Making Your Organization Understand Open Innovation

A Lesson from General Mills

by Stefan Lindegaard

Changing organizational culture is one of the most difficult tasks when it comes to open innovation. What can you do? Well, General Mills gave a great example at the recent CoDev conference. By sending more than 20 people to the conference, they sent a strong signal - internally as well as externally - that they are committed to open innovation.

I really liked this move and thus I did an interview with Mike Antinone, who is Sr. R&D Manager, Connected Innovation in General Mills Worldwide Innovation Network, in order to get a better understanding on this.


What made you decide to send this delegation to CoDev?

We had two main reasons for sending our GWIN team to CoDev this year. The first was really around team building. We have added several new team members as we expand our global innovation entrepreneur program and we wanted to have some time away from the daily demands of the office to foster an added sense of community.

The second area for us was to collectively learn and leverage the insights and best practices of other open innovation leaders represented at the conference and then create a plan of action to determine how we can best incorporate those insights and practices into our group.


What were the objectives?

We feel great about the progress that we have made with our Connected Innovation program, but we also wanted to put some serious thinking into "Next Practices" - those practices that we will need in the future to drive our program ahead and distance ourselves from competitors. We did not want to just go and listen, take notes, have a quick discussion then go back to our daily routine. Our goal was to create tangible action steps that we would incorporate into our development plans for our program.

We began our preparations about six to eight weeks before the conference. We divided the group into four teams with each team being responsible for a given topic. We chose to focus on three key objectives for our company. These were:

1. Driving profitable growth through Connected Innovation


2. Creating and leveraging more successful partnerships


3. Driving Connected Innovation throughout our company

Each team then created a list of questions they wanted answered about how we as innovation entrepreneurs could dramatically impact the three objectives outlined above. Our goal was to collect as many facts as possible.

The fourth team set up a series of networking opportunities, both before and after the conference to provide stimulus for answers to our questions. Some of those networking opportunities included:

• Smaller match-making events at the conference. We prearranged a series of discussions with conference participants. We met during breaks, at lunch, etc. to engage in a dialog about areas we wanted to advance and grow as an organization.


• Utilization of CoDev LinkedIn site. We posted several questions on the LinkedIn site to gain additional insights and make connections


• We also made sure we had prepared germane questions for each of the speakers to ensure we were tapping into their area of expertise.

Our team stayed in Scottsdale an extra day after the conference ended to have a working breakout session to summarize our key findings and to create an action plan going forward. During this session, we created list of "we-should" statements in our breakout sessions that were then reduced to three major areas of focus for each category as we continue to develop our program.


Which lessons have you learned so far?

It was very powerful to have our entire group at such a stimulating event. We had many opportunities to interact with each other, build on what we heard, and engage thought leaders with differing points of view. The conference provided us with a great opportunity to assess our program, consider new elements and chart a course as we continue our Connected Innovation journey.


Conclusion

I am impressed. Such an initiative can anchor open innovation in your company as it provides a great opportunity to build a common language based on what the team learned at the conference. This can really help develop the next practices of open innovation at General Mills.

Can you talk your executives into this kind of commitment?


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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

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

Part 3 - Three Innovation Distinctions

by Stephen Shapiro

This is the third of my "Innovation Distinctions" entries.

In the first part of this series, I wrote why you should focus on "Challenges, not Ideas." Next, I addressed the distinction of "Process, not Events."

In this final entry, I discuss why innovation requires "Diversity not Homogeneity." Be sure to read the previous two articles before reading this one.

As mentioned in the other blog entries, I first shared these distinctions with a group of speakers and authors who were brainstorming ways to improve the learning experience for other speakers and authors who attend their conferences. Here's the Catch 22: Having only speakers and authors speaking to other speakers and authors does not lead to much creativity. Most of the "ideas" presented are well-worn and don't address the "real world" outside of the industry.

Therefore, my last suggestion to the group was to increase the level of diversity at these learning experiences. This would provide a wider range of ideas, suggestions, and points-of-view.

How does diversity apply to an organization?

Diversity can mean a wide variety of things:

• Diversity of race, creed, color, sex, etc.
  
• Diversity of innovation styles
  
• Diversity of disciplines

I won't address the first point as that has been a topic of discussion for decades. Let me tackle the next two.


Diversity of Innovation Styles

The second point ties directly to my Innovation Personality Poker system.

In the card-based game, I discuss the four primary innovation styles: analytical, creative, planning/action, engagement. Most organizations favor one over another and therefore do not have a good balance of styles. There's a reason for this.

Although homogeneous teams are often more efficient (i.e., you get things done faster), having a bunch of "yes men" working for you is not the answer for long-term growth. When people think too much alike, new ideas struggle to surface. In these homogeneous climates, innovation and growth (i.e., effectiveness) suffer.

The essence of successful companies, then, is the ability to be both efficient and effective. They are able to focus on both production and innovation, not just doing things right but also doing the right things.

There's plenty of evidence that team diversity translates directly into corporate profits. Sigal Barsade and colleagues at the University of Pennsylvania's Wharton business school studied top management teams at large corporations in the United States. Interestingly, the more diverse the functional roles of the members of those teams were, the greater the average, market-adjusted financial return in those companies. Diversity of the top leaders translated into bottom-line results.

In Personality Poker, there are four key concepts:

• You need people in your organization "play to their strong suit." That is, make sure that everyone understands how they contribute to and detract from the innovation process. This includes ensuring that you have the right people with the right leadership styles in your organization.


• As an organization, "play with a full deck." You must embrace a wide range of innovation styles. Instead of hiring on competency and chemistry, also hire for a diversity of innovation styles. Every step of the innovation process must be addressed. You need people who are great at conducting research, delivering results, developing plans and reports, building relationships, and creating new ideas, amongst other things.


• "Deal out the work." That is, you must divide and conquer. You can't have everyone in your organization do everything. Instead, get them to divvy up the work based on which style is most effective at a given task. You can't have everyone generating ideas, or focusing on planning.


• Recognize that in order to treat everyone the same, you must treat everyone differently. People have different needs in terms of how they like to be managed, how they like to be praised, and how they want to contribute to the organization. In order to attract and retain a well-balanced organization you must be prepared to treat people as they want to be treated. To do this, you must overcome the inertia of your company's personality and embrace the needs of the individual personalities.

I could write a whole book on the value of diverse teams. Oh, wait, I did! My Personality Poker book will be published by Penguin's Portfolio imprint Fall 2010. Throughout, I provide examples of, and evidence for the value of having a diversity of "styles" within your organization.

But what about the third type of diversity: The diversity of disciplines.


Diversity of Discipline

A discipline is any area of expertise like biology, chemistry, physics or mathematics. You can have an organization comprised of diverse innovation styles while sharing only one discipline.

A while back, I spoke with Al Bredenberg, Senior Researcher from ILO Institute. He subsequently wrote an excellent blog entry on the topic of diversity where he quotes me. He also mentions a Harvard Business Review article by Lee Fleming that suggests that companies with less diversity of discipline produce better overall financial results than highly diverse ones.

"The financial value of the innovations resulting from such cross-pollination is lower, on average, than the value of those that come out of more conventional, siloed approaches. In other words, as the distance between the team members' fields or disciplines increases, the overall quality of the innovations falls. But, my research also suggests that the breakthroughs that do arise from such multidisciplinary work, though extremely rare, are frequently of unusually high value - superior to the best innovations achieved by conventional approaches... When members of a team are cut from the same cloth, you don't see many failures, but you don't see many extraordinary breakthroughs either."

However, as the diversity of disciplines increases, "the average value of the team's innovations falls while the variation in value around that average increases. You see more failures, but you also see occasional breakthroughs of unusually high value."

Therefore, although there is value to diversity of disciplines, the challenges seem to outweigh the benefits.

What's the solution to having a diversity of disciplines without having to deal with the inherent complexities?

Open Innovation. By working with companies like InnoCentive, you get the value of discipline diversity while having few of the downsides. You get the take advantage of a wide range of experiences while only paying for successful solutions.

I will write more on Open Innovation in subsequent entries.

The Bottom Line

Diversity can create incredible value for an organization. It can help facilitate the innovation process. It can help increase the quantity and quality of breakthrough ideas. The key is knowing the right way of managing and engaging a diverse set of perspectives.

Related posts:

• Challenges, not Ideas
  
• Process, not Events

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Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

Innovation and Idea Management

From Ideation to Collaboration to Execution

by Robert F. Brands

Innovation: What a great idea!

Innovation thrives on a diet of news ideas. It needs fresh thinking and a different perspective from across the organization.

We've noted that Innovation = Creative x Risk Taking. Setting aside risk for the moment, creativity is a central element to the innovation process. But it must continually be nourished with new ideas from a variety of sources.

Ideation is not a single event. It doesn't originate from a single silo or one person or one department, although it can come from a single source. Ideation thrives in an open environment; think Wikipedia, the open-source, online repository of the world's specialized knowledge. It is the result of a collaborative process that welcomes minds and teams from across any organization of any size.

How can you foster a fertile ideation environment?

Start by creating an "idea hopper." This idea bank is the repository of any idea to be pursued, saved and reconsidered - or at least explored.

In the closing scene of Raiders of the Lost Ark, the Ark of the Covenant is crated and stashed in endless warehouse of similar, non-descript crates. This is the polar opposite. Don't think of the Hopper as a bottomless pit. Think actionable. While this idea database can be managed online or in Access Dbase, Word or Excel, the key word is "managed". Ideas come in and are vetted by the Innovation Team and the Chief Innovation Officer. The CIO will organize ideas in order of importance or relevance based on the organization's current path or needs. Then the ideas then are presented at the next meeting of the Ideation or Brainstorming Session.

About that session... Brainstorm sessions should be held at a regular interval and include a variety of participants from across the organization. This isn't just a place for R&D or the New Product team. Sales should be there. So should Marketing. Include Customer Service. Those who interact with customers and have a feel for the shifting tidings of the consumer should have input in ideation - whether in feeding the hopper or digesting its contents.

The meetings also should be structured. They should be scheduled, with an agenda in place so participants know what to expect, the topics of discussion, and the anticipated outcomes. In this instance, the CIO should defer to a facilitator or Innovation Coach who can lead the session with complete neutrality. He or she (or someone designated for that task) will write, chart, graph or otherwise gather every idea presented. There are no bad ideas. All concepts should be filed, prioritized, validated, for future reference and / or use in combination with other ideation session results. The outcome of each meeting besides feeding the hopper is a prioritized list to be worked in Product Development

Next, feed that hopper. This database needs that constant diet of fresh ideas - especially between brainstorming sessions. Welcome ideas from all corners of the organization - from the C-Suite to the receptionist's desk. You never know where the next Great Idea will come from.

To be clear, new ideas aren't simply about products. Ideas can include process changes, technological enhancements - anything that represents change in the organization.

In ideation, think green. In those brainstorming sessions, some ideas will rise, some will fall. Throw none away. Those that don't pass muster at that moment should be placed back in the hopper and recycled. Some ideas fail based on momentary circumstances: bad timing, market conditions, budget constraints, technological disconnect, conflict with the organization's current needs or vision - any of which can change very quickly. In fact, two ideas discarded today may morph into a better concept tomorrow. Keeping them in the hopper ensures they can be revisited in the future.

The process of ideation isn't inherently a risk-taking endeavor. But it is part of the experimentation equation. As we've noted previously, Risk + Experimentation (+ Failure) = An Improved Environment for Innovation.

The risk here is to break the mold. Open the silos. Welcome input from across the organization. You might come away thinking, "What a great idea!"

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Robert F. Brands is President and founder of Brands & Company, LLC. Innovation Coach Robert Brands has launched a new site - www.RobertsRulesOfInnovation.com - to complement his upcoming book.

Arguing for Innovation - Patrick Lencioni

by Andrea Meyer

Point: Teams that create the best innovations know how to disagree about ideas without interpreting the disagreement as a personal affront.

Story: "I feel good when I see that engineering, advertising and manufacturing are really surfacing and talking about their differences," said the VP of Technology at a successful $100 million firm. "It's my job to keep the dialectic alive."

When we see companies moving swiftly, anticipating changes in the marketplace and developing new products or services to meet the change, we're tempted to think of the company as moving in harmonious agreement toward that new product or service.

But the surprising fact is that companies that innovate the fastest are actually those that invite debate over ideas. It's not a destructive conflict, but an airing of different views on a topic. Whereas conflict based on personality differences is destructive, healthy conflict focuses on refining a proposed idea. Healthy conflict gets a team out of group-think. It tests and challenges assumptions. Team members share different points of view. As Patrick Lencioni, speaking at the 2009 World Business Forum said, "productive debate over issues is good for a team." Disagreeing on issues make things uncomfortable but it builds clarity. "If you don't have conflict on a team, you don't get commitment," Lencioni said. "If people don't weigh in, they won't buy in." When team members challenge assumptions and point out the flaws of an idea, they improve the idea; the end result is a more robust idea.

To ensure that the conflict stays at the level of idea, not personal attack, Lencioni advises using a team assessment. Using an instrument like Myers-Briggs, team members learn their own communication styles and the styles of others. Knowing each other's personality style helps avoid personal conflict. If you know that Joe is generally quiet or that Jane always bulldozes in, you're less likely to take offense at what is actually that person's communication style.

Action:

• Don't suppress or circumvent conflict - the best ideas are forged during the "working out" of such conflicts.


• Give the team an assessment tool like Myers-Briggs to help member understand each other's styles communication styles, strengths and weaknesses


• Encourage healthy debate. Peter Drucker recounted how Alfred P. Sloan, legendary CEO of GM, handled this:

"Gentlemen, I take it we are all in complete agreement on the decision here," Sloan said. After everyone around the table nodded affirmatively, Sloan continued: "Then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."

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Author of more than 450 company case studies and contributor to 28 books, Andrea Meyer writes & ghostwrites about innovation, IT and strategy for clients like MIT, Harvard Business School, McKinsey & Co., and Forrester Research. Follow her at www.workingknowledge.com/blog and twitter.com/AndreaMeyer.

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.

Equality & Team Building

by Mike Myatt

In recent months I have observed a decent amount of politically correct discourse on the topic of team building and equality. The gist of the argument seems to be that for teams to be productive, employees have to feel 'empowered' by having an equal voice. I can sum-up my feeling on this in one word - 'ridiculous'. To be blunt, the concept of equality in the workplace has only made team building more difficult as employees seem to have a sense of undeserved entitlement with regard to their roles and responsibilities. And as odd as it may sound, one of the greatest impediments to building productive teams is practicing management by consensus. In today's post I'll share my thoughts on team building and equality...

Hear me loud and clear... While all men and women may be created equal, they are certainly not all equals in the workplace. While the thought that all employees should have an equal say may get some air time in business school, I have found that often the theoretical discussions that take place in halls of academia have little to do with the realities that exist in the world of business. You must also keep in mind that the classroom is one of the few remaining bastions of true equality (at least until the grades are posted). The business world is not fair...it is regrettably most times rather merciless. In a highly productive organization the power and influence of your voice is earned through trust and performance, and not entitlement.

Team building basics are often overlooked by ineffective leaders or unproductive companies. However great leaders and highly productive organizations always focus on team building as a key priority. I have found that highly productive executives and companies clearly understand the value, leverage, efficiency, and economies of scale that are generated by assembling highly focused, motivated, and productive teams. If you are a CEO or entrepreneur and don't see team building as a priority, then the text the follows is written for you.

I've often said that theory without action amounts to little more than useless rhetoric, and while most companies are spinning their wheels pontificating on the merits of team building, it is the truly great organizations that put theory into practice. Great leaders intrinsically understand that team building catalyzes collaboration, creates both disruptive and incremental innovation, facilitates a certainty of execution, and is one of the key foundational elements associated with creating a dynamic corporate culture.

It is one thing to be able to recruit talent, something altogether different to properly deploy individual talent, and quite another thing to have your talent play nicely and collaborate with one another. It is the responsibility of executive leadership to set the tone for great teamwork by putting forth a clearly articulated vision, and then aligning every aspect of strategic and tactical decisioning with said vision. A lack of clarity, the presence of ambiguity, obviously flawed business logic, or constantly shifting priorities/positions are the death of many a venture. However CEOs that implement a well thought out and clearly articulated vision create a sense of stability and a bond of trust amongst the ranks. This in turn leads to a very focused, coordinated, and ultimately a very passionate work environment. It is not too difficult to get your crew all oaring together when these characteristics are firmly in place.

I have been highly regarded throughout my career for building extremely effective teams, and what I can share with you is that team building is not about equality at all. Rather team building is about alignment of vision with expectations, and getting team members to understand exactly what their roles are, and to perform said duties with exacting precision. Building productive teams is about placing the right people, in the right places, at the right time, and for the right reasons.

Team building should have nothing to do with ego, tenure or titles, but rather it should be all aboutcompetency, collaboration and productivity. Leaders must clearly communicate to team members what their duties, roles, and responsibilities are, as well as setting forth a road map for performance expectations. Team building, group dynamics, talent management, leadership development, and any number of other functional areas are much more about clarity, focus, aligning expectations, and defining roles than creating equality. If you examine the most effective teams in the real world you'll find numerous examples which support the thoughts being espoused in this text.

Whether you look at athletic teams, military teams, executive teams, management teams, technical teams, design teams, functional teams, or any other team, you'll find that the best of the best have structure, a hierarchy of leadership, a clear understanding of roles, responsibilities and expectations, clear and open lines of communication, well established decisioning protocol, and many other key principals, but nowhere is equality found as a key success metric for teams.

While I'm a true believer in candor in the workplace, and have always encouraged feedback and input at every level of an organization, this doesn't mean that everyone has an equal say, because they don't. Moreover those that hold less of a vested interest, that don't have as much as risk, that don't have the experience, or those that may be looking-out for self interest more than the greater corporate good should not be considered equal with those that do.

While I concur that there is no "I" in team and many other statements to that effect, such statements are not meant as endorsements for management by consensus. They are simply meant to foster a spirit of cooperation. Understanding how to lead and motivate groups and teams should not be considered one in the same with creating false perceptions of equality that don't exist. Show me any team created of equals and I'll show you a team that will never reach its full potential.

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

Innovation as a Team Sport - Intuit

by Stefan Lindegaard

YOU: Fresh, dynamic, innovative entrepreneur or company. Relishes out-of-the-box thinking. Eager to deliver new product or service that improves the lives of millions. Web and social savvy. You think in the cloud - as in computing.

US: $3 billion innovative software company. Searching for passionate, spirited people who want to bring new ideas and products to life. Believes innovation is a team sport. Seeking possible long-term relationship. Hope to grow rich together.

No, this is not a dating agency. It is a quite unusual message from Intuit which on October 5 hosts their first Entrepreneur Day.

Entrepreneur Day is part of Intuit's broader initiative to drive mutual growth through open innovation and partnerships. They invite a select group of entrepreneurs, start-ups and small but more-established companies to meet and talk with a broad group of senior Intuit leaders including their founder and CEO.

Such an event is not a new thing in the IT-world, but I hope companies in other industries can learn from Intuit as I find this to be a great example on how you can establish relationships with external partners. Here are a couple of reasons:

1. Well-defined goals

• Intuit has set some clear goals on what they want to achieve from this initiative. They want to partner with young, dynamic companies to develop and launch innovative product offerings. Specifically, they are looking for:


• New business opportunities that align with Intuit's core markets and strategic direction, such as small business, personal financial management, taxation, online banking, personal health care information management and emerging markets.


• Leading edge technologies that Intuit can source to improve existing offerings or to create novel technology-enabled solutions, such as social software, mobile applications, data analysis, and Web 2.0 services relevant to our businesses.


• Such clear goals make it easier for Intuit to be successful at the event and it also makes it much easier for potential partners to judge whether the Entrepreneur Day is something they should consider attending.

2. A filtering process

• Besides the clear goals, Intuit also seeks quality rather than quantity and they have setup a filtering process to get this. Applicants need to fill out a form that is not too long and yet makes sense for both Intuit and the applying company. I also like this sentence taken from the website: "Although we'd like to meet everyone, we can't." Less is often more.

3. Intuit's contribution is clearly communicated

• Intuit does a pretty good job on explaining what the participating companies can expect from Intuit. It goes like this:


• "The potential rewards for collaboration are considerable: access to our leading brands, our large customer base, our award winning product lines, our developer ecosystem and our extensive marketing and distribution channels."

4. Strong commitment

• Intuit shows a strong commitment having their senior people and even Scott Cook, their founder and Brad Smith, the CEO present. It is not only a strong signal to the external partners that Intuit is serious about this event. It is also a strong signal internally that Intuit really wants to build strong external relationships.

5. Commitment to quick follow-up

• Intuit promises the participating companies a timely, candid and direct feedback on proposals and on next steps, if appropriate. You should not expect less as an external partner, but as we have seen in some of my recent blog posts this is not the case at other large companies.

I think Intuit has done very well so far. Hopefully, I can get my contacts at Intuit to share what they learn from their first entrepreneur day with us. It would also be nice to talk with some of the participating companies to check whether Intuit really follows up on their promises.

All in all, nice work by Intuit!

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

10 Innovation Lessons I've Learned

What should innovation leaders and intrapreneurs know about innovation projects and new ventures? I have had the pleasure of working with such people for many years and I begin to see a pattern that I have summarized into 10 lessons for innovation leaders and intrapreneurs:

1. Know that innovation and intrapreneurship is about teams

• build a team of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable (team definition by Katzenbach/Smith)

2. Work with passionate and persistent people

• nothing goes as planned in new ventures. Passion and persistence help overcome most challenges and they are essential for making great things happen.

3. Use recognition and stories

• recognition if often a better rewarding tool than money. Explore ways of recognizing people and use it to develop compelling stories that sells your company better than cold facts.

4. Define your target markets and eco-systems

• well-defined target markets are key to crossing the gap between early adopters and the main market. You also need to know that all markets are networked and that you need to break the current set of behaviours of many stakeholders within the eco-system before you can establish a new market equilibrium.

5. Understand the value proposition

• build a clear and concise statement that outlines your value-creating features to customers and stakeholders.

6. Craft an elevator pitch

• you always have something to sell; learn how to craft an elevator pitch that captures the very essence of your value proposition in terms that focus on the recipient of the message.

7. Define your values, personal brand and relationships

• know what you stand for and which messages you send to others and know the structure of your network and relationships; learn how to adapt to fit your strategic goals.

8. Define your team brand

• learn how to use values, personal branding and relationships as a team discipline to penetrate and win new markets.

9. Bring depth, breadth and empathy to the table

• all team members should have depth in an area that is critical to the company as well as breadth and empathy for the other things that makes or breaks the company.

10. Combine internal and external forces

• on development issues it is important to make "reapplied with pride" just as important as "invented here." Remember that the wealth of external knowledge outscores your internal knowledge and you need to turn this into an advantage. Get on the open innovation movement.

Let me know what you think.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Radical or Gradual Innovation?

"Radical Innovation" refers to high risk, high uncertainty projects which hold the potential to both influence the marketplace and bring high returns to firms. It's a kind of "promised land" of differentiation, growth and wealth for businesses and nations. Radical innovation is different from gradual innovation, in which small, incremental changes are made to activities in order to create more value with less waste. The focus of this article is how firms can realize radical, or breakthrough, innovation, which is the more difficult type to foster.

A 2007 McKinsey Global Survey revealed that 70 percent of corporate leaders call innovation one of their top three priorities. They believe that breakthrough (or radical) innovation will have the greatest affect on corporate performance. The report shows that these leaders agree - "innovation is the best strategic decision for sustainable competitive advantage." Yet these same leaders report that strategies for igniting innovation in their companies elude them. Too many barriers exist. Why?

One reason is that radical innovation, while prodigious in its rewards, is also prodigal in it's demands on resources. Translated: breakthroughs can payoff big, but the process is costly, and the risks huge. While investment and risk cannot be avoided in the rigorous pursuit of innovation, an understanding of what is known about successful innovation strategies can help organizations:

1. Trust in the wisdom of the pursuit


2. Move forward with greater confidence that the steps they are implementing are the right ones to truly foster breakthrough innovation

Another barrier to successful radical innovation initiatives is that the real driver of innovation is culture, and culture is the most difficult layer of the business pyramid to change (Flameholtz & Randle, 2007). When the words "culture" and "innovation" appear together in an article or research study, the discussion will most likely focus on national cultures, emphasizing the belief that nations demonstrating values of individualism, high risk tolerance and power distance are more predisposed to innovation than collectivist cultures that value hierarchy, social harmony and low risk tolerance. New research, however, indicates that corporate culture, not national culture, has the greatest impact on radical innovations.

In January of 2009, Tellis, Prabhu & Chandy released the results of their research into radical innovation across nations. They collected a wide range of data on 759 firms from a cross section of 17 major economies of the world. Their findings are startling. First, in every nation, radical innovation varies a great deal across firms. So, the idea that national culture is the innovation driver appears dubious. What, then, accounts for the difference between firms that innovate radically and those that do not?

No matter what the country, national culture or climate, firms that produce the greatest breakthrough innovations share three attitudes. These attitudes, the study finds, are "the willingness to cannibalize assets, future orientation, and tolerance for risk." How can corporate leaders use this research to drive innovation in their own firms? They must approach it from the highest level of their pyramid: the corporate culture.

How can firm leadership begin to address the cultural changes necessary to spur breakthrough innovation? They can begin by measuring their own firm's cultural practices using the diagnostic tool developed by Tellis, et. al. This is a great way for firms to benchmark their cultural practices against others of the same size or industry. Then, they can begin to manage and maintain an innovation-producing culture.

Next, leaders can shift their focus away from the number of patents they produce (numbers of patents to do not positively correlate to innovativeness, oddly enough) and toward cultural attitudes that drive radical innovation. Are they willing to cannibalize current revenue producing successes or do they slavishly protect them? A successful stream of profits from existing products and services generally leads to protective measures, in which the firm attempts to hold onto that revenue, rather than sacrificing profits for future discoveries. Do they rest on their past successes (or worse, romanticize them), or do they stay ever watchful of what the future may hold, what might make current profit streams obsolete, and focus on how to meet new challenges down the road? Finally, can they embrace risk? Radical innovation cannot flourish in a fearful atmosphere where risk avoidance is rewarded. "Dare to fail" is the mantra of the innovator.

Some other keys to innovation success include:

1. Make innovation a core part of your leadership agenda. Start every day with a discussion of innovation and corporate culture.


2. Managers must model behavior that encourages innovation.


3. Top innovators must not be penalized for failures; this will only discourage the risk-taking needed for the next big discovery.


4. Leadership teams must make the time to focus on new topics (future orientation).


5. In larger firms, collaboration between marketing and R & D departments can be essential to successful innovation.


6. Mentor both high performers in the firm to become future innovators, and mentor those who may not share in innovation pursuits but who could become innovation "antichampions" if not taught to value innovation, and tolerate the risk inherent in its development.


7. Accept failures an inevitable.


8. Try to balance your leadership team with people who are abstract thinkers as well as pragmatists. This mix can help move innovations forward with measurable goals.

Finally, team member selection is of utmost importance. Radical innovation teams need folks who are comfortable working on problems for which paths to solutions are unknown. Such people possess high levels of what's called "associative fluency." Associative fluency refers to a person's ability to make connections across a wide range of domains. It allows them to imagine many solutions to problems, and these people are less like to get stuck "narrowing," or finding solutions only within their domain of expertise. They are multi-dimensional people. So, instead of looking for domain experts for your radical innovation team, look for a mix of people with broad experiences and the ability to see problems from many angles.

Many firms want to create structured, repeatable processes for radical innovation. Instead, the research shows that building cultures and infrastructures that support innovation yield greater returns. In "The Human Side of Radical Innovation" (O'Connor & McDermott, 2004), the authors define radical innovation maturity as "the degree to which the organization has systematically implemented processes for initiating, supporting, and rewarding radical innovation activities." This is a cultural shift, and it's not easy. But it may be the key to the kingdom of the future.

References:
Flameholtz, E.G., Randle, Y. (2007). Growing Pains. John Wiley & Sons, Inc., San Francisco, CA.
McKinsy Quarterly (2007). How companies approach innovation: A McKinsey global survey. http://www.mckinseyquarterly.com.article_print.aspx?L2&L3+O&ar=2069
O'Connor, G. C., McDermott, C.M. (2004). The human side of radical innovation. Journal of Engineering and Technology Management. 21, 11-30.
Tellis, G.J., Prabhu, J.C., Chandy, R.K. (2009). Radical innovation across nations: The preeminence of corporate culture. Journal of Marketing, 73, 3-23.

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Julia Fischer Baumgartner is a founder and principal of art-cm, a consulting firm specializing in helping entrepreneurial stage start-ups move up to the professionally-managed level.

Book Review - "Inside Project Red Stripe"

"Inside Project Red Stripe - Incubating Innovation and Teamwork at the Economist"
by Andrew Carey
Published by Triarchy Press

I've been reading the innovation tome "Inside Project Red Stripe" off and on for some time now and I must say that it is unlike any other book on innovation that I have read to date. Instead of espousing a single innovation theory and taking 300 pages to do so, the book attempts to provide a neutral, anthropological look behind-the-scenes into the journey of Project Red Stripe.

Project Red Stripe was the code name for a discreet innovation effort at The Economist that brought together six team members for six months to research, select, and develop an internet-related innovation project for The Economist on a budget of £100,000. The project's aspiration was to deliver the organization's next big thing.

I found the book to be very well-written, interesting, and definitely worth the read if you are an innovation practioner or are fascinated by important project deconstructions. There are a couple of things you should be aware of before you begin:

• The book is written in an engaging research observation style, not your typical narrative or essay styles.


• The book is organized unlike most books and often feels more like a web site as you select a topic to follow and then jump around to read the installments relevant to that topic.

It was fascinating for me to see the human behavior challenges the group went through in gathering, selecting, and developing their ideas, and the downsides of conducting their project in such a public way.

If you are currently planning an innovation project or culture change at your organization, this book is an essential read to help remind you of the potential pitfalls that await you in such an undertaking. It also serves as a reminder of the potential disconnects between innovation theory and practice.

I won't spoil the ending and tell you whether Project Red Stripe was a success or a failure. You'll have to buy the book and read it in order to draw your own conclusion.

If you've already read it, what did you think?

@innovate