Honda's Innovation Culture

I've just stumbled across a really interesting set of videos that illuminate a lot about Honda's culture and it's ability to innovate. With a tip of the hat to Pollen Transport, let's review at least two of these short videos and ascertain what they can tell us about Honda and it's success.

Let me start by saying I don't know if we give Honda enough credit as an innovator - but they probably deserve the title. Too often we think of "innovation" as a shiny new gadget, rather than a successful series of very useful, compelling products. Honda has done an excellent job in so many different fields - power equipment, motorcycles, automobiles and many more - that we often lose sight of how powerful and how innovative the company is. And I suspect that much of that success is based on the culture of the organization.

Honda is releasing some documentary films about itself and its culture. Two that I think are especially relevant are entitled Failure: The Secret to Success and Kick out the Ladder. Let's break down both of them and talk about what they demonstrate about Honda.

Note that these aren't presented as "evidence" that Honda is innovative - at least that's not how Honda is presenting them. Rather I'm using them as evidence that Honda has an innovative culture. In the first film, about failure, Honda is reinforcing the notion that failure is acceptable, even expected, if the firm's technology is to be advanced. Failure creates significant opportunities for learning, and when a firm is willing to take risks and to "push the envelope" then failure is going to occur. It's only when failure is recognized as an opportunity for learning and advancement, rather than a time to punish those who failed, that the culture advances.

In the second video, Kick out the ladder, Honda talks about the need to push the organization. Basically Honda creates extreme stretch goals, and then expects the team to reach those through creative thinking. Only by really stretching the team and its expected goals can we get to the interesting thinking rather than the safe, conventional thinking. Note that these two films provide evidence of mutually reinforcing attitudes - you can't "kick out the ladder" in an organization that immediately and drastically punishes failure, but you can create tremendous stretch goals in a firm that recognizes failure will occur.

As innovators, we need this kind of cultural attitude. Certainly no one wants to fail, but real innovation happens when we are creating something new, untried and untested. Some of that work is bound to fail. When we hold up Apple as a shining example of innovation success, we often forget about the Newton and the Lisa. Both of those products were monumental failures, but on the bones of those failures came the Mac and the iPhone/iPod.

In many of the firms I see, people are afraid to create change, and will not take on any project with any real risk of failure. The dangers of failure in many firms are simply too great to ignore, and the project team spends much of its psychic energy reducing opportunities for failure (and the opportunities to stretch themselves). They stay comfortably in their cages like the songbird that refuses to leave the cage even when the door is opened. Perhaps one of the best things we could do for many innovation teams is to fire the team and tell them the only way to earn back their jobs is to create something new and different. When you have nothing, you've got nothing to lose.

On the other hand, perhaps we can modify our cultural expectations to demand more, stretch every team, create unrealistic goals but provide the tools and thinking necessary to allow people to meet those goals in ways we haven't conceived yet. Perhaps we should embrace the learning that can occur when a project fails, and build on that failure and that knowledge, rather than shun the team that fails.

Honda succeed because it has a culture that demands more, stretches the boundaries and recognizes that failure will occur. If your team wants to be truly innovative over time, you'll adopt these principles as well.

The first step to innovation success

Do you want more innovation in your business? If yes, then here's the first, most powerful step you can take. Make someone accountable. Sounds like reasonable business wisdom, right? The challenge with innovation is that it is usually an abstract concept, difficult to measure or manage, and distributed throughout the organization, so no one person can reasonably be responsible for innovation success. This is yet another case of something everyone wants, but no one is responsible for. When you add in the fact that innovation is risky, and represents significant change to the status quo, then you can begin to realize how difficult it is to task one person with the job, and hold them accountable for innovation across the business.

So, while CEOs and executive teams continue to demand more innovation, they don't put the appropriate measurements and metrics in place, and they don't hold individuals accountable for innovation success. If it is difficult to assign one person for innovation success, but it is required to assign the task to somebody, who should get the task, the measurements and the requisite rewards or punishments. That's easy. Everybody.

If you want real innovation, then everyone who is (or wants to be) involved should be measured on it. This means from the drill press to the CEO lounge, everyone who has committed and expressed an interest is no longer an interested bystander but knows their work will be evaluated based on its innovation capacity. Now, I've got the attention of the organization.

Let's start at the top. Every CEO wants more growth, more differentiation. How can innovation provide those attributes? How can the work the CEO does impact innovation? Let's hold the CEO accountable. In each business unit or line of business, let's put several measures or metrics of innovation, especially tied to growth, differentiation or profits. If the heads of business units or product lines know that their evaluations and compensation are subject to success at innovation, guess what gets funded and staffed? Guess what gets their attention in a staff meeting. And if the division president or product line head wants innovation, he or she will find the staff and the resources to do it, and will hold those folks accountable as well.

It's difficult to hold one "CIO" accountable for innovation when he or she doesn't own or manage the assets or funds. However, we know that if no one is accountable the work won't get done. To create a real culture of innovation, measure everyone on their innovation efforts and inputs, throughout the entire organization. You'll have the commitment you need to succeed.

In case of emergency break glass

Do you remember the old fire alarms? They would be mounted on a wall usually in a hallway, ready at a moment's notice to sound the alarm and alert others to mounting danger. Usually there would be a sign that read, in case of emergency, break glass, which would set off the alarm. The implication was that if there wasn't an emergency, then you shouldn't break the glass.

A lot of times I think our use of innovation tools, techniques and strategies are similar to a fire alarm. Even though we have great need of new and better ideas and new ways of thinking, we leave the innovation tools and techniques behind glass, waiting for an emergency. It's as if we can only use these tools in case of a dire emergency, rather than incorporate them in our everyday challenges. When we place that level of emphasis on the tools and techniques, the barriers for using them mount up over time. If the last crisis wasn't important enough to break out the innovation tools, is this crisis important enough? And eventually, you can only break out these tools in the case of a crisis, not as part of an every day activity.

Since the tools are locked behind glass and used infrequently at best, the understanding of the tools and their implications becomes more hazy. How the tools are best applied and the methodologies become suspect. When we do decide to "break the glass", we are usually applying these tools and techniques in a crisis situation when we haven't prepared adequately or used them for quite some time, so we're using unfamiliar tools in a high visibility, high stress situation. Talk about a recipe for disaster.

Instead of locking innovation tools and techniques behind glass, why not deploy them as a regular part of your team's toolkit, and practice using them on a regular basis? The tools and techniques may add more to your day to day thinking and output, and your team will be much more familiar with their usage when the time comes to address a larger or more strategic problem. Using this approach will require some training on the various tools and techniques, and frequent application of these tools or techniques during the regular course of your working week, rather than slapdash, highly visible uses of the tool under great duress.

If you can introduce innovation tools and techniques as a natural part of your business process and a regular "tool" in your daily toolbox, then your team will become familiar with yet another way of solving a problem, and will be able to apply these tools more effectively when the chips are down.

Innovating like the Marines

Here's a post sure to draw some "fire". I like to say that when it comes to innovation, I want people on my team who are willing to ask forgiveness not permission. People who constantly ask for permission to do risky things place unnecessary barriers and boundaries on themselves, and, by constantly asking for permission remind the people they are asking about the risks, so the risks become amplified. No, better to just get started and improvise as much as possible.

The old joke about the US military says that the Marines have a rule: That which isn't forbidden is permitted, and the Army has a similar rule: That which isn't permitted is forbidden. I suspect a bit of inter-service rivalry exists here especially since I grew up in a Marine household, but there is a larger truth at work. If your team operates from the standpoint that something not expressly permitted is absolutely forbidden, you'll have an exceptionally difficult time innovating. The rule attributed to the Marines provides a lot more leeway and latitude to the decision makers - unless something is expressly forbidden, it is permitted.

I come to make this post because there's been several articles in the news lately about the importance of innovation in this recent (Early 2009) business climate and the psychological and environmental barriers. One article in Time points out that the "survivors" of the downsizing in many firms have no desire to "stick their necks out" and have a significant amount of anxiety and survivor guilt. Another article in ComputerWorld reminds us of the Google 20% expectation and asks whether or not that is still operable in this environment. Both come to the conclusion that there is still great need for innovation, and good managers will recognize the range of barriers that are present to innovation and take steps to reduce those barriers and get people innovating again.

Clearly in this economy we need to be cognizant of the enormous financial pressures being exerted on our businesses, but we cannot allow those pressures to halt all innovation activities and to force innovators to pull back from their important activities. The difference between those firms that can and will invest in their innovative capabilities and those that won't will be evident as the economy turns around later in 2009.