technologies)

The opening of a new market

The securing of a new source of

supply

The creation of a new organization

Innovator’s Alliance (2012)

Exploring and adopting new

methods of creating value

Generating new ideas

Conducting R&D to develop

new products

Continuous improvement in

all functional areas

Finding new ways to deliver

products and services

"Creativity is thinking up new things. Innovation is doing new things."

- Theodore Levitt

"It isn't the incompetent who destroy an organization. The

incompetent never get in a position to destroy it. It is those

who achieved something and want to rest upon their

achievements who are forever clogging things up.”

— F. M. Young

"The difficulty lies not so much in developing new ideas as

in escaping from old ones.” — John Maynard Keynes

Copyright © 2010 John Wiley & Sons, Inc. 15-4

"Innovation is fostered by information gathered from

new connections; from insights gained by journeys into

other disciplines or places; from active, collegial

networks and fluid, open boundaries. Innovation arises

from ongoing circles of exchange, where information is

not just accumulated or stored, but created. Knowledge

is generated anew from connections that weren't there

before.” — Margaret J. Wheatley

15-5

Rewards and Recognition:

• Performance metrics associated with collaboration

• Reward action, and risk taking

• Recognize sharing of idea / provide feedback on idea

• Showcase success stories of collaboration

Flexible Learning and Development Practices:

• Encourage learning from mistakes

• Allow unstructured time for self-study or learning

• Formal program for peer training

Supportive Organizational Practices:

• Encourage cross-functional teams

• Establish ground rules for collaboration

• Openness to input from external experts15-6

Lack of Reciprocity:

• Stealing other people’s ideas

• Focusing only on self needs and not helping others

Restrictive Organizational Practices:

• Hierarchical structure that restricts interactions I

• Lack of clarity between functions

• Lack of shared objectives

Financial and Legal Constraints:

• Lack of technologies to allow distance collaboration

• Fear of IP loss leads to excess legal hurdles

Judgment:

• When people judge ideas prematurely

• Judge people for posting questions

•

15-7

Changing the way people behave and make

decisions

Behaviors are influenced by the individual, team

and corporate culture

• What gets rewarded and what gets punished

• What gets noticed and what is ignored

• What requires permission, where forgiveness is asked

Challenge is changing the balance

• What will be the effect, and what are the unintended

side-effects

15-8

"The things we fear most in organizations - fluctuations, disturbances, imbalances,

are the primary sources of creativity." — Margaret J. Wheatley

“Leaders have a disproportionately large effect on the

cultures of organisations and systems. By their

behaviours, leaders create the conditions that either

hinder or aid innovation.”

- Maher, Plsek, Price, Mugglestone

“Senior leaders often have an

emotional investment in the status quo

without even realising it”

- Gary Hamel

1. There is a natural tendency for organizations to keep

doing what they’re doing and resist changes. In the

absence of a force, they will continue to do what

they’ve always done.

2. Larger organizations require more force to change

what they are doing than smaller organizations.

3. For every force there is a reaction force that is equal in

size, but opposite in direction. When someone exerts a

force on an organization, he or she gets pushed

back in the opposite direction equally hard.

10

ResourcesFinancial

Technology

People

External

Business Information

Quality Management

Project Management

Decision Support

Processes

Leadership

Incentives

Communications

Risk Tolerance

Culture

StrategyProduct Leadership

Customer Intimacy

Oper. Excellence

Disruptive Offerings

Product Leadership

Customer Intimacy

Operational Excellence

Disruptive Offerings

Financial

Technology

People

External partnerships

Business Information

Quality Management

Project Management

Decision Support

Business Information

Quality Management

Project Management

Decision Support

Leadership

Incentives

Communications

Risk Tolerance

We are going to focus on three aspects;

Experimentation, and lean decision-making

Trusting versus controlling

Ideation

“Do not be afraid of day-to-day failures — learn from

them. (As they say at Google, “don’t run from failure —

fail often, fail quickly, and learn). Cherish your history,

both the successes and mistakes. All of these behaviors

are the way to get better at programming. If you don’t

follow them, you’re cheating your own personal

development.”

- Ben Collins-Sussman (Subversion, code.google.com)

"The essential part of creativity is not being afraid to fail."

— Edwin H. Land

• Develop an innovative idea you would like to consider

• Create a hypothesis that is testable (i.e. there is demand for

a recycled version at a premium price)

• Determine the cheapest, fastest and simplest experiment

you could undertake to support (or disprove) hypothesis

• Complete the experiment and gather the results

• Interpret the results, see if your hypothesis was confirmed

and move to next steps

• Most organizations started based on trust

• Over time rules (controls) introduced to ensure conformity

minimize risk and the likelihood of errors

• These rules had unintended side effects; can be outdated

• Challenge is to remove controls without damage

• Looking at trust behaviors a useful framework

• Four dimensions types of trust behaviors

“Organizations, by their very nature are designed to promote order and

routine. They are inhospitable environments for innovation” Ted Levitt

Trusting:• Disclosing

• Reliance

• Receptiveness

Capability:• Competence

• Experience

• Judgment

Trustworthiness:• Consistency

• Benevolence

• Alignment

Communication:• Accuracy

• Explanation• Openness

Clear understanding of why innovation is important

Innovation strategy is clear and well communicated

Method/process for collecting and evaluating ideas

There is the requisite support for innovation

Leadership support

Alignment of incentives

Allocation of necessary resources

Open decision support system

Make and implement decisions in a timely manner

"A new idea is delicate. It can be killed by a sneer or a yawn; it can be

stabbed to death by a quip and worried to death by a frown on the right

man’s brow." — Charles Brower

1. Change starts at the top

2. Innovation need shared throughout organization

3. Innovation strategy and direction developed

4. Resources made available

5. Procedures changed

6. Improved management of innovation process

7. Incentives and recognition modified

8. Experimentation embraced

9. Communication increased (internal and

external)

10. Results (and benefits) quantified

Experimentation is critical decision-making tool

Success rewarded, failure is a learning

opportunity

New projects viewed as an innovation portfolio

Cross functional teams; weak ties innovation

become critical source of innovation

Active communication and engagement,

internally and externally

Identified challenges of changing the culture, especially

critical role of leadership.

Changing culture requires some changes in what you do

(both by example and through explanation).

We will make available tools to identify your “innovation

quotient” and trust behaviors

Working these with your team starts the journey, although

you may want external help

Hopefully, you can share some of the issues with other

Innovators Alliance chapter members

Thank you

25