How to Win the Innovation Race

Change A Culture to Change the Game 

 

Why do some companies win at innovation while others fail?

How important is innovation to your growth?

 

From individual entrepreneurs to large global organizations, it seems everyone is chasing innovation. And it’s no wonder: Economists estimate that 80% of business growth comes from innovation.

So how do you develop an innovation culture powerful enough to consistently produce?

Gaia Grant and Andrew Grant are the authors of The Innovation Race: How to Change a Culture to Change the Game. They are the Directors of Tirian International Consultancy and help create innovative cultures for a range of businesses.

I recently spoke with them about global innovation.

 

The top 25% of innovative companies grow 2x as fast.

 

The Pace of Change

How is the accelerating pace of technological innovation impacting strategy and innovation?

Andrew Grant: Most people would be aware of how the pace of technological innovation has been accelerating, but conducting the research for our book The Innovation Race has really highlighted this issue and made us think about the potential impact of this manic race. We have discovered that the pace of change is now so rapid that we are in an unprecedented position. It’s like there’s an automatic speed-up setting on the treadmill that can’t be changed, and if we’re not careful the pace will just become too much to handle. Since the rate of technological innovation in particular has become exponential, a whole new leadership strategy and approach will be required. Small incremental innovations will not be enough to keep up. It will also be necessary to look ahead and anticipate the next new trends. By constantly looking for breakthrough new ideas and being ready to implement them faster, it can be possible to stay ahead of the curve. Agile new systems and structures will need to be built that can respond rapidly and effectively.

What is sustainable innovative action?

Gaia Grant: There’s no point innovating for the quick sale and short-term success. Innovation also needs to be able to be sustained over the long term. And, at a deeper level, it should be socially and environmentally responsible for the good of all people and the planet. Sustainable innovative action requires a balance of focusing on both short-term survival and long-term strategy: On the one hand the organization needs to be flexible enough to adapt to new needs and trends, but it also needs to be stable enough to be able to ride out the stormy times with a firm foundation. This will be both the greatest challenge and the greatest opportunity for success.

 

Authentic Connections Foster Innovation

How is empathy related to innovation?

andrew and gaia grantGaia Grant: Many people will innovate from their own perspective. That is, they will decide what they think the end user wants or what will sell the best and innovate based on this viewpoint. But being able to see from another person’s perspective is essential for innovation that connects with real needs, innovation that can make a difference in people’s lives and in the world – or purpose-driven innovation – and this requires empathy. To really embody empathy, you need to be able to see what someone else sees and, more than that, to be able to feel what someone else feels. This ensures the innovation process is human-centric and user-focused rather than innovator-centric. What’s essential to remember here is that the empathy process should not be a shallow marketing tactic but rather an authentic connection that enables the innovator to address real issues and meet real needs.

 

“Purposeful proximity in clever collaborative spaces can create hothouses for innovation.”

 

How to Create a Culture of Innovation

How do corporate leaders foster and encourage a sustainable innovation culture?

Andrew Grant: Most people assume that innovation is all about openness and freedom, but this is only part of the equation. Sustainable innovation needs to focus on balancing both openness and freedom – as well as the antithesis of these. That is, while there certainly needs to be openness and freedom, there will also need to be some focus and discipline to effectively guide the innovation process. Maintaining this delicate balancing act is at the crux of a sustainable innovation culture. The strategic leader will constantly be adjusting the balance to fit the market changes along with the organization’s current needs and future goals. It needs to be an ongoing constant strategic action, not a set-and-forget approach. It’s situational leadership.

 

4 Paradoxical Challenges to Innovation

Creating a High-Trust Culture for High Performance

 

How to Increase Trust

 

Why is culture so difficult to change?

Why are so many employees disengaged?

What should a leader do when she arrives at a company that is struggling?

 

The founding director of the Center for Neuroeconomics Studies recently wrote a book, Trust Factor: The Science of Creating High-Performance Companies to answer these and other questions. Paul J. Zak, PhD, is also a professor at Claremont Graduate University. He recently answered some of my questions about his extensive research into trust. His book is fascinating and contributes to the body of work on trust and organizational culture.

 

Survey of 200,000 employees: 71% of companies have mediocre to poor cultures.

 

Spot the Signs of a Low-Trust Culture

In one part of the book, you tell a story of walking into an office full of cobwebs, old furniture, and a struggling culture. What are some of the signs of a low-trust culture?

Distrust drains employees’ energy, so people move slow, think slow, and lack a passion for their jobs.  Organizations with low trust also have lower profits, so offices often look out-of-date, even while new employees show up as turnover tends to be high.  We have also shown that people take more sick days when they work at low-trust companies, so one sees empty desks.  All these factors are signs of a low-trust syndrome and a downward cycle of productivity, innovation, and profits.

 

“High-trust companies invest in employee health and productivity.” –Paul J. Zak

 

Why Healthy Cultures are Based on Trust

trust factorWhy is a healthy culture based on trust so vitally important to its success?

Companies are, first and foremost, people. As social creatures, we naturally form teams to accomplish goals together.  Extensive research shows that teams are more effective when they have a clear objective and when team members are trustworthy. Trust reduces the frictions that can arise in teams so getting things done takes less effort and as a result more and better work is done.  By measuring brain activity while people work, we’ve shown that people are more relaxed when they trust their colleagues. They innovate more and shed the stress from work faster than those in low-trust companies.  Creating a culture of trust provides powerful leverage on performance because it harnesses what our brains are designed to do: cooperate with others in teams.  And the neuroscience I’ve done shows how to create a culture of trust in a system so it has the maximum effect on brain and behavior.

 

Workers in high trust organizations are paid an average of $6,450 more.

 

I love the biological explanation of the Golden Rule. Explain the connection between oxytocin and trust.

How to Make Successful Connections in the New Global Era

How to Make a Successful Culture Crossing 

We live in an increasingly connected world. That much we all know. As a regular globetrotter, I know how easy it is to cross borders.

But it’s not always so easy to understand each other.

Often I see how a phrase in one language doesn’t translate to another. Try speaking on stage and using a gesture that is common in one country and see how it offends an audience in another. Technology and travel have moved faster than our understanding of cultural differences.

That’s why I loved reading strategic management consultant Michael Landers new book Culture Crossing: Discover the Key to Making Successful Connections in the new Global Era. It’s an extraordinary look into our differences. Michael provides insights into how we can create more effective interactions and thus achieve greater success in working with each other. I talked with him about his extensive work.

 

Leadership Tip: Be mindful of your own cultural programming when working with others.

 

Avoid a Culture Crash

What’s a culture crash?

Every time people from different cultures interact, a culture crossing occurs. When you get a culture connection, things go well, and the impact you have on each other matches your intentions. But there can also be a culture crash,  a phenomenon that occurs when someone from one culture unintentionally confuses, frustrates, or offends a person from another culture. Typically when these occur, people’s intentions are not in alignment with the impact they may be having on each other.

 

Would you share a high-profile example or two?  Some more recent culture crashes that come to mind include when Microsoft founder Bill Gates insulted the South Korean president by keeping one hand in his pocket while shaking her hand, a sign of disprespect in South Korea, or  when LeBron James inadvertently disrespected Princess Kate (and much of the U.K.) by slinging his arm around her for a photo op.

 

Recognize Your Own Cultural Programming

Can you share a few simple culture crash–minimizing techniques?

There is a three-step method that can apply in many situations that helps people to take some of the “cultural reflex” out of the equation and set themselves up for success.  It’s the same method I share with all my clients:

  1. Recognize your own cultural programming.
  2. Open your mind to other ways of perceiving or approaching a situation.
  3. Identify opportunities to adapt your response to optimize results.

The methodology is widely applicable, whether the goal is to increase sales, build strategic partnerships lead people/teams, or maximize the potential of a diverse customer base.   The more you search through your cultural baggage and recognize your own cultural programming (Step 1), the easier it will become to put the next two steps into action. Getting to the bottom of your bag won’t happen overnight. I’ve been at it for several decades, and I still regularly discover new aspects of my cultural programming.

 

Acknowledge You’re in the Dark

Leading the Malcolm Baldrige Way for Exceptional Results

Align Your Organization to Create Exceptional Results

 

How do leaders align and engage a workforce in the midst of uncertainty?

 

Authors Kay Kendall and Glenn Bodinson are expert Baldrige coaches. They studied more than two dozen organizations that delivered exceptional results following the Baldrige Criteria, key principles derived and championed by Malcolm Baldrige in the mid-1980s to improve productivity and competitiveness. Their research was supplemented by talking with more than fifty CEOs to gain insights on performance excellence. I recently asked them about their work and their new book, Leading the Malcolm Baldrige Way.

 

Disengaged workers have 37% higher absenteeism.

 

What do readers, who may not know Malcolm Baldrige, need to know before picking up your book? How will studying the Malcolm Baldrige Way help business leaders?

Malcolm Baldrige was a very successful businessman before Ronald Reagan tapped him to be Secretary of Commerce.  He was deeply concerned about the future of manufacturing in America.  At that time, the 80s, Japan was dominating in the automotive and electronics manufacturing industries.  Both of those industries – and others in America – were being plagued by poor quality, and consumers were making choices to go with Japanese products.  Secretary Baldrige championed an effort to establish a presidential award based on rigorous standards that would recognize manufacturing and service organizations that achieved high levels of performance.  After Baldrige’s untimely death, President Reagan decided to honor his friend with what became known as the Malcolm Baldrige National Quality Award.  Studying Leading the Malcolm Baldrige Way will help business leaders in any industry, in any situation – flourishing or in peril – learn how to align their employees to deliver exceptional results.

 

Why Engagement Matters

To those who think culture is soft, what statistics can you share that demonstrate engagement matters?

Leading the Malcolm Baldrige WayOne study showed that companies with high levels of employee engagement have five times higher shareholder returns over five years.  There is also clear evidence that engaged employees create loyal customers.  If that isn’t compelling, consider the flip-side of engagement.  Statistics from a recent article in Harvard Business Review cited, “Disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects.  In organizations with low employee engagement scores, they experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time.” Those are staggering costs for organizations.

 

 

Engagement is the rage these days in leadership circles, yet still many leaders don’t work on engagement. Why is this?

Honestly, we don’t understand it.  The evidence that engagement matters and impacts bottom-line results is clear.   There is also the notion that treating employees as valued assets is what leaders as decent human beings ought to do.  In the latest recession, we saw a lot of leaders with an attitude of “My employees should be grateful just to have a job.”  As the economy picked up, we saw many employees jump ship as soon as there were opportunities to work for an organization with a better culture, where they were treated as valuable contributors to the mission and vision.

 

Research: Companies with engaged workers report 6% higher profits.

 

Don’t Make Excuses

Why Employees Are Unengaged

The True Impact of Employee Engagement

 

There’s one phrase that often goes unheard in the workplace, yet has a huge impact on a company’s success: employee engagement.

Most business leaders have the mentality that they’re responsible for providing work; employees are responsible for getting it done. Under this logic, it’s up to the employees to motivate themselves day in and day out.

However, it’s practically impossible to stay motivated in an unsupportive environment (which is probably why 70% workers are disengaged from their jobs).

 

Fact: 70% of workers are disengaged from their jobs.

 

Disengagement is a defense mechanism. Employees distract themselves from what makes them unhappy (work) with other things they deem more fulfilling, like looking for new jobs, talking to friends, or watching funny cat videos.

 

“When people are emotionally invested, they want to contribute.” –Simon Sinek

 

This helpful illustration from Company Folders provides an eye-opening look at just how low employee engagement could be affecting you. (In the U.S. alone, companies could save up to $350 billion a year through increased employee engagement.)

Read on to learn what’s causing employees to disengage and how you can help them get back on track.

 

“To win in the workplace you must first win in the workplace.” –Doug Conant