Innovation Perspectives – Turnaround Innovation

This is the fourth of several ‘Innovation Perspectives‘ articles we will publish this week from multiple authors to get different perspectives on ‘What are three specific actions that a non-innovative company can take to become more innovative?’. Here is the next perspective in the series:

Three Real Lessons (plus One) for Turnaround Innovation

by Mike Brown

What three specific things should a non-innovative company do to spur innovation? While I frequently approach strategy from a “work with what you have and adapt if at all possible” mindset, the most incredible innovation-instigating experience I’ve personally been a part of came from a big, dramatic, exciting business turnaround.

The transportation company where I worked had sustained a variety of external and self-created landmines, and the vultures were circling figuratively (rumors of our collapse) and literally (turkey buzzards had taken up residence around our 10-story building). Although a public company, the management had been under the control of one family for more than 40 years. When the board had finally had enough, they pushed out two generations of family management to bring in a proven turnaround CEO from the outside.

Suddenly our slow-moving, familial company with significant strategic problems was turned upside down. A company that had lost its bearings was forced into reawakening its latent innovative instincts in dramatic new ways. Three clear must-dos for creating a company-wide innovative mindset emerged from that era. They aren’t all pleasant certainly, but they worked.

1. Publicly Kill the Known Innovation Killers.

In the early days of the new CEO’s tenure, people were evaluated and put on trial (in essence) to see whether they might be part of a solution or were clearly entrenched in creating the problems. As challenging as it was, it was a fair process since most forward-looking people made it through the test.

But, many others didn’t. Nearly every senior leader who attended the same university as the former CEO was let go in a single day. All but one of the former senior leadership team was fired, as well many in the next level down in the company. Other people who were also obvious roadblocks were pushed out the door as well. The cumulative effect made it clear: the old ways of stonewalling and protecting the status quo weren’t going to be tolerated. It was step one in reigniting innovation.

2. Find a hero, cheerleader, and lightening rod – all in one.

It’s great to have people thinking about change, but a company trying to get its innovation bearings needs someone very senior and very visible pushing hard for transformational change. This visible change agent has to be in the right place in the business with the leverage to make moves creating disproportionate impact. While being hailed by some, this executive will also be vilified by status quo lovers with vested interests in the old ways which brought them to power. This means it’s essential for THE change agent to be a charismatic leader who will not only persevere, but be emboldened by attacks from “tree huggers.”

Our change agent was my boss, the Chief Marketing Officer. He brought a completely new perspective (a consumer marketer in a B2B company) and willingness (as his father had taught him), “to get fired every day for doing what you believe in.” Wildly popular in some circles, he was ridiculed in others. I described it as a “Madonna complex” since this was when Madonna was regularly viewed as the best AND worst music performer of the day. A great innovation change agent has to be smart, with the personality to withstand an assault from any direction, at any time.

3. Make very visible, very dramatic changes.

One year into the turnaround, our CEO believed that despite the major transformation underway, remaining old guard members in the ranks thought the changes would pass and things would revert to how they’d been for years. He still saw a “we can wait this out” mentality holding back the company. That was all he needed to unleash the next major wave of changes beyond the initial sweeping organizational changes.

In short order, we created and implemented the company’s first strategic marketing plan in many years, with bold moves for us such as introducing a new customized service with a 100% satisfaction guarantee (along with our inaugural TV commercial), changing our sales people from salaried to commission-based compensation, and introducing an industry-first NASCAR sponsorship to signal building our brand would be vital for the company. Much of this was unveiled at first-ever all-company sales and operations meetings where operations management and sales were brought together from all over the country. It was a previously unimaginable barrage of very visible and high profile changes.

What Eventually Happened?

The changes led to a markedly different trend for the company, with a number of years of record financial performance. Yet the further we moved away for the turnaround CEO’s 3 1/2 year tenure, the more old thinking began to re-emerge. With the acquisition of a major competitor, we took on a whole new management group rooted in antiquated thinking. These individuals eventually came to be a dominant force inside the expanded corporate structure. Within a few short years, bad decisions and the economic downturn plunged the company into worse peril than it had ever experienced.

So, while we were asked for only three specifics, it’s imperative to add a fourth: Truly integrate the innovative mindset into the company’s culture, processes, and way of thinking strategically. If you don’t results from the first three steps will likely be way too fleeting.

You can check out all of the ‘Innovation Perspectives‘ articles from the different contributing authors on ‘What are three specific actions that a non-innovative company can take to become more innovative?’ by clicking the link in this sentence.

Mike Brown is an award-winning innovator in strategy, communications, and experience marketing. He authors the Brainzooming^TM blog, and serves as the company’s chief Catalyst. He wrote the ebook “Taking the NO Out of InNOvation” and is a frequent keynote presenter.