The Magic Pill of World Class Innovation
Google, Apple, GE, 3M, Nokia, Procter & Gamble … some of the most recognizable innovative companies in the world. Everyone wants to know, how can they be so innovative? What’s their secret to success, and how can I become as innovative and successful as them?
Well, good news! There is a magic pill that will make everyone in your organization creative geniuses, enable your leaders to see into the future, and provide years of innovations that make you a market leader. It’s not magic because it makes things happen instantly, or easily, or inexpensively. It’s magic because it works every time – as long as an organization is willing to put in the effort.
What is this magic pill? It’s called “innovation culture” and it’s the secret behind all innovative organizations. So how do you start to create a magic culture of innovation? At the top, with leadership style. Let’s look at three types of leadership style and the innovation cultures they inspire.
The Idea Marketplace Culture
The Idea Marketplace innovation culture is evident in companies like Google and 3M. These companies place a high value on employee idea generation. Employees are recruited not only based on skills, but also on creativity and passion. Company managers enable and reward new ideas and experimentation, and top leaders don’t mind taking a “back seat” and letting the employees steer a little. This egalitarian, open-minded atmosphere leads to an innovation culture that’s like a “marketplace” of ideas.
Of course, idea generation without management is not very productive. That’s why this type of culture also needs limits – well-defined boundaries and clear metrics for success. Not every idea will be actionable, so you need a system with documented and consistent scoring models to determine which ones will move ahead.
You also need an innovation portfolio that makes room for new ideas. At Google, the majority of projects (70%) focus on core offerings (search and advertising). Another 20% focus on secondary offerings, such as news, and 10% are speculative (focusing on completely new offerings or avenues of business, often proposed by an individual).
The downside of the Idea Marketplace culture is that it’s difficult to create in organizations with established hierarchies – both top leadership and middle management have to relinquish a little control over the strategic direction of the company and even more over how the strategy is accomplished.
A lot of small companies or startups develop this type of culture naturally, and it works well for them. Larger established organizations can always adopt better idea generation practices that encourage employee contribution, and can explore more risky innovation projects outside their core competencies.
The Visionary Leader Culture
The Visionary Leader innovation culture at companies like Apple, Microsoft and Virgin Atlantic, relies on the brilliance and charisma of a senior executive. When you think of Apple, for example, it’s hard not to think of Steve Jobs, founder and current CEO. Even though Jobs left Apple for 10 years, he was mainly responsible for getting the company back on top after a terrible performance in the 90s.
How did he do this? Jobs has an uncanny ability to see into the future – to understand what customers want months or years down the road. In addition to being the primary source of breakthrough ideas, he has the ability to motivate employees to pursue his vision without question (everyone loves to work for this guy).
In this type of innovation culture, employee creativity is valued, but less as idea generation and more to fulfill the leader’s ideas (creative problem-solving). Everyone works together to execute the leader’s strategy, which requires synchronization and loyalty at every level.
Since the company is pursuing only the visionary ideas of the leader, the innovation portfolio is somewhat unbalanced, with a greater dependence on risky disruptive and breakthrough innovation, and fewer resources for incremental additive innovation. The risk is worth it if you have a visionary leader with a proven record. If your organization is run “by committee” or has a “follow the leader” record of innovation, you’ll have a hard time making this type of culture work.
The Systematic Innovation Culture
Where Google and Apple tend toward opposite ends of the leadership spectrum, companies like GE, Nokia and Proctor & Gamble demonstrate that it is possible to have traditional leadership while still soliciting and embracing employee contributions.
In a culture of Systematic Innovation, innovation is a rigorous process that engages everyone in the organization for specific tasks. There are innovation teams in charge of managing and developing ideas. There are champions who are accountable to produce results. Ideas are tested using systematic innovation methods like TRIZ and DFSS. Company performance is measured using innovation metrics (like R2I and change of behavior).
Unlike the visionary leader culture, executives in this culture are not usually the source of breakthrough ideas – although they drive the organization to innovate at the level needed to achieve growth. And unlike the idea marketplace culture, employees aren’t encouraged to go off and experiment with their own ideas.
Instead, ideas are developed systematically in support of the strategic vision, without the vision specifics being mandated. “Make something great” is the unspoken message. This gives managers and employees room to experiment, even to fail, during the front end of innovation – but only within a mandated timeframe.
The organization’s application of roadmaps and project management ensures that all ideas are vetted, a certain number are pursued as projects, and a subset of these are brought to market. The innovation portfolio displays a diverse set of offerings, some of which may lead to distinct product lines and business models.
A culture of Systematic Innovation works well in established organizations – startups don’t tend to have the discipline for such a calculated approach, nor the resources for a diversified portfolio. However, for organizations that don’t have a visionary leader or aren’t able to capitalize on an idea marketplace culture, a Systematic Innovation culture is a practical and attainable goal.
What’s Your Innovation Culture?
It’s important to understand the type of innovation culture and leadership style of market leaders, but ultimately you must develop a culture that works best for your organization and leadership style. Don’t be afraid to borrow from the cultures above and create your own unique approach. Regardless of your leadership style, or the culture you develop, all innovation cultures have a few things in common that you can start to do right now:
- Challenge tradition, collective assumptions, mindsets and outdated ways of doing business.
- Eliminate silos, counter-productive politics and territoriality.
- Raise the bar for for trust, communication, teamwork, experimentation and the willingness to learn from mistakes.
- Understand the difference between incremental innovation and breakthrough innovation, and determine which type of innovation will sustain your growth.
Above all, commit to making innovation a day-to-day reality and you will develop a culture of innovation that propels your organization to the top of your market. It’s not really magic – but the results are the same.
Kamal Hassan is President and CEO of Innovation 360 Institute, and is responsible for leading the company’s global operations and customer acquisition.
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