Posted: February 15th, 2012 in Innovation Culture
by Tom Kuczmarski
AN INNOVATION MINDEST
For many years I have taught at the Kellogg School of Management that creating an innovation mindset is the number one most important thing that any CEO or COO can do to help foster innovation. It’s all about creating an environment where people are encouraged to take risks, think differently, come up with new solutions, and trust that their job is safe regardless if they experience a failure or not.
But how is an innovation mindset created? How can it be nurtured? For sure, it doesn’t happen overnight, but I have seen companies create one within just a few years. All it takes is commitment at the top. Do you want an innovation culture or not? That really is the first question that company leaders need to resolve. The worst situation is not agreeing on what innovation is -- never mind how it will be measured and rewarded.
RED FROG EVENTS
I was recently at one of this year’s Chicago Innovation Awards’ winners – Red Frog Events. It is an active entertainment company –in fact, they invented the category in 2007. They have grown from $50,000 in revenues that year to $13 million in 2010 and skyrocketed to $45 million in 2011. They are on a rapid growth trajectory to say the least.
Do they have a proprietary technology? Do they have a patented process? Have they invested a lot in R&D and are now reaping the benefits? No, they have created an innovation culture where they reinvented the average work place.
RIDING A ZIPLINE
As I rode a Zip line recently when I visited their offices, I also climbed up a tree house and sat in their “green” room –made with card-board tables and swings. But the real essence of their culture isn’t the way the office looks, it is they way they make employees feel. This work hard, play hard mentality is the foundation of RedFrog’s unconventional culture and has fostered an office that feels more like a family.
UNLIMITED VACATION DAYS
“We do whatever it takes to instill trust in our employees, says Greg Bostrom and Lauren Shield, the Regent of Ruckus and the Broadcaster of Buzz, respectively. Not your typical titles, I’d say. The company believes that no expense is too great if it is focused on cultivating the people that work for Red Frog. That includes, unlimited vacation days, 100% company-paid benefits, a four week sabbatical every five years, free food and drinks at the office, 100% 401K match up to 10% of one’s salary, and charitable giving matches, etc.
THE 10 BELIEFS
The 10 values or “Our Beliefs” as Red Frog calls them includes: “We’re team players to the core; we have contagious energy; and we give seriously good high-fives.” And, indeed they do!
For those of you that say this type of culture could never work in a billion dollar company, take a look at a relatively new company that has only been around for 13 years and you’ll see many of the same beliefs and similar aspects in their culture –Google.
Posted: January 11th, 2012 in Innovation Culture
By Amy Larson
A recent Fast Company article poses the question, “Do Innovation Consultants Kill Innovation?” And as an Innovation Consultant myself, I feel compelled to shout from the rooftops, “NO! Of course not!” But my cooler head has prevailed and I am forced to admit that this article makes some valid points about why companies, especially big ones, fail at innovation and what it takes to be a successful innovator, whether you hire a consultant or not.
Twenty years ago, the key to innovation was having a systematic process, so now we all have some version of a Stage-Gate system. Ten years ago we realized that process alone was not the answer; without strategic focus and goals, we would not get the results we wanted. Enter the Innovation Strategy. But something was still missing. As this article appropriately points out, successful innovators take risks. So an innovative company needs an Innovation Culture and Mindset that encourages and supports risk-taking.
And it’s true, big companies tend to develop systematic processes that help manage risk. And that’s for good reason; they have a lot at stake. But you can use a systematic process to develop the next Burnt Sienna crayon color, or you can use it to develop Crayola Color Wonder™ markers that don’t color on anything except the paper for which they’re intended. The difference is not in the process itself, but in the Innovation Strategy, Process, and Culture that collectively bring about innovation results.
So what do you do it you’re tasked with leading innovation, but you work in an inherently risk-averse environment? Fundamentally, you need to inject some risk-taking attitudes and behaviors; you need to address culture. And as the article suggests getting the right people and looking outside the company/industry can be great ways to do this … or, if all else fails, you could talk to someone with expertise in innovation culture and mindset … like a consultant.
Posted: May 29th, 2009 in Innovation, Innovation Culture
When it comes to the game of innovation, failure is not only an option, it’s an expectation. And I don’t just say that because I’m a Cub fan.
We all know that failure is part of baseball. The Cubs have only 16 post-season appearances in the last 106 years – that’s a pretty low success rate. And even the Yankees miss the post-season more often than not. But did you know that even the best, most innovative companies still fail 40% of the time?
These stats may sound discouraging, but there’s hope! There are practical, tangible things you can do to encourage risk-taking and an innovative mindset in your company whether you’re the CEO or an innovation team member.
Celebrate failure
Most companies do a great job of celebrating their successes. Credit is shared. Parties are thrown. Trinkets are handed out. Careers are accelerated. Failures are often the opposite. It’s hard to find the people who worked on a failed project and when you do, they will likely explain why the failure was someone else’s fault. These behaviors are stifling for an innovation culture because they encourage people to take small bets and achieve small wins instead of risking failure. And innovation growth goals won’t be met this way.
What if we celebrated our failures – just as we celebrate success? It may sound at best idealistic and at worst absurd. Have you even been to a failure party? Or even know someone who has? I do. In fact, I hosted one. It was a low key event compared to those high flying success parties. People were reluctant at first, but we did it anyway. As a group, we shared what we had learned about the consumer, the product, the manufacturing process, and the corporation. We recognized the effort that so many people had put into the project over the years and honored them for making the right, albeit difficult, decision to kill the project.
In the moment, I admit, I even questioned if it was the right thing to do. How could we celebrate the project that had failed on our watch? But afterwards, I knew for sure that it was the right thing because of the reactions of our team members. More people expressed their thanks and appreciation for our little failure party than ever had for a whiz-bang success party. It made them feel like the work they had done was valued and they didn’t have to hide or feel ashamed of having been part of it. This failure made us smarter for the next project. And maybe, just maybe it made people more comfortable taking a risk the next time around.
Give it some time
An innovation culture can not be grown overnight. You have to make some big trades – like clearly defining your innovation strategy, committing significant human and financial resources, and implementing a customer-driven process. And you have to play some small ball – consistently communicating management support, establishing rewards and recognition programs, creating incentives, and yes, even throwing some failure parties. And then you have to be patient. In April or May, you can’t yet tell how the season will turn out.
When it comes to innovation, the best advice just might be, wait until next year…
Posted: March 11th, 2009 in Senior Management Committment, Innovation Culture
Creating A Declaration of Innovation
Everyone has been focused on cutting costs and cutting jobs of late. The problem is that we have now cut the legs out from under many of our businesses. The economic situation will only turn around if we start putting people back to work and recreate jobs, then get businesses to invest again in future growth. One critical way to stimulate that growth is through innovation.
However, the innovation naysayers are widespread these days. “How can we possibly afford to invest in innovation?” “Our budgets have been slashed.” I understand. However, most companies haven’t fired their sales force, their marketing departments, or their accounting and finance people. Manufacturing plants are still operating and engineers are still working. The problem is that innovation hasn’t yet reached the priority level that it needs to be at in most companies.
Innovation is not a luxury expenditure that can be made in flush times. It must be viewed as a core business strategy that needs to be built into the budget in the same way as any other functional area – an on-going business discipline.
So what does it take to achieve this? First, get the CEO to move innovation towards the top of his/her to-do list. OK, but then what?
The next step is to create a simple but well thought-out statement on the strategic and financial roles that innovation should play for the company going forward. Often, I will refer to this as an Innovation Strategy or A Declaration of Innovation. This 1-2 page document needs to be signed by the top 7-8 executives similar to our forefathers signing the Declaration of Independence. One of the keys for innovation success is getting all senior managers on the same page in terms of how they define innovation, how they want to measure it, a common description of success, and an agreed-upon process. Making this dialogue happen is one of the most valuable things that a CEO can do to activate innovation – as opposed to just talk about it.
What goes into an Innovation Strategy (or Declaration of Innovation)? It should start with an Innovation Vision which defines the overall role and purpose of innovation within the company. Closely linked to this vision are Innovation Strategic Roles and the Financial Growth Gap. The roles should describe more specifically the balance of new products, new services, new business models, and new-to-the-world initiatives with closer- in more incremental innovations. The Financial Growth Gap should set up the financial gap that new innovations are expected to fulfill within the next 3-5 years.
In addition, screening criteria need to be developed along dimensions of customer or consumer need, market attractiveness, degree of competitive insulation, operational feasibility, and ultimately financial hurdles. However, it is important not to consider financials until concepts have been fully explored with consumers and/or customers.
By taking the time to get senior leaders to agree on these issues, most companies will have cleared one of the biggest hurdles to innovation – getting everyone at the top to agree to innovation objectives, goals, and the “rules” of the innovation game. While there is still more work ahead, creating an Innovation Strategy starts to shift the mindset and re-invigorates the culture to view innovation as an on-going business activity.