An Executive's Guide to Building a Culture of Innovation

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1 An Executive’s Guide to Building a Culture of Innovation 2013 Gail Golden, MBA, Ph.D. www.gailgoldenconsulting.com
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Gail Golden, MBA, Ph.D., is Principal of Gail Golden, LLC. As a psychologist and consultant for more than twenty years, Gail has developed deep expertise in helping businesses to build better leaders. In her "Guide to Building a Culture of Innovation” Gail explores the three fundamental elements of innovation programs, reviews organizational frameworks for innovation, and identifies ways to measure innovative success. To learn more visit: www.gailgoldenconsulting.com

Transcript of An Executive's Guide to Building a Culture of Innovation

Page 1: An Executive's Guide to Building a Culture of Innovation

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An Executive’s Guide to Building a Culture of Innovation

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Gail Golden, MBA, Ph.D. www.gailgoldenconsulting.com

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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

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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

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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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Leadership Attitudes

• 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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Try 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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Leadership Attitudes

• 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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Leadership Behaviors

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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Leadership Behaviors

• Clear out “project sludge” • Hold “liberation parties” where projects are killed

off

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Try It

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Leadership Behaviors

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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Sell 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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Leadership Attitudes

• 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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Leadership Behaviors

• 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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Leadership Behaviors

• 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.

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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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Group Innovation Scale

1–Agree 2–Somewhat agree 3–Disagree

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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Group Innovation Scale

1–Agree 2–Somewhat agree 3–Disagree

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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Group Innovation Scale

1–Agree 2–Somewhat agree 3–Disagree

Selection6. 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.

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Try It

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Group Innovation Scale

1–Agree 2–Somewhat agree 3–Disagree

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.

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Try It

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Group Innovation Scale1–Agree 2–Somewhat agree 3–Disagree

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.

[email protected]

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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

[email protected]

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