Creating People Innovation 18th September 2008 Claire Swyny Manager, Chandler Macleod Consulting WA

What is innovation? “ Innovation is trying to figure out a way to do something better than it’s ever been done before” Matthew E. May, Elegant Solutions: Breakthrough Thinking the Toyota Way

“ Innovation is trying to figure out a way to do something better than it’s ever been done before”

Innovation - Just a Fad? “ Like short skirts, innovation has traditionally swung into and out of fashion: popular in good times and tossed back into the closet in downturns” McKinsey survey on Innovation - January 2008

“ Like short skirts, innovation has traditionally swung into and out of fashion: popular in good times and tossed back into the closet in downturns”

McKinsey survey on Innovation - January 2008

Innovation - Just a Fad? “ A company’s ability to innovate - to tap into the fresh value-creating ideas of its employees, partners, customers and partners is anything but faddish. Innovation has in fact become a core driver of growth, performance and valuation” McKinsey survey on Innovation - January 2008

“ A company’s ability to innovate - to tap into the fresh value-creating ideas of its employees, partners, customers and partners is anything but faddish. Innovation has in fact become a core driver of growth, performance and valuation”

McKinsey survey on Innovation - January 2008

From the Survey… More than 70% of senior executives consider innovation will be at least one of the top 3 drivers of growth in their companies in the next 3-5 years Others see innovation as the most important way for companies to accelerate the pace of change in today’s global business environment Most executives are generally disappointed in their ability to stimulate innovation There are no best-practice solutions to seed and cultivate innovation The structures and processes that many leaders use to encourage it are important, but NOT adequate However, 94% of senior executives consider people and corporate culture are the most important drivers of innovation

More than 70% of senior executives consider innovation will be at least one of the top 3 drivers of growth in their companies in the next 3-5 years

Others see innovation as the most important way for companies to accelerate the pace of change in today’s global business environment

Most executives are generally disappointed in their ability to stimulate innovation

There are no best-practice solutions to seed and cultivate innovation

The structures and processes that many leaders use to encourage it are important, but NOT adequate

However, 94% of senior executives consider people and corporate culture are the most important drivers of innovation

Link Between Leadership & Innovation As with any top-down initiative, the way leaders behave send strong signals to employees Innovation is inherently associated with change and takes attention and resources away from efforts to achieve short-term performance goals Holding leaders accountable for encouraging innovation makes a big difference The research implies that most senior executives do not actively encourage and model innovative behaviour and thus do not provide the support employees need to innovate

As with any top-down initiative, the way leaders behave send strong signals to employees

Innovation is inherently associated with change and takes attention and resources away from efforts to achieve short-term performance goals

Holding leaders accountable for encouraging innovation makes a big difference

The research implies that most senior executives do not actively encourage and model innovative behaviour and thus do not provide the support employees need to innovate

Barriers to innovation Senior Execs cite an unsupportive climate as a critical roadblock to achieving innovation Inability to motivate and support people who have good ideas derail a well-intentioned innovation initiative Not enough of the right kinds of talent available Leaders protecting innovation People not allocated to innovation Global CEO Study 2006 & McKinsey Survey on Innovation - January 2008

Senior Execs cite an unsupportive climate as a critical roadblock to achieving innovation

Inability to motivate and support people who have good ideas derail a well-intentioned innovation initiative

Not enough of the right kinds of talent available

Leaders protecting innovation

People not allocated to innovation

Global CEO Study 2006 &

McKinsey Survey on Innovation - January 2008

Building an innovative environment Stage 1: “Set the stage” Define the kind of innovation that drives growth and helps meet strategic objectives Stamp out fear by creating a culture that embraces risk “ I did not fail; I just found 10,000 ways that did not work.” Thomas Edison – American inventor

Stage 1: “Set the stage”

Define the kind of innovation that drives growth and helps meet strategic objectives

Stamp out fear by creating a culture that embraces risk

“ I did not fail; I just found 10,000 ways that did not work.”

Thomas Edison – American inventor

Building an innovative environment Stage 1: “Set the stage” Define the kind of innovation that drives growth and helps meet strategic objectives Stamp out fear by creating a culture that embraces risk Encourage diversity – value and leverage ideas from your diverse group of employees How can you help your people understand your strategy and why you need to be more innovative? How do you encourage controlled risk-taking? What is your plan to leverage diversity in your organisation?

Stage 1: “Set the stage”

Define the kind of innovation that drives growth and helps meet strategic objectives

Stamp out fear by creating a culture that embraces risk

Encourage diversity – value and leverage ideas from your diverse group of employees

How can you help your people understand your strategy and why you need to be more innovative?

How do you encourage controlled risk-taking?

What is your plan to leverage diversity in your organisation?

Building an innovative environment Stage 2: “Connect the dots” Find people with the right mind-sets for innovation Ensure a mix of people – different levels of seniority and skill sets Combine people with different approaches to innovation Collaborate with external organisations that can compliment you How effectively do internal teams collaborate and with which supporting tools and processes? How often do you look outside of your organisation for ideas?

Stage 2: “Connect the dots”

Find people with the right mind-sets for innovation

Ensure a mix of people – different levels of seniority and skill sets

Combine people with different approaches to innovation

Collaborate with external organisations that can compliment you

How effectively do internal teams collaborate and with which supporting tools and processes?

How often do you look outside of your organisation for ideas?

Building an innovative environment Stage 3: “Engage” Establish goals and objectives including measures of success Establish timeframe and commitment required Plan how to establish trust amongst members To what extent are your employees already engaged in cross-functional teams, learning events and large-scale brainstorming events?

Stage 3: “Engage”

Establish goals and objectives including measures of success

Establish timeframe and commitment required

Plan how to establish trust amongst members

To what extent are your employees already engaged in cross-functional teams, learning events and large-scale brainstorming events?

Building an innovative environment “ We identify areas that are most important to us through strategic planning. Then we put up rail guards and let people play in these spaces” Bob Champagne – Dir of Corporate Development, Starbucks

“ We identify areas that are most important to us through strategic planning. Then we put up rail guards and let people play in these spaces”

Building an innovative environment Stage 4: “Support and govern” Define sponsorship and leadership Determine technology support required Define additional support as necessary, e.g., facilitators Define key knowledge and information inputs Which technologies do you leverage to understand your social networks and fuel global collaboration?

Stage 4: “Support and govern”

Define sponsorship and leadership

Determine technology support required

Define additional support as necessary, e.g., facilitators

Define key knowledge and information inputs

Which technologies do you leverage to understand your social networks and fuel global collaboration?

Building an innovative environment Stage 5: “Measure and motivate” Establish performance management criteria based on individual and group success Provide incentives and recognise employees contributions Define timing for assessment, review and modification of member group How often do you revisit incentive and recognition programs to align them with strategic objectives, as well as to offer rewards that employees value most?

Stage 5: “Measure and motivate”

Establish performance management criteria based on individual and group success

Provide incentives and recognise employees contributions

Define timing for assessment, review and modification of member group

How often do you revisit incentive and recognition programs to align them with strategic objectives, as well as to offer rewards that employees value most?

Building an innovative environment “Innovation is a big idea with a big potential but it is wise to approach it in small steps. For most companies, the initial steps on this journey are the most critical of all” McKinsey Survey on Innovation - January 2008

“Innovation is a big idea with a big potential but it is wise to approach it in small steps. For most companies, the initial steps on this journey are the most critical of all”

Innovation within the workplace Avenue A (global Interactive Communications firm) Ideas lab – looks at generating 3-5 employee ideas every quarter Creators of one idea are awarded 90 days “off the job” to bring the idea to launch stage Creation of employee WIKI where employees can log their ideas and brainstorm

Avenue A (global Interactive Communications firm)

Ideas lab – looks at generating 3-5 employee ideas every quarter

Creators of one idea are awarded 90 days “off the job” to bring the idea to launch stage

Creation of employee WIKI where employees can log their ideas and brainstorm

Innovation within the workplace BUPA Australia Established Innovation Panel Significant budget made available each year to foster new initiatives in the business environment Members of innovation panel come from all functional units

BUPA Australia

Established Innovation Panel

Significant budget made available each year to foster new initiatives in the business environment

Members of innovation panel come from all functional units

Innovation within the workplace Google Reputed to have directed employees to spend 60% of their time on the job; 30% of their time being helpful to others and 10% ‘thinking’

Google

Reputed to have directed employees to spend 60% of their time on the job; 30% of their time being helpful to others and 10% ‘thinking’

As a Leader you need to.... Assess your own leadership attributes Connect with the ‘possibilities’ and explain why you care Capitalise on the attributes of today’s talent Be a role model Help employees prioritise and not micro-manage Collaborate and listen Place trust in others Recognise and reward success Turn failures into lessons learned Coach for job satisfaction, not just performance

Assess your own leadership attributes

Connect with the ‘possibilities’ and explain why you care

Capitalise on the attributes of today’s talent

Be a role model

Help employees prioritise and not micro-manage

Collaborate and listen

Place trust in others

Recognise and reward success

Turn failures into lessons learned

Coach for job satisfaction, not just performance

As an Executive you need to.... Secure champions at the top Align behaviours and practices Provide structure and tools structured info sharing and problem solving online suggestion boxes creativity training Hire and develop authentic leaders

Secure champions at the top

Align behaviours and practices

Provide structure and tools

structured info sharing and problem solving

online suggestion boxes

creativity training

Hire and develop authentic leaders