Innovation to the Core Innovation to the Core Peter Szarzynski and Rowan Gibson
Part One: Turning Rhetoric into Reality
Chapter One: The New Innovation Challenge Difficult challenge for most organizations is how to turn …rhetoric into hard-nose, revenue-growing reality—not just by making incremental tweaks to existing products or services, or by pursuing a “once in a blue moon” blockbuster, but by producing a constant stream of breakthrough innovations that compound over time to build a formidable competitive advantage. P. 4 Booz Allen Hamilton—there is “no discernible statistical relationship between R & D spending levels and nearly all measures of business success, including sales growth, gross profit, operating profit, enterprise profit, market capitalization or total shareholder return.” Proof—GM has spent more on R & D in the last 25 years than any other company in the world and where are they? GE and P & G have driven innovation into core of their respective organizations. P. 5 GE—Jeff Immelt, CEO and Chairman, driven cultural revolution. Aim—“grow the boundaries” of the company, this time organically rather than through acquisitions by taking GE into new lines of business, new geographic areas, and new customer segments. P. 6 Alan G. Lafley, chairman of P & G, innovation flows freely across entire organization. Another leader-Whirlpool and CEMEX, building material producer. Keys to building culture of innovation: o Creation of large, cross-functional “innovation teams” to search for breakthrough ideas o Companywide training program to develop and distribute mind-set and skills of innovation o Appointment of innovation mentors and innovation consultants to advise new projects o Creation of “innovation boards” –meet monthly to review ideas and projects, allocate resources, and oversee continuing innovation o Sponsor Innovation Days to showcase developments to all constituents
1 Innovation to the Core o Create complex set of metrics to measure company’s innovation performance and progress o Develop sophisticated IT structure to support, promote, and track innovations. P. 8 Key objective—EVERY single employee at Whirlpool thinks outside the traditions “white box” of home appliances, and imagine exciting, customer- relevant solutions that create new wealth for the company. At CEMEX innovation is collective act springing from collaborative approach to solving business problems. Is innovation a core competence in your organization? Ask your midlevel employees the following questions and find out: o Could you describe your company’s innovation system? o Do you believe that top mgmt regards every employee in your company as an innovator, potentially capable of shaping corporate direction? o Have you been trained as business innovator? o How important is innovation in your own performance metrics and in your compensation? o How difficult would it be for you to get small amounts of experimental capital to test a new idea? o Would you know where to go in your organization to find coaches and mentors who could help you push an idea forward? o In what ways do your company’s mgmt processes—strategic planning, capital budgeting, etc. support your work as innovator? P. 11 Most organizations have not developed a clear model reflect in mgmt practice of what innovation actually looks like as a highly distributed, “all the time, everywhere’ capability. Quality Movement in 1970s—most people implemented only with piecemeal, superficial utilization rather than deep, systemic understanding. Quality needs to be an intrinsic ubiquitous capability rather than a specialized function. Bleeding edge for companies is no longer quality; it’s innovation. P. 14 [underlining mine]. Innovation is much more complex and multifaceted as a challenge than most people imagine. P. 14 Making innovation part of the system requires time, money and commitment —three to five years to build the kinds of skills, tools, mgmt processes, metrics, values, and IT systems that are required to support ongoing, across-the-board innovation. Can’t be done piecemeal. Must be systematic. P. 16
2 Innovation to the Core Chapter 2: Creating the Preconditions for Innovation 3 Critical preconditions for making breakthroughs happen 1. Creating time and space in people’s lives for reflection, ideation, and experimentation 2. Maximizing the diversity of thinking that innovation requires 3. Fostering connection and conversation –the “combinational chemistry” that serves as a breeding ground for breakthrough ideas Creating Bandwidth One of biggest barriers to innovation= lack of time, according to senior and midlevel mgrs. P. 22 Our attention is fragmented into tiny shards and distractions, by phones, email, etc. Therefore, challenge for leadership is how to create space for innovation in people’s lives—how to give them extra bandwidth and scope they need for this type of thinking. Need to build a culture. 3M has famous “15 percent rule” which allows employees to spend 15-20% of their time working on personal projects using company’s resources. [How do we do this for our teachers?] note mine. On p. 27 Skarzynski and Gibson have 8 questions to ask yourself as a senior mgr about whether or not you have created the time and culture for innovation in your organization. Maximizing Diversity Luke Visconti, partner and cofounder of DiversityInc magazine—“If you want to compete globally, you have to understand that 80% of the globe isn’t white and 50% isn’t male.” Composition of innovation teams must have diverse perspectives—it’s the ability to connect people with different skill sets, capabilities, and perspectives. Diversity characteristics: o People who are divergent thinkers, and people who are convergent thinkers. o People who are more analytical, and people who are more creative o People who are close to the head office, and people who work farther away o People who are younger, and people who are older o People with a lot of experience, and people with a lot of imagination o People who understand technology, and people who understand people o People from inside the firm, and people from outside the firm. Pp 28- 9 3 Innovation to the Core In most companies you will rarely find any teams that reflect this kind of diversity, particularly at a leadership level. Where do we find the least diversity and the most responsibility for strategic innovation—at the top of the management pyramid—exactly the opposite of where it should be which is one of the reasons why the ideas coming out of many organizations are as dull as dishwater. [underlining mine]
Need for new voices Need young people or at least people with youthful perspective because they are living closest to the future Need newcomers to the company, preferably those who have worked in other industries because they bring a fresh viewpoint Need people from geographic periphery of organization because creativity and entrepreneurial thinking increase proportionately the farther you move away from corporate headquarters. P. 30 Diversity fuels innovation Scott Page, author of The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, “Innovation…depends as much on collective difference as on aggregate ability. Corporate HR people need to keep this in mind when recruiting. Don’t force employees to be ‘homogenized or be fired.” P. 33 Bringing the Outside In There’s a moment when all that thinking going on inside the company can get a little stale and incestuous which is why it is important to bring in voices from outside the organization and outside the industry. Mixing is the New Norm Most trendsetting cities—New York, London, LA, San Francisco—we find a rich combination of different ethnic groups, age groups, skin colors, etc. It’s incredible diversity. Silicon Valley even incorporates bright engineers from different academic disciplines and from almost every corner of the globe. Gregg Zachary—“Mixing is the new norm…Mixing trumps isolation. It spawns creativity, nourishes the human spirit, spurs economic growth, and empowers nations.” P. 35 Connection and Conversation Great myth of innovation—that breakthrough ideas are produced solely by intuitive individuals or by small creative teams working in isolation. Reality—leaders like Edison, Ted Turner, Steve Jobs—got brilliant insights because they embedded themselves in a vibrant web of connection and 4 Innovation to the Core conversation. Their big ideas were built by interacting and networking with a rich and diverse community of people. P. 36 Innovation is about “combinational chemistry”—taking ideas, half-baked notions and recombining them in ways that allow you to do interesting new things or invent entirely novel products and services. Unpack any successful innovation, and you’re likely to find that it’s a recombinant mix of previously existing ideas and domains. What’s new is the mix itself. [underlining mine] Essence of innovation is “creative collision.” Only way to create interplay of different ideas is through connectivity and collision.
Making Serendipity Happen 4 ways to make connections happen 1. Rethink org chart—take innovation out of its silo and make it integral part of org. 2. Create open market for ideas—create culture where anyone in org can have creative idea and a place to voice it 3. Utilize the net to harness imagination—Use IT as a global operating system to facilitate exchange of conversations and ideas 4. Make more time for face time—Need to bring diverse people together to voice and share ideas and create synergy for innovation. Is that all there is to it? If you bring diverse people together, give them time and space, have them connect and converse and hope they produce ideas but if they are starting with same old data, same old orthodoxies and same old perspective, you will never get anything very radical coming out of the other end. Asking people to innovate in breakthrough way without first building a foundation of novel strategic insights is mostly a waste of time.
Chapter 3: Building a Foundation of Novel Strategic Insights Four “Lenses” of Innovation Innovation comes not from brilliance but from looking at the world from a fresh perspective—a different set of “lenses.” such as 1. Challenging orthodoxies—Questioning deeply held dogmas about what drives success 2. Harnessing discontinuities—spotting unnoticed patterns of trends that could substantially change rules of game 3. Leveraging competencies and strategic assets—think of company as portfolio of skills and assets rather than as provider of products or services for specific markets 5 Innovation to the Core 4. Understanding unarticulated needs—lean to live inside customer’s skin, to learn unarticulated feelings and unmet needs Innovation has less to do with increasing personal creativity and more to do with assembling right sorts of insights to provoke personal breakthrough. P. 47. Challenging Orthodoxies First thing one discovers is that radical innovators are almost by definition, contrarians. [look at Steve Jobs] note mine Innovators are willing to challenge orthodoxies that are big and deeply embedded and taken for granted. Willing to challenge mind-sets, particularly when usefulness has eroded and started to stifle rather than foster progress. P. 48 In too many cases, success turns “one way” of doing business into “the way” at least in minds of senior executives. [What about in schools where when you do something once, it suddenly a “tradition” and must be done all the time?] note mine. P. 49 Don’t Follow the Leader Google and Linux-examples of ideas that slaughtered a whole herd of sacred cows which helped them become so popular Doing the Opposite Exploring and challenging orthodoxies—key way to surface opportunities for profitable innovation and growth Identifying Orthodoxies 1. Surface the orthodoxies—identify some common assumptions 2. Finding absurdities—look for things that are absurd in eye of customers 3. Going to extremes—Innovators who create sustainable disruptions tend to be those who go to extremes, e.g. Amazon wanted to be a “bookstore” with millions of titles, 4. Searching for the and—Turn either/or into AND. P. 54 Harnessing Discontinuities” Radical innovators are those who are very aware of how things are changing and then taking advantage of the changes. The deep discontinuities— clusters of trends—have power to restructure an industry e.g. social networking an example. Increasing technology has led to increased social isolation which leads to need for such things as Craigslist to provide access to ideas and services for those who are isolated. Identifying Discontinuities—How do you see these trends? 1. Look where competitors are NOT—Not found in magazines or newspapers. Must be hyperaware of surroundings and society
6 Innovation to the Core 2. Amplify weak signal to anticipate 2nd and 3rd order consequences—something that may be small, if exaggerated, can make huge difference 3. Try to understand trends in historical context—Ask yourself is this beginning of trend of just random event. 4. Look for interactions of trends. –we are all on information overload to look at intersections of trends to see if something fits between the isolated facts and trends e.g. aging but increasingly active population Leveraging competencies and assets Leveraging comes from companies identifying embedded resources. Companies too often identify themselves by what they do rather than by what they know of what they own. Figure out what your company does uniquely well, e.g. Apple great at branding. P. 65 How do you define your core competency? Ask yourself if your strength has the following 5 criteria 1. Creates value for customer 2. Unique or at least scarce at minimum in your industry and better yet, in the world 3. Sustainable over period of time 4. Important to company’s position today 5. Leveraged into new products, markets, or businesses. P. 66. Now define your strategic assets. 1. What are you input assets—access to suppliers, supplier loyalty, financial capacity 2. Process assets—technology, standards, functional expertise, infrastructure? 3. Channel assets—access to distributors, and distribution networks 4. Customer assets—customer information, loyalty 5. Market knowledge assets—understanding of customer, competitors and suppliers Now ask: 1. What assets does our company possess that are: rare, valuable to customers transferable to new opportunities? 2. Could we exploit our strategic assets in new ways to bring new value to customers? 3. Could our strategic assets be valuable in other industry settings? 4. Can we build new business models that exploit our existing strategic assets? Understanding Unarticulated needs. Look around to see if there are unvoiced needs of customers. You can do so by 1) direct observation, 2) customer experience mapping—put yourself in
7 Innovation to the Core role of customer to see what they experience, e.g. be a patient for a day, 3) analogies from other industries. P 74-75 Organizing discovery process What is missing in most large companies is a theory of innovation. Develop teams of different types: one for each of the “Challenging Orthodoxies” category to see what erupts. Discovery Insights: 3 types 1. That which was previously unknown 2. That which was previously underappreciated 3. That which was previously underleveraged. What you want from discovery process is not just a collection of insights but a common point of view.
Part Two: Enlarging and Enhancing the Innovation Pipeline 5 design rules for enlarging and enhancing the innovation pipeline which will create an innovation-friendly culture: 1. Involve many minds—across levels—engage as many as possible to get rich input. Utilize volunteers. Get input from outside the organization. 2. Sow enough seeds—need to generate a lot of ideas to have one big winner— Takes a thousand ideas to find a hundred with enough commercial promise to merit a small-scale experiment. Of those 10 will be worthy of pursuing and only 1 or 2 with turn out to be a success. 3. Widen the front end—open up to broad range of innovation opportunities— Different types of innovations: o Technology o Products o Service o Operational o Cost o Experience o Mgmt o Business model o Industry. 4. Increase the combinations—look for ways to have ideas collide –At intersection of ideas are innovations that have game-changing potential. E.g. reinventing appliances. Whirlpool recognized the increase in single person households and designed a dishwasher for one person that fits in the sink 5. Ideate around specific themes—aim for certain challenges. –Look for some theme like “female friendly”, pp. 85-106
8 Innovation to the Core Chapter 5: Innovating across the business model A new business model is about creating fundamentally new kinds of businesses or bringing in more strategic variety e.g. Southwest Airlines point-to-point service rather than a “hub. There are a series of questions about business models on pp. 118-120 to ask your company [because these notes are going on an educator blog, I will let you read those questions and not repeat them. Although we have things to learn from business, we are not one.]
Chapter 6: Asking the Right Questions at the Right Time It isn’t a shortage of ideas at issue; it’s which ideas are the right ones to execute. Businesses ask about cost return Another question is How feasible is this? How radical is the idea? Sometimes one develops an idea incrementally over time e.g. if Apple had implemented Newton and tested it over time, it may have been developed and then not such a failure. Yet, iphone was a radical idea that needed to be unveiled rapidly. But sometimes a radical idea has to be implemented quickly as a game changer. Radical doesn’t have to be risky. Ask—will this have impact? P. 132.
Chapter 7: Constructing an Innovation Architecture Strategic innovation requires a high degree of focus—It comes from narrowing focus in a “don’t get distracted, get all the wood behind one arrow” sense. It requires coherence, consistency, and specialization. P. 137 There’s an art in all of this to find a way to both unleash and focus innovation at the same time. You want a lot of diversity, but you also want some things that constrain that diversity. 3 mechanisms for creating aiming points: 1. Growth platforms—ways to incorporate new ideas 2. Customer problems—ways to make a meaningful difference in customer experience 3. Innovation architecture—ways to define 3 or 4 vectors of innovation to transform existing business model or reinvent the rules of the industry. Shaping innovation portfolio First is the divergent phase—generating rich and diverse ideas and options
9 Innovation to the Core Second is the convergent phase—look across the options and concentrate ideas that reinforce each other and lead to clear direction. P.140-141 Screening and sequencing ideas Screen ideas that make sense in abstract but don’t fit overall strategy. However, always need to be aware of fundamental marketplace shifts that occur during your innovation architecture. If the market changes, you can go back and review the wealth of ideas that were generated originally to modify and adjust. Shared Point of View Real power of innovation architecture is collective understanding it develops inside an organization about what the company wants to become. P. 148 Quite often executives can’t identify their own company’s mission statement when given the task to pick their mission statement out of a group of many mission statements. [Could all of the teachers in a building identify the district’s mission statement?] Question mine. If the corporate mission statement suggests a level of consensus around whom a company is or what it wants to be, then what represents the consensus of how it is going to get there? P. 149 More than a mission, vision, or plan: Innovation architecture is: Grounded in original, deep insights…that are viscerally understood Distilled from many competing options…in a transparent process Boldly aspirational…. And immediately practical Engendered from deep commitment,yet still appropriately tentative. P. 151 [What would this look like in schools?] note mine Strategy from Bottom Up Historically, most mission statements and strategies have been created by small number of top executives and direct top/down However, strategy should be both from bottom up and driven from top down. P. 151 Because every single person in company should be part of conversation about what kind of future you are building. P. 152 [How would this look in schools?] note mine. Proprietary but not confidential Some people wonder how an idea can be transparent and not let the competition know what is going on. The answer is that it’s the process of creating the architecture—the depth and breadth of the analysis, as well as all the discussions and decisions around it—that is proprietary; it’s not the architecture itself. It’s the process that is important and rich. P. 154 Blueprint for Building the Future
10 Innovation to the Core The innovation architecture—helps synthesize ideas but it’s also a blueprint for building that future. It provides emotional and intellectual energy to make sense of the journey. Senior mgmt teach is to lead this inclusive, companywide process It’s to share the deeply and widely shared view of company’s future throughout the organization. P. 156.
Part Four: Maximizing the Return on Innovation Chapter 8: Managing and Multiplying Resources One of most difficult challenges in innovation is how to quickly get enough talent and capital behind those ideas to start turning them into viable business plans and scaleable opportunities. [Problem for schools is that we have so many stops and starts that it is difficult to sustain the energy around a project across school years.] note mine Barriers in budgeting process: Often innovations come from current budget. The trick is to get outside investors and multiple funding streams [really difficult in education] note mine. If innovation teams are isolated, the rest of the corporation does not know what is happening and then the core business can’t support the initiative financially or emotionally [particularly an issue in schools] note mine Marketplace for ideas, capital, and talent In most organizations, certain people have a much greater chance of getting heard than others. Usually a person’s share of voice diminishes proportionately to their distance from corporate headquarters and their level in the corporate hierarchy. Companies really need a mechanism for connecting an idea—wherever it originates and whoever thinks it up—with the money and the talent required to start pushing that idea forward. Markets are better mechanisms than hierarchies for getting the right resources behind the right opportunities at the right time. Most large companies create a centralized innovation process that moves as slowly and surely as an advancing glacier. P. 165 Can set aside a certain percentage of budget for funding break-the-rules concepts. Can offer an incentive or a prize for a project [like Singularity University] Creating Portfolio of Projects Venture capitalists know that investing in perhaps a dozen or so companies within the same market space, knowing that six will lose everything, three 11 Innovation to the Core might break even, one or two will double the investment, and one could turn out to be the next Google [How does this translate to education????] Toward Hybrid Organization Clearly getting the right resources behind the right ideas requires companies to take on new ways of thinking, new management processes, and new organizational forms. While the hierarchical “command and control” paradigm was indispensable to the evolution of the large-scale industrial organization—which was built for efficiency—it is proving to be a less appropriate form of governance for an organization that is built for innovation. P. 172 Hierarchies put mgrs in control of considerable economic resources but they simultaneously create the allocational rigidities that hamper creativity and the development of radical ideas. The exhibit a systemic bias against the exploration of the new. Markets, on the other hand, are becoming increasingly attractive as a form of organizing innovation, precisely because they offer the promise of disrupting these rigidities. P. 172. A hybrid organizational form that combines elements of both a hierarchy and a market with a view to improving the innovation capacity of a firm is what is needed. P. 172 Multiplying Available Resources Finding enough resources is a problem. However, the correlation between innovation resources and competitive outcomes is much weaker than most people imagine. P. 174 To innovate on the cheap, you need to break with the notion that pathbreaking innovation requires your company to do everything itself. Can increase resources by starting with small increments of capital and time rather than hefty, investments Also another strategy—keep resource allotment steady over time. Another strategy—free your employees’ imagination. Pacing and Derisking Innovation Investments Pacing your investments—can be a marathon over time or a sprint with quick infusion. No company should run marathon unless it believes there is an enormous prize at the end of the race. P. 182 Sprints—have to be careful not to move too slowly so competition beats you out. Must be a “smart” mover Avoiding Risk There’s a difference between actual risk and perceived risk. Actual risk determined by 4 factors
12 Innovation to the Core o Size of irreversible and nonrecoverable financial commitment that must be made to get project off the ground o Degree to which new opportunity departs from company’s exiting base of technical and market understanding o Amount of irreducible uncertainty surrounding critical project assumptions o Time frame required for ramp-up (longer the time scale, the higher the risk. Perceived risk—function of ignorance, based on pure lack of information, evidence, or experience—called ignorance gap. Ignorance gap breeds 2 dangerous effects: 1) can cause company to overestimate total risk of doing something new 2) can cause company to underestimate specific risks p. 187 To close ignorance gap, and thereby derisk innovation, company needs to do everything it can to reduce uncertainty. It needs to be excruciatingly clear about assumptions or hypotheses that are critical for an opportunity’s market success. Maximizing Learning over investment Instead of emphasizing financial earning power, emphasis should be on learning instead of earning in early stages to increase level of knowledge and emotional investment in project. [What’s the role of teachers’ unions in this?] note mine p. 189 Learn Faster, Learn Cheaper, Learn Better With new innovation need experimentation phase. Need to experiment, assess, and adapt. The faster a company can go through this cycle, the faster it can resolve uncertainty around the new business concept. Having a portfolio of experiments helps in this case so that if something is not working completely, innovators can go back to portfolio to look for possible modifications and improvements. P. 194 Sharing Risk with Partners Don’t have to manage all the risk alone. Can share with partners. [How do we do this in schools?] note mine
Part 5: Driving Innovation to the Core
Chapter 10: Dynamically Balancing Supply and Demand To keep a robust innovation capability, an organization needs to manage both supply and demand side of innovation.
13 Innovation to the Core Supply—Previous part of book has talked about how to create and sustain supply side of ideas. Must get all of the previous actions working together as a SYSTEM so that all of the elements function together in an integrated fashion. In addition, there are some critical enablers to make the supply side a system: o Broad-based training—people need to be trained to think like innovators. They need a set of tools, not a one-day workshop. They need to know how to recognize a big idea and how to think conceptually. P. 203 o Technology infrastructure—use web-based tools to gather and refine ideas from inside and outside the organization. Can even be global p. 203 o Coaching and mentoring—people need mentors and need coaching along the way to produce and refine ideas o Rewards and recognition—can have Innovation Day. Money not the only reward; recognition is equally important. Driving Innovation Demand Too many companies see innovation as something that happens at margins, not in the core business. To make innovation part of core business it is important to have continuous leadership. [Do superintendents move around too much to sustain the initiative before it’s really embedded in the culture?] note mine. Key division leaders must take innovation seriously. Creating Right Pressure Points Budgeting—relegate a certain part of budget to innovation. Plus, focus on short-term and long-term goals. Mgmt compensation—Mgmt compensation not linked to innovation performance. We need a new set of metrics. Bold Growth targets—set targets that stretch the organization and monitor progress routinely and frequently Aspirations beyond the numbers Driving innovation demand is not purely about the numbers; it is also about crating well-articulated and meaningful challenges that speak to employees’ hearts as well as their heads. P. 215
Measuring Innovation Performance Very few orgs have effective system for measuring overall innovation performance. Can ask the following questions:
14 Innovation to the Core o How many measures do we have that focus specifically on innovation performance? o How many of my colleagues talk about innovation performance as part of company’s cost efficiency? o How many people have personal performance metrics related to innovation? o Do we measure each operating unit’s innovation performance against the rest of the company? o Do we know how to access and systematically benchmark the innovation performance of other companies in our industry and other industries? P. 217 Have to measure innovation inputs—e.g. number of hours people spend on innovation. Comprehensive matrix of metrics Whirlpool good example. They have several things they measure: 1) 30% of budget for innovation projects, 2)%age of $ spent on advertising to truly innovative products, 3) track number of new ideas being submitted, # of ongoing experiments and ventures and the pace at which projects advance through pipeline; 4) leadership measures for divisional leaders to be held responsible for their own unit 5) how much time and money spent on prof. development for training innovators. 6) linked all these metrics to compensation. However, no org. can simply take the metric system from another company and import it. Must adapt it to one’s own personal setting. P. 221 Must fine tune the scorecard and build a high performance innovation pipeline. P. 225
Chapter 11: Building a Systemic Innovation Capability There is no single right way to organize an enterprise for innovation. P. 229 [Schools—no one right way to instruct students. ] note mine Have 4 interdependent and mutually reinforcing components that need to come together to institutionalize innovation: 1. Leadership and organization—Leaders must be supportive of innovation yet the ideas and processes must come from bottom-up and top-down. Leaders must provide communication avenues, resources, etc. Organization must have innovation infrastructure that is supportive e.g. coaches and mentors Must have cross-boundary interaction—across business units and functions and geographics [how to do this in schools?] note mine 15 Innovation to the Core Everyone is responsible for innovation, not just an i-team. P. 237 2. People and skills—Every person must have skills (or be taught how to) and expectation to be an innovator Changes role of HR who must unleash this potential by hiring the right people, providing target training. P. 241 3. Processes and tools—Everyone must have tools and a process to develop and share ideas in every workstation. IT can be great help here. Create an “innovation democracy.” P. 244 4. Culture and values—Values never come from a “values statement.” It comes from a culture that reinforces ideas and sometimes inhibits others. P. 245. Must have managers who “walk the walk” “Don’t talk about it, BE about it. 247 It’s less and less about “what people do” and more and more “what people are.” P. 248 Making the Cultural Transition: Must utilize the ideas in this book. The ideas all work together to create a SYSTEM of interlocking parts, not just an add-on to company structure. o Visible leadership engagement o Org. structures to build skills and hire right people o Disciplined approach to building skills and hiring right people o Tools and processes for generating novel insights and opportunities o Mechanism for redeploying resources and creating an open innovation marketplace o Ongoing communication and conversation about innovation issues o Highly inclusive events for input and involvement o Metrics, mgmt accountabilities, and reward structures o Regular cultural activities that promote innovation and allow it to thrive. P. 251 Few orgs succeed in building deep, ongoing capacity because they do things piecemeal, instead of systematically. A true innovation culture will have its own inertia. Core competencies do not come and go with changing of the guard. P. 252
Chapter 12: Making Innovation Sustainable Identifying Innovation Impediments Ask several questions: o Are there things in our values that get in the way? o Are there things in our everyday cultural behavior that get in the way? o Are there things in our mgmt processes that get in the way? 16 Innovation to the Core o Are there things in our org. structures or our political structures that get in the way? o Are there skill deficits where we simply don’t know how to do certain things? p. 257 Balancing Innovation and Efficiency Make innovation a core competency Be attentive each day to innovation Maintain constant creative tension every day Have to honor both innovation and efficiency and not be hostage to either one. P. 265 Tensions within Innovation Unbounded and unfocused—people need to be unbounded in their thinking, yet they need to be focused so that ideas fit into a certain architecture of goals Radical and prudent—People want power to upset the org’s balance, yet they must be prudent and not “bet the farm” on a too costly risk. Committed and tentative— Creative and systematic—People need training and space yet must have a system for feedback and implementation Impatient and persistent—must be timely yet persistent to see return. P. 266-7 Your own Innovation Journey Real innovation imperative is not the race to drive growth; it’s the race for renewal. P. 269
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