This blog first appeared as Steve Wunker's piece for Forbes
By Steve Wunker
This post was co-written with my colleague David Farber:
As over-used as the word “innovation” may be these days, there is no denying that building a culture of innovation is at the top of most corporate agendas. After all, a company’s own employees are uniquely positioned to understand the intersection of business operations, product development pipelines, and customer demand. New growth should be spurred from within. Yet attempts to build a culture of innovation – where employees share new ideas, then use fast and cheap processes to get breakthrough solutions to market – often fall flat.
It’s not for lack of trying. We have seen plenty of companies try to build that culture. They put in a foosball table and paint the walls with bright colors. They announce that innovation is going to be one of the company’s top priorities. They even offer cash prizes to employees who come up with great ideas. There’s a wave of excitement, but three months later it’s business as usual.
General Assembly and ONEin3 (respectively, an educational institution focused on technology, business, and design, and an organization that connects Boston’s young adults) recently brought together a group of entrepreneurs, design thinkers, and innovators – including those from some of the world’s leading brands – to help understand what groundwork needs to be laid for an innovative culture to survive. Although there’s no silver bullet or single right way to build a culture of innovation, our conversation uncovered 5 strategies that worked across industries.
1. Understand the different types of innovation that you’re trying to foster. One of the biggest problems with new innovation efforts is that they often don’t encourage employees to think beyond the development of new products. This means that employees with non-customer-facing roles are either left out or forced to brainstorm new product ideas in spite of a lack of knowledge about customer needs. Despite the product-centric view that gets passed down to employees, business strategies tend to align with a need for bottom-up innovation across several domains – most notably the 4 P’s: profit models, processes, products, and policies. By highlighting the different arenas in which employees can be involved with innovation, companies can help employees add value in areas where they have deep knowledge and a desire to get involved. Microsoft ’s innovation team now actively encourages employees to get involved with three forms of innovation: product, business model, and policy. Since moving beyond the traditional product focus, Microsoft’s innovation efforts have taken the company in directions that were previously unthinkable. For example, earlier this year the process helped bring free versions of Office to the Android and iOS platforms. The broader innovation process is also a driving force behind the company’s ongoing efforts to establish legal precedents that push back against the NSA and EU regulators on privacy and disclosure requirements that could have deep and lasting impacts throughout the industry.
2. Empower champions to push back against bouncers. Big businesses have large employee bases with clear reporting lines. While this structure provides a number of benefits, it can also be a roadblock when it comes to creating a culture of innovation. While a company may preach the benefits of innovation, middle managers are still tasked with ensuring optimal performance in the business’s core activities. They have little desire or capacity to jeopardize core initiatives for unproven innovation efforts. Employees often get an early “no” from their direct supervisors, return to their day jobs, and put innovation out of their minds again. Brett Bishop, a Managing Design Strategist for Capital One, explained how his team beat the system. “We went to people who were too busy to pay attention. We got our quick wins while no one was paying attention, then had the proof point to do more.” Bishop’s strategy is one that Capital One has now institutionalized, with his team helping innovators find the fringe – the people who have tried, recognized that they need help, and are willing to let you try out new ideas. Innovation champions can help employees find friendly spaces to test their new ideas, while also providing a level of protection against managers who are charged with focusing on the core.
3. Redefine metrics and incentives. New ventures often struggle because they are judged by the same metrics used to evaluate activities that the business has been involved in for decades. New initiatives can’t compete at the same level, and they are killed off before they’re given a chance to prove themselves. Performance metrics often suffer from the same problem. While employees are told to be innovative, their performance goals and compensation packages don’t create the incentives to do so. Cathy Wissink, a Senior Director at Microsoft, shared how the organization went from a performance system reminiscent of Game of Thrones – with teams bringing on “sacrificial lambs” who could be easily cut come review time – to an atmosphere where senior management provides air cover to those willing to take on important innovation challenges.
4. Give employees the tools they need to make their case. Even the best ideas aren’t going to get any traction if the value they bring to the organization isn’t made clear. And that’s often where companies fall short. They invest in innovation programs to bring in new ideas, but they don’t give individuals the tools or frameworks to show why those ideas are worthwhile. Autodesk , a leader in 3D design and engineering software, built a strong culture of innovation by bringing its employees through a series of innovation workshops. Employees are taught not how to come up with new ideas, but rather what to do with the good ideas they come up with, from knowing who should hear the idea to what that person should be hearing. Autodesk employees are given both the training and resources to create business pitches that highlight the value of their ideas and demonstrate why Autodesk is uniquely positioned to implement the solutions.
5. Create a safe space for experimentation. While a number of businesses have embraced Lean Startup principles around fast and cheap experimentation, many stop short of providing a truly safe space to experiment. Cheap tests are good…as long as they’re successful. Despite the rhetoric that’s shared publicly, failures are not truly embraced as learning opportunities. They’re still regarded as failures. This creates fear among those who might otherwise conduct worthwhile tests to help prevent the organization from over-investing in risky projects. The New Urban Mechanics team within the City of Boston Mayor’s Office provides an excellent public sector model for how private sector companies can create a safe space for innovation. The New Urban Mechanics team is comprised of individuals without a “day job.” Instead, team members are solely focused on helping other departments launch innovative solutions to targeted challenges. As Program Director Susan Nguyen explains the system, “If the project succeeds, the department takes all the credit. If it fails, we take all the credit.” By sheltering departments that want to try out innovative experiments, the team has created an atmosphere of trust and confidence, which has encouraged other departments to embrace the system as it struggles with its own challenges.
As much as companies talk about how innovation is a top priority, few excel at creating a culture of innovation in which employees are truly empowered to generate, develop, and pitch great ideas. They overspend on idea collection platforms, then wonder why they fail to meet their innovation goals. By thinking carefully about how innovation capabilities can achieve a broad range of innovation objectives, reimagining how they evaluate employee performance, and providing a support system for employees who are willing to take on tough challenges, even the stodgiest and most established organizations can help employees release their inner entrepreneur.
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