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What do Innovative Work Cultures and Inclusive Work Cultures Have in Common? –R-E-S-P-E-C-T
Posted on March 28, 2017

I.  Most organizations fail at becoming innovative or diverse, for similar reasons.

Many leaders say they want their companies or agencies to become more innovative.  Most of their initiatives will fail because the leaders themselves won’t be willing to make the changes necessary for creating cultures that are conducive to innovation.  (The term “innovation” means much more than breakthroughs in new products and services.  Most often, it relates to the continuous improvements that streamline processes, lower costs, and improve customer satisfaction.)1

  • If the organization is in the public or nonprofit sector, it may limp along while falling short of fully accomplishing its mission and will continually grapple with morale and productivity issues.

  • With for profit companies, failures to maximize both efficiency and adaptability in a rapidly changing world often results in financial losses that end in closures or takeovers.(40% of companies in the S&P 500 will fail in next ten years; projections are even higher for small businesses and startups.) 2

Similarly, many leaders talk about increasing diversity.  Some are motivated to jump on “the diversity train” in order to improve public relations or because it seems the thing to do.  They may have heard that companies that reflect society’s changing demographics sometimes grow market share.  (Especially through the use of Employee Resource Groups (ERGs).)3  For whatever the rationale, most organizations fall short of significantly increasing diversity across their workforce and within senior management.

Here again, the failure is due to the general unwillingness of most leaders to do what it is required of them to embed the inclusion piece of “Diversity & Inclusion” (D&I) into their cultures.  Human resource departments can recruit for candidates from varying identity groups all day long, but if the work environment is not one in which all employees feel included, meaning that they know their perspectives and input matter, the best and the brightest won’t stay longer than they have to, regardless of their cultural or gender identity groups.  In many “top-down” organizations, a substantial percentage of employees “check out” and do only enough to get by, while counting the days until they can go elsewhere or retire.

What is the common thread to these two failures to launch?  — A lack of respect and trust.  The inability to create either innovative or diverse environments both result from deeply entrenched hierarchical approaches to management.  “Hierarchy” is actually the polite or PC (politically correct) term for “elitism.”  Most management in the U.S. is still based on the 19th century industrial elitist model, which maintains that the smartest people should be running things from “the top,” and employees’ roles are merely to carry out the instructions of the smart big bosses.  Management typically believes their superior capabilities entitle them to be paid considerably superior salaries.  (Sometimes, the organizational benefits of their tenures are irrelevant; thus, the “golden parachutes” even for those who bring financial ruin to their companies.)

“Respect” is an organizational value commonly cited in annual reports and on company plaques, but top-down management approaches neither reflect trust nor respect for rank and file employees.  Given that the “important thinking” is left to those up the food chain, employee voices are generally absent from the table, other than when absolutely necessary (i.e. unions) or for show.  “The mindset is that managers have all the answers and their jobs are to dictate them — not to learn from workers.  These beliefs run very deep in most organizations.” 4  As a result, the trust or respect employees might have for senior management is limited, as is their would-be engagement.

II.  What is Missing?  Both Innovation and Inclusion Require Listening, which is tied to Respect and Trust

Although command and control leaders generally assert that departmental “silos” 5 are necessary for efficiency, these structures actually serve to control the flow of communications and ideas in order to maintain the power dynamics.  They inevitably slow everything down due to continual bottlenecks.

Continuous improvement requires the input and creative problem solving from workers throughout the organization.  Innovation is generally the result of a diversity of perspectives from numerous people asking questions and looking at issues with fresh eyes.  “Kaizen” is the Japanese word for “improve.”  Through rigorous application of the Kaizen system, each employee at Toyota is expected to submit no less than nine ideas per year on ways to do everything more efficiently.  And thus, Toyota has become known as the most efficient car manufacturer in the world.  (Yorke & Bodek: All You Gotta Do Is Ask)

There is nothing either mysterious or elusive about employee engagement.  ”Carrots” are not required.  Employees invest a considerable amount of their waking hours and their skills into their jobs.  The future and security of their livelihoods are linked to decisions made by management.  And so, it is only natural that they feel a sense of ownership and organizational pride when they are respected enough to be included in important discussions that tie to the success of their companies or agencies.  As the book title above reflects, if you want to engage employees, “All you gotta do is ask.”

III.  Success in both Diversity and Innovation Management Requires Courageous Captains to Venture Beyond The Known World

There are countless documented examples of companies becoming highly profitable industry leaders as the result of leadership initiatives that flatten organizational structures and apply Servant Leadership6 or other collaborative management models  (i.e. Southwest Air, Toyota, Harley Davidson, Starbucks, Whole Foods, and Virgin Air).  So why does resistance continue to persist within the wider managerial field?  Senior managers generally pride themselves on their rationality.  But where is the logic in ignoring all of the data gathered by innovative organizations and in resisting recommended best practices and the opportunities they present?

2,500 year-old lessons from The Buddha:  When people are not behaving in constructive or rational ways, there are generally strong underlying emotions at work.  There is a Buddhist teaching that I find valuable for “root cause analysis.”  It asserts that all human behaviors result from one of two sources: they are either motivated by fear, or love.  The object of our love can be humanity, learning, trying new things, adventure, creating, making a difference in the world, and so on.  At various times, we have all been animated and driven by this kind of love, which has been at the center of human advancement for millennia.  Love is an expansive and outward energy.  

However, when we turn away from options that positively affirm and help others or that would allow us to grow in new ways, our decisions are fear-based.  Fear causes us to shrink away from others or opportunities and go into “self” protective mode.  It is a contracting energy.  Things such as self-centeredness, deception, and betrayal are manifestations of fear, but fear is the underlying driving emotion.

The ongoing entrenchment of command and control management that flies in the face of potential benefits for our workforces, organizations, missions, and society, is due to leaders’ fears.  The fear may be of not having full control of outcomes as processes become more collaborative or experimental, or uncertainty of one’s role as leader when information becomes more transparent and solutions emerge from across the organization.  Or there may be trepidation of working with employees or colleagues whose ethnic, religious, or gender identities differ from one’s own and of saying anything that displays a lack of awareness.  It is sad that there is so much truth to the saying, “Better the devil you know, than the devil you don’t.”  Initiatives to create more inclusion are often sabotaged by managers who find themselves outside of their comfort zones, because one foot never leaves the old, known turf.  Without 100% commitment on their parts, there are too many mixed signals.  Incremental approaches to the necessary management and organizational culture changes generally fail.

It is not that the leaders of innovative and inclusive organizations have never experienced any trepidation in democratizing their organizations.  Most humans go through some amount of self-doubt when venturing onto unfamiliar ground and sensing the loss of full control.  As has been said, courage is not the absence of fear, but rather learning to face one’s fears and insecurities, and forging ahead despite them.  These leaders recognize and value the opportunities that increased diversity, inclusion, collaboration, and agility present to their organizations, and then push beyond their own fears, learning to navigate through increased ambiguity,7 and embracing the collective magic their teams create.

Leaders Eat Last:  Unfortunately, most MBA programs spend far more time teaching students to correctly interpret balance sheets than to substantively explore the role of character, integrity, and courage in leadership.  Regardless of one’s political persuasions, many of us would agree that integrity is in increasingly short supply among our political and corporate leaders.  Our captains of industry and the public sphere would benefit from the training that our captains of the military receive.  In his book, Leaders Eat Last, leadership consultant Simon Sinek shares some of the valuable lessons he gleaned from interviews with admired leaders from both the military and other fields. 

As Sinek explains, standout leaders create "Circles of Safety” that foster trust and cooperation throughout their organizations.  Good leaders earn respect, not through their rank or prestige, but through the respect they demonstrate towards those within their charge.  These leaders know that respect is not an abstract concept, but is known through its actions.  Taking their responsibilities for their teams seriously, they insure they have the tools they need to do their best work, listen to their input for operational improvements, provide them with opportunities to develop and lead, and are open to learning from them.  The respect exhibited from the leadership for those in the ranks increases success throughout the entire organization.

IV.  In closing: Choosing Respect and Trust, and Following Through

In order to help their organizations to gain the benefits of diversity and innovation, organizational leaders need to start by making a basic choice: hierarchy or inclusion. 

They then must commit and follow through with the path they have chosen.

Many managers are not ready to lose the comfort of top-down approaches to running their organizations and to support broader participation and input from their employees.  And that is certainly their choice to make.  Institutions have succeeded for decades and centuries using top-down approaches.  – However, the cost to maintain a higher level of predictability is that other possibilities and agility are lost.  There may come a time that such organizations will lose capacity and/or be forced to close their doors for failure to adapt.  The managers of these organizations should simply recognize that the benefits of diversity and innovation that they say they want will remain out of reach.

There are other leaders whose desire for the benefits that increased diversity, inclusion, and innovation can bring is greater than their fear of change and uncertainty.  They are willing to make the necessary adaptations within themselves, and then to the structures and cultures of their companies or agencies.  Fortunately, they will have at their disposal numerous roadmaps left behind by those who co-led their organizations to new levels of success based on the basic principles of mutual R-E-S-P-E-C-T.  These principles are the DNA, the thread that binds leaders with employees, teams, and potential with a thriving future.  

Sing it – Aretha! 

3.  Employee Resource Groups are voluntary identity or interest-based groups that organize to provide professional development support to members, while providing their organizations with ideas related to recruiting, on-boarding, marketing, and service ideas for current prospective identity-based customer groups.

 

 

 

 

 

 

 

 

 

4.  https://hbr.org/2011/06/how-toyota-pulls-improvement-f

5.  Siloes are distinct hierarchical departments in which all information must travel up and down that department’s chain of command, and communication between departments by lower level employees is frequently discouraged.

 

 

 

 

 

 

 

 

 

6.  Servant Leadership is built on the concept that a leader’s primary role is to support his/her employees and make sure that they have the resources and systems in place to excel at their jobs in serving the customers.

7.  http://ridingthewave.net/cliff-type-notes-on-ibms-2010-global-ceo-survey-capitalizing-on-complexity/

8. YouTube video of Simon Sinek discussing this book: http://tinyurl.com/n6abhsg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(Since Culture Eats Strategy for Breakfast anyway) — Let Them Eat Cake!
Posted on March 21, 2017

(Revised 2012 post)
I am a passionate evangelist for innovating management.  This term, popularized by Gary Hamel, refers to helping organizational leaders to adapt the structures and systems throughout their organizations in order to empower all employees to bring their ideas, their creative problem-solving, and the full range of their talents to workplaces that are committed to excellence in accomplishing their missions. In other words, innovation can't really take hold as a way of operating until management innovates its way of operating in that organization.
 

As many know, isolated incidents of process improvement (incremental, or process innovation), or producing 1-2 successful cutting-edge products or services (disruptive innovation) does not mean that an organization is “innovative.”  The genius of certain companies is due to the fact that its leaders have found ways to standardize the conditions and processes to do this repeatedly. (Langdon Morris, Permanent Innovation and Agile Innovation).

There are numerous guidelines available on how to make organizations more innovative.  Having studied and pondered some of these over the years, I came up with a mental model for delineating the key components necessary for this change path. — And it happens to very much resemble the form of a two-layer cake!

The Bottom Layer: A Solid Foundation:

These are the basic, fundamental structures and processes necessary to the stability of any organization.  Vision and missions should be clear and aligned, legal and fiduciary structures must be in place, accountability and communications systems are required, and so on.  This basic foundation also necessitates some ongoing attention and maintenance in order for organizational and fiscal health to continue.

–However, even in troubled organizations, leaders who are wise solicit creative problem-solving ideas from staff on all levels on ways to improve various operating efficiencies.  This lays the foundation for implementing the structures and processes needed for continuous improvement (an indispensable form of innovative) and for fostering workplaces that are inclusive and engage employees.

Top Layer: Innovation Structures:

It is in this layer that specific structures and procedures are added by those organizations committed to maximizing resources, employee talents, and effectiveness in being agile and responsive to changing needs and opportunities in an exponentially complex world.

These include such things as efficient systems for:

  • The ongoing collection of ideas solicited from both inside and outside the organization. (Toyota implements an average of 10 ideas per year per employee toward continuous improvement.)
  • Vetting which ideas to explore and which to shelve.
  • Rapid-prototyping.
  • Pipelines for short, medium, and long-term products.
  • Creating “Intra-preneur” programs.
  • Agile, Lean, Kaizan, and Kanban systems that increase efficiency, speed, collaboration, and transparency.
  • Skunk works and “Organizations within Organizations.”
  • Silo slashing and increasing both formal and informal cross-functional collaboration.

Management innovation:

  • Metrics that reframe and leverage (what non-learning organizations automatically discount as) “failure” as learning.
  • Systems that reward managers for experimentation, and not just ROI.
  • Increased transparency and open communications.
  • Management approaches that focus on removing obstacles from promising initiatives, though innovation champions, innovation leaders, servant leadership, and MBWA (Management by Walking Around). Empowering employees and pushing decision-making down.

Before going on…

Leaders who are willing to relinquish some of the command-and-control approaches that are antithetical to innovation, and who venture down the pathway of building this top layer may meet with some success.  But just as the majority of change initiatives fail, most innovation efforts do as well. — Why?  It’s the “culture thing.”  And, it has to do with “cognitive dissonance”:

If culture were truly as nebulous and intangible as many would have us believe, Cultural Anthropology would never have become the important field that it is.  There would be nothing to observe in various communities around the world.  Similarly, the customs, routines, norms, practices, and management style are all outward manifestations of the underlying beliefs and values of organizational culture.

So, when encouraging employees to begin to apply experimental thinking in their project work, it makes no sense when everything else looks and feels the same day in and out: “operational drudgery” as usual.  Guardedness and skepticism will remain in tact as employees wonder when will it be “safe” to think out-of-the box, and when divergent thinking be chastised? In order to transform a culture into one that values out-of-the-box approaches (instead of negating, undermining, and swallowing up nascent ideas and efforts, as most do) – concerted effort also needs to be applied to devising creative approaches to otherwise mundane corporate functions in order to create a consistency of values.  Which brings us to…

The Icing: Daily Operations Re-thought!!

The icing or frosting covers and runs through the center of the entire two-layer cake, just as culture covers and permeates an entire organization.  The icing on an innovative cake is the “special sauce” that supports the paradigm shifts that support creative problem solving and out-of-the-box thinking.

It is no coincidence that the most innovative companies have cultures that are anything but staid, and are designed to encourage playful, divergent thinking. (Southwest, Google, Virgin Air, IDEO, etc.) Creative thinking is a core value and encouraged as a norm, and it shows – all over these cakes!  In organizations wanting to increase innovation as a practice, managers and teams should be rewarded for coming up with creative approaches to doing everything: from how on-boarding is done; to communications; to rewarding staff for pushing through tough deadlines; to designing and delivering training, celebrations, meetings; and so on…

In closing…

Not everyone is going to be on-board with the changes needed to create innovative organizations.  Most organizations will not be willing to do what is necessary.  Choices are being made everyday, generally through inaction, as far as who goes forward and who will be left behind, both on the individual and organizational levels.  The rewards of making a successful transformation are as clear as day, and well documented.  For those that choose inaction, the consequences will become increasingly clear and painful. 

For those who are committed to do what it takes to lead into the future, the good news is that out-of-the-box, creative thinking is contagious.  The rewards of happy customers, fully engaged employees, and mission accomplished then foster more of the same.

 

Build it, Bake it – And they will come! 

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The Contenders for “Innovator-in-Chief”: Obama v Romney
Posted on September 21, 2012

Will it be President Obama or former Massachusetts Governor Mitt Romney who will offer the best strategy and leadership for helping the U.S. to increase the innovation needed to rebuild its economy?  For those who fully comprehend the direct link between America's economic survival and the role of innovation, this is a question of monumental significance.

To attempt to provide some answers to this question, the Washington, DC-based Information Technology and Innovation Foundation (ITIF) recently released a 33-page report.  The report provides a comparison of the two men’s approaches in ten policy areas. The ITIF based their analysis on a variety of the candidates' documents and policy statements gathered from a ten-year period.  

According to the ITIF, “the United States is engaged in a fierce race for innovation-based economic growth” that will require the future President to place science, technology, innovation and entrepreneurship at the center of economic policymaking.  The ITIF describes itself as "a nonpartisan think-tank" that does not take a position on which candidate will likely do a better job with innovation. 

However, the report did conclude that neither candidate nor political party is correct on every issue and, therefore, encouraged the creation of a “bipartisan Washington Innovation Consensus." It states that a partisan approach to creating technology policy will only hamper the nation. “Each side has to bend if we are to restore U.S. economic greatness.” 

An article in the Business Journals provides a helpful side-by-side summary of that report:

FEDERAL RESEARCH & DEVELOPMENT FUNDING:

  • In 2008, Obama pledged to double federal funding for basic research, focusing on physical and life sciences, over the next ten years.  He’s falling short of that goal, even though he did increase funding for the National Science Foundation.
  • Romney has called for an immediate 5% cut in non-security discretionary spending. Non-defense R&D programs presumably would be subject to this cut — Romney hasn’t said they’d be exempt.

TAXES:

On corporate taxes:

Both Obama and Romney favor revenue-neutral corporate tax reform that would lower the tax rate while eliminating many business tax breaks. They both also favor making the research and development tax credit permanent.

  • Obama, however, wants to collect more U.S. taxes from multinational corporations.
  • Romney wants to move to a territorial tax system, where income is taxed where it is earned with no additional U.S. taxes if companies move this money back [to America] from foreign countries.

On individual income taxes:

  • Obama would raise the tax rate for households making more than $250,000.
  • Romney proposes a 20% across-the-board cut in tax rates, accompanied by the elimination of many tax deductions.
     
  • Obama also has proposed raising the capital gains tax rate from 15% to 20%.
  • Romney would maintain the 15% rate.

BROADBAND/INTERNET POLICY:

Both candidates propose making more spectrum available for commercial use, and both oppose efforts by the International Telecommunications Union to take over the pricing on Internet interconnections and technical standards.

Their biggest difference is on net neutrality — whether the government should prohibit Internet service providers from favoring some web sites over others.

  • Obama favors net neutrality regulations, while exempting wireless networks from most of them.
  • Romney opposes net neutrality rules, instead relying on market forces to ensure an open Internet.
     
  • Obama also would rely more on regulations to address issues such as online privacy and cybersecurity. The president also favors a more robust government role in expanding broadband access.
  • Romney would leave broadband demand creation to local governments and the private sector.

ENERGY INNOVATION:

This is one of the biggest areas of disagreement between the two candidates:

  • Obama is promoting a national energy strategy to transition from fossil fuels to renewable energy sources.  That includes government investments in energy innovation, including deployment as well as basic science.
  • Romney wants to achieve North American energy independence primarily by significantly expanding domestic oil and natural gas production.  He would limit government investment in energy innovation to basic research and demonstration projects of new energy technologies.
     
  • Obama wants to continue tax breaks for renewable energy while eliminating subsidies for oil, natural gas and coal production.
  • Romney wants to scale down or eliminate subsidies, grants and tax incentives for clean energy commercialization and deployment.

MANUFACTURING POLICY:

  • Obama has proposed investing $1 billion to create a National Network for Manufacturing Innovation and $2.2 billion in advanced manufacturing R&D.
  • Romney is silent on these issues.

IMMIGRATION:

  • Obama has called for “fixing the immigration system for America’s 21st century economy,” but he hasn’t offered many specifics yet.
  • Romney has proposed raising the limit on visas for holders of advanced degrees in technological fields and giving green cards to foreigners who graduate from U.S. universities in these fields.

TRADE:

Both Obama and Romney support completing the Trans-Pacific Partnership trade agreement, and working to expand exports.

  • Obama, however, places more of an emphasis on putting environmental and labor provisions in trade agreements.
  • Romney also has promised to be tougher on China when it violates trade agreements, particularly when it comes to currency manipulation.

Some Conclusions:

According to ITIF:

  • The Obama-Biden platform is more willing to have government serve as an active partner with industry, such as in helping fund early-stage technology.  They propose keeping the private sector as the main source of innovation while creating government collaborations and intervening in the event of market failures.
  • "Romney would take a lighter touch role for government and have the private sector take the lead" in many areas.  

In general, Romney tends to stress tax and regulatory reform.

Obama emphasizes the need to improve the nation's digital infrastructure and worker skills.

  • The Obama-Biden platform also supports the creation of stronger rules governing the Internet and telecommunications, and fostering the growth of the alternative energy industry.
  • The Romney-Ryan conservative platform also favors eliminating any government policy that steers investment in any particular direction, such as government policy that would assist the alternative energy industry.

A Huffington Post article concludes:

"…the vast majority of the literature that the 2012 Obama-Biden campaign has made available on its science, technology, and innovation policies points to the Administration's past achievements …In general, more specificity is needed regarding the Obama Administration's science, technology, and innovation goals should it win a second term."

The report does give the Administration credit, however, for coming up with a detailed plan for reinvigorating high-tech manufacturing.

The Romney campaign is taken to task for issuing plans that "only addresses energy innovation and not the broader role of federal R&D investment in stimulating innovation in other areas, including life sciences, nanotechnology, or advanced manufacturing."

http://www.bizjournals.com/bizjournals/washingtonbureau/2012/09/12/obama-vs-romney-on-7-innovation.html.

http://www.huffingtonpost.com/2012/09/14/obama-romney-science-federal-government-role-report_n_1881786.html

http://www.govtech.com/policy-management/Obama-Romney-Do-Their-Tech-Policies-Differ.html

To see the full ITIF Report, "Comparing the 2012 Presidential Candidates’ Technology and Innovation Policies": http://www2.itif.org/2012-obama-romney-comparison.pdf

 

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