Tuesday, February 18, 2014

You can't impose a culture of innovation

Lately it seems that everyone is talking about how to create a "culture of innovation" in their company.  The good news is that after many years of one-off innovation attempts, people are starting to grasp two important concepts.  The first is that for innovation to be valuable it must be sustained.  The second is that to sustain anything in a large organization, the culture must embrace it.  And here's the hard lesson.  Most corporate cultures are built for efficiency, not innovation.  So when people blithely talk about "building a culture of innovation" they forget the old saying that "Rome wasn't built in a day".  Rome was built over centuries, one brick at a time, and was constantly in flux.  Your culture has been built and honed over 20, 30 or 40 years, honed to efficiency.  You can't quickly change it, and can't impose innovation on top of it.

How does a corporate culture become innovative?

So here's the interesting question:  is innovation emergent, constructed, coerced or otherwise imposed on an organizational culture?  Clearly, almost every firm was "innovative" at one time, when it was a scrappy newcomer and had to out-innovate the competition to win.  Over time, however, once a customer base was locked in and overheads and administration demanded more careful husbandry of resources and risks, many firms settled for a culture of productivity and efficiency, which slowly edged out innovation, until innovation seems like a strange interloper rather than a familiar friend.

If your organization has achieved ultimate efficiency and is now grasping for innovation, how does it become more innovative?  More importantly, can you "create" a culture of innovation in an organization where the culture is conservative, risk averse and focused on predictability and stability?  It's not very easy, and it certainly isn't a quick transition.  There are three methods you could attempt:

  1. Impose innovation on an existing culture of efficiency.  Most organizations, if they give culture a second thought, will acknowledge the importance of innovation culture but will simply try to impose a "culture of innovation" on top of an existing culture of efficiency.  This is, like Keats said, writing your name in water.  You cannot create a "culture" on top of another more powerful culture.  A house divided will not stand.  The prevailing, original culture of efficiency will win, and you'll be reduced to sporadic, discrete innovation activities in which you constantly commit the same mistakes and face the same hurdles and barriers.
  2. Create a "skunkworks" that isolates innovation from the prevailing efficiency culture.  Many organizations that are smart enough to understand the investment in culture and the effort to change it will attempt this approach.  They'll separate small teams of innovators and place them in a cultural bubble, isolated from the prevailing culture, like an experiment in a Petri dish.  In that isolated environment ideas can thrive, not bound by existing culture.  But when the ideas make the transition from Petri dish back into the product or service development stream, they are frequently rejected by corporate culture anti-bodies.  Isolation accelerates innovation but it doesn't increase acceptance.
  3. Invest in long term change.  If you want to sustain innovation and increase your odds of success, you'll understand the ancient saying that a journey of a thousand miles begins with a single step.  Changing a culture isn't easy and it certainly isn't quick.  There are several factors you can influence that will make the change more acceptable and more fluid:
    1. Focus on evaluation, compensation and rewards.  If people are evaluated on the time they spend innovating, and that evaluation leads to increased compensation and job progression, some people are more likely to spend more time doing innovation work.
    2. Remove hazards and uncertainty.  Focus on what people attempt, rather than what they achieve, when they innovate.  Failures are going to happen, and the learning should be collected and recognized.  Public beheading is rarely an inducement for more innovation.
    3. Define a method that people can use, learn and become experts in.  Rather than every man for himself, using any tool or framework, define and reinforce a small set of tools and workflow so that people can increase their knowledge and expertise.  
    4. Training.  Train them on the process, tools and workflow defined above.  Nuff said.
    5. Identify your best innovators and recruit more of them, both new graduates and experienced hires.  Infect the organization with optimism, purpose and excitement.  Inoculate it from pessimism and "the way we do it here".
If you do all the things I've suggested in alternative three, and you do them well, you may begin to change your culture within two or three years.  Yes, I said two or three years.  And that's with a consistent focus, investments in training and changes to how people are evaluated and compensated.  You want a culture of innovation.  In fact you NEED a culture of innovation, but you can't "build" it.  You can't impose it.  You can influence the existing culture, but understand that anything that informal, that powerful and that slow to change steers and maneuvers like a battleship.

And, by the way, stop talking about a culture of innovation.  Everyone knows you need it, but words without actions just creates cynicism.  Actions like those defined in item 3 above will speak with far more command, and will gain far more attention, than constantly talking about the need for an innovation culture.  Further, when you are talking about a culture of innovation, the existing culture and its keepers feel under attack.  What's wrong, they ask, with our existing culture?  It's served us well so far.  Create change by making actual change, rather than talking about change.  Talking about change just raises the stakes and increases the effort.
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posted by Jeffrey Phillips at 12:06 PM


Blogger Gary said...

Good points. For a large organization just getting started on adopting innovation, how pervasive does the training and communication need to go? Does every single employee need to be given education and awareness, or just selected teams? Certainly nearly everyone has some innovative ideas in their head. But if you educate everyone on innovation, but then only involve a small group on a few efforts, won't the others feel left out and alienated?

Taking your lead on action vs. words, wouldn't it be best to quietly start with a small team, train them, get them doing some innovation work, and then later engage the rest of the organization as some of the innovation spawned projects and changes are approved, developed and ready for roll-out?

5:14 PM  
Anonymous Anonymous said...

This comment has been removed by the author.

7:47 AM  
Blogger Curt said...

Hmmmm.... You know, I've been working on this problem in my various companies for decades. And I've helped a number of the fortune 100 here and there as well.

I don't think education does it at all. In fact, I don't think talking does it at all. I think you hit on the correct issue early on, which is that companies calcify around efficiency.

Secondly , it's just an economic law, that bureacracies in all companies exploit rents wherever possible, such that all available flexibility in the organization is consumed.

So, there really are only two points that I've found one can make a great difference

1) When you are the CEO and can prune the business to pay for innovation.
2) When a company has endured a shock but still has resources.

The most important factors in creating innovation are:
a) material incentives that reward it.
b) processes for managing innovation
c) Terminating as much middle management as possible, to pay for it, and then terminate half of the rest. Push employee compensation into production talent not management overhead.

If you don't have an innovation target and manage it as seriously as you do your sales, revenue and overhead, then you won't accomplish it. 3M used to be brilliant at it, and many great companies are.

But innovation is expensive. And it has to come from somewhere. Since the bureaucracy is almost always dead weight and an impediment to change, put process in place to manage the

I wouldn't try to teach innovation, I would teach people project management if I taught them anything at all. And to rotate the management of initiatives across the company in ADDITION to their normal work, rather than hiring specific people for it.

If you structure it, and involve people in it, it will work.

I've done it over and over again.

What you can't fix is broken bureaucracy, and rent seekers, or employees that resist because it challenges their power and rent seeking.

Fire them as fast as you can find them, and hire new people. The world is full of them. And the age where we slowly mature into increasingly lax positions is done with.

1% of people do pretty much all the invention.
10% do all the application
The rest are along for the ride.
If you don't have any of the 1% in your company and if you're too weak an exec to hire them, then stick with efficiency.

5:04 AM  
Blogger Suleman Ali said...

Give people lots of freedom, to think and grow. But people take a long time to become accustomed to that freedom, so patience is also needed.

4:42 AM  
Blogger Unknown said...

This is a very good topic and well timed for what is needed to advance our world.

Wow, just wow ummmm...Curt, first of all, I believe your solution will work great for the big companies. But, for the workers, not so much.
And, I agree that approximately 1% of the people do pretty much all the invention/innovation & 10% do all the application/production. Hey isn't your method a little Bobby Fischer like. In other words, you would be playing chess with the workers' livelihoods and the big companies will take the board's position of The King. As you know, in chess, all is a sacrifice for the well being of The King.

As you bravely said...

"Fire them as fast as you can find them, and hire new people. The world is full of them. And the age where we slowly mature into increasingly lax positions is done with.


Again I believe it will work. But, it is definitely a "PAINFUL TRUTH"

Maybe I am a bit too soft to run a thriving big company, but I would try to increase my 1% (the inventors) and 10% (the appliers (for the like of a better word)).

By using outside inventors. If the big companies use independent inventors, by developing avenues to allow open innovation to contribute to their companies (Besides, they won't have to pay for mistakes. The big companies will only have to pay for (license/purchase) successful inventions/innovations.) Than educate more(and hire and fire, if necessary)appliers/producers to compensate the influx of ideas and concepts for innovations.

Well, there you have it. It maybe little shortsighted, but that's my opinion.

8:04 AM  

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