An Executive's Guide to Building a Culture of Innovation

1
An Executive’s Guide to Building
a Culture of Innovation
2013
Gail Golden, MBA, Ph.D.
www.gailgoldenconsulting.com

4/30/2013 22
Objectives
• Strengthen your skills in nurturing an
innovative organizational climate
• Identify barriers to innovation in your
workplace
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Agenda
1. Three fundamental elements in an innovation
program
– Think It
– Try It
– Sell It
2. Organizational frameworks for innovation
3. Ways to measure innovative success
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1. Three Steps to Innovation
4
THINK IT TRY IT SELL IT

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Step 1: Think It

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The Goal
• Empower your people to imagine and
communicate innovative ideas for the business
often.
– 3,000 bright ideas
– 100 worthwhile projects
– 4 development programs for new products
The Economist
6
Step 1: Think It

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Barriers to Innovative Thinking
• Too busy
• Afraid of humiliation
• Afraid to take risks
• Short-term thinking
• Narrow perspective
• No access to communication channels
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Think It

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Leadership Attitudes
• Be curious.
• Be open to new ideas - suspend judgment.
• Be respectful and non-threatening.
• Make it fun.
• ―Knowledge is perishable. Treat it like milk. Date
it.‖
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Think It

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• Look for small innovations, not just blockbusters.
• Don’t create two classes of corporate citizens:
―those who have all the fun‖ and ―those who
make all the money.‖
• Innovators are seldom easy to be around. They
can be annoying, touchy, intolerant, and self-
aggrandizing.
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Think It

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Key Leadership Behaviors
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Think It
• Expect people to submit ―Imagination
Breakthrough‖ ideas and reward them when
they do. How?
• Search for insights widely – where?

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Example: Innovation Networks
• Build innovation networks, internal and external,
focusing on diversity, not number, of contacts.
– Solution networks, geared toward finding answers to
specific problems
– Discovery networks, geared toward unearthing new
ideas within broad technology or product domains.
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Think It

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Example: Innovation Networks
• Offer people opportunities to make more
money with more risk.
• Accept their surreptitious activities.
• Allow them to make decisions based on
incomplete information.
• Let them run with promising, if
uncertain, ideas.
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Think It

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The Goal
Sort out which innovative ideas are worth
investing in by editing out most of them and
concentrating on the ones which add the most
value.
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Try It

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Barriers
• Hard to say no
• Projects take on momentum
• Hard analytic tasks are not as much fun as
coming up with ideas
• ―Ready, fire, aim‖ mentality
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Try It

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• Balance enthusiasm with critical thinking.
• Use rigorous frameworks to screen ideas.
• Show support for people’s creativity even when
their ideas are rejected.
• Demonstrate fairness – the quality of the idea is
what matters, not who it comes from.
• Fail early, fail often.
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Try It

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Leadership Behaviors
• Store knowledge—record, track and analyze.
Keep a multi-year data base of project reviews.
• Develop new ways of tracking and rewarding the
progress of innovations. Rewarding a manager
who "sticks to plan" doesn't encourage
something new.
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Try It

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To increase the number of successful projects per
year:
• Reduce the number of active projects.
• Increase resource allotment to major projects.
• Decrease time to completion.
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Try It

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Example: Lean Startups
• Use of free and open source software
• Application of agile software development
methods
• Ferocious customer-centric rapid iteration
Eric Ries
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Try It

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Leadership Behaviors: The Six Questions
1. How many breakthrough projects in the last 5 years
(incremental sales >1% of total sales)?
2. How many active projects do we have in the pipeline?
3. How much time have we committed to each one?
4. Do we have clear review points?
5. How many projects failed to clear the hurdles? How
many did we actually kill?
6. What proportion of our budget is for breakthrough
projects vs. line extensions?
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Try It

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• Clear out ―project sludge‖
• Hold ―liberation parties‖ where projects are killed
off
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Try It

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Institute post-failure management:
• Formulate criteria for distinguishing between
excusable and inexcusable mistakes
• Glean learnings from both successes and
failures
• Senior leaders share stories about their own
past failures
• Share the learnings widely
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Try It

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The Goal
Gain alignment throughout the company, so the
organization will aggressively pursue winning
innovations.
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Sell It

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Barriers
• Lack of time
• Lack of focus – too many projects
• Lack of skill in building networks
• Lack of access to decision makers
• Politics
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Sell It

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• Balancing enthusiasm with hard-headed
business acumen
• Paying attention to the impact of the message
on the audience
• Open to input, but able to stand his/her ground
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Sell It

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• Understand that networks are about give-and-
take. Support others’ innovations and they will
be more likely to support yours.
• Develop superb presentation skills.
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Sell It

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• Link innovative ideas with business strategy and
quantitative data.
• Be persistent – timing is everything.
• Recognize that you aren’t going to win them all
and know when to let go.
28
Sell It

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2. Organizational Frameworks

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Create an Innovative Business
Architecture
Organizational Hardware
– Reduce hierarchy
– Increase autonomy
– Encourage diversity
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Innovative Business Architecture
Organizational software
– Cooperating norms
– Performing norms
– Innovating norms
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3. Measure Your Success
Survey using “The Group Innovation Scale”

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Group Innovation Scale
1–Agree 2–Somewhat agree 3–Disagree
In-house innovation
1. People on our team generate a lot of new
ideas.
2. Our culture makes it easy and
comfortable for people to put forward new
ideas.
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Think It

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Cross-fertilization
3. People on our team typically collaborate
on projects with others across the
company.
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Think It

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External Idea Sourcing
4. We find a lot of good ideas for new
products and services from outside the
company.
5. We consider ideas from outside the
company to be just as valuable as those
invented here.
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Think It

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Selection
6. We have tough rules for investment in new
products, but good ideas get funded.
7. People know what the criteria for
investing are.
8. We take calculated risks to invest in new
ideas.
36
Try It

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Development
9. We complete most of our new-product-
development projects on time.
10. It is pretty easy to get traction to develop
new ideas for the business.
37
Try It

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Sales
11. We roll out new products and services
promptly and efficiently.
12. We are usually ahead of the competition in
rolling out our new ideas.
13. We excel at penetrating all
channels, customer groups, and regions with
new products and services.
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Sell It

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References
• Beinhocker ED. The adaptable corporation. The McKinsey
Quarterly, 2006, 2.
• Day GS. Closing the growth gap: Balancing ―Big I‖ and ―small I’
innovation. MSI Reports, 2006, 4.
• Pink D. A whole new mind. New York, Riverhead Books, 2006.
• Silverthorne S. Lessons not learned about innovation: Q&A with
Rosabeth Moss Kanter. Harvard Business School, Working
Knowledge for Business Leaders, 2006.
• Warren C. Innovation, Inc. American Way, Dec. 15, 2004, 92-98.
ggolden@gailgoldenconsulting.com
39

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Gail Golden, MBA, Ph.D., is the Principal
of Gail Golden Consulting, LLC. As a
psychologist and consultant for more
than twenty years, Gail has developed
deep expertise in helping businesses to
build better leaders.
www.gailgoldenconsulting.com
ggolden@gailgoldenconsulting.com
4040

An Executive's Guide to Building a Culture of Innovation

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