“ Progress comes from a satisfactory philosophy of ignorance.” Richard Feynman

G.O.L.F. T.E.E CEO’s role in Innovation Bill Burnett 06/08/09 [email_address]

G.O.L.F. G reat O rganizational L eaders F acilitate … ? T. ? E. ? E. to deliver innovation. 06/08/09 [email_address]

G reat O rganizational L eaders F acilitate …

? T.

? E.

? E.

to deliver innovation.

Manager or Leader? Almost all books on innovation come to the same conclusion. Innovation depends upon the right ‘ innovative ’ culture . Does the right culture in a company develop from leadership or management? 06/08/09 [email_address]

Almost all books on innovation come to the same conclusion.

Innovation depends upon the right ‘ innovative ’ culture .

Does the right culture in a company develop from leadership or management?

CEO Leadership Role Abandon practices that inhibit innovation. Believe in the workforce. Innovation is our natural state. Innovation develops on the front line. 06/08/09 [email_address]

Abandon practices that inhibit innovation.

Believe in the workforce.

Innovation is our natural state.

Innovation develops on the front line.

What Business Are You In? Tuned In Question: “ What business are you in? ” The answer for every business: “ We ’ re in the business of continuous problem solving for our market. ” Craig Stull, Phil Myers, and David Meerman Scott 06/08/09 [email_address]

Tuned In

Question:

“ What business are you in? ”

The answer for every business:

“ We ’ re in the business of continuous problem solving for our market. ”

Craig Stull, Phil Myers, and David Meerman Scott

Business -- Problem-Solving vs. Innovation What is the difference between regular “ problem-solving” and innovation? Why do we innovate? We innovate when we want a competitive advantage: otherwise, any old solution will do. 06/08/09 [email_address]

What is the difference between regular “ problem-solving” and innovation?

Why do we innovate?

We innovate when we want a competitive advantage: otherwise, any old solution will do.

Power of Knowledge “… acquiring and applying knowledge will become the key competitive factor. ” Peter Drucker “… creating new knowledge will become the key to competitive advantage in the future. ” Nonaka and Takeuchi 06/08/09 [email_address]

“… acquiring and applying knowledge will become the key competitive factor. ”

Peter Drucker

“… creating new knowledge will become the key to competitive advantage in the future. ”

Nonaka and Takeuchi

Business Innovation Defined We innovate to Gain competitive advantage by creating new knowledge that solves a market problem. We seek to protect this new knowledge. Innovation can start with a problem, or a solution. 06/08/09 [email_address]

We innovate to

Gain competitive advantage by creating new knowledge that solves a market problem.

We seek to protect this new knowledge.

Innovation can start with a problem, or a solution.

The chicken or the egg? Start with a problem, look for a solution. When painting a car with two tones, the paint bleeds. 3M Masking Tape Start with a solution, find a problem. Invented a glue that sticks hard to one surface then can be stuck and removed from a second surface. 3M Post-It ® 06/08/09 [email_address]

Start with a problem, look for a solution.

When painting a car with two tones, the paint bleeds.

3M Masking Tape

Start with a solution, find a problem.

Invented a glue that sticks hard to one surface then can be stuck and removed from a second surface.

3M Post-It ®

Business Innovation Defined We innovate to Gain competitive advantage by creating new knowledge that solves a market problem. 06/08/09 [email_address]

We innovate to

Gain competitive advantage by creating new knowledge that solves a market problem.

How to Create New Knowledge “ New ” means new to the human race. Discovery Charcoal burns hotter than wood Experimentation Build kiln technology to make charcoal Synthesis Waste: Natural Fibers + Starch = Briquettes 06/08/09 [email_address]

“ New ” means new to the human race.

Discovery

Charcoal burns hotter than wood

Experimentation

Build kiln technology to make charcoal

Synthesis

Waste: Natural Fibers + Starch = Briquettes

Idea and Implementation Innovation requires two things: The ability to come up with the idea. The ability to implement the idea. 06/08/09 [email_address]

Innovation requires two things:

The ability to come up with the idea.

The ability to implement the idea.

The idea What kind of person is good at problem solving? Has the ability to see the “ Big Picture” and how all the details fit together. Is broadly knowledgeable. Seeks truth. The “ Supersynthesizer” 06/08/09 [email_address]

What kind of person is good at problem solving?

Has the ability to see the “ Big Picture” and how all the details fit together.

Is broadly knowledgeable.

Seeks truth.

The “ Supersynthesizer”

What kind of person is good at problem solving? James March – Stanford Stereo type: Problem solver character traits: Avoid contact with co-workers Have high Self-Esteem No respect for “ Authority” Low Self-monitor “ heretics, deviants, eccentrics, crackpots, weirdoes, and original thinkers ” . 06/08/09 [email_address]

James March – Stanford

Stereo type: Problem solver character traits:

Avoid contact with co-workers

Have high Self-Esteem

No respect for “ Authority”

Low Self-monitor

“ heretics, deviants, eccentrics, crackpots, weirdoes, and original thinkers ” .

What kind of person is good at problem solving? Low Self-Monitor Unable/uninterested in reading non-verbal (and verbal) signals. Gives off wrong non-verbal signals. Guided by inner compass – not influenced by others. Won ’ t be following the herd. The Individualist 06/08/09 [email_address]

Low Self-Monitor

Unable/uninterested in reading non-verbal (and verbal) signals.

Gives off wrong non-verbal signals.

Guided by inner compass – not influenced by others.

Won ’ t be following the herd.

The Individualist

06/08/09 [email_address] What Do You Care What Other People Think!

Solving the Problem Define the Problem See how everything fits: Big picture Smallest relevant detail Define criteria Evaluate alternatives against criteria Pick solution 06/08/09 [email_address]

Define the Problem

See how everything fits:

Big picture

Smallest relevant detail

Define criteria

Evaluate alternatives against criteria

Pick solution

Ideas plus Implementation It is not enough to have ideas about good solutions, the ideas must be implemented. 06/08/09 [email_address]

It is not enough to have ideas about good solutions, the ideas must be implemented.

Implementation Competency Willingness to take risks where there are lots of unknowns. The passion to drive over obstacles. Persistence. 06/08/09 [email_address]

Willingness to take risks where there are lots of unknowns.

The passion to drive over obstacles.

Persistence.

Culture is Key The single most prevalent theme in innovation literature is around the critical nature of culture. Without the right culture, innovation will not happen. 06/08/09 [email_address]

The single most prevalent theme in innovation literature is around the critical nature of culture.

Without the right culture, innovation will not happen.

CULTURE and INNOVATION 06/08/09 [email_address]

Culture and Innovation Model of Cultural Differences Geert Hofstede: Power Distance Index (PDI) Individualism (IDV) Masculinity/Femininity (MAS) Uncertainty Avoidance Index (UAI) 06/08/09 [email_address]

Model of Cultural Differences

Geert Hofstede:

Power Distance Index (PDI)

Individualism (IDV)

Masculinity/Femininity (MAS)

Uncertainty Avoidance Index (UAI)

Culture and Innovation Model of Cultural Differences Geert Hofstede: Power Distance Index (PDI) Individualism (IDV) Masculinity/Femininity (MAS) Uncertainty Avoidance Index (UAI) 06/08/09 [email_address]

Model of Cultural Differences

Geert Hofstede:

Power Distance Index (PDI)

Individualism (IDV)

Masculinity/Femininity (MAS)

Uncertainty Avoidance Index (UAI)

Uncertainty Avoidance Degree of tolerance for uncertainty and ambiguity. Feeling either uncomfortable or comfortable in unstructured situations. Degree of tolerance of opinions different from what ’ s long established. 06/08/09 [email_address]

Degree of tolerance for uncertainty and ambiguity.

Feeling either uncomfortable or comfortable in unstructured situations.

Degree of tolerance of opinions different from what ’ s long established.

Uncertainty Avoidance Obstacles Uncertainty avoiding cultures try to minimize the possibility of situations that are novel, unknown, surprising, different from usual They establish strict laws and rules, safety and security measures, and philosophy and religion are based on belief in absolute Truth; “there can only be one Truth and we have it.” They have little need to look further for truth. 06/08/09 [email_address]

Uncertainty avoiding cultures try to minimize the possibility of situations that are novel, unknown, surprising, different from usual They establish strict laws and rules, safety and security measures, and philosophy and religion are based on belief in absolute Truth; “there can only be one Truth and we have it.” They have little need to look further for truth.

Obstacles Problem Solving and Innovation mean change. Change carries some risk. Problem solvers are not always risk takers. “ Problem-solving doesn't correlate with risk-taking or willingness to be on the margins ” -- Mitch Kapor, founder and former CEO of Lotus. 06/08/09 [email_address]

Problem Solving and Innovation mean change.

Change carries some risk.

Problem solvers are not always risk takers.

“ Problem-solving doesn't correlate with risk-taking or willingness to be on the margins ” -- Mitch Kapor, founder and former CEO of Lotus.

First Leadership Responsibility Trust To overcome fear of risk the CEO must build a culture of trust. Trust is a two-way street. Trust will follow you around. 06/08/09 [email_address]

Trust

To overcome fear of risk the CEO must build a culture of trust.

Trust is a two-way street.

Trust will follow you around.

Building Trust Tell the truth, be transparent. Truth trumps everything. You cannot solve problems if you don ’ t face them honestly and completely. No tolerance for politics. Includes withholding information 06/08/09 [email_address]

Tell the truth, be transparent.

Truth trumps everything.

You cannot solve problems if you don ’ t face them honestly and completely.

No tolerance for politics.

Includes withholding information

Building Trust We are all equal in our adulthood. Change the lexicon – eliminate distinctions which imply adult to child relationships. “ Superior-subordinate ” “ Senior - Junior ” Change to: “ Colleague ” “ Team member ” 06/08/09 [email_address]

We are all equal in our adulthood.

Change the lexicon – eliminate distinctions which imply adult to child relationships.

“ Superior-subordinate ”

“ Senior - Junior ”

Change to:

“ Colleague ”

“ Team member ”

Building Trust Eliminate Power and Prestige in the hierarchy. Hierarchy is just a decision making tool. Remove marks of distinction – Perks, Privileges, Executive dining rooms, etc.,. 06/08/09 [email_address]

Eliminate Power and Prestige in the hierarchy.

Hierarchy is just a decision making tool.

Remove marks of distinction – Perks, Privileges, Executive dining rooms, etc.,.

Build Trust We are in this together: Establish a Layoff as Last Resort policy. First we will: Eliminate bonuses Cut Executives’ salary Reduce salary across the board 06/08/09 [email_address]

We are in this together:

Establish a Layoff as Last Resort policy. First we will:

Eliminate bonuses

Cut Executives’ salary

Reduce salary across the board

Build Trust We are all unique. Differences spur innovation Therefore, we value our differences. 06/08/09 [email_address]

We are all unique.

Differences spur innovation

Therefore, we value our differences.

Second Leadership Responsibility Build Engagement Engaged employees self-motivate. Engaged employees seek excellence. Engaged employees solve problems. Engaged employees self manage. 06/08/09 [email_address]

Build Engagement

Engaged employees self-motivate.

Engaged employees seek excellence.

Engaged employees solve problems.

Engaged employees self manage.

Build Engagement Link personal values to the work. Toyota ’ s 5 “ whys”. 06/08/09 [email_address]

Link personal values to the work.

Toyota ’ s 5 “ whys”.

Build Engagement Create small teams of shared purpose linked to personal values. Allow task and job rotation. Listen; ask questions; coach; support; help; find resources; don ’ t order. 06/08/09 [email_address]

Create small teams of shared purpose linked to personal values.

Allow task and job rotation.

Listen; ask questions; coach; support; help; find resources; don ’ t order.

Build Engagement Set team goals. Set objective measurable goals as only measures of performance. Adjust goals for unpredictable events. Welcome passion 06/08/09 [email_address]

Set team goals.

Set objective measurable goals as only measures of performance.

Adjust goals for unpredictable events.

Welcome passion

Build Engagement Define leadership behavior. Allow the led to police leadership. 06/08/09 [email_address]

Define leadership behavior.

Allow the led to police leadership.

T.E.E. G reat O rganizational L eaders F acilitate … Trust Engagement. ? E. to deliver innovation. 06/08/09 [email_address]

G reat O rganizational L eaders F acilitate …

Trust

Engagement.

? E.

to deliver innovation.

Third Leadership Responsibility Empower employees Match responsibility to authority. Take all offers. Never kill an idea. Let teams make decisions. 06/08/09 [email_address]

Empower employees

Match responsibility to authority.

Take all offers.

Never kill an idea.

Let teams make decisions.

Empower Save ideas: Build a “ problem” database Build a “ solution ” database All great ideas look bad at first. “ When an employee comes to me with an idea, how do I know a good one from a bad one? ” 06/08/09 [email_address]

Save ideas:

Build a “ problem” database

Build a “ solution ” database

All great ideas look bad at first.

“ When an employee comes to me with an idea, how do I know a good one from a bad one? ”

Empower Reduce Smaller Risk Encourage team formation. Idea can only be presented by a partner. Allow minimal investment thresholds. 2 sponsors (minimum) - $ 5,000 3 sponsors - $15,000 4 sponsors - $ 25,000 … 06/08/09 [email_address]

Reduce Smaller Risk

Encourage team formation.

Idea can only be presented by a partner.

Allow minimal investment thresholds.

2 sponsors (minimum) - $ 5,000

3 sponsors - $15,000

4 sponsors - $ 25,000

…

Empower Reduce the Big Risk Identify your Supersynthesizers who are least familiar with the problem. Ask them to evaluate the problem definition. Ask them to evaluate the solution alternatives. 06/08/09 [email_address]

Reduce the Big Risk

Identify your Supersynthesizers who are least familiar with the problem.

Ask them to evaluate the problem definition.

Ask them to evaluate the solution alternatives.

Empower Pull in everyone: Marriott ’ s “ Red Tape ” for everyone. Tag problems and they get fixed. Everyone sees it working. 06/08/09 [email_address]

Pull in everyone:

Marriott ’ s “ Red Tape ” for everyone.

Tag problems and they get fixed.

Everyone sees it working.

T.E.E. G reat O rganizational L eaders F acilitate … T rust E ngagement E mpowerment to deliver innovation. 06/08/09 [email_address]

G reat O rganizational L eaders F acilitate …

T rust

E ngagement

E mpowerment

to deliver innovation.

CEO Leadership Role Trust Engage Empower 06/08/09 [email_address]

Trust

Engage

Empower

06/08/09 [email_address]