How to Create a Culture of Innovation

Create an Innovation Culture

 

How do organizations revolutionize their products and services?

Is it possible to create a culture of innovation?

Is organizational culture linked to innovation and competitive advantage?

 

Soren Kaplan, Ph.D. answers these and other questions in his new book,Invisible Advantage: How to Create a Culture of Innovation. After reading his book, I had the opportunity to ask him some questions about his research in the area of innovation, disruption, and corporate culture. Soren has been recognized as a Thinkers50 Global Thought Leader. He’s a keynote speaker, a consultant, and an author. You may have read his previous book, Leapfrogging.

 

“Competitive advantage is temporary.” -Soren Kaplan

 

What is Missing from Culture Discussions

Organizational culture has been the rage in discussions for quite some time. What have many of these discussions missed?

People have been talking about organizational culture for years. But few discussions on the topic have explicitly linked culture directly to innovation.  Even fewer focus on the integrated set of things that leaders can do that directly create a culture of innovation in a truly systematic way.

It’s one thing to create rewards for example. It’s another to look at how rewards, metrics, processes, and storytelling can all be used together to change culture for the better. The problem is that most leaders do things that both support and contradict a culture of innovation all at the same time, like telling people they want innovation but then not giving people time to innovate.

To many executives, culture has become a complex and mysterious topic.  Business and leaders have lost sight of the fact that organizational culture is actually pretty simple.  Here’s how it works:  Employees have experiences in organizations that are influenced by leaders’ conscious and unconscious decisions and behaviors. Experiences shape assumptions about what is both desirable and undesirable behavior.  Assumptions, in turn, influence and reinforce behavior.  It’s an ongoing cycle. That cycle can be either virtuous or vicious and can lead to innovation or stagnation.

 

Why Culture is a Sustainable Advantage

Share a little about your thinking of culture as a sustainable competitive advantage.

The Invisible AdvantageThe first reality in today’s disruptive world is that competitive advantage is temporary. Products, services, and even business models become commodities over time. If organizations do not continually invent and reinvent their competitive advantage, they risk being disrupted into obsolescence.  Given all the disruption out there, this fact is the no-brainer.

As a result of the commoditization of just about everything, culture becomes the only sustainable competitive advantage. Culture represents the norms and values that drive behavior.  When it’s focused on and reinforces innovation, it becomes the invisible secret sauce that drives employee engagement, business growth, and continuous reinvention.

The bottom line is that the soft stuff is the hardest stuff for competitors to copy.  The goal is to create an “invisible competitive advantage,” something I call your “Invisible Advantage.”

 

“The only defensible competitive advantage is your culture.” -Soren Kaplan

 

In what ways can culture stifle innovation?

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

The Innovative Thinking Behind the Reinvention of Football

Reinventing American Football

Almost anything is ripe for innovation. We’ve all seen startups wipe out the established players. We’ve seen whole industries upended as new technologies create new possibilities.

I love to collect these stories. It’s also fun to collect quotes from the naysayers who laughed at the disrupters, but are later proven wrong.

Aspiring leaders always benefit from studying disruption whether in your own industry or even in a distant field. Because often the principles and lessons are applicable elsewhere.

That’s why I have to share this story with you. It’s the reinvention of American football.

Don’t care about football?

Just wait.

You may learn a few lessons from this story that may inspire you. And even if you don’t, you may find yourself at a cocktail party one day, looking for conversation. Read this and you’ll have another story guaranteed to fascinate everyone.

S.C. Gwynne is a first-rate author. Sam was a finalist for the Pulitzer and worked at Time as bureau chief, national correspondent and senior editor. Mix his superb writing with a compelling story and you have The Perfect Pass: American Genius and the Reinvention of Football. I recently had the opportunity to ask him about his research into the reinvention of the game.

 

“Innovation distinguishes between a leader and a follower.” –Steve Jobs

 

A Passing Innovation

Hal Mumme transformed football from a running game to a passing game. Who knew!? Your book tells the untold story of how this transformation happened, and it does it in a compelling way. Would you briefly share how this happened?

In the NFL, the middle 1970s came to be known as the “dead ball era.” Fewer points were scored than at any time since 1942. Fewer passes were thrown than at any time since the 1950s. The game was heading back to its ground-and-pound origins, which is what many players and coaches really wanted anyway: a bloody scrum in the middle of the field featuring halfback dives and snarling middle linebackers. Things got so bad—and so boring (it was just as bad in the college game)—that the NFL made radical changes to its blocking rules in 1978, allowing offensive linemen to use their hands, and limiting how many times a receiver could be bumped.The Perfect Pass by S.C. Gwynne

It was, coincidentally, precisely at that time that the coaches who would change the game arrived on the scene. Bill Walsh was experimenting with what would become the West Coast offense; Don Coryell’s receivers were running routes in new ways; Mouse Davis was setting records at Portland State; LaVell Edwards was starting his long run of offensive dominance at BYU, and a young Hal Mumme was studying the passing tactics of all the above. Fast forward to the present day, where a few quick statistics will illustrate the impact those coaches collectively had on the game. Prior to 1991 (the year Hal arguably changed the game), five NCAA D-1 quarterbacks had passed for 10,000 yards or more in their college careers. Since then, 90 more have done it. Of the 92 quarterbacks to date who have thrown for more than 4,000 yards in a single season, 78 have done it since the year 2000. And so on. The game has changed.

Of these passing innovations, by far the two most extreme were the Run and Shoot—invented by Ohio high school coach Tiger Ellison in the 1970s and brought into the modern age by Mouse Davis at Portland State in the 1970s—and the Air Raid. No one else was even close. As I describe in my book, the Run and Shoot did not really survive the 1990s, while the Air Raid was just starting to take off.

Hal’s approach began with the fact that he simply threw the ball more than anyone else. At Iowa Wesleyan, his quarterback Dustin Dewald once completed 61 of 86 passes, both all-time records. He passed on first down and fourth. Hal also messed with the basic assumptions, goals, objectives, and premises of the game. If most football teams ran 60 offensive plays in a game, he ran 85 to 90 and sometimes 100. If most teams believed that controlling the ball—time of possession—was the most important single statistic of the game (other than the score), Hal’s players behaved as though that number was utterly meaningless. He put five feet of space between his offensive linemen, shifting the basic geometry of the line of scrimmage. In a world of exceedingly complex playbooks and ever-multiplying plays, Hal had no playbook and only a handful of plays. His players saw a dead simple game, while opposing defenses saw what looked like wild complexity. Because Hal usually went for it on fourth down, his teams had four downs to make a first down, while his opponents had three, thus altering the assumptions one might make about what sort of play Hal would call on third and 9. (Hint: in his relativistic universe, he does not have to make 9 yards.) And so on. It was as though Hal’s team was playing an entirely different game.

 

Hal Mumme coaching on the sidelines, Used by Permission Hal Mumme coaching on the sidelines, Used by Permission


You point out that before Hal Mumme introduced his technique, only five NCAA Quarterbacks had ever thrown for more than 10,000 yards and since then 90 have done it. That’s amazing. When did his technique catch on with others?

Though one can argue—as I do, in my book—that Hal definitively changed the game of football in the Iowa Wesleyan-Northeast Missouri State game on August 31, 1991, the rest of the world did not know that. The football world would not truly understand what he had done until the late 1990s. That was when he took his video game offenses to the game’s motherland—the SEC—when he became head coach at the University of Kentucky and did what everyone said he could not possibly do: in 1997 he beat Alabama. After the Alabama game, American football started making pilgrimages to his doorstep.

 

Leadership Characteristics Designed to Challenge

10 Reasons Drawing Improves Your Leadership

Draw to Win

Want to make your idea clearer to others?

Looking for a way to have your message stand out?

 

“Open your eyes and look within.” -Bob Marley

 

Dan Roam just wrote a new book, Draw to Win: A Crash Course on How to Lead, Sell, and Innovate With Your Visual Mind, and it challenged me to communicate in new ways. I’ve always been visually oriented, but drawing is not always on my top “go to” list of tools.

I’ve learned that it should be.

Drawing is not something only for kids. It’s a powerful communication tool if used properly. I recently asked Dan about his life’s work.

 

“Business without pictures is boring.” -Dan Roam

 

Don’t Resist the Visual

In business, some would reject images and drawings as childish. You say that it’s the most natural thing in the world and dismiss this. Why do some people feel that way and resist the visual?

If you’ve ever witnessed a board meeting, suffered through a bullet-point presentation, or tried to read a business-school article, you know first-hand that “serious” businesspeople hate pictures. Pictures are childish, simplistic, and patronizing.

But if you consider that most meetings are torture, that most people sleep through PowerPoints, and secretly admit you’d rather watch Game of Thrones than read “The Harvard Business Review,” you also know this hatred of pictures is insane. The sad fact is that business without pictures is boring – and boring doesn’t get the job done.

There are many reasons this anti-picture mentality persists: In school drawing is considered just a stepping-stone to reading. Most of us had a parent or teacher who told us sometime that our drawings were terrible, and there are few resources for creating or critiquing business-oriented pictures, etc. But I think the most profound reason pictures are poo-pooed in business is historical.

Think about it like this: A century and a half ago, we inherited our educational system from the British – and most of it was developed during the industrial revolution. England (and America, who still looked across the Atlantic for guidance on most social issues) suddenly found itself needing to shift its workforce from fields into factories. Faced with millions of former farmers who had to learn overnight how to pull the right levers in the right order, our modern educational system was born, and the essence was this: If you could talk well, you went to university, banking, and law. If you couldn’t talk well, you went to the factory. The die was cast, and to this day the greatest definer of “intelligence” – despite increasing data and cognitive studies pointing out the power of pictures – remains your ability to talk. That’s great if you’re a natural Shakespeare, but miserable if you’re more Michelangelo.

 

“The best CEOs I know are teachers, and at the core of what they teach is strategy.” -Michael Porter

 

How to Start Drawing

In your work, many will tell you what I’m thinking right now, “But, Dan….I can’t draw!” What do you say to the many who resist?

It’s important to realize that drawing isn’t an artistic process; drawing is a thinking process. By virtue of being human, you are from birth an extraordinary visual-thinker. More of your brain is dedicated to processing vision that to any other thing that you do, with nearly half your neurons keeping you alive by seeing the world around you.

Kids love to draw. Drawing is the first way that all of us model and record our thoughts, and as kids we’re really good at it – until the “That’s a terrible dog; dogs don’t look like that!” judgement sets in, and drawing is beaten out of us.

Don’t get me wrong: I love words; words and spoken language are a miracle – but words work best when supported by pictures. Words and pictures amplify and complement each other – in exactly the same way our brains work when making sense of the world.

Copyright Dan Roam, Used by Permission Copyright Dan Roam, Used by Permission

Once you realize that, drawing becomes easy to reintroduce: You start by drawing a few simple shapes – a circle, a square, and a line to connect them – and before long your visual mind wakes back up and you’re on a roll.

(In fact, when I do training at major organizations and corporations, it takes most people about three minutes to start drawing again.)

 

“Business has only two functions-marketing and innovation.” -Milan Kundera

 

Transform Your Leadership By Drawing

What are some of the benefits you’ve seen when someone learns to make drawing part of their regular practice? Any stories of how this transformed someone’s leadership you can share?

 

Copyright Dan Roam, Used by Permission Copyright Dan Roam, Used by Permission

The first discovery of someone who starts drawing again is clarity. We think that the verbal voices in our head make beautiful sense – right up to the moment we try to describe our ideas to someone else and we find ourselves spinning and our audience drifting away. Pictures fix that, in a couple ways.

First, when you draw out your idea, you don’t have to remember anything: the full logic of your idea is there before you, all in one place, all immediately scannable, and none of it hidden. (And if you can’t draw out at least a few pieces of your idea, I think it’s important to ask yourself how well you really know it.)

Second, drawing exposes holes in your thinking that you typically don’t notice when just talking. It’s really easy to lie to yourself with words but a lot harder with a picture.

I’ve seen this sudden discovery of clarity hundreds of times in consulting and training sessions. My favorite example was when Ted, the Director of Strategy at one of the world’s largest professional services companies, had an epiphany during a visual-thinking class. I was taking the group through my “Six-by-six” visual storytelling exercise when Ted suddenly jumped up, and waving one of his pictures, ran out of the room.

He returned thirty minutes later, saying, “I just sold the job! I took a photo of my sketch and emailed it to my client, then called and walked them through it. I finally saw the way through – and they finally saw it, too.”

 

“In sales, it’s not what you say; it’s how they perceive what you say.” -Jeffrey Gitomer

 

As a student of innovation, I was fascinated by your five essential visual innovation prompts. Would you share one of those with us and how this has had an impact on organizational thinking?

Why You May Need A Wicked Strategy

 

What do you do if you face a problem so complex that it can only be described as wicked?

Is it possible to confound competitors?

 

How Companies Conquer Complexity and Confound Competitors

John Camilius, author of Wicked Strategies: How Companies Conquer Complexity and Confound Competitors outlines a number of ways that managers can handle the most difficult problems. Camilius is the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh.

 

“We shape our buildings; thereafter they shape us.” -Winston Churchill

 

For those who don’t know your work, what is a wicked problem?

In the early seventies, Horst Rittel and Melvin Webber, two professors of design and urban planning, recognized that there are certain problems that are not amenable to resolution by traditional, accepted problem-solving techniques. They evocatively labeled these problems as “wicked” and identified ten distinguishing characteristics. Ten characteristics are difficult to remember, and over the years, I have whittled them down to just five.  If a problem displays these five criteria, you can be pretty sure you are facing a wicked problem.Wicked Strategies John C. Camillus

The first characteristic is deceptively simple and requires some thought:  Is the problem one that is substantially without precedent, something that you have not encountered before?

Second, are there multiple significant stakeholders with conflicting values and priorities? You need to go beyond the traditional big three stakeholders—employees, customers and shareholders.  Non-government organizations, multiple layers of government, creditors, communities in which you are located, political parties in power and out of power are all becoming more significant and demanding.

Third, are there several causes and are they interactive and tangled?  For instance, the future of social media is driven by a complex brew of technology advancements in hardware and apps, changing demographics, evolving social and cultural mores, government regulations, privacy expectations, geopolitical developments, educational practices, disposable income, and economic and social mobility.

 

“If we don’t change direction soon, we’ll end up where we’re going.” -Irwin Corey

 

Fourth, there is no sure way of knowing you have the right answer. Another way of phrasing this is that there is no stopping rule—you can continue searching indefinitely for a “better” answer.

Fifth, the understanding of what the “problem” is changes depending on the “solution” being considered.  In other words, the problem and the solution are interactive. For instance, entry into a country that does not permit foreign multi-brand retailers might be accomplished by creating a cash-and-carry model for small retailers or by being a minority partner with a local retailer or by entering an entirely new business employing a distinctive competency such as logistics. Each of these responses to the wicked problem of accessing the huge purchasing power of emerging economies’ populations creates a wholly different set of issues.

A note of warning may be in order. In the public policy arena, the wickedness of problems is hard to overlook. Problems such as immigration policy, violence against women, religious fundamentalism, and public education are overtly wicked. In the business world, however, the thing about wicked problems is that though they can show up anywhere, they are likely to be perceived as “tame” problems.

Wicked problems are certainly more common than most managers realize. Not recognizing that they were facing wicked problems, I believe, led to the dissolution of Westinghouse, the demise of Polaroid, and the decline of Kodak, RadioShack and Atari. Though wicked problems can occur anywhere, it is more likely than not that you will encounter wicked problems if you are a public company, operate globally, and are in a technology-driven business.

 

“Every threat to the status quo is an opportunity in disguise.” -Jay Samit

 

3 Megaforces Challenging Business

You talk about 3 megaforces that are challenging business. How do these trends help create wicked problems?

While there are a variety of forces and environmental factors that can create wicked problems, over the years I’ve identified three forces that are widely experienced which, in concert, are a major source of wicked problems. They are: the inevitability of globalization, the imperative of innovation, and the importance of shared value. The first two forces are well understood. Shared value, which has been brought to the attention of the managerial world by Michael Porter, is the notion that social benefit and economic value are synergistic. It also raises the issue of the appropriate sharing of value across diverse stakeholders.

The interactions of these three forces create strategic challenges that combine to create wicked problems. For instance, innovating to meet the needs of unserved, low-income customers across the world results—as the guru of disruptive innovation Clayton Christensen has affirmed—in disruptive technologies that can upend industries. Innovation also creates changes that differentially impact stakeholders, creating the likelihood of conflict between stakeholders as the organization transforms. The extreme complexity and uncertainty embodied in the global economy coupled with the conflicting priorities of multiple stakeholders creates unknowable futures. This roiling cauldron of disruptive technologies, conflicted stakeholders and unknowable futures is what spawns wicked problems.

I like to illustrate the interaction of these forces in a Venn diagram.

unnamed-1

Three Mega-Forces and their Strategic Challenge

These three forces can interact to create wicked problems in any context. Of course, other environmental forces can also breed wicked problems, but I have chosen to focus on these three because they are so ubiquitous and powerful.

I believe there are business contexts or “industries” that will be breeding grounds for wicked problems. Health, software, information technology, fossil fuels, water, automobiles, and public transportation are prime examples. Technological innovation, drastically changing regulations, geopolitical developments, and changing notions of social responsibility make these industries particularly prone to encountering wicked problems that demand that firms develop and deploy wicked strategies. 

 

“The human spirit is to grow strong by conflict.” -William Ellery Channing

 

How to Deal With Uncertainty