Inspiring Corporate Entrepreneurship to Fuel Innovation

by Robert F. Brands with Jeff Zbar

It's been said that successful people either are entrepreneurs - or think like entrepreneurs.

Look around your company. Are you surrounded by entrepreneurs? Is your team comprised of people who take ownership of any project or task that comes across their desk or inbox? Do they embrace challenges, possess the process, and take responsibility - for successes and failures alike?

Some may come away thinking that 'corporate entrepreneur' and 'employee' are contradictory. They believe that entrepreneurs take the ultimate risk - ditching the security of the day-job, as it were, and facing the personal, financial and psychological challenges of business ownership.

That's one definition. Another would be 'corporate entrepreneurship'. This realm is inhabited by people who - though they receive a paycheck signed by someone else - see the organization (or at least their small domain within it) as their turf. This is the most valued type of employee.

Innovation and corporate entrepreneurship are inextricably intertwined and fuel well-reasoned risk taking. Especially in large organizations traditionally risk averse, innovation drives leaders and teams to become more corporate enterprising. This process encourages growth from within, which helps set the stage for leadership continuity.

As a business leader, you must build an environment that tolerates such entrepreneurial thinking. It's the leader's job to encourage such entrepreneurial thinking - to exude and build trust, to embrace the risk to fail, and to inspire people to take well-reasoned chances.

In the book, "Grow From Within: Mastering Corporate Entrepreneurship," co-author Robert Wolcott discusses how companies can enable and support 'internal entrepreneurs' to achieve innovation-led growth. Such entrepreneurial thinking drove IBM to realize some $15 billion in new annual revenues from 22 Emerging Business Opportunities, and Whirlpool to realize $4 billion in revenues from companywide innovation efforts - "despite global recession and the steep drop in housing markets," notes one review.



The authors reveal four models of corporate entrepreneurship laid out on an axis of organizational ownership (on the horizontal) and Resource Authority (on the vertical). Each possesses unique and specific characteristics. The Opportunist (bottom left), takes no deliberate approach to entrepreneurship; the Advocate (bottom right) evangelizes for it; the Enabler (upper left) provides funding and executive attention, and the Producer (upper right) establishes full service groups with mandates for corporate entrepreneurship

Applying Robert's Rules of Innovation, the Advocate, Enabler and Producer can thrive in this environment for each has corporate support. They have executive support, from Inspiration to Net Reward, needed for innovation borne of corporate entrepreneurship to thrive.

Yet for corporate entrepreneurship to thrive, it needs more. It requires the structure and culture. Assuming the right people are in place, leadership must provide divisional and business unit autonomy. How can you lead your organization to a climate of corporate entrepreneurship?

• Like innovation, Define what entrepreneurship means. The phrase "Corporate Entrepreneurship" must mean the same thing organization-wide. Moreover, leadership must delineate objectives and point the way as part of its vision and mission.


• Incubate and nurture. Corporate entrepreneurship doesn't flourish without guidance. It starts small - and grows through encouragement. Begin with small projects heavily supported by leadership. Those success stories should be heavily communicated as such. They then will become the lead project to pull the rest of the group or other entrepreneurial-minded teams along.


• Create a reward system. Risk and reward, when properly aligned, can foster accountability. Rewards - whether in the form of praise from immediate managers, attention from leadership, or the chance to lead future projects or task forces - are powerful motivators. They also can help solidify the creation of stronger corporate entrepreneurs.

So look around your organization. Are you surrounded by employees - or entrepreneurs? The difference may be not only the way they think, but they way they're being nurtured.


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Robert Brands is the founder of InnovationCoach.com, and the author of "Robert's Rules of Innovation: A 10-Step Program for Corporate Survival", with Martin Kleinman - to be published in March by Wiley (www.robertsrulesofinnovation.com).

Listening to Employees is a Best Buy

by Robert B. Tucker

Several years ago, the Wall Street Journal reported on an unusual cost-cutting move by electronics retailer Circuit City. The chain abruptly fired their top-producing veteran salespeople and replaced them with lower-wage new hires.

When Circuit City went bankrupt last year, you had to wonder if decisions like that were at least partly to blame.

Meanwhile in Minnesota, retailer Best Buy took a different approach. They began to focus on creating a deeper dialogue with the firm's 160,000 employees spread out amongst 1,150 stores across the United States and China, Mexico, England and a growing number of countries.

Best Buy began experimenting with social networking technologies centered upon the company's intranet site. They started conducting weekly online polls of employees. They set up wikis for people with common interests to brainstorm together. They invited senior managers to participate in agenda-free town hall meetings. And they established a "listening chair" where employees could survey other employees on such questions as "Do you think the Geek Squad uniform needs updating?"

When they started listening in earnest, employee turnover stood at 81 percent a year. Three years on, it had dropped to 60 percent. Last year, it was down to 49 percent.

All of this hyper-listening didn't just happen. And it wasn't something decreed by senior management.

Jennifer Rock was a mid-level marketing manager when she became aware of what lack of communication was costing her company. Highly analytical and a self-described 'Type A' person, she noticed that stores with higher than average employee engagement levels and lower than average turnover rates tended to be stores that outperformed the others in sales growth and sales per employee. But merely noticing an opportunity doesn't do any good.

To her credit, Jennifer took action. She created a new position for herself, Director of Intranet and Dialogue.

Next she and her team developed a clear mission: to use every low or no cost means possible to help Best Buy become extraordinary at communicating with employees (not just at them), and to connect employees with information and with each other as well. The goal of all this was to add to business success by helping the individual employee succeed.

If you've attended one of my keynotes lately or participated in my new "Innovation is Everybody's Business" in-house workshop, you have heard me rave about what Jennifer Rock and her team have accomplished. You have heard me extol this group of quiet revolutionaries for their innovativeness in seeing a problem, and stepping up to the challenge of solving it using every trick in the innovator's toolkit. And you no doubt heard me point out that developing one's innovation skills may be the smartest career move you'll ever make - especially if you want to become indispensible.

And you may have heard me say that Jennifer Rock represents the future of the innovation movement.

When I visited with Jennifer recently in Minneapolis, I asked her why would any company, especially a quarterly-results obsessed American company, give a hoot about listening to its employees, especially now? Why would they add headcount (Jen's team has climbed to eight people) when competitors were busy chopping heads?

Jen's unflinching response: Because she and her Intranet and Dialogue Team sold senior management on the bottom-line benefits of listening to employees. "Our success boils down to the interaction between one customer and one employee," Jennifer said. "Is that employee happy and productive and informed and excited? We need to know that employee's state of mind better than anyone else in the company."

Though we are loathe to admit it, the global economic crisis disrupted the Innovation Movement as more and more firms went into survival mode. A new survey conducted by Chuck Frey of InnovationTools.com suggests that most initiatives are in a holding pattern at best, and there is little enthusiasm for broad-based, enterprise-wide initiatives. CEOs and senior executives admit they are just too distracted with more immediate issues. But meanwhile, they are suddenly, desperately in need of more people like Jennifer Rock. As John Draper, senior VP marketing for Mead Consumer Products told me:


"I need people to be less risk averse, I need them to rattle the cage, challenge what we do and look for new ways to do things."


Jennifer and her team realized the impact of what their team was doing when company leaders decided to reduce the employee discount. "The move set off a firestorm with employees," Jennifer recalled. "On the Watercooler [an online forum] hundreds and hundreds of employees talked about what this discount meant to them, and what it meant to customers, since employees could try out products and recommend them to customers. People wrote in to suggest other ways the company could save money without touching the employee discount."

And company leaders changed their mind and rescended their decision.


"They said to us, 'The next time you see a groundswell like this and we are unaware of what's happening, you have our permission to kick down our door. Don't even knock. We need to know.' And that's when we thought, 'Wow, we are adding value, we are making a difference.'"


Jen said she will remember that day for as long as she lives.


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Robert B. Tucker is the President of The Innovation Resource Consulting Group. He is a speaker, seminar leader and an expert in the management of innovation and assisting companies in accelerating ideas to market.

Innovation From the Inside Out

by Mitch Ditkoff

These days, almost all of my clients are talking about the need to establish a culture of innovation.

Some, I'm happy to report, are actually doing something about it. Hallelujah! They are taking bold steps forward to turn theory into action.

Still, the challenge remains the same for them as it does thousands of other forward-thinking companies - and that is, to find a simple, authentic way to address the challenge from the inside out - to water the root of the tree, not just the branches.

In today's process-driven, OD-centric, Six-Sigma savvy organization, the tendency is to focus on systems as opposed to people - as if systems were sufficient to guarantee change.

Guess what? Systems are not sufficient to guarantee change. In the words of Oliver Wendell Holmes, "Systems die. Instinct remains."

This is not to say that organizations should ignore systems and structures in their effort to establish a culture of innovation. They shouldn't.

But systems and structures all too often become the Holy Grail - much in the same way that Six Sigma has become the Holy Grail.

Unfortunately, when the addiction to systems and structures rules the day, an organization's quest for a culture of innovation degenerates into nothing much more than a cult of innovation.

Organizations do not innovate. People innovate. Inspired people. Fascinated people. Creative people. Committed people. That's where innovation begins. On the inside.

The organization's role - just like the individual manager's role - is to get out of the way. And while this "getting out of the way" will undoubtedly include the effort to formulate supportive systems, processes, and protocols, it is important to remember that systems, processes, and protocols are never the answer.

They are the context, not the content.

They are the husk, not kernel.

They are the menu, not the meal.

Ultimately, organizations are faced with the same challenge that religions are faced with. Religious leaders may speak passionately about the virtues their congregation needs to be living by, but sermons only name the challenge and remind people to experience something - they don't necessarily change behavior.

Change comes from within the heart and mind of each individual. It cannot be legislated or evangelized into reality.

What's needed in organizations who aspire to a culture of innovation, is an inner change. People need to experience something within themselves that will spark and sustain their effort to innovate - and when they experience this "something," they will be self-sustaining.

They will think about their projects in the shower, in their car, and in their dreams. They will need very little "management" from the outside. Inside out will rule the day - not outside in. Intrinsic motivation will flourish.

People will innovate not because they are told to, but because they want to. Open Space Technology is a good metaphor for this. When people are inspired, share a common, compelling goal and have the time and space to collaborate, the results become self-organizing.

You can create all the reward systems you want. You can reinvent your workspace until you're blue in the face. You can license the latest and greatest idea management tool, but unless each person in your organization OWNS the need to innovate and finds a way to tap into their own INNATE BRILLIANCE, all you'll end up with is a mixed bag of systems, processes, and protocols - the husk, not the kernel - the innovation flotsam and jetsam that the next administration or next CEO or next key stakeholder will mock, reject or change at the drop of a hat if the ROI doesn't show up in the next 20 minutes.

You want culture change? You want a culture of innovation?

Great. Then find a way to help each and every person in your organization come from the inside out. Deeply consider how you can awaken, nurture, and develop the primal need all people have to create something extraordinary.


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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of "Awake at the Wheel", as well as the very popular Heart of Innovation blog.

Empowering Innovation

by Paul Sloane

The challenge with innovation is finding products and services that are easier to use, easier to maintain and more appealing to customers. Where can you draw the creativity and drive to make this happen? Often the best source for innovation is the team within your business. A great leader can turn them into entrepreneurs who are hungrily looking for new opportunities. The key is empowerment. By empowering people you enable them to achieve goals through their own ideas and efforts. The leader sets the destination, but the team chooses the route.


What do employees need to be empowered?

People need clear objectives so that they know what is expected of them. They need to develop the skills for the task. They need to work in cross-departmental teams so that they can create and implement solutions that will work. They need freedom to succeed. And when you give someone freedom to succeed you also give them freedom to fail. Above all, empowerment means trusting people. It is by giving them trust, support and belief that you will empower them to achieve great things.

Empowerment is more than managers setting objectives and then leaving people alone. It is about encouraging and enabling people to solve problems, meet customer needs and seize market opportunities on their own initiatives - either individually or in groups from different disciplines.

The goal is to have everyone think of themselves as an entrepreneur who has the right and the duty to solve problems and seize opportunities - not to offload them to others. In many organizations problems are passed up and down a long chain of command. They are postponed, delegated, transferred, ignored and eventually handled by some remote manager who cannot avoid the issue any longer. In the empowered organization they are handled by the first employee who encounters the problem. They have the authority to solve problems and take initiatives fast. They do not do this in isolation - they communicate. The senior team knows what is going on – but because they trust people to do the right things they find out later - after the fact in most cases. This involves risks but it pays back in a much more agile, effective, creative and dynamic mode of operation.


Encouragement Is Not Enough

The goal is to change the business from a routine group of people who are doing a job to a highly energized team of entrepreneurs who are constantly searching for new and better ways of making the vision a reality. We want to use creative techniques to drive innovative solutions to reach the goal. But just encouraging innovation is not enough. You need to initiate programs that show people how they can use creative techniques to come up with new solutions.


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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Reputation and Innovation

by Drew Boyd

Sustainable innovation requires structured methods. But it also requires collaboration and information sharing among colleagues. Innovation is a team sport - groups produce better results than the lone genius. So how do you create a more favorable context for collaboration and sharing in your business unit?

Reputation is what matters. The degree to which a technical worker will share information with a colleague depends on that colleague's reputation for returning the favor. The rule of reciprocity states that people give back to those in the form they have received from others. It is a social rule taught by every human society to its members - you give back to those who have given to you. But the key is: to make the first move. You have to be seen as someone who gives and shares information with others, and has a reputation for returning the favor when others give to you.

Dr. Prescott Ensign and Dr. Louis Hebert investigated this phenomena by surveying more than 200 pharmaceutical scientists working in the R&D operations of 63 different companies in Canada and the United States. They found that technical workers often hold critical information privately without fear of sanction or consequence. What motivates them to share with others is when they see the other person as likely to give back - the other person has a well-deserved reputation for giving information back to the other person that is meaningful. The complete results and analysis of the study are described in the book "Knowledge Sharing Among Scientists."

Here are the key findings (from Sloan Management Review, Winter 2010, Vol. 51 No. 2, pp 79-81):

• Past behavior by individual scientists, and the groups they belong to, influences whether knowledge is shared.


• Longer duration of interaction positively influences the flow of information.


• Quality matters more than quantity of information shared.


• Pre-existing personal and professional relationships increased the likelihood of knowledge sharing.


• Individuals who were already obliged to another person were less likely to be helped by that person that someone who was less obligated, not obligated or owed a favor.

Organizations who want to be more innovative need to do two things. First is co-location of knowledge workers and team building. Putting people in close proximity to one another and getting them to socialize will make them more likely to have the day-to-day, random encounters where they can share critical tidbits of knowledge and information. The second is training. Companies are recognizing a key gap in the skills of influence. People can be trained how to systematically and ethically influence and align their co-workers. Six universal principles of persuasion such as Reciprocity are well-described by Dr. Robert Cialdini in his book, "Influence: Science and Practice." Companies are even conducting formal training courses in the practice of influence to make their knowledge workers more effective.

For individual innovators:

• Make the first move. Share critical information with others even if they have not given anything to you. Make sure the information is meaningful and customized to that specific individual so that they feel especially obligated to return the favor.


• When you receive information from others, reciprocate in kind. Build a reputation as a person who is willing to give back to others who give to you.


• Develop informal social relationships and networks within - and outside - your work group.


• Learn the principles of influence and how to deploy them in the workplace and increase the level of knowledge and sharing.

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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd

Focus on Your Winners

by Holly G. Green


Four Ways to Keep Your Top Performers From Jumping Ship

Have you ever lost a top performer to a competitor?

I see it happen all the time, even in good companies. Surprisingly, it rarely has to do with money. More often than not, it's due to indifference, apathy, or neglect on the part of a leader or manager.

Why the neglect?

Because most leaders and managers focus the majority of their time and energy on the low performers. It makes no sense when you step back and look at it, but leaders are either trying to correct mistakes, deal with behavior issues, or simply get wayward employees back on track with the results they're supposed to be producing. As a result, they fail to give their winners the time and energy they deserve.

If you want to keep your winners, make sure they feel acknowledged and appreciated. Here's how:

1. Identify your winners.

Almost every company has the salesperson who regularly makes his numbers but leaves a trail of angry customers and disgruntled co-workers in his wake. And almost everyone knows the manager who gets the short-term results but drives good employees away with her abrasive personality. Clearly, there is more to winning than just producing results.

Performance consists of two distinct components - what employees do and how they do it. Many employees excel in one area or the other. Top performers excel in both. They produce outstanding results while demonstrating total alignment with the values and culture of the organization. They get things done AND do it in a way that respects, supports, and empowers others.

2. Show your appreciation.

The biggest mistake most leaders and managers make is taking their top performers for granted. Partly because they are absorbed in putting out the ongoing fires caused by problem employees. And partly because the winners are so busy getting things done that they rarely make waves.

To show your appreciation, recognize your top performers on a regular basis, both publicly and privately. Tell them how much you appreciate their hard work and ability to get things done, and hold them up as role models to other employees. Send them handwritten notes, small gift cards, or other incentives. They go the extra mile for you, so go out of your way to make them feel wanted and appreciated.

3. Remove their roadblocks.

For top performers and innovators, nothing is more frustrating than a lack of information, resources, or management support. Check in on a regular basis to make sure your best performers are getting everything they need from you and their co-workers to innovate and get the job done. At the same time, make sure their needs are getting met in the areas of training and professional development. Look for ways to give them new assignments and special projects that will broaden their skill sets and enhance their value to the company.

4. Get inside their heads.

When top performers leave to go to another company, it's rarely for more money. Far more often it involves dissatisfaction with something in their work environment. To keep your best people from jumping ship, get inside their heads and find out what really motivates them and what they enjoy most about their work.

Do they want increased authority or responsibility in their current position? Do they want more opportunity for professional development? Do they want to lead a team, department, or division? Perhaps they would like to have more time off to spend with family. Or maybe they want to get involved in some type of community service on behalf of the company.

Check in regularly to assess their morale. Ask questions like, "What do you like most about working here? What do you like the least? If you could change one thing about your work situation, what would it be?"

Obviously you can't make everyone happy all the time. And it may not be feasible to provide what your superstars say they want. But an honest effort on your part to understand and meet their needs will help your winners feel wanted and appreciated. And that can make a big difference the next time a competitor comes calling!


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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.

Share the Love

by Holly G. Green


Three Strategies for Creatively Recognizing Employees

Valentine's Day is for lovers. Usually we stay away from the topic of 'love' at work but we're talking about positive recognition here, not the stuff that gets you in a sexual harassment lawsuit!

Smart leaders and managers know that it's a good time to show your employees some love as well. In other words, let them know how much you appreciate their hard work toward achieving your organization's goals. (You did set the goals in January, right?)

Recognition doesn't have to be big, time-consuming, or expensive. In fact, the most meaningful recognition often comes simply from saying "thank you" for a job well done. But there are times when the situation calls for more than just a simple verbal acknowledgment. There are a lot of things that get in the way, but you do need to do it.

Here are three strategies for letting your employees know how much you care.

1. Start small.

Start by saying "thank you" on a regular basis. Over time, change what you say and how you say it so that it doesn't become routine. Be specific. Instead of, "Nice job," say, "Nice job on the quarterly audit. I know you worked incredibly hard to get it in on time."

Recognize individual accomplishments with a short e-mail note or comment in a team meeting. Send the employee a handwritten note of appreciation, and send a copy to your boss. How many of us have those handwritten notes saved away because they are so rare and really do mean something? Leave a sticky note with a snack thanking the person for his or her efforts. Leave a message on their desk that the employee will receive first thing in the morning.

Give small gifts such as cards, desk toys, picture frames, gift cards, or chocolate. To make sure your gift will truly be appreciated, check out the employee's work area to see what types of things they display. Or find out where they go for coffee in the morning or lunch at noon. A gift card to a favorite coffee shop or restaurant shows that you are observant and thoughtful.

2. Get Personal.

For performance that requires more than your basic pat on the back, orchestrate a thank-you letter or e-mail from senior leadership. Have the company leader call the employee with personal thanks. Make sure the employee is recognized publicly perhaps in a company e-newsletter, on the intranet, or at an all hands meeting. Send flowers or a gift basket on behalf of the company to the employee's home.

Offer the employee an assignment or project that will stretch their current skill set. Give them an increase or change in responsibility and authority. Offer them an opportunity to shadow someone in a job they want to have next. Increase flexibility of work hours and/or occasional comp time (hint: employees really like this one).

Give employees a relevant book inscribed with a message from leadership recognizing their accomplishment. Allow them to observe a team or project that would represent a big promotion (and thus a learning opportunity to observe). Arrange for your manager or a senior leader to take your group out to lunch or dinner to celebrate a team accomplishment.

3. Use Peer Recognition

It is just as important for employees and teams to recognize each other as it is for leaders and managers to acknowledge good work. One good way to recognize a team, department, or organization is to establish a "Caring Credits" program.

At the beginning of the month, give everyone three cards. Employees write notes acknowledging their colleagues for going above and beyond their job requirements, and submit the cards to a designated individual (someone in HR, the team leader, etc.). At the end of the month, the person with the most cards written about them earns some sort of recognition. Distribute all the cards collected to employees acknowledged so people can see the praise they received from co-workers. That way, everyone gets recognized, not just the winner.

Another good strategy involves setting aside some wall space for public recognition. Pick a Friday afternoon to engage employees in creating their own (and your own) "What's Great?" wall boards.

Employees use the boards to write a brief note about something great that occurred during the week. Notes can include professional or personal achievements or events. Encourage people to contribute to each other's boards as well as their own, and watch how easily they begin to add to the boards without weekly prompting. The different handwritings and colored markers will brighten up the workspace. And others will stop by just to see what's new on the boards.

So take a few moments this Valentine's Day to show your employees some love - the legally appropriate kind! Then look for simple and effective ways to do it throughout the year. A little bit of recognition goes a long way toward maintaining a happy, motivated, and innovative workforce. Remember, recognition doesn't have to be big, time-consuming, or expensive. It's not brain surgery... sometimes it's harder!


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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.

Importance of Employee Engagement

by Mike Myatt

The topic of "Employee Engagement" is something that many CEOs tend to struggle with. Long gone are the days where the executive leadership of a company can remain sequestered in their offices with an internal focus on hard metrics. Given the current economic climate, it takes far more than cost-cutting to survive. It is the CEO who understands the need for focus on the soft metrics of customer centricity and employee engagement that will create sustainable growth in revenue and brand equity. In today's post I'll examine the need to have a fully engaged work force...

Before you read any further, I want you to stop and ask yourself the following question: How many of your employees are truly passionate about your company, its values, its vision, its mission, and the role that they play within the organization? Don't fool yourself... Conduct a harsh, critical analysis and come up with a true head count of the passionate employees within your organization.

Your answer to the question above should be a very telling sign about the overall health of your business. Are people just showing-up and punching the clock to collect a paycheck, or are they personally consumed and committed to achieving the company vision? Are your employees corporate evangelists serving as a motivating force to be reckoned with, or do they gather in small groups to gripe and complain about all the things wrong with the company and its leadership?

The key to having an engaged workforce is to have a passionate workforce. And the simple truth of the matter is that no single person in the company can instill passion in the ranks like the CEO can. Despite the consensus recognition that employee engagement matters, the enormity of its impact on the company's bottom line and its capacity for innovation, still appears to be misunderstood by most CEOs. I rarely talk to a CEO that doesn't understand this principle in concept, but yet I rarely see chief executives who put theory into practice.

So it begs the question, why are CEOs listening but not taking action? The answer seems to be that CEOs continue to allocate considerable effort and resources toward engineering the corporate strategy, yet they seem to be unaware of what forces can prevent said strategy from being delivered successfully. Not surprisingly, employee engagement is often the critical missing factor.

As the CEO you must also become the chief engagement officer. Operating in a vacuum and being out of touch is never a good position to find yourself in as the CEO. I have consistently espoused the value of walking the floor, dropping in on meetings on an impromptu basis, taking employees of all ranks to lunch, and any number of other items that focus on raising your internal awareness and creating a passionate workforce.

It is your passionate employees that are the franchise talent (regardless of position) that you should be building around. If you can't get employees to see the light and become passionate about the company and their contribution, then seek to replace them as quickly as possible. Just as passion is a positive, contagious trait so are apathy and dissatisfaction. Passionate employees are productive, energized, committed and loyal assets. Apathetic employees quickly become disenfranchised liabilities that will hurt both productivity and morale. To drive home the point of how much I value passionate employees, I would take a moderately talented but passionate employee over a very talented but complacent employee eleven times out of ten.

Truly great companies are built around passionate employees. When you walk into a dynamic, thriving company you can sense the passion. You feel a certain buzz and fervor that pervades everything. Contrast this with a company that feels as if it has no pulse. If you've ever walked into an organization that feels like rigor-mortis has set in, you know what I'm referring to. In today's economy, the old saying that "the only thing worse than an employee who quits and leaves is the employee who quits and stays" has never been more accurate.

As a leader you need to understand that your employees not only want to be led, but they want to be led by a passionate leader. Ultimately employees want to be passionate about what they do; in fact, they'll go to the ends of earth and sacrifice tremendously if passionate about the endeavor. Think of the employees that started off with Gates and Allen at Microsoft, or those that worked with Phil Knight in his garage before Nike even had a name, or those employees that endured the early days with Larry Page and Sergey Brin at Google. It was their passion and commitment that helped change the landscape of business, not their starting salaries.

To build an extraordinary company, you must light the fire in the bellies of your workforce. You must get them to feel passion about your organization and to connect with your vision. You must get your employees to engage. As the CEO, your ability to transfer your passion to your employees is the essence of being a great leader. So much so that if you can't accomplish this, you simply can't be a great leader. Think of any great leader, and while you'll find varying degrees of skill sets, intellect and ability, I challenge to name even one that did not have passion, as well as the ability to instill said passion in team members.


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Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

Creating Innovation Best Practices of Tomorrow

by Paul Sloane

Directors constantly strive to increase efficiency, implement best practice and deliver increased shareholder value. They seek to improve cash flow through efficiencies of scale and cost reductions. But there are limits to cost saving. In a global economy your competitors in lower-cost countries can beat you at that game. The best way to create value is to innovate your way ahead of the competition. You need to create temporary monopolies where yours is the only show in town. You can do this by harnessing the creative power of your greatest asset, your people. The goal is to turn them into opportunistic entrepreneurs who are constantly looking for new ways of doing business.

A copy-machine operator at Kinko's, a major chain of outlets providing copying and document services, noticed that customer demand for copying dropped off in December. People were too pre-occupied with Christmas presents to do much copying for the office. So he came up with a creative idea. Why not allow customers to use Kinko's color copying and binding facilities to create their own customized calendars using their personal photos for each of the months? He prototyped the idea in the store and it proved popular - people could create personalized gifts of calendars featuring favorite family photos. The operator phoned the founder and CEO of Kinko's, Paul Orfalea, and explained the idea. Orfalea was so excited by it that he rushed it out as a service in all outlets. It was very successful and a new product - custom calendars - and a new revenue stream were created.

This kind of creative energy should be the goal for every organization. How can you make all your staff into creative entrepreneurs like the operator in Kinko's? How can you energize people to see problems not as obstacles to success but as opportunities for innovation?

To build a truly innovative organization you need to have a vision, a culture and a process of innovation.

The key elements of creating a truly innovative and entrepreneurial organization can be summarized in the following eight steps:

1. Paint an inspiring vision.
   
2. Build an open, receptive, questioning culture.
   
3. Empower people at all levels.
   
4. Set goals, deadlines and measurements for innovation.
   
5. Use creativity techniques to generate a large number of ideas.
   
6. Review, combine, filter and select ideas.
   
7. Prototype the promising proposals.
   
8. Analyze the results and roll-out the successful projects

Painting the vision

You start by painting a vision that is desirable, challenging and believable. If you can do this then there are three big gains for the organization:

First, people share a common goal and have a sense of embarking on a journey or adventure together. This means they are more willing to accept the changes, challenges and difficulties that any journey can entail.

Secondly, it means that more responsibility can be delegated. Staff can be empowered and given more control over their work. Because they know the goal and direction in which they are headed they can be trusted to steer their own raft and to figure out the best way of getting there.

Thirdly, people will be more creative and contribute more ideas if they know that there are unsolved challenges that lie ahead. They have bought into the adventure so they are more ready to find routes over and around the obstacles on the way.

At GE the vision is "We bring good things to life." The Ford Motor Company vision is "...to become the world's leading consumer company for automotive products and services." Vision statements should be short and inspiring. They should avoid vague and woolly clichés about outstanding customer service. The vision should not be restricted to today's type of business. It must set a goal that gives employees enormous freedom in finding ways to achieve it. The pharmaceutical giant Glaxo Smith Kline has a mission "to improve the quality of human life by enabling people to do more, feel better and live longer." They do not define their mission in mundane terms of drugs or medicines or markets but in inspirational terms of helping people do more, feel better and live longer.

Just painting the picture is not enough. It quickly fades from view if it is not constantly reinforced. Great leaders take time to meet staff. They illustrate the vision, the goals and the challenges; explain to staff how their role is crucial in fulfilling the vision and meeting the challenges. They inspire people to become crusading entrepreneurs finding innovative routes to success.


Empowering

You cannot deliver the change on your own. The best source for the idea-generation and creativity needed for innovation is the team within your organization. To turn them into entrepreneurs who are hungrily looking for new opportunities you have to first empower them. The purpose of empowering people is to enable them to achieve the change through their own efforts. They need clear objectives so that they know what is expected of them. They need to develop the skills for the task. They need to work in cross-departmental teams so that they can create and implement solutions that will work across the organization. They need freedom to succeed. And when you give someone freedom to succeed you also give them freedom to fail.

People want to understand and agree what is expected of them. The scope of their freedom and their responsibility must be agreed. They need training, coaching, reinforcement and encouragement. They need support in acquiring creative problem-solving skills and encouragement to be brave enough to come with radical innovations. Above all, empowerment means trusting people. It is by giving them trust, support and belief that you will empower them to achieve great things.


Overcoming Fear

People are anxious about change. Change is uncomfortable. Change means winners and losers. It is natural that people will prefer to stay within their comfort zones rather than risk an embarrassing or costly failure. You should spend time with people encouraging them to undertake risks and reassuring them that those risks are necessary and worth taking. Fear of failure often inhibits people from pushing themselves to new limits. You have to show that doing nothing has its risks too; that staying in the corporate comfort zone is a dangerous option. You have to reassure them that they will not be punished for taking risks, for worthwhile failures, for bold initiatives that do not succeed. Of course taking risks means taking calculated risks not wild risks. Every employee who is undertaking a risky initiative needs freedom but they need mentoring and guidance too.

Once again communication is the key. Informed people don't fear change. As Dick Brown, Chairman and CEO of EDS put it, "People are not afraid of change. They fear the unknown."


Using Innovation Techniques

Can creativity be taught or is it a rare talent possessed by a handful of gifted individuals? The answer is that every one of us can be creative if we are encouraged and shown how to do it. We were all imaginative as children but gradually most people have their creative instincts ground down by the routine of work. With proper training people can develop skills in questioning, brainstorming, adapting, combining, analyzing and selecting ideas. They can be the innovative engine your organization needs.

The process of finding creative solutions is something that can be built into the culture of the organization. This is done by techniques, methods, workshops and a pervading attitude of encouragement for crazy ideas.

The goal is to change the organization; to achieve a metamorphosis from a routine group of people who are doing a job to a highly energized team of entrepreneurs who are constantly searching for new and better ways of making the vision a reality. We want to use creative techniques to drive innovative solutions to reach the goal. But just encouraging innovation is not enough. You need to initiate programs that show people how they can use creative techniques to come up with new solutions. People need training in order to learn the skills and to develop the confidence to try new methods.

The innovation process involves the generation of many ideas in response to a given issue or challenge. The ideas are then whittled down to the most promising. The key then is to move rapidly to prototyping the best ideas. Businesses that are fast to market carry out quick pilot tests rather than spending months in "paralysis by analysis." For new products, innovation projects go through a number of evaluation "gates" that test the feasibility, attractiveness and payback. Those that pass through the gate are given more funding.

The innovative organization is constantly trying new products, new processes, new business practices and new partnerships. Its people share an open, questioning, empowered and entrepreneurial culture. They know that innovation is the only way to remain agile and ahead of the competition. After all, it is the innovation of today that becomes the best practice of tomorrow.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Combining Brand Management with Workforce Enablement

by Steve McKee

In my December BusinessWeek.com column, I highlighted the vital need for internal branding, calling it the missing link between perception and reality, promise and delivery, effective marketing and positive outcomes.

Now along comes a speech by Jon Iwata, SVP of communications and marketing at IBM, that makes my argument look like a kiddy pool compared to the depths he's diving. His speech was titled, "Toward a New Profession: Brand, Constituency and Eminence on the Global Commons," but don't let that scare you. He made some insightful points about why IBM has created a new internal discipline that combines brand management and what he calls "workforce enablement," aligning "experts in the workplace and experts in the marketplace."

The reason? Iwata says, "One day soon, every employee, every retiree, every customer, every business partner, every investor and every neighbor associated with every company will be able to share an opinion about that company with everyone in the world, based on firsthand experience. The only way we can be comfortable in that world is if every employee of the company is truly grounded in what their company values and stands for."

In ancitipation, Iwata emphasizes the need to "go from managing outward expressions and manifestations of the company - visual identity, naming conventions, messaging, design and the like - to the behavior and performance of people."

Iwata also addresses the current corporate hand-wringing over social media: "The CFO worries about financial disclosure. The General Counsel fears intellectual property leakage. HR will say we're helping competitors recruit our people. And everyone will be nervous about criticism of management." But instead of mocking these worries, he points out how legitimate they are and that they will need to be - and will be - addressed. The key, he believes, is not just to lay down policies and procedures (although those do have a role), but to "build the eminence of our workforce."

Perhaps this statement sums up the speech best: "For great companies, values are not the work of 'positioning' or messaging or story-telling alone. For great companies, what they value defines who they are - and who they hire, and what they make, and the broader constituency of aspiration they seek to define. And they methodically and intentionally align their operations and cultures to authentically be that."

Iwata is not only smart, his speech demonstrated a humanity and a humility not often found at the highest levels of the biggest corporations. Count me a fan. If you'd like to read the speech in its entirety, it's [here].

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Elevating HR to Drive Innovation

by Rowan Gibson

It's every employee's nightmare in recessionary times: finding a "pink slip" in the pay envelope, or getting a fateful phone call from HR. Over five million workers in America have had that gut-wrenching experience since the economy hit a wall in 2007. And this year the global layoff tsunami will claim millions more jobs worldwide. So I imagine that, right now, a lot of HR Directors are feeling about as popular as bird flu. But they need to take heart. Even in the midst of the worst economic woes for several decades, a new day is dawning for Human Resources. It's the day that HR finally gets the strategic recognition it deserves; the day that HR steps up from a mundane back-office function to play a center stage role.

My friend, Dave Ulrich, professor of business at the University of Michigan, has long argued that HR leaders should assume a more vital, strategic role inside their companies. Rather than merely busying themselves with everyday stuff like policies, payroll, and picnics, Ulrich says that HR professionals should be striving to build and strengthen the unique set of organizational capabilities that give a company its competitive advantage. In essence, that means developing a particular mix of resources, processes and values that makes it hard for rivals to match what the company does.

Sounds good in theory. But before the HR department starts packing boxes and moving upstairs, we should first give some serious thought to exactly which organizational capabilities today's companies should be building. Let's face it, most traditional forms of competitiveness - cost, service, technology, distribution, manufacturing, product design - can now be quite easily copied. Sure, these variables may still provide a company with a temporary head start, but over time they no longer offer the basis for a sustainable competitive advantage. So what do we have left? The answer, in a word, is radical innovation. As my colleague Gary Hamel puts it in "The Future of Management":


"In a world where strategy life cycles are shrinking, innovation is the only way a company can renew its lease on success."


What we're finding out in today's value-based economy is that radical, game-changing innovation is literally the only strategic weapon we have left, in the sense that it's the only capability that can create value for customers in a way that is difficult for competitors to imitate.

That's why innovation is now such a major strategic priority for every company on earth, not to mention national and even regional governments. But it's also where the real problem starts. Because, until now, very few organizations in either the private or the public sector have managed to turn innovation from a buzzword into a core competence - a wall-to-wall, top-to-bottom enterprise capability. Most of them wouldn’t even know where to start - or, indeed, how to sequence - the capability-building process.

As I have written before in this column, making innovation a systemic organizational capability is a complex and multifaceted challenge. It simply cannot be solved with some Band-Aid or silver bullet. Instead, it requires deep and enduring changes to leadership focus, performance metrics, organization charts, management processes, IT systems, training programs, incentive and reward structures, cultural environment and values. All of these elements need to come together and mutually reinforce each other as a system in order to institutionalize innovation. Otherwise, a company's efforts to make "all-the-time, everywhere" innovation happen will be doomed.

What companies need is not merely a pro-innovation mindset, or better brainstorming techniques, or "hot teams". The challenge is not about quickly coming up with a few new products or services to get the sales curve moving upward. It's about making innovation a new organizational way of life; something that permeates everything a company does, in every corner of its business, every single day. It's about infusing the entire lifeblood of an organization with the tools, skills, methods and processes of radical innovation.

That's the true imperative for rethinking the role of Human Resources. As soon as we recognize the strategic value and the immense organizational transition that's involved in building a corporate-wide innovation capability, HR automatically moves to center stage.

Who else but HR leaders would be capable of turning a company's strategic intent with regard to innovation into tangible everyday action? Who else could make the necessary changes to executive roles and goals, political infrastructures, recruitment strategy, broad-based training, performance appraisals, awards and incentives, employee contribution and commitment, value systems, and so on? Who else could build and foster the cultural and constitutional conditions - such as a discretionary time allowance for innovation projects, maximum diversity in the composition of innovation teams, and rampant connection and conversation across the organization - that serve as catalysts for breakthrough innovation? Who else could ensure that each employee understands the link between his or her own performance (as well as compensation) and the attainment of the company's innovation strategy? In short, who else but HR leaders could create a company where everyone, everywhere, is responsible for innovation every day—whether as an innovator, mentor, manager, or team member?

The sad reality is that too many CEOs overlook HR's potential in this regard. They still think of HR solely in terms of regulatory compliance, hiring and firing, employee comfort, compensation and benefits. Notably, Jack Welch, illustrious ex-CEO of GE and arguably one of the greatest corporate leaders of our times, sees things differently. In a recent column in BusinessWeek, he writes that "every CEO should elevate his head of HR to the same stature as the CFO." I couldn't agree more. It's time for HR to step up to the plate and take on the strategic role of innovation capability builder.

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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Planning and Designing Excellent Service

by Damian Kernahan

It's the Me-conomy stupid.

And so sums up in just four words the feeling a lot of us have as consumers as yet again we encounter another average service experience with a company we have provided our custom, our dollars and our time, often over many years.

In this article we will look at trying to understand why we so often have these average customer experiences, why services are still most often developed using an industrial product mindset and how that might be improved. We will also provide a new approach to ensure that services are more regularly designed with the end user in mind rather than as an organic process, which has little connection to the importance of the crucial revenue stream that it has been set up to deliver.

It has been proven there is a huge gap between companies' and consumers' perceived customer experience. Bain and Co conducted a study several years ago across 362 firms. Of those firms, which were a representative sample across businesses, 95 per cent said they were customer-focused. Of those companies, 85 per cent believed that they delivered a superior experience for their customers. And the corresponding amount of customers that agreed with them. Eight percent! Yes, that's right, only eight percent of customers believed that they were being delivered a great experience. By my count, that is a rather large discrepancy between what the company intended and what they actually delivered upon. It's an even scarier number for any company that operates as a service business given their product is 'customer experience'.

According to the ABS, nearly 75 percent of the business conducted in Australia is produced by organisations that provide services as their means of generating revenue and growth. Importantly, that figure is growing annually, not only in Australia but across nearly every developed western country as manufacturing moves offshore to cheaper more cost-effective countries.

With the service sector growing in terms of both numbers employed and its importance to the economy, the requirement of having a process to maximise the value of the service exchange to both company and customers becomes even more crucial, especially in a world that is becoming increasingly complex.

In the '80s there was only one way to access the funds in my meagre bank account and that was by fronting up with my passbook and talking with the teller. Now, in addition to the traditional teller, you can transact with a bank via phone using the keypad, Internet, Paypal, and even more recently via smartphones. The world has changed and with that has come added complexity. With more channels and avenues to connect with customers and for customers to connect to service providers, logically that should result in a better service experience. Paradoxically with this increased complexity and choice has come greater difficulty in providing the customer with a better experience.

Accenture published a global report in January of this year with specific focus on major western countries, one of which was Australia. It showed that over 52 percent of customer expectations were never or rarely met and 64 percent of customers left at least one provider last year due to poor service.

So, why is that? Why, given the size of the service economy, the number of jobs and the importance in delivering business growth, is the service experience so average? It can't be that business leaders don't believe in delivering a great customer experience, because apparently 95 percent of business leaders do.

Our hypothesis is that service organisations in determining how they will reach their business goals have a firm belief that they face a choice. They can deliver increased margin and profitability at the expense of the customer experience. Alternatively, they can choose to focus on delivering the superior customer experience that nearly all managers are aspiring to and forgo potential margin and revenue because of the investment needed to do so.

And using traditional approaches they are absolutely right. Using the skills and frameworks that thousands of postgraduates - including myself - learned in the leading MBA programs in this country, we very quickly determine that we need to make a trade-off between the two choices at hand. As the saying goes, 'money talks', and nine times out of ten, forgoing the customer experience in exchange for the most efficient process will always almost win out.


DESIGNING SERVICES

Businesses have used design as part of their new product development process for decades. But unlike products, services are produced only at the point of consumption. So how do you design something that is ostensibly intangible?

The good news is that using proven approaches developed over the past 15 years by leading US and European Business consultancies-cum-'Big D' design companies such as IDEO, organisations now have a legitimate and robust process they can successfully call on to prevent the need to trade-off between profitability and customer experience.

Working alongside small and not-so-small organisations, some firms have successfully demonstrated that when you spend the time to design and determine what the ideal service scenarios look and feel like, it significantly increases the chances of the customer experience actually being delivered as it was intended. When that occurs consistently as part of the customer journey, it significantly enhances the value of the service for both the service provider and customer.

The discipline that is resolving this trade-off is known as 'service design'. Service design is the thinking and design that goes into every interaction that a service organisation has with its customers, in such a way that the organisation delivers both a dramatically improved customer experience and increased profitability. It helps organisations identify where, when and how their services can be improved and made more valuable for both themselves and their customers.

As a discipline, service design occupies a new space combining the skills of management consultancies, research agencies, and marketing and design firms. The firms occupying this space formed as a result of the inability of traditional approaches and disciplines to solve the myriad of non-traditional problems and complex business issues.

The positive impact of design on practically every measure of business performance, especially service businesses, including market share, growth, productivity, share price and competitiveness, has been shown repeatedly by data from the UK Design Council National Survey of Firms. It shows that:

• More than 80 percent of design-led companies have introduced a new product or service in the last three years, compared with just 40 percent of UK companies overall.


• 83 percent of companies in which design is integral have seen their market share increase, compared with the UK average of 46 percent.


• 66 percent of companies which ignore design have to compete mainly on price. In companies where design is integral, just one-third do so.


• 80 percent of design-led businesses have opened up new markets in the past three years. Only 42 percent of UK businesses overall have done so.

So how does it work? Well it begins with understanding what a company is trying to achieve. Most business challenges for service-based organisations boil down to successfully answering one, or more likely, both of the following questions:

• Retention - how do we improve the customer experience so we grow our loyal customers?


• Acquisition - how do we create ways for new customers to engage with us?

Upon closer inspection, service design firms often help answer questions that need solutions. They typically look something like the following:

• We currently just make products - how do we go about becoming a service-focused business?


• How do we build a strategy around a coherent suite of services that supports our product range?


• How do we come up with compelling service propositions that meet customer needs and deliver against our strategic objectives?


• How can we deliver new and improved services around a particular brand?


• How can we add far greater depth to our service concepts to ensure long-term competitive advantage?

If you find yourself asking these or similar questions in your business and want to take a positive step in creating better services and happier customers, then there are five areas that you can immediately focus on to start the journey.

A good starting point is to look at the following service design principles as a way of determining where, when and how your company can approach the creation of better services.

Using these principles alongside a methodology, tool set and skillset that have been purpose-built to drive service innovation, will provide the significant boost required to drive new and improved growth for any service-based organisation.


PEOPLE

Services, unlike products, are only created at the point that users and service providers come together. Providing a great customer experience relies very heavily on the delivery by staff of that experience. Without scripts, training and a deep understanding of the outcome they are ultimately trying to create, staff will never be able to deliver a sustainable and consistent experience for their customers. The other key point is that people leave, get promoted, forget and are fallible. Knowing this ensures that companies take these aspects into account when designing the system.


SERVICE PROPOSITIONS

Services are often referred to in service design literature as 'propositions'. It makes sense, as a service is often a collection of different elements and touchpoints that combine to hopefully deliver a compelling service proposition. The reason this takes on such great importance is that unlike manufactured products, services are quite often developed organically, and they lack the pro-active design and development required to ensure that service providers take all the available opportunities to maximise the desired experience. Companies generally focus on the 'during' phase of the service and spend far less time on what occurs 'before' or 'after' the service exchange. And the economic tragedy of that is that these areas are quite often the sweet spot where significant value can be created for a very small investment.


TOUCHPOINTS

One of the key differentiators of service design is that it looks in great detail at the entire customer journey of any service. As indicated earlier, a service takes place over time and a well-designed service also enables customers to access information, help or customer service the way that they wish to, not just the way that a service provider thinks it should be provided. By starting with the end-user in mind when designing the various touchpoints, it significantly increases the ability of the service provider to determine where and when they wish to inform, engage or influence the behaviour of current or new customers.


SYSTEMS

How many meetings have you attended where multiple ideas are generated to improve the experience for your customers? You know these meetings because they are filled with statements like 'wouldn't it be great if we ...'. And you know what is always missing at these meetings? It's the backend systems or processes to link these 'wouldn't it be great if we' statements to the operational aspects of service delivery. Focus on the development of user-centred (useful, usable and desirable) customer opportunities and understand and appreciate how the operational limitations of the back end systems will impact the successful execution of the idea. This ensures that as an organisation you always keep your promises to your customers.


SHARED VALUE

Finally, service design focuses on creating mutual value for both company and customer and is one of the crucial aspects of delivering the required performance. Innovation, it is often said, is created when someone solves the previous requirement to trade-off between two options. And in using the same logic, service design resolves the need to trade-off between value created for the company or the customer. The process is about maximising the total mutual value for both parties - a much smarter and far more 21st century approach to growth.

Which brings us back to the opening line of this article, "It's the me-conomy stupid", borrowed from a David Armano presentation.

If last century was about organisation control or organisation-led service, then this century will be about customer control or customer-led service.

The internet has given us the ability to access information and knowledge easily. We no longer need to accept things at face value, we can check to see if there is a better and/or cheaper option. We can look around with a few clicks and see if what brands and companies are promising, they are actually delivering. No longer do customers have to wait to determine if they will be in the 92 per cent of customers who are likely to receive average service; they can look online and choose which companies have proven repeatedly that they will deliver the service and the experience they promise.

With so much at stake for service-based companies, the opportunity exists even in the face of greater complexity to deliver against the constantly changing and increasing expectations of their customers to their great benefit. And if those companies listen hard enough they will have thousands of their customers saying to them, "But enough about me, let's talk about you ... what do you think of me?"


Giving Service Design Wings

Nestled in a nondescript brown industrial park near Mascot, an inner city suburb of Sydney, something very interesting is taking place. It involves a $10 million capital investment, a 5000 square metre facility and 18,000 staff per year in an effort to deliver better service for the company's customers. And the company involved? Qantas.

Qantas has embraced service design as a key driver of reaching its vision. As part of its journey as possibly the first Australian company to embrace service design, it is now focused more than ever before on its quest to deliver what it describes as "the combination of world class product and flawless service at every customer touchpoint".

With $1.7 billion invested in product, Qantas decided that service design was key to leveraging that hard investment in order to deliver the service standards needed to compete in a fiercely contested market.

For Qantas, the move to focus on delivering better customer service involves three key elements:


USING SERVICE CHAMPIONS AS ADVOCATES

Understanding the scope of its challenge, last year Qantas endorsed over 200 sales, cabin crew, customer care, pilots, engineers and corporate staff to act as service champions across the business. Their role is to continue to reinforce service levels and encourage other staff they come into contact with to deliver against the standards that Qantas has set for itself.


THE 'CENTRE OF SERVICE EXCELLENCE'

An old engineering apprentice workshop was rebuilt as a purpose-built facility to help employees experience and understand the Qantas brand and desired customer experience. The end-to-end customer experience has been recreated in the facility so that employees can feel, see and touch what the brand represents and more importantly how it is presented to customers (THE 'EXCEPTIONAL PROGRAM').

As the kick off to a wider company change program, this year Qantas is planning to take 18,000 of its staff through a one-day learning experience at the Centre. Initially, they will learn and experience how they can play their part in delivering the right level of service for their customers. In a good example of practising what they preach, from the time attendees are picked up by a dedicated bus at Sydney airport to the time they leave the facility at the end of the day, every interaction they have has been carefully designed to ensure all staff are clear on what is expected. To reinforce the initial day, ongoing initiatives have been developed to reinforce the key messages and maintain staff commitment levels.

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Damian Kernahan is the managing partner of corporate growth consultants, Proto Partners, www.protopartners.com.au.

Optimizing Innovation - Dr. Daniel Sturman of Google

by Braden Kelley

We are happy to bring you some of the key points and insights from Dr. Daniel Sturman's talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Dr. Daniel Sturman, Engineering Director at Google, spoke from an engineer's perspective, not from an innovation director's perspective, about the culture at Google. The main key in his mind?

Make sure you have good people, that they know what direction you're going in, and then as a manager, try to get out of the way:

• Rich and broad mission scope


• Tolerance of failure and encouragement of risk-taking


• Decentralized action towards a commin mission and platform


• Technical leverage (cloud computing)

The Google approach to managing people and launching and iterating, may very well not be applicable to other areas, but it's what they do. Dr. Sturman talked about how he wouldn't necessarily want his surgeon launching and iterating.

From his experience, there was no master plan to Google from 2001 to 2009:

• Many ideas large and small were tried and abandoned


• What worked was defined by user excitement


• We focus on launch and iterate, and fail early and often, because often our first conception of what the user wants were wrong

"Usage is the currency that speaks - not what customers say they will use"


To help them figure out which ideas will succeed and which will not, Google does a lot of live experiments on the Google site - re-routing a small portion of their traffic to experimental parts of the site (as little as .1% of the traffic).

Dr. Sturman feels that having a strong and flexible technical foundation is key to Google's success. This means easy access to hardware resources - rather than machines belonging to a certain group or having to requisition things through a restrictive process.

Google has the advantage of low experimentation costs - because they're in the online services business and have lots of servers. Dr. Sturman referred to the Google portfolio as "shared warehouse computing".

Also key is that all the pieces of code (with very few exceptions), are available to everyone in the organization.


"When in doubt, always move towards empowerment"


Management sets the tone:

• How important is control?


• I have 25 direct reports, some with the same spans of control


• This makes it almost impossible for me to be a control freak


• I can't possibly know exactly what everyone is doing


• A rational organization can often rationize away innovation
  
  • Accountability must be balanced
  
  
  • Some chaos can be a good thing!
  
  
  • Technnology in lieu of hierarchy
  
  
  • Communication can enable flatness
  
  
• Small teams (say 8 people) and a flat heirarchy are good


• Peer driven evaluation and promotion


• If peers don't think your work is important, but boss does, you're not going to be promoted


• peer opinions are almost more important

"Always look for reasons as a manager at Google to say yes."


Google Labs is their outlet for 'radical ideas' to allow for ideas to be tested out:

• Google Squared and its table format for search results is one example of solutions being tested


• Okay that user interface is not consistent


• Primarily advanced users will find these ideas

One of the great things Dr. Sturman has found at Google is that it is much easier to build solutions for very complex problems.


Question from Jack Anderson of Chevron:

"How does Google attract the right people to work in such an environment?":

• We look for people who are comfortable with ambiguity and who have the ability to accept failure


• We hire smart generalists and hope they can acquire the necessary specialized knowledge to solve the problems at hand


• There is no formal process for hiring or training innovators

But, one of my favorite quotes from the event came from Dr. David Matheson in the audience:


"The accumulation of policy and procedure is the greatest burden that a company faces."

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Here's to the Passionate Creatives

"Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do."

Apple ad, "Think Different", 1997




by Hutch Carpenter

Why did Apple's ad resonate so well with you? After all, how much time do we spend disagreeing. Admit how happy it can make you when your manager praises you for executing well on an assignment. I know I feel it. No "think different". More like "think excellence".

But that Apple ad. It was damn good, wasn't it? Seemed to reach inside us to something else beside the praise we get for doing an assigned job well. It was celebrating some thing in each of us.

John Hagel recently wrote A Labor Day Manifesto for a New World. The post is a call to action for work that better fits our human nature. Our desire for creating better ways to address problems, in ways that fit our personality, interests and skills. To reach our full potential. We're not all doing this though.

Hagel terms people whose personalities and drive are based on making situations better than what currently exists as "passionate creatives". There have always been these types, but recent changes in the global economy and shifting market dynamics (e.g. digital technology rewriting one industry after another) are increasing their importance.

Passionate creatives exist within organizations, and as independent entrepreneurs. For those inside firms, Hagel notes:


"They experience deep frustration today with the institutional barriers that have been put in their way as they seek to more effectively achieve their full potential. They want and need platforms that can help them connect with others and drive performance to new levels."


For many of us, even if we wouldn't label ourselves "passionate creatives", the point about frustration resonates. How often have you had an idea, but can't attention for it, nor resources, nor figure out who else to work with? I've had jobs like that in the past. You know some things are not working well, and you can see how to improve the product/delivery/business model. But you can't make headway on iterating through new possibilities.

Hagel's manifesto is a great read. I want to hit on two points I take away from it:

• What is the role of "passionate creativity" in daily work?


• The gathering of passionate creatives at the edges and the accelerating rate of change in markets

The Role of Passionate Creativity in Work

Very few of us get to live a life of unfettered passionate creativity. The realities of the mundane trump the thrill of the new. And that's not a fault of the system. If all we did was work on new stuff, there'd be no stability and no scalability. More like mass economic anarchy.

But that's too heavy handed a look at it. We can be quite productive and help our companies, and careers, while working on tasks that hit our passionate creative sweet spot. A good question to ask is, how much of this passionate creativity infuses our work days?



Take a look at those two Venn Diagrams. They're saying different things. The left one says that we all have to execute on tasks assigned by others, or assigned by ourselves for the role we fill. In some of that work, we'll have the opportunity to reach deeper, to deliver creativity on an activity that animates us. But the primary focus is executing on the plans and processes already in place.

The right one indicates a job which is dominated by passionate creativity. Hagel's call-to-action is more aligned here. We work primarily on things which stimulate and energize us regularly. But there is a twist to this notion. It doesn't mean spending one's time on only starry-eyed big picture thinking, producing little of tangible value for your organization. It includes work by those "who are searching for new and creative ways to do the most 'routine' tasks."

Which model of work are we likely to see arise in the next decade or two? Both. Neither. Yes.

Hagel's manifesto is not so much a clear-eyed plan for rearranging organizations. Rather, it's a wake-up call to the corporate world that the nature of work and what employees seek is changing. As he says:


"Why will more and more people evolve into passionate creatives? Because we live in a world that is shifting inexorably from an obsession with efficiency to an obsession with learning. We have come to call this the Big Shift."


In that statement, I draw some conclusions that relate which model above will emerge. First, note that the Big Shift is a shift in "obsessions". From efficiency to learning. That's a shift in attention, and in resources. It's a shift in the dynamics of the supply side of the equation.

What hasn't shifted is the demand side of the equation. Consumers worldwide still depend on the massive efficiencies that Tayloresque methodologies have brought to our economy.

So there's the quandary: if we're all working on things that inflame our passionate creativity, who is minding the massive scalability store?

My sense is that the Venn Diagram on the left is closer to what we'll see. Enlightened companies will follow the examples set by Google and 3M, encouraging employees to pursue initiatives outside their regular routines. This does a couple things:

• It provides an outlet for growing passionate creativity on a wider basis


• Some of those initiatives will turn into full-fledged projects

The second point then lets employees live a life in the right-side Venn Diagram.

Passionate Creatives at the Edges

Another point Hagel makes is that passionate creatives tend to occupy spaces that are "edges":


"Passionate creatives are everywhere among us, but they are not evenly distributed. They tend to gather on the edges where unmet needs intersect with unexploited capabilities. Edges are fertile seedbeds for innovation."


Reading this, I was struck by how well this fits with the observation that Gary Hamel made. The pace of change in markets is faster now than it ever has been in history. What this means is that Hagel's edges - unmet needs intersect with unexploited capabilities - will be more frequently found.

Companies need to get better in pivoting to meet changes in their markets. And this keeps CEOs up at night. IBM surveyed global CEOs in 2008, asking them about their view of changes in their markets. The results are eye-opening:


"Collectively, CEOs set their organization's ability to manage change 22 percentage points lower than their expectations for the level of change they will have to manage - a 'change gap' that is widening."


A wide 'change gap' there, isn't it? If Hamel identifies the problem companies face, Hagel identifies the types of workers who will make a difference in addressing the problem. The passionate creatives.

The edges are places of opportunity and uncertainty. It's hard to know what the demand dynamics are, and existing infrastructure and processes don't address the changing market needs. New alternatives are emerging, it's time for fresh approaches by existing firms.

Companies are best-served by allowing employees who are attracted to these changes to pursue innovative ways to address them. Why? They get energy. They get an experimenter's mentality. They get a happier workforce. Let employees exercise some form of self-organization to accomplish this.

The alternative may be incumbent staffers who have fallen into routines, or have reason to protect the status quo. This does not help companies address rising levels of volatility. Free the passionate creatives!

Passionate Creativity Will Fall on a Spectrum

My sense is that work will evolve, over years and decades, to allow people to shift attention to work that energizes them more fully. It will happen on a spectrum, with daily jobs that fall between those two Venn Diagrams above. Society cannot get away from the requirements of predictability, efficiency and scalability. We're all going to have elements of our jobs that are routine.

I think Hagel's post is right on though. It will be a slow change where companies integrate the existing passionate creatives more effectively, and develop the passionate creativity in all employees. Companies doing it well will need to celebrated and publicized repeatedly for the value to be understood more widely in the market. Over time, we'll see the change.

Note what G. Michael Maddock and Raphael Louis Viton wrote in this recent Business Week article. Passionate creatives like to "follow the challenges":


"Stop and think about the last truly great person who left your organization. First think about what made that employee great. We bet you name such characteristics as action-oriented, driven, passionate, fun, and genuine."


Now think about where that worker went. Chances are, to a position with a perceived promise of putting his or her talents to better use - moving into a role with greater challenges and opportunities to learn and make a difference. It wasn't about money.

It will happen. Here's to the passionate creatives.

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Hutch Carpenter is the Director of Marketing at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.