CULTURE OF INNOVATION (McDonald’s Corporation)
We have discussed the importance of engaging in the behaviors discussed in this book with examples to provide insight. To conclude our discussions, I am providing you a case study to illustrate how using all the behaviors has transformed an operation into the most competitive and dominant enterprise in their marketplace.
Situation:
This client constructed restaurants throughout the eastern seaboard of the United States. Two units were responsible for all production. One unit (Real Estate) had the responsibility for identifying suitable sites and purchasing land. The second unit (Construction) was responsible for design and build of restaurants on the sites. Each team consists of 5 to 10 members. Each team employed a director-level manager for leadership and guidance to their teams. Together the teams had constructed no more than seven units in a year.
Conflicts caused by rivalry and blaming were well known regarding these two groups. It was described to me as each unit throwing grenades over the wall into the other unit’s workplace. The managers did not communicate well with each other or with their units. Unit members were verbally chastised in public when things went wrong and things frequently went wrong! The groups blamed each other for problems and within each group members were singled out for blame, not infrequently by other unit members. As a result, members avoided coming to the office and came prepared to defend themselves when they had to meet. The managers gave work assignments to each person individually and separate from the others.
The region updated its strategy for the year and agreed on a highly aggressive goal for restaurant construction. In addition, these two units were tasked with creating a new restaurant model. The units were challenged to innovate the manner in which they performed their duties and to create a model for constructing a totally new restaurant for the region. Shortly after the strategy session, one of the unit managers was transferred to an overseas assignment.
New Beginning
I suggested to the regional executive vice president (EVP) a different approach be taken with these units. Rather than hiring a new manager, use the remaining manager as project leader for both units and provide time for them to reorganize around their new strategy. He agreed and added that should these units build 30 restaurants within the strategy period he would send every member to Hawaii for a week’s vacation.
Behaviors: Aligning Vision and Strategy, Planning and Organizing With Strategy, Linking Customers with Staff, and Regular Meeting Schedules.
We then held an intensive two-day retreat in which every member of these two units along with their manager participated in creating a new vision, mission, and principles for the whole group based on their challenge from the regional strategy. They then identified measures for production, costs, sales, and customer count along with a timeframe for restaurant construction. They were taught how to analyze their work processes, and after visualizing the work of each unit, they recognized the similarity of each groups’ work and the problems each experienced. They began innovating the manner in which they would perform their work, divide up work, and work together. They practiced using a problem solving model and began resolving causes of their conflicts. Finally, when considering customer requirements they realized the best way to satisfy their markets would be to organize into two units containing both real estate and construction personnel, that is, cross-functional work teams, and agreed for Team A to work one side of the Potomac and Team B the other side. Each team then chose a team leader for their team and agreed to report progress to the manager together rather than individually. Each team agreed on a weekly meeting schedule coordinated with the other team and a monthly meeting for the whole group.
Behaviors: Listening Before Speaking, Building Trust, and Modeling Ethical Behavior
As each team began meeting, the manager would attend but would not speak unless asked a question directly. Many times he would refer the question to the team leader. He made it clear to the team that the team leader should lead the meeting. To build trust among the members, any problem brought up in the meeting was treated as an opportunity to solve the problem and learn from the experience. A team member having difficulty was celebrated for raising the issue and members began offering ideas and personal assistance. To encourage ethical behavior, each group established a code of conduct for their group and codes were reviewed each week at the start of the meeting.
Behaviors: Drive out Fear, Facilitate, Encourage New Ideas, and Delegate.
As the teams were formed and began functioning, anxiety and fear of blaming still existed. To reduce the anxiety, the manager delegated to his team leaders the responsibility for starting the meetings with something fun like a guessing game, or exercise using tennis balls. In addition, he would tell them of his failures when doing similar work to let them know they have company and understanding. Team leaders began describing their “humanness” also. Combined with using problem solving to address roadblocks on projects these tactics began not only eliminating fear within the groups but also began creating innovative ideas that were incorporated into the way work was performed. Members began opening up and risking as a result of experiencing not only the ability to problem solve work issues but having the responsibility for making changes delegated to them.
Facilitation and delegation became a way of life for the team leaders and manager. For example, when problem solving, the leader used round robin or freewheeling combined with open-ended questions to determine along with team members the causes of project delays or cost overruns. Open questions were used to determine solutions. Members were asked to choose the actions they should take and determine timelines for getting tasks completed. These behavioral changes resulted in creation of many new ideas that became part of a new work system and restaurant model.
Behaviors: Celebrating Improvement and Goal Attainment, Positive Thinking, Calm Correcting, and Flexible Styles.
In weekly meetings, each team took time for others on the team to recognize each other for achievements or help received. If the teams met weekly goals, they would go to lunch together. In their monthly meeting, the summary scorecard was reviewed reflecting the achievements of both teams together. The review was in the office hallway where other staff and management could see and hear. Goal achievements were recognized with cheers and hand clapping before going to lunch together. Each month the group was reminded of how close they were coming to their trip to Hawaii.
Flexibility when working with each team became an important consideration. Some team members had much experience and needed very little coaching whereas others had limited experience and needed much more coaching and mentoring. As the teams began maturing, the manager and team leaders realized they could delegate much more than in the past and with some experimentation began finding how much authority and decision making the teams could be assigned. For example, the teams were not able to negotiate with architects or contractors in the beginning. However, after contractors began attending team meetings, it was clear the team had developed to the point they were able to negotiate fairly with their contractors and architects. One team member even began helping contractors improve their work processes to get restaurants built quicker and more efficiently.
Another example illustrates how human resource systems may interfere with attempts to be creative and innovate. The group manager wanted new hire orientation to be conducted by the team. He could not understand why the teams would not take time to train new team members and show them the ropes. It was only after a team member explained that if he took the requisite time to orient someone he would not be working on his project. He would have a poor performance review and could lose his year-end bonus. Both the pay and performance review systems were rewarding individual contributions that discouraged group collaboration and ability to innovate. Later that year, the performance review and bonus systems were changed to encourage time for orientation and collaboration. The teams began new hire orientation and moved forward collaborating and implementing ideas for meeting their goals.
From time to time, a team member would experience personal problems. In those situations, the manager would invite the person to his office for calm problem solving. Very rarely was there a need for progressive discipline in this new environment.
Regarding positive thinking, a manager explained to me how negative the environment used to be. Their policies described infractions or violations leading to termination. The leadership team realized that newly hired personnel were being confronted with termination before even being on the job a week! They discarded the policies and instituted a one-page list of positive behaviors expected of everyone.
Outcome:
By creating a total environment dedicated to collaboration, creation, and innovation, leaders created a totally new culture. The organization became highly competitive in its marketplace. One competitor left the market altogether as over 30 new restaurants were built and all restaurants in the system became highly efficient and customer focused. Additionally, new revenue was generated that year and the 20 members of the two project teams thoroughly enjoyed time with their families in Hawaii!
CULTURE OF INNOVATION (EBCI Travel and Tourism)
More recently, a travel and tourism client went through a similar initiative. The initiatives’ goal was to create greater capacity to produce within the operation. Leaders were trained and coached, and the organization was organized in collaborative work groups. Managers began facilitating rather than dictating and delegating decisions and responsibilities. In this new culture of collaboration and innovation, work groups created more new events faster than before, doubling the number and type of events over the same period the previous year. The quality of events improved and the number of people attending events increased.
The organization performed at this level with fewer people than the year before. Another consulting firm was contracted to merge several programs including my client. These consultants told my client’s personnel who they would be working for, assigned the group a strategy designed by the consultants, and redefined individual responsibilities. Additionally, the leader was replaced with a more traditional manager. Employees reverted to individual work silos. Productivity and performance declined to prior levels. Initiatives to create new events or improve the way work was performed ceased.
CREATING NEW PRODUCTS AND SERVICES (Clemson University)
Peter Drucker noted several factors to consider when collaborating to create a new organization, product, or service. He observed the most reliable of innovation opportunities have to do with changing demographics such as population numbers, age, education, occupation, and geographic location.
An example he cites is Japan’s venture into robotics. Over 10 years ago executives in Japan realized the number of people working in production would be diminishing worldwide within the foreseeable future. The result was development of a national strategy to create robots to address the anticipated labor shortage. Recently, Google began buying robotics companies to close the lead Japan has gained in the quickly expanding robotic market.
I was invited to present to a Travel and Tourism business class at Clemson University. We discussed the issues in new business start-ups after which they were organized into two business groups. Changing demographics were reviewed with each group after which they were assigned the task of creating a product or service to address either one or a combination of changing population numbers, age range, education levels, occupation, and geographic location. At the end of 30 minutes, each team reported out. One business team identified their market needs as parents coming to campus. They designed an app to inform parents of available parking when arriving on campus for football games and other events. The other business team identified their market to be retired persons living in the state of Florida. They developed a series of unique services for these individuals.
These students had begun the innovation process. After their collaboration to create concepts they were prepared to focus on the principles of “Analyze all Opportunities” along with “Go Out, Look, Ask and Listen.”
SOLVING A PARKING PROBLEM ON CAMPUS (Western Carolina University)
Recently, I spoke to an engineering class at Western Carolina University. I told them about my son who is a mechanical engineering student in Georgia. He asked me to attend the school’s Pumpkin Chunking event. His class had been challenged to design and build catapults that could chunk a pumpkin across the school lawn. The best catapult won an award. I came to the big day only to see my son very discouraged. He explained that his team’s device could not win because of its design. Two members of their team insisted on their design idea and the team went along with them (group think). Sure enough, when the time came for the team to chunk its pumpkin, the catapult failed. Several tense minutes passed as the team frantically made adjustments and finally chunked their pumpkin a short distance.
In class we discussed the importance of collaboration and consensus building when innovating to avoid the problems experienced by our pumpkin chunking team. The 35 mechanical engineering students were taught the concepts of brainstorming. We reviewed the three types: freewheeling to stimulate out of the box and random ideas, round robin to ensure quiet people and anyone else not yet participating have a chance to be heard, and slip method for situations in which tension exists or communication is just not happening within the group. We then reviewed key guidelines including “go for quantity,” “no discussion,” and “build on ideas.”
The class was then challenged to solve the parking problem on campus. Using Free Wheeling and Round Robin, the students created over 25 ideas, some quite unique and creative. Using Round Robin, the group then voted to select one item having the most potential for solving the problem. Not surprising, their solution was a parking garage. Innovation occurred when the class built on the idea. The garage changed to an underground garage (avoids interfering with views of the surrounding mountains and provides energy efficient heating). They suggested graveled satellite parking areas to handle overflow. Segway devices were considered a green alternative to other forms of transportation and would be available in the garage for students traveling across campus. Everyone in class voted and reached consensus on their final design. We reviewed how their ideas could be applied to a decision tree for fully scoping out the project and how an action plan could serve as a tool for successful project implementation.
In summary, establishing a culture of collaboration and creativity, combined with tools for managing and implementing new concepts, can renew your organization and move it forward in existing as well as new markets. Complete the survey below to determine what you can stop, start, and continue doing to become sustainable in competitive in your markets.
