CHAPTER 3
Cultivating the Culture

Changing a company’s culture is not an easy task. Yet the good news is that with the right leadership, you can create a culture of innovation and growth. This chapter will provide you with the key factors to focus on and approaches you can use to develop a comprehensive strategy to align your culture with your innovation objectives.

Let’s start with a much-needed definition.

What Is Culture, Anyway?

Culture refers to an organization’s values, beliefs, and behaviors. It is transmitted through subtle cues, through employees sharing their interpretations of events, and largely through the behaviors and attitudes of leaders that signal what is expected.

If an organization values “playing it safe,” making your numbers, and operational excellence, risk-taking is inherently discouraged. If it values 56cohesion, loyalty to the company way ,conformity, and blind obedience to authority, then it devalues their opposites. If it hires people that comfortably “go along to get along,” then it devalues those who are inclined to challenge rules and boundaries. If a culture is “cutthroat, competitive, and secretive,” as the once high-flying Enron has been described after its collapse, it cannot be also humane, collegial, or open.

A company’s culture may or may not be conducive to promoting innovation. Its reward system may be at odds with encouraging people to want to try something that may not work. Its hiring practices may weed out maverick personality types.

It’s easy for leaders to say to employees, “We want you to take risks, we want creative ideas bubbling forth, we want you to think outside that box, oh, and we also want you to make your numbers, and we don’t want failure.” The message that gets translated to the farther reaches of the organization: Make your numbers and we don’t want failure.

Culture is often revealed in the stories employees tell each other. At firms with a long history of innovation, the stories remind people that it is safe to take risks. Robert Johnson, one of the founders of Johnson & Johnson, encouraged a manager who lost money on a failed new product by telling him, “Son, if you’re making mistakes, that means you are making decisions and taking risks.” Similarly, the oral history at 3M revolves around tales of the early days when the company introduced one product failure after another before it began to succeed wildly.

Fear—the Enemy of an Innovative Culture

Fear is the most prevalent enforcer of a company’s cultural norms. People fear failure, ridicule, loss of face, loss of legitimacy, loss of one’s job. Fear of being sent to Siberia. Mary Jean Ryan, president and CEO of SSM Health Care System in St. Louis, observes that fear has been the “standard operating procedure” in healthcare organizations for years.

In that culture, according to Ryan, a budding administrator’s professional growth would be signaled by increased mastery of military-style command and control. “I recall an instructor whose way of checking to see whether management trainees were doing a good job in their supervisory roles was to ask them to identify someone they had recently fired or disciplined,” Ryan wrote in Healthcare Forum Journal. Hiring the “right” people, monitoring 57them closely, and firing them when they failed to be commanded and controlled were the manager’s primary tasks.

Although Ryan was describing healthcare organizations, she could just as easily have been describing organizations in other industries. Fear is the enemy of an innovative culture because it tends to arrest the very activities necessary for it to take place: experimentation, risk-taking, and failure. Management by fear was possible during a period of stability. But healthcare, like many other industries, is no longer stable; instead it has become super-competitive, knowledge-intensive, and fast-changing.

From Controlling Behavior to Shaping Behavior

To respond to these new conditions, SSM Health Care, under Ryan’s leadership, realized it needed new ideas to come from all areas of the organization, not just from the top. In the former culture, observed Ryan, “there was not much encouragement to innovate and create, to listen to those who were not as ‘high up’ in the hierarchy, or to look proactively at all levels of the organization for ways to improve the products and services being offered.” Like many other companies, SSM Health Care needed to create an innovation-adept culture. But how?

Suddenly asking for innovative behavior from employees is likely to get attention and may improve morale short-term. Longer term it may not only confuse people but is unlikely to produce results. Efforts to improve innovation on a short-term crash basis, or in a select part of the organization, while tempting, have little or no effect on the enterprise because they go against the prevailing cultural norms.

University of California psychology professor Charlan Nemeth examined companies that were identified as being “built to last,” meaning that they had been successful over a long period of time. From the standpoint of their cultures being conducive to innovation, Nemeth issued this warning: “The very cultural traits that made these companies successful may in fact preclude their ability to invent radically different futures.” Nemeth looks for the clues to a company’s culture in subtle on-the-job socialization, in “how we do things at this company,” meaning the correct, accepted way. Sometimes it is made clear in the form of approval or disapproval by peers and continual ranking and performance appraisals that separate the good guys from the bad, and increasingly, none too subtly asking the “bottom tier” to leave the company.

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While such cultures are highly productive and efficient, they tend to “eject like a virus” those who do not fit the mold. Yet these very nonconforming qualities are key to innovative thinking, Nemeth observes. To conceive and introduce the truly new, you and your people must be unhindered by these forces. You must feel free to “deviate” from “the way we’ve always done it around here,” to question big and little assumptions, paradigms, conventional wisdom, thinking styles, and other received ways of viewing things.

Creating the Culture: What Doesn’t Work

Based on recent studies, we now have clear guidelines as to what doesn’t work in creating a more adept culture.

In the category of “you’re liable to be tempted to try this but it probably won’t work,” consider the innovation center. The idea is this: rather than trying to change your culture, why not just assign a group of folks to go and work in a separate unit where they can churn out one creative idea after another while leaving the rest of the organization to execute unencumbered and undisturbed. Sounds like a good idea, doesn’t it?

So good that millions upon millions of dollars have been spent to set up and fund these centers with the specific charter of stimulating new business and product ideas. “But after 10-15 years of these programs, most have been terminated. Most of the individuals [who were appointed to run them] have left the companies,” notes a study conducted by the Association of Managers for Innovation, an informal group of 50 current and former innovation center leaders for Fortune 500 firms. They have been meeting for over 20 years to discuss experiences and technology related to the area of organizational innovation.

The approaches of these company-sponsored centers differed widely. Some were independent funding sources, while others were simple facilitation and encouragement staffs. Others provided creativity-ideation rooms. Most made an effort to make the center distinct from normal business activities, and often, the funding came from individual business units. Sometimes these programs were combined informally with an acquisition or venture-capital effort. Almost all of the centers’ efforts were centralized within the R&D function.

All of these efforts succeeded in generating new ideas, sometimes generating 59significant new businesses. Indeed, according to Jack Hipple, who led the study, “many new products currently in the marketplace can be identified, many years later, with these programs.” So why were they disbanded?

“The biggest barrier to success in these programs was their nearly exclusive focus on the research and development function,” concludes Hippie. “In many cases, these programs were funded at the expense of existing business technology budgets and had virtually no involvement of the commercial or marketing arms of the corporations.” This type of sponsorship, over time, opened the door to “subtle forms of sabotage by the business units” looking to meet short-term objectives and take care of current customers. In addition, “the costs and impact of these programs were not clearly thought-out ahead of time in a way that could be communicated clearly to senior management.” Further, sponsorship was too narrow to have staying power, meaning that such programs sometimes withered “because of the retirement of just one key person.” And, lastly, the time horizons for top- and bottom-line impact were usually seriously underestimated.

Thus, these programs proved these two concepts:

• A centralized creativity center cannot significantly impact the bottom line of an organization.
• The R&D function, alone, can significantly affect an organization’s long-term bottom line or new business development.

Clearly, it is time to rethink innovation, and to look for methods that do work to drive revenue momentum. In this regard, we can learn from our survey of Innovation Vanguard companies the elements necessary for long-term success.

Unpacking the Steps Leading to Breakthrough

Creating an innovation-adept culture has a lot to do with how “innovative activity” is viewed by people in the organization: how it is looked upon by management, the emphasis it is given, the resources that are devoted to it, the types of people who work in the company, and how successfully the barriers that inhibit it from happening are dealt with and overcome.

In Chapter 2 we observed that innovation, in its simplest definition, is “coming up with ideas and bringing them to life.” Think about your 60favorite example of a breakthrough product, service, or business model, say, the Post-it Note. Now consider all the things that had to happen from “aha” to “bringing it to life.” The story goes that Art Fry came up with the idea while singing in the choir at St. Paul Presbyterian Church.

Fry had a problem: the little scraps of paper he used to mark pages in his hymnal kept falling out, and he was having trouble keeping up. A solution occurred to him, involving a sticky substance that a colleague at work had invented, but hadn’t been able to find a use for. The glue had unusual properties: it would stick fairly well, and it would allow you to unstick it as well. Aha, thought Fry, maybe this could be a new product for 3M, little sticky notes that people could use for various things.

All well and good, Art Fry had fulfilled the first part of innovation: he’d come up with the idea. The story of the second half of the definition, “bringing it to life,” is much longer, so I’ll summarize.

Fry experimented with the glue and little pieces of paper, got others in his department enthused about his idea (especially the chap who’d come up with the glue), and continued to develop the idea. He even got funding to spend money to develop the idea and overcame skepticism from peers who doubted if consumers would pay for tiny pieces of paper when they could simply use scratch paper. Well, finally the product was officially launched to a resoundingly indifferent market.

As Fry himself explained, the “bringing to life” portion of innovation was, for his idea, anything but straightforward, even in a company known for its culture of innovation. “We had a difficult time building the buy-in for Post-it Notes,” Fry told Fast Company magazine. “People in 3M just couldn’t see that there was a big enough market. Stores were reluctant to stock the new product. Customers didn’t know how to use them.”

The original product sold so poorly that senior management wanted to scrap it. In desperation, Fry and his team loaded up suitcases of Post-it Notes and headed for Richmond, Virginia, where they handed out samples of the product to passers by in an attempt to get people to reorder. They sent samples to corporate administrative assistants hoping that, once they used the new product, they also would want to reorder. Needless to say, the product caught on from there.

Post-it Notes now add billions of dollars to 3M’s overall revenues each year. It also gives us a window into the multifaceted, multidimensional process that is innovation. While inventing the future is often exciting and even 61exhilarating at times (“the most fun I have ever had with my clothes on,” someone once termed it), it’s also one of the more complex forms of human endeavor.

If you were to use time-lapse photography to film the “making of an idea” from vision to successful product, what you would see would be a series of discrete activities that must be performed by a team—make that an entire company—of people. Think about the skills that are needed along the way to accomplish this development. Opportunity-sensing and idea-hatching, or else Fry would never even have hatched the idea. And then, a panoply of problem-solving and the meshing of specialized skills of teams of people who turned that idea into a breakthrough product.

The process, if we unpack it, involves tons of experimentation, developing and applying technologies to design and develop the new offering, prototyping, piloting, costing, and tons of reworking, refining, rethinking, and learning. And “failing” as well. Look at all the experimentation that had to take place—even after launch.

Well, innovation in your firm probably doesn’t involve launching the next Post-it Note. But here’s the point: The rate at which you and people in your company come up with promising ideas, do feasibility research, obtain funding, build prototypes, gather feedback from potential users, pilot launch, solve problems, improvise solutions, and overcome hurdles and barriers is the rate at which innovation occurs. Or doesn’t occur. And culture is at the heart and soul of every one of these activities, either serving to catalyze innovative behavior—or thwarting it.

Creating an Innovation-Adept Culture

The box on the following page lists 11 strategies designed to guide you in improving your firm’s culture for greater innovation effectiveness, and we will look at each topic in detail.

Culture Strategy 1: Assess variance between present climate and optimum climate.

Assessing this is not as difficult as it may sound. In fact, when I’m conducting a kickoff seminar for a company wanting to seriously look at its innovation process with an eye toward improvement, I actually perform such an 62

assessment with what is usually the management team in real time. Simply ask participants to rate on a scale of 1 to 10 (with 10 being highly innovative and 1 being innovation-challenged in the extreme) the present climate for innovation in their company. After those votes are passed to my assistant to begin finding the average number, ask participants to rate what they believe to be the “optimal climate” for innovation, given competitive challenges, growth goals, and so forth. After these votes are also tallied and an aggregate number tabulated, I’ll ask the group for their thoughts. Having done many of these in a wide variety of companies throughout the world, I then show these managers what is usually a significant gap between their present culture and their ideal or optimal culture.

One suggestion I would make is that you poll your management team just for their perceptions on these two questions: “where are we now?” versus “where do we need to be to meet the growth challenge?” Also tune in to your own perceptions regarding where your culture sits presently. Based on numerous surveys of this sort with clients, I find that most companies rate themselves and their present climate at or below average, while they see that to accomplish their growth goals, they must optimally become an 8 or 9·

How hard will it be to get there? That depends on the barriers that exist and how you overcome them.

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Culture Strategy 2: Describe barriers to innovation.

Consider all impediments to accelerated “idea to profits” activity in all spheres of your firm, both structurally and culturally. By structurally, we mean things like “lack of an innovation process” such that people know what to do with their ideas once they hatch them. Structurally also could mean that your firm lacks a funding mechanism for ideas that don’t fall neatly into the purview of an existing business unit, or that are more radical and longer term. Cultural barriers would be perceived punishment for “failure,” lack of time, etc.

Here is one firm’s list of barriers, as reported by the top 200 or so managers:

• Lack of time
• Budget and Wall Street pressures
• Lack of global coordination/communication
• Inadequate human resources
• Bureaucracy
• Complacency
• Silos thinking
• Lack of knowledge of client needs
• Lack of innovation process
• Averse to risk

Here’s a second list, this one from a major manufacturer of mobile phones and this was a survey we did with the high potentials, whom I addressed at one of their gatherings:

• Lack of time
• Large corporation syndrome
• Legacy business slows change
• Long era of past success
• Little budget freedom to experiment
• 64Decision-makers at global level have technical background, not services background
• Short-term focus
• Resource constraints
• Only technological innovation regarded as real
• Matrix structure slows buy-in
• Risk-averse culture

Here is a third company’s list, this company was a specialty chemical company located in the United States:

• Lack of customer focus
• No established innovation process
• Risk-averse culture
• Silos and functional fiefdoms
• Lack of goal alignment
• Lack of time
• Our TQM emphasis
• Recent downsizing

It’s worth it to do this analysis right, which means either developing a survey instrument yourself or using one that already exists. A variety of assessment tools are available to give you an unbiased assessment of your firm’s climate for innovation as perceived by rank-and-file employees and mid-level managers.

A quick way to focus on possible barriers to innovation is to ask yourself some questions: What happens to maverick thinkers in your organization? What happens when someone fails? What stories are told by people in your company about the perils and/or rewards for risk-taking? What type of behavior vis-à-vis innovation does senior management really want? Does management really walk the talk? Such questions get at the heart of your company’s cultural climate for innovation.

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Culture Strategy 3: Describe your current innovation process.

If you’re slightly or completely stumped by this, don’t worry, you’re not alone. By far, it’s the most frequent barrier to innovation. “People don’t know what to do with their ideas and don’t know how to take action on them.” According to one innovation best practices survey, fewer than one in three companies use a formal process to collect ideas. An equally small number have an ideation or innovation committee for collecting, screening, and taking action on growth-producing ideas and improvements.

By contrast, all of the Innovation Vanguard companies studied for this book have comprehensive “idea management” systems in place that assist them in approaching innovation in a fundamentally different way. These systems come in quite a few varieties and aren’t mutually exclusive (many companies researched for this book have more than one program in place). We’ll examine the different systems in greater depth in Chapter 4, but for now it’s important from the standpoint of improving a company’s culture to note that single-handedly these systems overcome the biggest impediment to enterprise-wide innovation: lack of a process.

Culture Strategy 4: Address the “lack of time” barrier.

If you’re like most knowledge workers today, you’re putting in a lot of hours on the job. About 163 hours more each year (an extra month a year, in essence) than a similar person in the workforce 30 years ago. Clearly, the “doing more with less” trend really means in most companies “doing more with fewer people.”

The increasingly frazzled, multitasking, constantly interrupted work style is a real innovation inhibitor. Each day, according to a recent study, knowledge workers receive 52 phone interruptions, 36 emails, 23 voice-mails, in addition to a barrage of other intrusions, electronic and otherwise. The result: workers who are overconnected, overcommitted, overworked, and overwhelmed.

Is it any wonder that, after “no innovation process” the next most common barrier is “lack of time to innovate.” Lack of time inhibits innovation by crowding out reflection time that can produce fresh approaches, enable people to gather information about an idea, or perchance to catch up on 66their reading, accomplishing particular goals or dreaming up the company’s next breakthrough. If somebody is seen sitting quietly at his or her desk thinking, that person may be perceived to be loafing.

Adding to the problem, companies can more easily make demands on their employees from afar, simply by providing them with the latest techno-gadgets. In an attempt to be more productive, companies outfit their troops with devices that make them reachable anywhere, at any hour. Forty-one percent of employers supply at least some of their workers with cell phones or pagers, while 57 percent provide laptop computers for off-premise use, notes one survey. The ability to escape the day-to-day routine, in order to manage the future becomes an even greater challenge.

Recent attempts to deal with the issue include:

• Every other Friday at S.C. Johnson & Sons, a placard is posted on the door of all conference rooms: “Room Sealed by Order of ‘No Meeting Day’ Police.” Twice a month, the Racine, Wisconsin maker of Windex, Pledge wax, Ziploc storage bags, and other household products, bans meetings by its 3,500 U.S. employees.
• Microsoft offers senior executives as much time off as they need in addition to annual vacations of up to five weeks and a sabbatical every seven years.
• At Google, engineers are given one full day a week to work on their ideas.

Such attempts to address the time barrier are a start—they show that firms are aware of this barrier to innovation. But few companies are willing to take more dramatic steps to include an allocation of time in their overall innovation strategy.

One of the few companies to have addressed the time inhibitor is 3M, which gives its employees 15 percent of their time to pursue their own ideas. It turns out that even at this bellwether company, the forces of efficiency have led to the downplaying of this oft-cited practice. Research and Development chief Paul Guehler told me that the 15 percent free-time concept “is not a written rule, I view it as we have 85 percent managed time.” That’s no doubt news to the many companies that have attempted to emulate 3M, such as Corning, whose 10 percent free-time policy, at least for scientists, has led to numerous “Friday afternoon projects” that have paid off.

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The question at the heart of this barrier is, if people are given more time, would there necessarily be more innovation? Would there be a greater tendency to discover and implement better processes, products, and services? Or would the tendency be to simply expand the remaining workload to fill the available time?

To be sure, an abundance of time does not guarantee more creative output, just as a lack of time doesn’t always mean less innovativeness. The issue is not that simple. Employees and managers may list “lack of time” as a barrier to innovation, but hiring more people and cutting people’s workload won’t necessarily lead to more of it.

Indeed, innovators often point to a time crunch to meet a deadline that led them to stop ignoring a problem and come up with a novel solution. Often it is during “crunch times” that employees see the inadequacies of the firm’s present processes, methods, and safeguards. Similarly, it is during times of stress that customers reveal the limitations of your company’s products or services, such as your ability to customize or not customize, or your ability to deliver more quickly than normal.

The sales rep in the field office sees that “there’s got to be a better way” of processing her order and comes up with an idea to do just that. The team busily preparing for the all-important exhibit at the industry trade show comes up with ideas that dramatically improves next year’s process. The consulting team busy preparing a bid proposal by the promised date is spurred to redesign its system so that next time won’t require an all-nighter. All of these are examples of how innovativeness can turn “lack of time” from being a barrier to being a booster. Necessity is the mother of innovation.

It’s only when people are required to work at such a pace all the time that “lack of time” becomes the mother of all barriers. When a company is doing well, looking to explain its uncommon success, it often notes with pride that the leader “drives his people hard” and has an “incredible work ethic.” One such leader, chairman of a national retail chain, was invariably lauded for working his people at a frenetic pace throughout a decade. But then the company began to lose its edge and missed trends, its stores fell behind the times, growth stalled, and its stock price tanked. Key talent, fed up with the 60-to-70-hour weeks, departed in droves. A cultural trait that had been viewed as a plus had become a burden.

Clearly, when “lack of time” surfaces on internal surveys, you must delve deeply into the issue. Are people trying to send a message to senior 68management? Is there a deeper problem? Is “lack of time” symptomatic of a production-oriented culture that deeply distrusts creativity?

And finally, will granting free time to work on innovation have the desired effect? It’s not a simple barrier to ameliorate, but correct understanding of the lack of time barrier is essential.

Culture Strategy 5: Institute practices that create openness.

Companies with a high awareness of culture’s importance to innovation have visible, tangible, and frequently humorous reminders that it’s okay to take risks—that a person won’t be beheaded for sincere attempts that fail.

Hewlett-Packard engineer Chuck House became something of a legend when he defied cofounder David Packard and continued surreptitious development of a computer graphics project that he believed in. Ultimately the product was a big moneymaker for H-P, and a Chuck House Medal of Defiance was created honoring his persistence.

Esso Resources of Canada presents the Royal Order of the Duck, a wooden duck’s head mounted on a toilet plunger. This object sits on the desk of the person who sticks his or her neck out and does something without approval.

At Medtronic, a program called Quest awards up to $50,000 to pursue “proof of concept” of ideas that R&D management has rejected. “Sometimes the ideas compete with something the company is already doing and would not get funding within the normal structure of things for a variety of reasons,” explains Dr. Glen Nelson, Medtronic’s innovation czar and vice chairman. “Whether it’s too far out or whether it’s counterintuitive, the whole idea of funding these ideas is to make sure that we allow the devil’s advocates to prove something will work when [management] doesn’t think it will.”

Each year half a dozen Quest projects get funded and a number of them over the years have become real products. One such product is Reveal, a small implantable EKG loop recorder. “Everyone said it wouldn’t work, even the customers,” Nelson recalled during our interview. “I can tell you if you have an individual with a real belief and you give him enough time to prove it, he’ll prove everyone wrong including the customers. If we hadn’t funded a Skunk Works for Reveal, I don’t think that idea would have ever reached the market.” 69

Culture Strategy 6: Balance the mix of people.

Diversity is a word oft-used these days to describe variance in gender, age, ethnicity, and country of origin. Certainly this type of diversity is helpful in cultivating a culture of innovation. Diversity of thinking styles and personality types is another kind of diversity that must be appreciated by those seeking to foster innovation.

Companies are concerned with attracting and retaining “talented” people. By this they often mean intelligent, experienced, “team players.” Such people are different from the kind of people you need to ignite and sustain innovation. The essential mix for teams, work groups, business units, and even entire companies really means balancing three different personality types: mavericks, contributors, and champions.

Let’s take these three one-by-one, beginning with mavericks.

Culture Strategy 7: Identify mavericks.

Pat Farrah has been called wacko and a genius depending on to whom you talk. However, people at Home Depot agree on one thing: he’s a maverick. After helping found the Atlanta-based home-improvement chain in the late 1970s with Bernard Marcus and Arthur Blank, Farrah burned out and left the firm to pursue other interests.

Returning a decade later, he was soon up to his nonconformist antics. When a store manager made excuses about slow progress on a store renovation, Farrah hopped on a forklift and knocked down an interior wall that needed to be removed. He has been known to take a chain saw in hand to demolish product displays that he deemed insufficiently alluring.

“Just a wild man,” in the words of one former Home Depot executive. “Known for his crazy ideas,” chimes in another, describing how Farrah once priced fireplace screens at one store at a quarter of the price of a nearby rival. Veterans further recall the time Home Depot was opening a store in Florida and Farrah snatched catalogs from a rival chain and hung them in the new Home Depot outlet with signs promising prices 20 percent lower.

Often called mavericks, or cowboys, or free thinkers, folks like Pat Farrah are cut from a different cloth. They don’t thrive on blending in, or “going along to get along” or being popular. They really don’t know how. Sometimes they seem incapable of doing anything but causing trouble. They 70are the kind of individuals who look at things differently because they themselves are different. They would rather ask for forgiveness than for permission. They are not big on “social skills.”

Do you have at least a few such people in your company? You’d better. You need them! They are essential to a climate conducive to creativity. The Pat Farrahs of this world help keep complacency at bay, they ask those “have you thought about” or “what if” questions that nobody else thinks of or is willing to ask. They are the individuals who, in highly regimented environments, have all been sent packing, if they somehow managed to get hired in the first place.

When they get interested in something, these folks bore into it deeply. They are excited by the thrill of the hunt, whether for information or for novel solutions to vexing problems. These are the people most likely to come up with the ideas that become tomorrow’s breakthroughs.

If this personality type seems fuzzy, the role mavericks play in fostering innovation is anything but. Social scientists’ studies such as those conducted by University of California, Berkeley’s Charlan Nemeth confirm time and again that we humans tend to be a conforming-prone race. “When people are faced with a majority of others who agree on a particular attitude or judgment, they are very likely to adopt the majority judgment,” says Nemeth. “Even when using objective issues, such as judging the length of lines, people will ignore the information from their own senses and adopt an erroneous majority view.”

The question is: Why? “The available evidence suggests that there are two primary reasons for adopting normative or majority views, even when incorrect,” suggests Nemeth. “One is that people assume that truth lies in numbers and are quick to infer that they themselves are incorrect when faced with a unanimous majority. The other reason is that they fear disapproval and rejection for being different.” Most of us loathe suggesting an idea for fear of ridicule and rejection. Mavericks, like antibodies, keep the organization healthy and safe.

For years, in their efforts to rationalize work, companies weeded out their mavericks and tried to put them someplace apart: in R&D facilities, in Innovation Centers, in Skunk Works—anywhere but within the main organization. While this approach might work for the creative personality, it doesn’t work for the company. Their thinking style brings a type of diversity that’s needed in the main organization to create an optimal climate.

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Culture Strategy 8: Improve or change the system.

The notion that people have preferred problem-solving styles was first advanced in the early 1970s by Michael Kirton at the Occupational Research Centre in London. Kirton speculated that there are two principal styles of creativity: adaptive (those who prefer to improve the system) and innovative (those who prefer to change the system), and he devised a 33-question survey, the KAI Inventory, to objectively assess an individual’s preferred style. Kirton’s work led him to observe that most people naturally prefer one style to the other, and that among the general population, preferences are fairly evenly dispersed.

Inside organizations and specific work groups, however, Kirton and his adherents discovered that the mix of creativity styles often gets skewed in ways that are detrimental to the culture. Charles Prather, former manager of DuPont’s Center for Innovation and Creativity, frequently uses Kirton’s instrument to gain deeper insights into the mix of styles in the companies he works with as an independent consultant.

Because people with an adaptive problem-solving style seek to make an existing system or process better, they are naturally comfortable suggesting and implementing process ideas: those that reduce costs, improve productivity, ensure safer procedures. Having worked with and administered the survey to groups of employees in more than 50 large companies, Prather finds that manufacturing groups and human resource groups, to mention two, tend to be populated by people with this orientation. “These people bring high immediate value to any business,” says Prather. “Without them, the business would quickly fail.”

By contrast, innovative problem-solvers seek to change the system. These folks tend to exhibit the maverick style. They have no problem coming up with ideas that might change the fundamental nature of the business. Marketing staffers and research-and-development scientists consistently exhibit this style

By better understanding these styles, starting with your own, you can staff teams and functional areas more appropriately, avoid the pitfalls of inappropriate staffing, and better capitalize on the talent pool you have. Asked for clues as to a person’s likely KAI score, Prather uses the example of a person’s wallet. If you organize the bills in your wallet sequentially, and if you know without looking how much money you have in your wallet at any 72given time, chances are your creativity style is adaptive. If you haven’t got a clue as to how much is in there, much less how it’s arranged, your style is likely to be innovative.

From a cultural perspective, what’s most important is that leaders and managers at all levels (and especially those in human resources) understand the importance of achieving the right mix in creativity styles. As in a marriage where each partner compensates for the other’s weaknesses or strengths, so too in work settings. Team problems call for a variety of problem-solving styles. So does the corporate-wide challenge to grow via innovation. Every company needs a balance and blending of styles. Groups populated by too many innovators won’t execute well. And groups where the innovative style is absent or sorely lacking won’t necessarily surface bold, stretch goals or ideas.

People invariably do best when they are in jobs that require the problem-solving style they naturally prefer. “When you see someone struggling under their job responsibilities like a donkey under a heavy pack,” says Prather, “the cause can usually be traced to a great mismatch between the problem-solving style demanded by the job and the one the jobholder prefers. The greater the mismatch, the more unproductive energy must be expended to cope with the job’s ill-fitting demands, leaving less available energy to do the job.”

By extension, appointing a person exhibiting strong adaptive characteristics to be the company’s innovation champion would be a mistake. Conversely, appointing someone with a strong innovative style to be responsible for the company’s quality initiative would not be a good fit.

Culture Strategy 9: Examine your attitude regarding innovation and individual contributors.

In over two decades working with top leaders in companies around the world, I consistently find that rank-and-file workers are underestimated. Leaders don’t know how to stimulate or harvest their ideas, and they go to extraordinary lengths to design jobs where thinking is essentially eliminated altogether.

Not so at companies that are shaking up their belief systems to accelerate bottom-up innovations. Consider how these ordinary contributors did extraordinary deeds.

Starbucks’ popular Frappuccino drink came not from the product development 73wizards at headquarters, but from a few regional managers who got the idea literally while sharing a cup of coffee. Almost as a joke, they experimented with a variety of formulations until they got universal “mmm, that’s really good” approval from coworkers and customers, only then sharing the idea with top brass in Seattle.

Faced with a growing number of lawsuits, DuPont’s legal department looked for ways to accomplish more in less time with fewer resources. They introduced new, more efficient, case-management systems and databases that saved $15 million in its first year. Better yet: the new system decreased the average time required to resolve a case by 44 percent.

More and more companies are realizing that the heart and soul of their culture resides in the everyday attitudes and aptitudes of their regular contributors. To achieve growth, these firms are establishing systems that embed idea management into the organization.

Culture Strategy 10: Identify and develop champions.

Champions are those people in your organization who are adept at shepherding, developing, and nurturing ideas toward the goal line of commercialization.

These “idea quarterbacks,” who are not to be confused with the chief innovation officer, need to have to have experience and credibility within your organization. They need a sense of how the business operates, how it creates value for the customer today, and how a new offering might create new, unique, or exceptional value for the customer tomorrow.

Champions need to know who to see to get things done. They need an uncanny ability to overcome obstacles and solve problems. They need to know how to get buy-in for ideas, how to “work the system,” and how to find resources needed, including facilities, equipment, budget, information, and people.

The champions I’ve observed over the years that consistently deliver are good at networking, both inside and outside the organization. They have a good “feel” for the market environment, for what customers will and will not respond to, and they must have experience commercializing new ideas. Champions need selling skills, persuasion skills, the ability to convince and get buy-in from those who may be threatened by or opposed to their ideas, and an ability to motivate people who don’t report to them. They also need 74to be able to inspire the best work from mavericks, technical people and outside specialists and to orchestrate cross-functional teams toward goal achievement. The best champions are the ones who personalize the project and infuse uncommon enthusiasm in the teams they lead by their personal example of persistence and passion.

How important are champions to executing innovation? My colleague, Gifford Pinchot III, author of Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur, has studied hundreds of cases of innovations in his work as a consultant. Pinchot said that he “has yet to find a success that happened without a strong champion,” without someone who puts his or her entrepreneurial spirit and drive to work within the framework of the company rather than independently. Pinchot calls these champions “intrapreneurs.”

Does your business unit or company have enough champions to effectuate change? If your answer is yes, you and your firm are fortunate. If your answer is no, remember this: champions are made, not born. They get better with practice, by observing other champions at work, and being mentored by them. Because they are vital, you may also need to alter the way your firm recruits people, so that instead of looking for people who think, act, and behave “just like the rest of us,” you go outside the mold and attract a few mavericks and champions.

Culture Strategy 11: Identify and recruit innovators.

What things did you make as a child? What was a stumbling block you encountered while working on a problem, and how did you handle it? Do you like to “perfect the system” or “change the system”?

If you are applying for a job at an ever-growing list of innovation-adept companies, these are not just random questions. They are asked for a specific purpose: to determine your innovation style, and how your skills and abilities meet needs of having the proper mix of mavericks, champions, and contributors—both now and in the future. To foster ongoing innovation, human resource professionals are beginning to ask questions that 3M has been a trendsetter in evolving.

At 3M, a team of company recruiters, human resource specialists, and technical specialists interviewed 25 of the most prolific company inventors. Their mission: to identify signs of innovative potential to use in screening 75job applicants. These individuals exhibited characteristics that have since become the basis for hiring practices; they:

• Are creative: they ask questions constantly, like looking for solutions, exploring new areas
• Have broad interests: are eager to learn, like exploring ideas with others, have hobbies, are multidisciplinary
• Are problem-solvers: have an experimental style, “do it first, explain later,” are not afraid to make mistakes, take multiple approaches to problems, willing to do the unexpected
• Are self-motivated/energized: are self-starters/driven, results oriented, have a passion about what they do, take initiative
• Have a strong work ethic: are committed, work in cycles, flexible, not structured work habits, and are tenacious
• Are resourceful: able to network to solve problems and get information, and able to get things done through others.

Like 3M, many companies profile people who now work at the firm to identify and recruit people that best “fit the mold.” If you find your company needs to change the mold to create the right mix of mavericks, champions, and regular contributors, you may have to alter your hiring practices and mentoring methods to foster the culture you seek.

Designing Your Firm’s Approach to an Innovation-Adept Culture

As you reflect on the important issues of this chapter, my suggestion is that you use the subheadings as discussion points for you and your process design team to reflect on. For example:

1. How would you describe your organization’s culture: its values, beliefs, behaviors?
2. What are the most important enablers of innovation you’ve got going in your organization?
3. What systems and practices are in place at your firm that continuously 76open your culture to experimentation, taking a contrary view, and showing initiative to marshal evidence that an idea has merit? Are these sufficient?
4. How big a gap exists between what you believe to be your firm’s optimal climate for innovation and the one that exists presently?
5. Does your business unit or company have the right balance of people to foster diversity and also to execute well?
6. What barriers are responsible for blocking increased innovative output?
7. Do you have enough people skilled in championing ideas?

There’s no question that a supportive culture is a key success ingredient at Innovation Vanguard companies. But make no mistake. No culture is perfect and few if any of the hundreds of companies I’ve had the privilege to work with during the past 20 years are satisfied that they have a culture that fosters innovation. The important thing from a leadership standpoint is that a culture left alone is a culture that is becoming less and less conducive; that’s just a fact of life. So just as a gardener works constantly to prune, fertilize, water, and mulch her garden, innovation leaders must cultivate the culture for innovation. As we move on to another key topic—how your firm “manages” ideas—you’ll see the cultural implications at every turn. Especially as they relate to the opening question of the next chapter.