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.

Innovate or Die - Tactics #17-42 of 110

by Tom Peters

This is the second of four parts of the list of 110 Innovation Tactics.

• Click here to view Part One - Innovation Tactics #1-16

We Are What We Eat. (And Who We Hang Out With.)

17. Hang out/"We are what we eat" We are what we eat/We are who we co-habit with, and variants thereof are of infinite importance to the effective innovator. Managing "the hang-out factor" is of the utmost strategic importance - and usually an under-tended lever.


18. Hang out/Basic axiom. Hang out with weird - get more weird. Hang out with dull - get more dull.


19. Hang out/Customer portfolio. Consider one's customer portfolio. Perhaps a few giant customers account for 85% of one's revenues. One must listen to them, but the odds are that these giants are relatively conservative. Hence one must purposefully and urgently recruit oddball-"on the frontier" customers. Their revenue stream may be limited, but these folks force you to play with novel products and services to meet their peculiar needs. Hence careful construction of the total customer portfolio is an essential practice.


20. Hang out/Customers everywhere. Customers at various staff meetings, on various teams, etc.


21. Hang out/Our folks at customer sites. Imbedded staff at lead customer locations. The success watchword is "intermingle."


22. Hang out/Vendors/Outsourcing Partners Portfolio. Instead of a few "strategic suppliers," as important as they may be, one needs "far out" vendors and outsourcing partners whose innovations force you into an innovation mode. I.e., repeat #19 and #20 and #21 for vendors.


23. Hang out/Locale (Hotbed). Company or unit HQ location is important beyond measure. Working in a "hotbed" (e.g., Cambridge MA and biotech) is an immeasurable spur to innovation. (Beware: Hotbeds eventually become lookalike and-or complacent - think Detroit, 1920 vs 1980-2008.)


24. Hang out/Team placement. An offsite team in an innovation hotbed often takes on the attributes of a gang of on-the-make pirates. A team near a plant takes plant-derived considerations particularly seriously. Etc. Want weird? Start with consideration of locale.


25. Hang out/Space management. Space management is arguably the singlemost important strategic lever. Designer moved next to the CEO? Design vaults up the importance scale. Etc.


26. Hang out/Consultants Portfolio. Types of consultants brought in influences who we talk to-live with, how we approach problems. There are "hot" consultants, and "not-so-hot" consultants. Again, purposefully and strategically manage the portfolio.


27. Hang out/Crowdsourcing. Crowdsourcing stands a good chance of radically changing the world of innovation! You simply must experiment vigorously. The tool is powerful, but the process is not automatic - it needs lots of thought and oversight. (And it applies to every nook and every cranny of the enterprise - and to small enterprises.)


28. Hang out/Clubs, learning networks, etc. Electronic, physical, any and all formats. Turning the enterprise into a de facto university, with learning and growing honored and ubiquitous and fast and furious and fun, is the point here.


29. Hang out/Staff. Where staffers live relative to their line customers is critical. A finance person imbedded in the logistics department, for example, changes both perspectives.


30. Hang out/Lunchmates. Never waste a lunch!!!! Lunch is 5 opportunities per week, 220 opportunities per year, to get to know interesting outsiders, folks from other functions, customers, vendors, frontline staffers. This is remarkably important. "Lunch management," a "lunch culture" is not an amusing aside.


31. Hang out/Meeting Attendees. We spend enormous amounts of time in meetings. Never waste a meeting. Invite interesting outsiders, folks from other functions, etc. (See #30 immediately above.)

Diversity Per Se. Sine Qua Non.

32. Diversity/Every flavor/Management & Measurement. Diversity with a lower-case "d." Black, white, brown, purple ... tall, short ... North American, Asian ... public school, private school, no school ... etc. ... etc. (Etc.) Decision-making of every sort is far, far better with diverse views of any flavor. Period. I have come to view this as a gamechanger - for a 6-person project team, a 20-person company, a huge enterprise.


33. Diversity/Hiring. Search every oddball corner of the world for interesting people. Hire dull, get dull results. (Duh.) (This holds across the board - and irrespective of the size of the enterprise.)


34. Diversity/Freak Acquisitions. I'm an enemy of 99% of mega-mergers, and a vigorous ally of small acquisitions that allow skipping steps in obtaining interesting new pieces of the puzzle for an enterprise. This can be the purchase of an intriguing 2-person accountancy by a 15-person accountancy, as well as a small-acquisition overall strategy by the likes of Cisco Systems.


35. Diversity/Promoting. Diversity of every stripe at every level, achieved by design. Remember, diversity-qua-diversity works.

100% Enthusiasts. 100% Innovators. HR = Supercool.

36. "What do you think?" Innovation - an innovation culture engages one and all. (All = All.) Getting everyone to think about improvements small and large comes from, de facto, constantly asking "What do you think?" - perhaps the 4 most important words in the innovator's vocabulary. Treating every voice as valued yields more value from every voice.


37. Hire enthusiasts. Innovation is about active engagement. The more enthusiasts, the more people want to "opt in" and fully engage. Enthusiasts are innovators almost by definition. (Or, at the least, non-enthusiasts are guaranteed non-innovators.)


38. Promote enthusiasts. Enthusiasts are important in all roles. Enthusiasts as bosses is a "no option" imperative - if you want to create an "innovation machine" in organizations of any size.


39. Innovative behavior is the best predictor of innovative behavior. Want to discover an innovator? Best test: a history as an innovator, apparent at the latest by, perhaps, age 10 or 12 or 14.


40. Re-invent HR to be a Center of Innovative People. It's not that HR has to "support" a culture of innovation. HR must be a chief carrier of the culture of innovation, must model innovative behavior 100% of the time. An "innovation culture" in HR is arguably more important than an innovation culture in marketing and new product development. (Think about it.) (Alas, this is ever so rare.)


41. Get the incentives right! Profitability, quarter by quarter, is essential - in organizations of all sizes. But a commitment to innovation as evidenced by the likes of share of revenue from products introduced in the last 24 months should be a major component of discretionary compensation. Equivalent measures must be developed for logistics, purchasing, HR, IT, etc. Incentive schemes must "speak" innovation.


42. Get the evaluations right! Per #41 immediately above, the evaluation process must focus on risk-taking, innovations launched, "excellent failures" as one exec puts it. Department bosses might be evaluated by comparative innovativeness at similar departments in peer-competitor firms. Etc. Innovation-in-evaluation is a 100% affair.

If you missed Part One - Innovation Tactics #1-16 - Click here.

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Tom Peters is the author of "In Search of Excellence" and twelve other international bestsellers, and a consultant, columnist, seminar lecturer, and more at the Tom Peters Company

Tenure versus Loyalty

by Mike Myatt

If your organization confuses loyalty and tenure there is trouble on the horizon. If your business highly values tenure as a measure for employee evaluation, it is time for you to consider updating your talent management practices and procedures. So, what's wrong with tenure you ask? In principle very little; but in practice virtually everything. Think of any organization that has mediocre talent, where management has frustrated you with consistent under-performance, or where cavalier attitudes and a sense of entitlement overshadow a focus on productivity and performance, and I'll show you an organization that embraces tenure.

An old business saying that sums-up my feelings about tenure goes like this:


"The only thing worse than an employee who quits and leaves is an employee who quits and stays."


You see tenure is not synonymous with loyalty, but rather is a more often a measure of compliance and survival. Ask yourself this question: Who is more loyal - an employee who has been with the company a long time but is an under-performer, or a less tenured employee who always goes the extra mile and consistently exceeds expectations? The following are the top reasons why tenure as business practice simply constitutes flawed business logic:

1.Tenure is Outdated

• In case you haven't checked your calendar lately it isn't 1950, it's almost 2010. Outside of government and academia (this should be more than enough proof that tenure is a bad thing) most people don't work for 30 years for the same employer.

2.Tenure Suppresses Talent

• Just because 'Employee A' has performed a task longer than 'Employee B' doesn't necessarily mean that 'A' is more skilled than 'B'. Furthermore, just because 'A' has been with the company longer than 'B', doesn't necessarily mean that 'A' possesses more talent, upside, knowledge, or adds more value than 'B'. When an organization promotes based upon tenure, and not based upon recognition of talent, merit, performance, etc., the company is not leveraging its true talent base. Not recognizing, developing, and rewarding talent is the fastest way I know of to drive talent out of your organization and directly into the hands of your competition.

3.Tenure Breeds Obsolescence and Mediocrity

• The sad reality is, that with very few exceptions, if you have someone on your payroll who has been with the organization in a similar role or capacity for an unusually long period of time, you likely have a mediocre employee producing mediocre work. Here's an example. Even in this day and age it is still not that uncommon to find large corporations and government agencies with IT silos built upon mainframe computing solutions. These silos are staffed with legions of 'tenured' COBOL and C++ programmers, as well as 'tenured' IT managers overseeing the operation. Walking into these organizations is often like traveling back in time 20 years. These companies have placed themselves far behind the technology curve because tenured managers hire employees with obsolete skill sets and together they create mediocre solutions.

4.Tenure Inhibits Change and Cripples Innovation

• Organizations that favor tenure also tend to be prone to majoring in the minors. The mandates for compliance along with the accompanying maze of bureaucratic processes and procedures, will often take precedence over doing the right thing. Tenured organizations also tend to embrace comfort zones and are often built upon the "DITWLY" (Did It That Way Last Year) principle. All of these traits preclude the advancement of change initiatives and cripple innovation.

5. Tenure Kills Brands

• As an organization expands and continues to promote mediocre talent up through the ranks, you'll notice that growth will eventually slow, quality and customer service suffer, and eventually these negative attributes will be reflected in declining brand equity. Think of any negative brand connotations you have, and you'll likely find an organization that embraces tenure. The Costco experience isn't what it used to be, US auto manufacturers continue to struggle, the Comcast brand has been hammered, the banking industry has been crippled, and government agencies (pick one - IRS, DMV, etc.) often evoke feelings of hatred at the mere mention of their name.

The bottom line is this...as an employer you need to possess an extreme bias toward performance. Reward talent, innovation, loyalty, attitude, creativity, work ethic, contribution, and leadership ability...not tenure.

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

Optimizing Innovation - Dr. Guido Petit of Alcatel-Lucent

by Braden Kelley

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

Dr. Guido Petit, Director of the Alcatel-Lucent Technical Academy spoke about Optimizing Innovation through Entrepreneurial Boot Camps. The program had its genesis back in 2002 after massive layoffs at the company. At that point in time, the CEO decided to focus on making innovation the job of everyone. They started in Belgium with an idea generation site that they built. They received maybe ten idea submissions per month in Belgium after launching it.

But, then they decided to put a car on the parking lot and offer it as a prize. Submisions tripled to thirty per month. So, they got 150 ideas in the 5 months of the car contest. Eleven people were selected to pitch their ideas to senior leadership out of the 150 ideas. But this car prize promotion was a mistake. In the end we made one person happy and 149 people unhappy. This is not sustainable.

As a funny side note, the person who won the car, was someone who rode his bike to work every day, and he sold the car after one week. And after contest the volume of idea submissions dropped back to 10 per month, and none of the eleven selected ideas made it into a product (including the winner).

But, the guy with the second place idea proposed starting a program to help people learn how to develop their ideas. This evolved into our entrepreneurial boot camp.


"Let people pursue their passion."


The Entrepreneurial Boot Camp takes place over three weekends (Friday + Saturday) - with the Friday being donated by the company and the Saturday being donated by the employee, and then a dry run, and finally a Super Friday for people to pitch their ideas (all together this takes place over about three months - spaced 2 weeks apart).

For the program, we set expectations that idea subissions must be for a new business that will be worth 50-100 Million Euros in 3-5 years:

• Otherwise we just get a lot of process improvement ideas or suggestions on improving the food in the cafeteria

We partner with the Flanders Business School on the program and typically have five teams of five people with a senior manager as part of the team as a coach (for a total of six people). We generally have five or six teams per boot camp.

Super Friday consists of 15 minutes per team, with 12 slides each to target all 12 points including vision, competition, solution, etc.

• 30 minutes for Q&A


• Participants don't want to lose because this is a great exposure opportunity


• CEO, CTO and CFO of Alcatel-Lucent Belgium and venture capitalists make up the panel


• Now VCs are knocking on our doors to participate


• Only 1 of the 5 ideas will go into the incubation phase where market validation, fast prototyping, and a lead customer must be sourced


• Sometimes ideas are transfered immediately to business units if they are close to core

One thing that we have found is that people don't always want to post their idea on an innovation web site, so we have these 'dating events'. Idea owners can pitch their ideas to anyone in the company at a dating event to attract supporters. This also serves as an opportunity to connect people. We encourage people to merge research, mktg, finance, engineering, and sales into diverse teams.


"Talented people are everywhere but... they are not connected."


We have found that in our organization the smokers are the connectors, and so we have made it more comfortable for people to smoke. This is not to say that we encourage smoking.

• There are no salary levels when people smoke together


• Our smokers tend to be very social


• hey call people to go smoke


• They also like coffee and beer

We do our best to promote success stories from the boot camps. The boot camps are 80% coaching and 20% theory. Boot camps are done on top of daily duties.

We encourage risk-taking and entrepreneurship with our boot camps:

• A way to change the innovation mindset


• They provide an opportunity to scout entrepreneurial talent (finding people that have skills that are not otherwise shown and to possibly redeploy talent)


• HR doesn't know where the entrepreneurs are


• 80% of the ideas coming through the boot camps address new markets - the other 20% are new technologies for existing markets


• We include VC's and business school professors because they often have insights into new markets - either new or existing technology

The results of our boot camps so far?

• 2 internal ventures


• 3 projects in incubation


• 5 proposals were transferred to existing business units

Setting expectations is important to get the good ideas. Managing expectations is important because all of the teams believe they will win even though only one can win. For those teams that lose, they will get feedback from VC's and our executive leadership in the room.

Successful teams don't always move onto the incubation or venture teams. Some have had nobody transfer into the venture team and others have seen 4 of 5 carry forward onto the venture team. GM's for venture teams can be hired from outside.

We started two ventures in 2008. It is still to early to tell if they will be successful. We can tell you though that the business plans of ventures were different at the end of incubation and the at the end of the venture period than they were going in.

We are on Boot Camp 8 and we have now put 200 out of our 1,800 people through our boot camps and the number of ideas and the quality of ideas are inevitably and expectedly trending down. So now we are opening our boot camps to Alcatel-Lucent employees outside of Belgium, and we are sharing the methodology with other companies like Exxon, Agfa, Philips, J&J, Picanol, etc. We are also going to experiment with joint teams from more than one company.

One nice outcome has been that the alumni still supply new ideas and are interested in being coaches the next time around. Surprisingly, only about 10 of the 200 people in the program have left the company.

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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.

Why can't your firm innovate?

by Jeffrey Phillips

Recently there's been a debate about why larger firms can't innovate. Perhaps they are too comfortable. Perhaps they are too afraid to cannibalize their markets. Perhaps they are afraid of risk and uncertainty. Perhaps, Perhaps.

Or maybe they operate under a management model that rewards compliance and punishes creativity. Now I think we are getting to the crux of the problem.

I've had the opportunity recently to hear Gary Hamel speak and see Dan Pink's new Ted Talk. Both are compelling, and somewhere between Hamel's discussion about management innovation and Pink's thoughts about compensation and incentives lies the real issue that challenges many larger, and especially entrenched, firms. We structure our organizations (Hamel) and reward structures (Pink) to reward consistency and compliance, when what we really need is experimentalism and creativity.

Think about it. Most of the management practices we follow are based on management models put in place by Taylor or others modelled after GM in the 30s and 40s. Many of the employees at that time were uneducated or undereducated and their value proposition was in labor. The goal of the organization was to send down management's goals and break them down into work units for simple tasks. The goal of the organization was top down, consistency and compliance to orders and tasks. As Pink points out, the compensation models that accompanied that structure made sense as long as the tasks were simple and clear and can be executed following a very specific process.

Now, most of the work we do is knowledge work. It is difficult to place specific outlines or processes around the work, and can be difficult even to define the end products. If I can outsource a steel factory and make semiconductors overseas, the premium on labor and compliance is gone. What differentiates a firm in this environment is not compliance and control, but creativity and engagement. I need an organizational structure that attracts people to work on products or services they believe in, and are engaged in, and I need different compensation models. Pink talks about Autonomy (choice), Mastery and Purpose (engagement), the words in parenthesis being my interpretation.

So, many firms, especially older firms are built on hierarchical models that are top down and organized for compliance, not creativity. As I blogged earlier, they are well designed to meet the operating needs and realities of the mid 20th century, just as labor and compliance were becoming less of an issue as a management consideration. We have entered a completely different environment, which calls on organizations to be nimble, able to adjust rapidly, call on the best insights of all employees and create a meaningful relationship and experience with customers. Virtually none of those attributes are prevalent in older organizational models.

Many firms can't innovate because their structures, processes and compensation models are rigidly organized for the work world of the 1950s and 1960s and haven't shifted the organizational structures, processes and compensation models to reflect what's necessary today. When a firm like P&G is heralded for taking ideas from its customers as if that is a novel concept or something no one else could foresee, or when WL Gore is held up constantly as a management icon because of its "Lord of the Flies" organizational and management approach, you can see that many theorists in academia and many executives in larger organizations can't quite grasp the changes that are necessary for many businesses to innovate successfully.

It's not the people, it's not the "culture", it's not the compensation, it's not the management hierarchy, it's not the fear of risk or uncertainty that holds back most larger firms. It's all of the above, and being willing to make a clean break with the past.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Rewarding People for Helping the Planet

by Kevin Roberts

If guilt is the gift that keeps on giving, here's an easy way to break its grip. We're all aware of the things that we can be doing to improve society, the community, the environment - but frequently we don't get around to activating this desire, usually because it involves sacrifice or getting around some inconvenience.

Recycling is one thing that's easiest enough to do, yet we don't recycle as much or as often as we could. Eighty percent of all garbage is recyclable, yet the average residential recycling rate is less than 20 percent. Recycling saves cities millions of dollars in landfill and disposal fees, saves trees from the paper mill, and even millions of gallons of oil from use.

Some point this as a result of problems in the infrastructure of cities or simply that it's not convenient enough to do. Some of our cities are better placed with bins and programs, while other cities leave it entirely up to your own persistence.

Maybe we need more incentive to do so? That's the approach from the people at RecycleBank. They have introduced the element of rewards into how and when you recycle for both curbside pickup and electronic waste recycling.

RecycleBank's slogan is "Rewards for people and planet". So what do people get? Similar to an airline rewards system, you earn points that are redeemable for goods or discounts from retailers. Some pretty big names have signed on - Target, Kraft, Sears, Evian, and Bed Bath & Beyond.

Headquartered in New York City - about three blocks from the Saatchi & Saatchi office - and co-founded in 2005 by Ron Gonen, RecycleBank now serves over 20 million people in America. Last week, Mayor Daley in Chicago instigated the RecycleBank program in 10,000 households. This summer they launch in Europe. They're also expanding the program to include additional Blue actions, e.g. using solar and wind power, efficient use of water, riding public transportation, or buying products that are manufactured from recycled content.

I think the idea is a very good one, as do some of the savviest venture capitalists in America - Kleiner Perkins are among the investors. For what it's worth, the United Nations and World Economic Forum agree. Incentives can be a smart strategy for any product or service, especially when those coincide with rewards for the planet. Now that's Blue Thinking.


Image Source: RecycleBank.com

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

The Carrot Principle - Pixar Style

I'll be publishing a book review of "Conquering Innovation Fatigue" soon, and for a bit of fun I thought we could flashback to a book I reviewed in June 2009 - "The Carrot Principle" - Pixar-style:





It just goes to show that not paying attention to the rewards and recognition for your most valuable resource (your employees), can result in breaking the will to share - this point we will discuss in the book review of "Conquering Innovation Fatigue" by Jeff Lindsay, Cheryl Perkins, and Mukund Karanjikar.

Are you moving your employees' carrot?

Are you willing to pay the consequences?

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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.

BOF 3.0 - Culture of Innovation Session

The first of the Brightidea Birds of a Feather (BOF 3.0) unconference discussion sessions I attended posed the question - What are the key elements of building a culture of innovation and what is the leader's role?

Here are some of the key insights and comments from the session:

• There was a great deal of discussion around the role of the leader in creating a culture of innovation by being a direction setter, venture-capitalist, talent scout, mentor, and silo-buster.


• It was also felt that is was important that respect for people be demonstrated or the culture will not change.


• Accountability vs. Authority - Often times people are made accountable for achieving innovation gains, but are not provided the authority to actually work to make it happen.


• "You are going to inspect what you expect."


• It is important to strike the balance between operational excellence and ideating/initiating growth


• It is worth considering the use of open book management so that people can better understand how to contribute to the organization's success


• Innovating within an ecosystem versus innovating within a company


• How do you enable more nodes in the network to collaborate?


• Defensive IP management is restrictive to innovation


• I need to move from IP defense to IP offense


• IP and IT and Finance are often anti-business teams (they work against innovating fast)


• We explored the concept that the leader should only have the role of driving change (versus maintenance or command & control)


• Leaders must understand that tomorrow will be different than today and that when you start trying to protect today - you are dead


• What signals are your corporate policies sending to employees about innovation?


• Leaders are responsible for strategic clarity - this applies to innovation too


• Do leaders need to change their focus from shareholders to employees if they want to drive innovation?


• Does a leader enable people to take risk? ("If you don't fall down skiing, you won't get better")


• Adobe has a program to allow executives to bet their bonus on ideas they believe in


• SAP is trying to implement a mulligan policy to encourage people to take innovation risks

Overall the session was very lively, with good discussion. People definitely want to create cultures of innovation in their organization, and are finding their way there little by little. Ultimately, you don't make an innovative culture, you make changes to strategy, policies, processes, systems, and training that cause slight changes in people's behavior that over time can effect how innovative a culture becomes.


What things in your mind help to make a culture more innovative or restrict it from being so?


More from the Brightidea Birds of a Feather (BOF 3.0):

• BOF 3.0 - Ruffle Your Innovation Feathers


• BOF 3.0 - Innovation Fatigue Session

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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.

Do Rewards Kill Innovation and Creativity?

I am constantly asked how to best structure a financial reward system in an effort to motivate people to contribute ideas and improvements. My answer: Just say no.

Combined research from the Employee Involvement Association and Japan Human Relations Association reveals that the average number of ideas submitted per employee annually is 100 times greater in Japanese companies than in U.S. companies. Why? For one thing, we reward the wrong thing in the wrong way. The average reward in Japanese companies is 100 times less than the average U.S. reward of nearly $500. We have it backwards!

In a nutshell: payment for ideas can defeat the purpose.

The situation brings to mind one of my favorite parables:

An old woman lived alone on a street where boys played noisily every afternoon. One day, the din became too much, and she called the boys into her house. She told them she liked to listen to them play, but her hearing was failing and she could no longer hear their games. She asked them to come around each day and play noisily in front of her house. If they did, she would give them each a quarter. The youngsters raced back the following day, and they made a tremendous racket playing happily in front of the house. The old woman paid and asked them to return the next day. Again they played and made noise, and again she paid them for it. But this time she gave each boy only 20 cents, explaining that she was running out of money. On the following day, they got only 15 cents each. Furthermore, the old woman told them she would have to reduce the fee to a nickel on the fourth day. The boys then became angry and said they would not be back. It was not worth the effort, they said, to play for only a nickel a day.


Sound familiar? The old woman's scheme effectively stole from the boys the very thing they loved most to do, what they were in fact doing for free. The moral of the story is pretty clear. If we're not careful, we can replace a natural motivation with a synthetic one. We can rob creative power from people by attaching a financial reward to ideas.

The story repeats itself all the time. Companies treat employees like a rat in a maze after cheese, by paying for approved ideas and accepted suggestions. They then wonder why they get such low participation. They give no thought to the notion that in order to get a good idea, you need a lot of ideas.

Teachers at my daughter's school are notorious for the practice, and I take them to task regularly. They want students to read more books, so they reward the completion of books. Maybe with a homework exemption. Or extra credit. Or even vouchers to the local Taco Bell. So the quick and easy books get read. The superficial books get read. Even the good readers, the ones who love to read, get swept up in the program. They stop reading the classics, turning to the quick reads to score points. Then the program is discontinued, and everyone stops reading. Even the best readers lose their love of words. And that's a true shame.

Is there a solution? I think so: mandatory kaizen, aka continuous improvement. Yep, good old Yankee born and bred incremental innovation, circa World War II, courtesy of Training Within Industry under the auspices of Roosevelt's Emergency Services. Make it part of the daily work. Make it the daily work. Kaizen aims to draw out the natural curiosity and creativity within people and guide it toward adding value for customers.

Kaizen does not attempt to light a fire under people. It lights the fire within them.

Related Article: Importance of Recognition to Innovation Success

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Matthew E. May is the author of "IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing." He is constantly searching for creative ideas and innovative solutions that are 'elegant' - a unique and elusive combination of unusual simplicity and surprising power.