Risk-Taking and Innovation
- 3M rewards ‘intelligent’ risk taking, trying new things and learning from failure. Ideas are allowed to go ahead to further testing, or even release to customers, as long as risks are acknowledge up-front, studied as well as can be expected short of actually doing the test of the idea, and mitigated against to the extent reasonably possible. One of 3M’s foundational principle is: “Management that is destructively critical when mistakes are made kills initiative; and it is essential that we have many people with initiative if we are to continue to grow.”
- CEO of SAS UK, Jim Goodnight, notes that his organization works hard to create a corporate culture that “encourages employees to try new things and yet doesn’t penalise them for taking chances.”
- At animation studio Pixar, the practice of showing unfinished work each day liberates people to take risks and try new things because it doesn’t have to be perfect the first time.
Resources and Innovation
- The “GameChanger” program at Shell Oil Company fosters innovative ideas from staff by “…providing appropriate, staged financing for their development”. The program “…strives to develop real businesses that are outside and between the companies existing lines of enterprise by following a process outside the constraints and priorities of Shell’s day-to-day business”.
- Both Nike and Asda encourage employees to ‘think for two hours a day”.
- Google allows its employees to set aside 20% of their time for innovation and use it to develop projects that they feel passionately about.
- 3M have an HR policy that allows all staff to spend up to 15% of their time working on promising new ideas, and provides even more resources and time for those ideas that meet criteria indicating that they show the most promise.
- Engineers at Hewlett-Packard are encouraged to spend up to 10% of their time on their own pet projects and have 24-hour access to laboratories and equipment.
- At Gore Tex, staff get to spend 10% of their work hours as ‘dabble time’ to develop their own ideas.
Knowledge and Innovation
- Proctor & Gamble has set a stretch goal of having 50 percent of its new project portfolio come from ideas originating outside its own four walls. “We had to move from ‘not invented here’ to ‘proudly found elsewhere’”, notes one senior leader. “When we talk about innovation, we’re not just talking about technology. If someone has figured out a better way to communicate with the consumer, that’s of great interest to us. If there are new ways to distribute our products that better meet the consumer needs; that’s innovation.”
- Merck’s head of R&D states, “Every senior scientist here running a project should think of herself or himself as being in charge of all the research in that field. Not just the 30 people working in our lab but the 3,000 people, say, in the world working in that field.”
- Julian Richer of the hi fi company Richer Sounds has realized the benefits of encouraging employees from different departments and branches of the company to meet up. This happens once a month and has resulted in many fresh or innovative ideas for improvement and collaboration.
- Eli Lilly has a strategy to tap into experts from outside the company by bringing specific problems to virtual (online) arenas. It founded InnoCentive, a wholly owned subsidiary, to bringing outside researchers’ attention and energy to the drug development process through an incentive system.
- The highly-successful design firm, IDEO, encourages its designers to transfer ideas across their project and team boundaries. Organizational routines for the acquisition, storage and retrieval of solutions are embedded in the culture and supported by work structures. New employees are encouraged to seek and give help as required and to share their knowledge.
- Faced with inflationary pressures on the Irish economy, consolidation in the insurance industry and the need to reduce costs John O’Neill the CEO at AXA Insurance in Ireland wanted to increase the levels of service and new product developments. He developed a deliberate and strategy targeting energy and resources into becoming more innovative in business processes, organizational learning and development and the work environment. Early initiatives included the ‘madhouse’, a team-based program for stimulating innovative ideas. In the first six months over 200 new business improvement ideas were taken forward towards testing and implementation. Innovation is now linked to objectives at every level; organization, departmental, individual and managerial. Each employee has the responsibility of generating a specific number of innovative ideas and to also become involved in the implementation of some. Managers have to support a set number of potential innovations a year.
- Marks & Spencer’s systematically collects and shares stories of success in order to recognize innovative contributors and to maintain momentum for even more.
- At BAE Systems, The Chairman’s Award is given to teams who work with colleagues or customers to come up with “brand new thinking – as opposed to improvements on existing ideas – which deliver cost savings or other benefits to the organization.” Winners receive a small financial prize but at primarily rewarded through the kudos of recognition when their ideas are publicized and implemented throughout the company.
- In order to revitalize its marketing division and encourage more innovation, Proctor & Gamble used methods such as interviewing and focus groups that it had long since mastered for listening to its external customers and deployed these in a massive internal listening exercise. Leaders learned in-depth about what really mattered to staff and they began redesigning internal structures and incentives to be more in line with these values. Global Marketing Officer James Stengel described the results as “the most dramatic and sweeping redesign of P&G’s marketing organization in 60 years.”
- At Dyson, staff receive no royalties for innovations on which they participate, but they are named on patent documents and are widely recognized throughout the company as inventors.
- Scripps Newspapers has established a $1 million innovation fund. Staff can submit to the fund’s governing board “idea resumes” that provide a basic overview of the ideas, the reason why the idea is worth funding, and the critical assumptions that need to be addressed. Senior leaders regularly teach innovation workshops at each of the company’s newspaper properties to help trigger re sorts of ideas the fund seeks.
- Cusco Systems has a focused and disciplined approach to innovation. Multiple teams simultaneously work on finding innovative approaches to a specific issues, but as soon as one team has found a solution, work in all the other teams ceases and the approach is standardized and diffused.
- Tesco uses a “hothousing” approach for refining and testing innovative ideas. They define hothousing as “trialling improvements in a protected environment to allow risk taking that is necessary to create innovation.” Ideas are first stress-tested in 6 stores and further refined before being rolled out to others. The process includes lots of staff involvement and purposeful tools such as root cause analysis, process mapping, and plan-do-review cycles.
- Global agrichemical giant Syngenta AG has an internal Learning and Development Unit that designs and executes training courses that foster innovation and leadership among its 25,000 employees.
- Speaking from the front-line of leadership in an industry where innovation and creativity is everything, Pixard and Disney Animation Studios president, Ed Catmull (2008) says this...”What’s equally tough, of course, is getting talented people to work effectively with one another. That takes trust and respect, which we as managers can’t mandate; they must be earned over time. What we can do is create an environment that nurtures trusting and respectful relationships and unleashes everyone’s creativity. If we get that right, the result is a vibrant community where talented people are loyal to one another and their collective work, everyone feels that they are part of something extraordinary, and their passions and accomplishments make the community a magnet for talented people coming out of schools or working at other places... Our philosophy is: You get great people, you bet big on them, you give them enormous leeway and support, and you provide them with an environment in which they get honest feedback from everyone.”
- Google notes that the ability to quickly form small teams to refine, pilot and implement ideas is a critical component in the success of its innovation process. Google’s policies allow staff to spend a portion of their time on projects of their own choosing and this freedom makes it easy to rapidly form teams of intrinsically motivated individuals. Further, every key decision in Google is made by groups where the ethos emphasizes finding the best idea over merely achieving consensus.