Innovation is a Banquet! –So Why Are So Many Leaders Starving to Death?!
I’m actually taking great liberties with the classic quote, “Life is a banquet, but most poor 
suckers are starving to death!" from Patrick Dennis’s book and Broadway hit, “Auntie Mame.”
My point being that although there are countless ways to engage our creative problem-solving brains to innovate day in and out, I am not optimistic that the majority of Americans in the business, non-profit, or governmental sectors will access this cornucopia before a lot more damage is done to our economy, environment, quality of life, and future potential.
For many, the word “innovation” is just a buzzword. They fail to understand that innovation is a state of mind and an approach, not a commodity that one can just order up, like a pizza, or flip on with a switch. Thinking that one can just make a few minor adjustments within one’s organization to become innovative is like having an argument on the cell phone while driving 90 miles an hour to get to a retreat center, and expecting serenity or enlightenment to be waiting at the door upon one’s arrival – It just doesn't happen that way.
And this is why it is projected that by the year 2020, only one out of five S&P 500 companies will still exist (findings of a comprehensive study published in Creative Destruction by R. Foster and S. Kaplan). The majority of companies simply will not have adapted to the changing world, and will therefore make themselves vulnerable to being taken over, sold off, broken up, or bankrupted.
I’m currently listening to the audiobook, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back, co-authored by international journalist Thomas Friedman (author of the blockbuster The World is Flat) and American foreign policy professor Michael Mandelbaum. Like the authors, I consider myself to be a “realistic optimist.” By which we mean that it is only by clearly taking in the “bad news” — the looming threats facing our companies, institutions, and economy — that we have any chance to do what is necessary to adapt our mindsets and correct our course.
Like Friedman and Mandelbaum, I too, still believe in “Yankee Ingenuity” and that we have the collective capacity to rise to the occasion and deal with great challenges, just as Americans did in The Great Depression, World War II, and the race to the moon. But we can’t even begin until we pull our heads out of the sand.
When it comes to business, I am enough of a capitalist to believe in the survival of the fittest. On one hand, I believe that companies led by short-sighted, arrogant leaders and managers should fail. It’s best f
or them to get out of the way to make room for other ventures led by those who are wiser, more humble, and better attuned to both the world around them and to the intelligence and talents within their ranks.
The tragedy won't be the auctioning off of the brick and mortar and mastheads of these companies themselves over the next decade. Rather, it will be the human costs resulting from the bad choices made by those leaders: the millions of talented people who will lose their jobs and livelihoods, as well as the loss of tax revenues that will further cripple our society.
And then “four out of five” of these US companies will fail?! – Even if it were half that (e.g. 51% of
CEO's in the 2010 IBM CEO study expressed concerns regarding their companies' futures for lack of creative thinking abilities) — what part of economic catastrophe do we still not understand?! Neither manufacturing jobs or increasingly outsourced pink and white collar services will be returning from our lower-cost overseas competitors in any significant numbers. That leaves American creativity and inventiveness to carry our economy forward. Yet we allow Brazil, India, and China to far outspend us in innovation (Boston Consulting Group Report, 2010) as the previously unchallenged lead we held in patent application filings now steadily shrinks. http://economix.blogs.nytimes.com/2010/10/06/china-poised-to-lead-world-in-patent-filings/ & http://www.wipo.int/pressroom/en/articles/2012/article_0001.html
Even among those in management who are talking about innovation, many don’t seem to grasp the irrefutable causal relationship between management style and innovative culture. I don’t believe that most American managers or the consulting professionals upon whom many of them rely, understand this fundamental reality: sustained innovation cannot exist in hierarchical, siloed, watch-your-back organizations.
“Management innovations” are necessary in order for other forms of innovation to see the light of day. It has been stated in numerous ways throughout these blog-posts that an organizational culture that fosters an innovative mindset and which produces winning results requires authentic mutual trust and respect throughout the organization. As the stand-out CEOs in the IBM 2010 Global CEO survey (“Capitalizing on Complexity”) indicated, trust and innovation are the means and ends and involve:
- Cross-departmental and external stakeholder collaboration
- Efficient and open communication in which mistakes are valued as educational opportunities rather than
something to be covered up or blamed on someone else
- Comfort with ambiguity, experimentation, and trial by error
- Encouragement to question the status quo for the sake of continuous improvement
- Processes and reward systems for fully engaging employees in contributing ideas for continuous improvements and increasing problem-solving autonomy throughout the ranks.
All of these necessitate a collaborative, versus a command-and-control style of management. Evidence abounds that the most successful U.S. companies (like Southwest Airlines, Google, and Apple) flatten their organizations and, far more than average companies, value and foster both the creativity and critical analysis of “whole brain” thinking at all levels.
Yet evidence and logic do not persuade many in leadership whose perceptions continue to be clouded by barriers of their own making. I am not optimistic that most organizational leaders in the U.S. are willing to trust and develop their employees’ abilities enough to relinquish control, because, as is said in Twelve-Step programs, their pain isn’t deep enough yet. –If only their poor choices wouldn’t inflict so much pain on the rest of us.
However… despite my concerns expressed above, as a dedicated realistic optimist, I will continue to focus my attention not on those who stubbornly fail to grasp the paradigm shifts that are necessary, but rather on the great innovators in all walks of life working with their creative muses and collaborating all over the world. I will feed my spirit and mind by exploring and learning along with those equally excited by the possibilities and the array at the banquet table!
Bon appetite!
Mangia!
The next post will further explore management innovation with a review of Gary Hammel’s great Harvard Business School article, “The Why, What, and How of Management Innovation.”
Enjoy this three-minute creative educational video by Explania on the many benefits of employee engagement and how organizations can cultivate it. http://www.explania.com/en/animations/detail/how-to-use-employee-engagement-to-boost-your-business
As “illustrated” in this video, "engaged" employees means those who regularly go the “extra mile” because they carry energy and passion for the organizational vision and take great pride in their work and the contributions they make towards the mission and goals. They take initiative and serve as examples to other staff. They tend to have stronger relationships with customers, building sales and boosting reputation, and they promote the organization to others.
Sadly, even among the organizations that take care of the basic employee satisfaction areas (fair pay, reasonable management, and reasonable working situations), according to the statistical research cited by Explania, engagement is as low as 20% in the average organization. However, in innovative organizations, the number of engaged employees is eight times greater than those that are average. The video attributes recognition, leadership, education and professional opportunities as drivers for engagement.
All good, and spot on!… The only lacking I see is that there is no mention of a) what makes organizations innovative or b) the role of employees’ contributions of ideas in any of the areas discussed on this blog: process improvements, marketing, services, or products.
What this clever little video does not mention is that employees need to know their ideas and opinion are valued in order to feel respected in order be willing to or have the option to fully engage all of their talents, and for the organization to be an innovative one. –The authors probably meant that as well, but the oversight was probably a simple “slip of the pen.” 😉
Cheers!
Originally posted August 2011. Revised January 2018.
A colleague told me he hadn’t realized that when I talk about innovation I am often referring to improvements in processes, workflows, and efficiency, in addition to new product and service developments. So, let me set the record straight.
According to The Oxford American Dictionary, innovation is defined as: n. Change, alteration, revolution, upheaval, transformation, metamorphosis, breakthrough; new measures, new methods, modernization, creativity, ingenuity, inspiration….
Therefore, "change" and "new methods" can be something as modest as altering the steps in verifying data to ensure greater accuracy, or ordering a piece of equipment so that fewer people need to be involved. Minor “tweaks,” collectively, can be world changing. Toyota became the largest and “most efficient” car manufacturing company in the world not based on revolutionary, head-turning Tesla-like designs (although it has certainly has had breakthrough designs of its own). What Toyota has mastered is a whole other realm of innovation:
"… Small incremental innovations [have] snowballed over time into huge improvements in productivity, efficiency and output."
Improving Processes — Keeping it Simple in the Spirit of "Kaizen"
It is important not to conflate an openness and commitment to improving processes with adopting formal process improvement systems such as Lean and Six Sigma. A future blog post will provide a high-level overview Lean and Six Sigma, as well as Agile. In short (while there is some interrelationship between them) these are disciplined, multi-step methodologies for revealing and eliminating: a) waste in time, energy, and resources (Lean); b) inconsistencies in production quality (Six Sigma), and c) for speeding up development and leaning cycles (Agile). The latter, Agile, has been primarily used in software development, but many believe its use would improve the outcomes and efficiency of most projects.
There are times when these frameworks utilize creative thinking, and at others, the intense drive for speed and exact measurement can stifle it. In order to maximize the benefits of divergent thinking, depending on the stage of the cycle within any one of these methodologies, process leaders must hold fast to a commitment to balance, and ensure there is sufficient time for the creative ideation and reflection process.
Toyota has honed each of these systems to a high art. But they are viewed only as tools within their overarching approach called "Kaizen,” which is Japanese for “change for the better” or “continuous improvement.” Kaizen itself is not a specific tool, but rather, it is a mindset or value system, and a "journey."
With the belief that everything can be improved and performed more efficiently, and that continuous improvement is everyone's business, just as the stand-out leaders in the IBM CEO study did, Toyota requests every one of its employees to help "identify problems and then develop and implement ideas to solve [them]." (My most recent information estimates all Toyota employees contribute an average of ten improvement suggestions per year, from line-workers, to administrative assistants.)
In the spirit of Kaizen, in this article, we are referring to improving processes in its simplest form. On any given day at our work, most of us have ideas pop into our heads for how things could be more efficient or effective. Innovation management expert Langdon Morris writes that “seeing things as they are and things as they could be” is the creative tension that is foundational to innovation.
Many American companies that have adopted Lean and Six Sigma tools have fallen short of achieving the results that their Japanese counterparts have. Some ascribe this to a failure to fully understand the art of kaizen and the balance between:
- Applying the rigorous systems of Six Sigma, and Lean
- With taking adequate time for divergent thinking and stepping back
- With drawing creative continuous improvement ideas from the ingenious rank-and-file humans who come to work for them every day.
Unless leaders put processes in place for employees to share their ideas, and then to vet them and experiment with those that may be viable, rhetoric aside, they are not creating innovative workplaces. The cost of not implementing these is a tremendous loss of brainpower, opportunities, and financial and human resources. Regardless of what great employee benefit programs are offered, their organizations' rates of dissatisfaction and turnover will be higher than had they engaged the talents of their employees in continuous improvement.
Other Forms of Innovation:
Now that we've explored the over-arching concept of process improvement, let's look at some other viewpoints. Brownell Langdrum of Draw Success (www.DrawSuccess.com) supplemented her own list of types of innovation with those generated by a group of chief innovation officers from companies such as Google, Mattel, and Hewlett-Packard. A few of these are included below; some overlap, and some "hairs might be getting split." But it's an interesting prompt for thinking through the various areas where we can take our questions and wonder if there might be better ways… (In looking at her full document, you will find that some of the descriptions are quite original themselves.)
Improvements in internal operations:
- Efficiency Innovation delivers ways to improve efficiency and the speed of effectiveness. It can include internal systems and processes or ways to expedite the customer/client experience.
- Financial Innovation conveys ways to increase sales, reduce costs, improve tracking of expenses, and reduce accounts receivable, along with other ways of managing finances to enhance profitability. It also includes ideas to improve tax/audit compliance.
- Process Innovation encompasses the implementation of a new or significantly improved production or delivery method.
- Systems Innovations includes introducing a new infrastructure or system, which could produce new sectors, and induce major change across several areas of business.
And now for the Flashier forms of Innovation:
- Breakthrough, disruptive or radical innovation: These involve launching entirely novel products or services. Breakthrough innovations are rare because of the risk and uncertainty, but they can deliver tremendous rewards. They require large leaps of thought and a high risk tolerance.
- Business Model Innovation involves changing the way business is done, whether in terms of sales and distribution, marketing, pricing or any other core business strategy.
- Incremental Innovation is when one adds something extra to a product or service that the competition doesn't have or isn't doing. Or, when one makes something last longer, makes it more convenient, or faster.
- Marketing Innovation involves development of new marketing methods with improvements in product design or packaging, product promotion, communication or advertising, pricing or distribution.
- Product Innovation is the introduction of a good or service that is new or substantially improved, which may include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.
- Service Innovation: Compared to goods or product innovation or process innovation, service innovation delivers ways to improve the delivery of a service or expertise and is both interactive and information-intensive.
- Technological Innovation may include coming up with new technologies to solve a problem or new uses for existing technologies. Solutions may be high-tech (i.e. computer systems) or low-tech (a better mouse trap).
In summary, when hearing or using the term “innovation,” be aware that it often refers to simple improvements in workflows and processes. Creating environments that challenge all employees to help lead continuous improvement can result in organizational benefits that go far beyond what any one mind could ever have imagined.
With the belief that everything can be improved and performed more efficiently, and that continuous improvement is everyone's business, just as the stand-out leaders in the IBM CEO study did, Toyota requests every one of its employees to help "identify problems and then develop and implement ideas to solve [them]." (My most recent information estimates all Toyota employees contribute an average of ten improvement suggestions per year, from line-workers, to administrative assistants.)
