thanks Mark! On Fri, Feb 4, 2011 at 1:27 PM, Mark Petz <[email protected]> wrote:

Frm Nick Jankel <[email protected]>

http://www.wecreate.cc/nuggets/nugget/the-key-to-sustainable-growth-building...

Home <http://www.wecreate.cc/> > Nuggets > The Key to Sustainable Growth: Building an Open Innovation Culture The Key to Sustainable Growth: Building an Open Innovation Culture

*January 26, 2011*

A landmark report from The Judge Institute at Cambridge University, published in the Journal of Marketing, has finally proved something of unprecedented importance to all innovation professionals. Innovation success is not driven by innovation process, star hires, R&D spend, budget or even the country in which the company is based. In the study of 800 firms across 17 countries, company culture was the single greatest determinant of profitable innovation. Yet developing a culture of innovation, especially of radical innovation, is extremely challenging - perhaps nothing could be more challenging for an organisation, particularly those entrenched in conventional, risk-averse and hierarchical management practices. What is more, the usual costs associated with such a wholesale change management process are prohibatively high in this economy and risk alientaing staff. But there is another way...

For those that commit to creating such a culture, the rewards are rich indeed. Having an innovation culture is perhaps the greatest asset a company such as Apple or Pixar has. It provides them with a unique, defensible and sustainable capability to overcome market challenges whist concurrently shaping the market to fit their own ideas and vision. We believe creating bot just an innovation culture but an open, collaborative innovation culture is the preeminent business challenge of this century. Given the evolutionary law of requisite variety (organisms that thrive best are those that most closely match the features of their environment), it is clear that organisations that match the increasingly open and networked culture of our emerging society will be best placed to capitalize on the vital role distributed creativity (I.e. the wisdom of the crowd) can play in creating profitable innovation. The era of GM stye hierarchies is coming to a close. The future belongs to those who innovate, and do so collaboratively.

Here are the 7 specific, smart and cost-effective tools and mechanics - the ‘jewels\ to engineer an innovation culture that won’t break the bank or be resisted by ‘business as usual’ attitudes and conventional behaviors of the majority.

1. FOCUS ON FOSTERING A VIRAL INNOVATION CULTURE ONE MIND AND TEAM AT A TIME

Top down hierarchical initiatives designed to ‘make’ a company innovative are expensive and far from certain to work, especially in challenging times when entrenchment is common and ‘change fatigue’ an issue. Whilst one needs definitive innovation leadership and commitment at the top, it it usually fastest, more efficient and more effective to create an innovation culture at the grassroots, one team / mind at a time. To make grassroots transformation happen fastest, one needs to create a set of simple (but not simplistic) tools, practices and principles, the best of which are set out below. As Buckminster Fuller said, small interventions - put into motion in specific sweetspots in the system - can create massive change. He called these trim-tabs (after the tiny part of a rudder that can alter the course of the largest tankers). A great way to find them in your organisation is observational / ethnographic research into how your teams do and think and what real and perceived obstacles exist for innovation. Then small but powerful changes can be designed to transform ‘business as usual’ into ‘innovation as usual’. The goal is to create the maximum conditions likely to lead to sustained innovation - not mandating it from on high. Lasting competitive advantage comes from harnessing distributed creativity inside and outside of the organisation as a matter of course - no longer from managing (through command and control) a small group of innovators in traditional R&D depts.

2. INSTITUTIONALIZE INNOVATION HABITS USING HEURISTICS

Innovation is not a ‘thing’. It is a set of behaviours or habits, driven by a governing mindset. This is what a company culture is. Apple’s “best feat may be the culture that helps generate so many folks who’ve gone on to create great products elsewhere” (Business Week). As well as coaching and training, we suggest designing and instilling a set of heuristics (or rules of thumb) which the organisation uses semi-religiously and becomes ‘the way things are done here’. E.g ‘Always look for the win win win.’ or ‘Fail fast but only fail once’ or ‘Do things nobody else will do’. This also includes strategically re-designing the way meetings are run, projects signed-off, people appraised etc that generates an innovation culture every day. For example, when people rubbish or critique an idea at any time in a meeting, ensure that any team member has the right to challenge them to think of two good reasons why the idea is good (and there are always two good reasons for any idea, no matter what). New recruits can be invited as a matter of policy to present to the team / management the 3 top things they would change about the organisation, the company or its products, perhaps a month after joining (when their critical capacities and lack of group think are keenest). These small changes ensure new habits are built in the everyday moments when culture is created and maintained.

3. DEFINE WHAT INNOVATION LOOKS LIKE USING THE POWER OF CHECKLISTS

It is vital the the organisation gains consensus on what quality, innovation and creativity look and feel like when you do create them. This means knowing what the ‘minimal viable’ value add is. To create a common approach - as well as ensure optimal iteration of all ideas as far as they can be pushed - we use checklists, which are designed around organisational values, business practices and goals. Checklists have been proven to be extremely powerful in shifting behaviour in the real world and they are very simple. They can be put on credit card sized aides, desk accoutrement or within forms on and off line.

4. GIVE MAVERICKS & THEIR NETWORKS PERMISSION TO INVENT THE FUTURE

Lack of ideas is never the problem. Most of the winning ideas already live within your teams, partners, customers / users and networks. The trick is to harness them within impactful and / or profitable innovation. Mavericks within the team (and outside the organisation) have more ideas and passion than most. But often they are sidetracked, ostracized or ignored. Clustered around them are often the other kinds of people needed to generate successful innovation - commercializers and those great at implementation. Centralised R&D / innovation prevents distributed innovators from prototyping, testing and iterating at the rapid pace they can work at when not managed centrally. Give natural innovators permission - and space / time / budget / credibility - to turn their ideas into innovations. Research also shows that diverse teams are often better than crack teams at solving complex problems so ensure that the team is made up of people that dont have the same perspectives. Encourage team member to understand the vital importance of their own personal and professional networks in their innovation capacity - and give them time and space to nurture their strong and weak ties inside and out (including online and in social media). Banning Facebook may not make your organisation more competitive.

5. HARNESS THE PLEASURE PRINCIPLE BY CELEBRATING THE ROLE OF INNOVATION IN GENERATING FLOW STATES AND PERSONAL FULFILLMENT

IIf you want people to shift to be more creative and inventive, show them the benefits of being innovative rather than forcing them, cajoling them or threatening them. Being innovative is a fundamental competitive advantage to any professional and also has many positive benefits within our personal lives. It allows us all to solve our own, and our organisation’s, problems no matter what life throws at us. More than anything, innovators tend to experience the psychological phenomenon of ‘flow’ far more often than others because they are so engaged. Inspire your teams to explore their potential as innovators and creative leaders for their own benefit. Fear rarely creates the right conditions for innovation and it is vital to repeatedly prove to people that taking risk and making mistakes will not lead to ‘pain’ (in the form of ridicule, alienation etc) Once they start to shift, it is vital that you trust them to grow and develop themselves and their ideas. All innovation projects can lead to valuable learnings for individuals and the organisation. This means you reframe ‘failure’ as ‘successfully learning how not to do something’.

6. INCENTIVISE INNER MOTIVATION AS MUCH AS LEVERAGING FINANCIAL OR PROFESSIONAL REWARD

Recent research has shown that human beings are highly motivated by the excitement and kudos of cracking a problem or mastering a new skill. In fact, when we reward inner motivated people with money or promotion, often their performance falls! True innovators are highly motivated by problem-solving, making things better and taking on new challenges so allow them to self-organize and self-direct. That said, for many others types of people necessary within innovation teams, unless innovation habits or behaviours are measured in evaluation programs, it will not be prioritized. Ensure your incentivisation levers are balanced, rewarding innovation with a mix of credibility / kudos, promotion and material benefits. With open innovation, sharing rewards is as important as sharing the efforts. Incentivising entire teams can work better than incentivisng individuals which can just drives non-collaborative practices.

7.GIVE INNOVATION CLEARLY SANCTIONED SPACE (& BRING IT TO LIFE)

Unless innovation has an officially sanctioned physical place and conceptual space, it will often peter out. GIve people time to experiment, try new protocols, shift their mindset as well as space to take real risks and make mistakes. Signal to teams that some areas of the office (which can grow over time as the viral innovation culture spreads) are set up for innovation. In some cases, taking people out of the office into a new space like a ‘skunkworks’ - where new habits / principles apply rather than the old ways of doing things - can radically shift their behavior towards innovation (and it can replicate the start-up atmosphere that leads to more disruptive innovation). Turn complex innovation processes and approaches into visual tools that can go on walls, in rooms and even on the floor. We even work to turn innovation process into 3D experiences, as in the latest museum exhibits, that act as both training programs, design tools and *aide memoires*.

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