Tuesday, May 30, 2006

"Get out of your culture" free card

After a week of traveling and talking with a wide range of potential innovators, I’ve decided to give away a very valuable gift to many people who want to innovate. I’m calling it the get out of my culture card. As you'll recall from the game Monopoly, there's a "get out of jail free" card, which allows the owner to skip going to jail. I think many innovators need a "get out of my corporate culture" free card.

While at the Front End conference last week, it was clear that very many innovators are excited about the potential of sustainable innovation, implementing processes, tools and methodologies to improve innovation. However, it also became clear that the biggest impediment to innovation isn’t tools, isn’t process, isn’t people, but it is the corporate culture.

Probably a third of the people I spoke to felt stymied by their culture - to the point where they've given up trying to implement anything and are simply observers of innovation. There are several powerful corporate cultural roadblocks to innovation. They generally fall into one of three categories:

- What’s our motivation? One class of response had to do with why people in the organization would be motivated to use new processes or tools. Well, I can think of a number of ways to motivate people to participate. We ran into this issue many years ago implementing CRM systems. What solved the problem of getting sales leads and opportunities into CRM systems was that a sales person would receive 100% of her commission if the sale was registered in the CRM system when a deal closed, and 50% of herr commission if the opportunity wasn’t registered when the deal closed. In other words, you can change motivation by compensation. We tied the use of the tool and the process directly to compensation, and the use of CRM went up dramatically. Of course that’s not the only way to impact motivation. Having senior management reinforce the need for new systems or processes, creating a sense of urgency around a new initiative can help tremendously. It's fairly simple for senior management to indicate how important innovation is to the business, but what's more important is for that same senior management team to make innovation and the measurements and metrics one of their top priorities. What gets measured gets done.

- How do we turn the battleship? Another class of response has to do with the size and complexity of the organizations in question. Even if we want to implement such a system, it’s too big, too complex for us to manage and effectively implement. To this argument I say – start small. Identify one working group and demonstrate success. Don’t worry about the entire organization – prove out the process on a small scale and people will find you. The larger the group you try to change, the longer the change will take to ripple through. Rather than forcing change on a large and unwieldy group, identify smaller working teams that have a strong desire for change. Demonstrate how easy the change can be, and the results these changes can have. Then, instead of facing resistance, you'll find teams lined up for more. This is the approach the Six Sigma teams have used to great success.

- How do we justify the expense? Another area of concern is justifying the expense of implementing new processes or systems to improve innovation. This one is understandable yet very short-sighted in my opinion. In many businesses a new idea converted into a product can mean significant growth in revenues. Contrast a multi-million dollar revenue stream against a cost of $100,000 or so for new processes and systems. The potential return and ROI for these systems and processes is significant. Yet so much focus today remains on approaches to cut costs that I’m afraid we’ll have to justify innovation initiatives as methods to cut costs, rather than as alternatives to grow revenue and margin.

I'd love to hand many of these folks I meet with a "Get out of my culture" free card. However, I can't do that. That power lies in their hands and in their management teams' hands. Rather than ask for permission, however, it may make sense to make an innovation jail break.
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posted by Jeffrey Phillips at 10:17 AM

40 Comments:

Blogger Chas Martin said...

Several decades ago, cartoonist/animator, R.O. Blechman, the creator of squiggly characters, depicted a the truth about innovation in 4 frames. The scene was a board room with the boss at the head of the table. One of the others at the table came up with an idea. Blechman depicted this as a light bulb in a thought balloon. The next character had a better idea, shown as a lamp in a thought balloon. The third person went one step further. His idea was symbolized with a chandelier. Finally, the boss spoke up. His idea was a light bulb. Everyone rejoiced.
Blechman’s simple cartoon strip speaks volumes. Culture, including support from the top, is what determines the potential for innovation. Nothing will ever successfully come from the bottom unless risk is permitted and failure acknowledged as part of the process.
Terry Jones, one of the keynoters at The Front End of Innovation conference, offered several great ideas for permitting innovation to succeed.

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