Thursday, February 26, 2009

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.
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posted by Jeffrey Phillips at 5:31 AM

40 Comments:

Anonymous Honda Tamworth said...

I have to agree with your comment that "Honda succeed because it has a culture that demands more, stretches the boundaries and recognizes that failure will occur."

We work with several manufacturers and many supply companies and the difference is astounding.

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Innovation is such an incredibly challenging process. One of the remarkable things about what Honda produces is considering how many projects must have been proposed and tested and not made it to production for the projects that did make production to be with us.

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Anonymous LCV said...

You mention the risk of failure. One thing that astound me about the auto industry is that many manufacturers are signing off on new models 3-6 years before production starts! That is an incredible risk for such a huge commitment.

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Innovation is all relative. One manufacturer may stand out as more 'innovative' because it's competitors aren't very innovative.

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