Why innovation deep pockets can lead to dry wells

CEO’s recently placed R&D Department  #8 on the list of “sources of great ideas” for their company. 

What is #1?

It should be no surprise that it’s your customers, followed closely by your employees. (By the way, this is the reason that the IBM and Booz Allen Hamilton Innovation studies show that the top R&D  expenditures aren’t producing more ROI.)

The secret to unleashing it?  You have to listen to a different beat, with a different set of ears and eyes, for a point of view that is completely outside your own.

In our zeal for ‘BIG’ and ‘GLOBAL’, many corporate communities have lost sight of the golden rule of providing value:  Do unto others as if they were human.  Entire consulting practices are sprouting up selling solutions to “diversity” – a nice way of saying “the bigger the sandbox, the harder it is to play nice together.” 

Seems we have to be trained to remember what it is that we really care about ... and perhaps are overly caught up in a game where one measure of success eclipses all others.

In that great chase, great ideas are lost every day. 

But on the bright side, you have a whole bunch of those great ideas waiting to happen if you know how to REALLY listen.

For five tips for building a culture of innovation, go to click here.

Everyday Innovation

In everyday innovation, everyone plays.  Nobody is on the sidelines. 

The daily onslaught of Google-news in my inbox suggests that CEO’s, CIO’s and other VIP’s in the corporate world are onto the  secret:  Making innovation an everyday occurrence instead of an R&D responsibility is critical to long-term survival.

The shift toward this mindset is big:  Business hasn’t  supported creativity the past few decades, unless their survival depends on the latest-greatest brand of soap, salsa, cell phone or boom-box.

But you can’t Six Sigma your way to everyday innovation.

Creating a culture of innovation doesn’t have to be painful.  Balance between efficiency and creativity are key, so the pendulum shouldn’t swing too far in either direction.

There are simple strategies to make innovation an everyday occurrence throughout the entire company.  These send a powerful message to employees that the other half of their brain (the one they use at home, on the weekends, with the families) is welcome in your workplace.

Follow the 3M pathway to everyday innovation (no, not the company):

Mindset & Message – Over the past decade, the number of new consumer products introduced in the U.S. grew 7%, while sales grew only about 3%.  Research demonstrates almost no correlation between increased R&D spending (more products), and improvement in profits, and often not even between sales and revenue growth.  This is largely due to a mindset of separation:  Business compartmentalization and silos disconnect research from the front lines.  Executives have to decide innovation is critical throughout the company, create a message to “brand it” for the business.  Most importantly, it’s about building systems for experimentation that encourage innovation to take place in response to customer feedback, rather than the field-of-dreams approach.

Meeting culture – In the task-driven, fast-track environment of business today, there’s simply no room for “open innovation” (eg, the type that’s not scheduled on an off-site agenda).  Meetings are all about fly-by status updates or troubleshooting a point of pain.  Meetings to explore possibility have a very different structure, facilitation, and process than most meetings in business today.  Get an expert to help overhaul your meetings so they support creative, innovative thinking, and watch the magic happen.

Metrics – What gets measured, gets results.  A new Boston Consulting Group study reports that 63% of 1070 executives globally plan to increase innovation spending in the next year, 48% are not satisfied with the financial ROI in innovation, and 63% use “very few” innovation metrics – five or less.  It's not easy to bring fresh thinking and creativity to an environment that mostly rewards and recognizes only what drops to the bottom line.  It requires defining and recognizing successful activity through more upstream metrics, versus measuring success only from performance.   

It’s time to get serious and make room for everyday innovation -- from the receptionist to the boardroom.

Otherwise you might just be outwitted sooner by those who did.

Is Failure an Option?

Chairman and CEO of Coca-Cola Co. Neville Isdell stood in front of his board recently,  recounted Coke’s flops:  Choglit, Soda, Surge, and of course, the infamous New Coke.  “You will see some more failures.  As we take more risks, this is something we must accept as part of the regeneration process.”

An uncommon but courageous scenario, indicative of the sign innovation is making a comeback.  But how will leaders cope with its ugly stepsister:  Failure ???

Our society hates risk and hates failure even more.  Our love affair with safety has created big business from eliminating hazard from American life.  Just a generation ago, we lived in a VERY dangerous world:  Infant car seats were mere blankets in the backseat.  Killer bio-chemicals lurked in every can and bottle.  Grade school children could walk to and from school unescorted -- imagine!  People even smoked during pregnancy, for heaven’s sake! 

By now we’ve spent the better part of five decades attempting to eliminate risk and uncertainty in every part of our society.  There’s a lot of good news – most of us experience a longer, higher quality of life.  The downside?  This relentless pursuit of eliminating risk inadvertently threatens the infrastructure of our creativity and innovation roots in the corporate world.

The evidence?

Ask 10 or 100 employees in an organization:  How safe it is to the speak up?  How effective are your meetings at driving creative thought and action?  How well do leaders communicate the priorities in a way that makes people excited about creating something new? Are mistakes in your company a career limiting move or a welcome learning experience?  What happens when someone fails badly?  What happens when someone floats a dumb idea?

Leaders who are serious about the trend toward innovation as a growth strategy will need to take an honest and hard look at whether their culture can really support it.  Simply put:  If you want greatness from your people, you need to make it OK to be wrong once in awhile.

The trick is learning to be wrong in the right ways:  Clear guardrails and boundaries make the difference.

Bonus:  You may actually discover the biggest risk is in the relentless attempt to eliminate risk from your world.

For tools on managing innovation through culture, go to http://jacksonandschmidt.com/pubtools.html

IBM: Destination Innovation

A 2006 study by IBM Business Consulting Services shows that 65 per cent of the world’s top corporate CEO’s plan to radically change their companies in the next two years, due to pressure from competitive and market forces.

Only 20 per cent of CEO’s believe they had been highly successful in doing this, and are increasingly focused on innovation of their business models and operations as key drivers of change.

76 per cent of CEOs ranked business partner and customer collaboration as their top sources for new ideas.

The study also suggested a link between collaboration and financial performance: 30 percent of companies who collaborate with external partners outperform in growth compared to slower-growing counterparts.

Given shrinking, cost-cutting, lean and mean thinking have ruled for almost a decade, making this happen in most companies will be an uphill climb.  Efficiency rewards similarity of mind and action.  Cultivating a culture of innovation and collaboration is a radical about-face:  Creating an environment that values risk, empowers people, seeks diverse and conflicting points of view, and embeds ownership throughout?  This is not a short-term fix.  Building a house of bricks is reserved for the courageous and visionary, and offers rewards beyond the fairy tale.

Quite simply, there couldn’t be a clearer mandate for culture change.

Is your corporate culture up to the challenge?  To find out, go to:

http://jacksonandschmidt.com/getting_started.html