承
Chapter 6
Commit
The eight disciplines I describe in this book are closely interrelated. Each one supports the others, and there is a certain degree of overlap among them. This is probably more so for Commit than for any other single discipline. Commit is where the “rubber meets the road” for innovation. If the other disciplines we have discussed so far are missing in our work, the result is usually a lack of commitment. When these others disciplines are in place, however, our intentions can turn into action. Because of the disciplines' strong interdependencies, this chapter returns to many of the key principles discussed so far, while providing additional detail and perspective.
Cheng is an ancient word, used to mean “by order of” or “in the name of.” The term 承 諾 chengnuo, created by adding 諾 nuo, means not only “to take on,” but also to “agree to do so verbally.” The left side of the character 諾 nuo is 言 yen, meaning “say” or “indicate.”
“To commit” in English means “to agree to be bound to a certain course of action,” or “to pledge.”
Good leaders commit themselves to tasks or missions as if their lives depended on it. Once that commitment is made, they must believe in it wholeheartedly, and take action to fulfill that commitment.
Footnote: Even an Emperor in China takes his order from “Heavenly forces.” In traditional Chinese terminology the Son of Heaven, or the Emperor, must receive the “mandate” of Heaven, bestowed on him from above and supported by the people.
Culture and Commitment
An open and inspiring environment that encourages risk-taking is the ground on which a successful innovation culture is built. A shared vision and sense of purpose provides the framework for motivating and aligning employee ingenuity.
Tarkan Maner, previous CEO of Wyse Technology, serial entrepreneur, and investor, finds inspiration in history and a rallying cry to motivate his team when obstacles must be overcome:
One of my favorite mottos is a quote from Hannibal: “There is always a way! We will find the way! If there is no way, we will build the way!” I use that quote a lot with my team, because you face difficult challenges when you are innovating. Challenges are guaranteed, so you need to be resilient. You can't give up. You can learn, you can adapt, but don't quit. Keep working on it because there is always a way. Passion creates persistence and persistence creates success.
Appropriate incentives, guidelines, and processes manage the downside of risk-taking without continuing to foster a fear of failure. Admiral Mullen has some sage advice for leaders based on his own experience with failure and risk and how they relate to commitment. He asserts that we must learn how to fail constructively. The personal failure he refers to happened after he took his first command and crashed a gasoline tanker into a buoy. The event nearly cost then-Lt. Mullen his career.
I think for an organization to keep remaking itself for the future, there has to be some high risk. . . . In my own life, one of the reasons that I am so tolerant of failure is because I failed very early. It's less about the failure than it was: What did I do after I failed? How did I pick myself up? What did I learn from that? And how did I incorporate the learnings into future steps?
There are risks that leaders take associated with investments, with people, with careers, and with success and failure. . . .
If leaders take that risk, then the organization will as well.
But if a leader just runs an organization at status quo, it will just keep generating the same kind of relatively weak outcomes certainly with respect to innovation. . . . I think you have to use risk mitigation in any new area, where there may not be a lot of data, certainly not much experience or much history. That can be very difficult, but you have to try to learn that in a new area, feed-back your lessons almost in real time as you continue to move forward, continue to innovate.
Dean Kamen draws a wonderful analogy between the kind of support he received from his parents for his youthful adventures and the kind of culture corporations need to create where failure is allowed.
My parents ran the family in the same way I run DEKA. Which is, yes, they wanted us to get a good education, they wanted us to learn all the tools, but if I wanted to try something new and different, they encouraged us.
If I or my brother or somebody tried to do something really different and failed, you know they were disappointed, but they didn't ridicule us, they supported us. They helped us even when—like all good parents—they were trying to protect their kids from failure. They would urge us to do something more conventional, but in the end if I said “No, I really want to try this,” even though they were nervous and even though they were protective parents like big corporate management people might try to protect their status quo, in the end my mother and my father always said, “Oh whatever you are going to do, we are going to support you.” And they did.
It was enormously valuable to me that I knew that, even if I failed, I could get up and try again, and they would be there supporting me. It's sort of what I am suggesting companies ought to do. They ought to try to avoid the same mistakes of the past, they ought to rely on education and knowledge and experience, BUT at some point they ought to say, “All right, you really want to try something different? We know it's high risk; we know you will probably have to do a bunch of things that won't work. We can tolerate that; we can overcome it, and we can keep going.”
If corporate management was as supportive and indulgent of our passion inside a company as my parents were inside a family, I think those corporations would, in the end, have greater rate of innovation than they do now by plodding along, being conventional, avoiding risk.
You know—the safest place for a ship is in the harbor. But it just doesn't do any good there. I think companies need to take reasonable risks and support people, even when they are having troubles in what they are trying to do. That's what my parents did.
As discussed in Chapter 2, Lead, in many corporate cultures, failure of any type has negative consequences. Not all failures result in lost jobs or denied promotion opportunities. However, they almost always result in a loss of organizational standing and credibility. This does more than simply demoralize the individuals involved and make it more difficult for them to gain support for future efforts. For the organization as a whole, it reinforces the negative consequences of trying to do things differently and better.
Tom Mendoza describes the antidote to this as something he calls a culture of safety.
Many of the true innovations at NetApp actually happened at a very low level in the company. There's a culture of safety here in the sense that we understand not all ideas are going to make sense and you have to be somewhat vulnerable to come forward with your idea; therefore the culture has to say it is okay to be wrong. If you never can be wrong, you can't have innovation; it's impossible. I think it is very, very important that if someone pursues an idea with passion and integrity and gets the most out of it given the circumstances, then you do what you need to do to make sure they don't get killed. Even if the task's not done, if they significantly move the ball forward, you make sure something good happens to them. Then you can ask, okay, who's going to step up next?
I think Tom has hit on a critically important requirement for an innovation culture, and it is one that I don't always see practiced. I actually had the very great fortune of attending one of the last training classes delivered by W. Edwards Deming, the great management thinker, whose insights and observations are still relevant and useful today. Dr. Deming called upon leaders to “drive out fear,” and observed that it is more likely to be faulty processes, rather than people, responsible for most mistakes. Tom has applied very similar thinking to getting the very best from employees. He recognizes that it's unreasonable to expect people to behave in ways that are counter to their interests. He doesn't demand that they “step out of their safety zone.” He widens that zone.
Innovation Management in the Safety Zone
Leaders of teams and organizations can widen safety zones for their employees by clearly differentiating the criteria for “acceptable failures”—what Dean Kamen calls “kissing frogs”—and carefully contrasting these from the type of failures that put the larger enterprise at risk. When I led State Street's Office of Innovation under Jim Phalen, he illustrated the point succinctly and humorously to a global audience of State Street employees, saying “Don't get me wrong, this commitment to innovation doesn't mean we're looking for highly creative trading practices!”
Clear guidelines allow employees to take calculated risks in a way that serves the interests of the organization and its goals. When people understand the limits within which they can experiment, when they know that they won't be penalized for doing so, and when they can see potential for achievement and reward, employees have no reason not to invest their ingenuity. Appropriate innovation management practices provide the support as well as the controls needed to oversee and optimize these efforts.
Most organizational controls seek to maximize conformity and predictability. Frequently, people who have spent much of their careers managing these controls and the related processes don't even recognize how inconsistent these principles are with the requirements of an innovation culture. This is why folding innovation projects into existing practices, such as program management functions, often creates issues.
The goal of most projects in a corporate setting is to deliver the expected results on time and on budget. The goal of an innovation project, on the other hand, is to assess and harvest new ways of creating business value.
Projects of all types, innovation projects included, certainly need to meet or manage expectations regarding budget, resources, and schedule. However, traditional program management practices often assume an ability to define timing and allocate funding in advance. They then monitor the extent to which projects meet these commitments. There's also an assumption that, barring unforeseen calamity, each project will continue to move forward. This leads to a failure-avoidance mentality as well as a focus on requirements such as compliance that might have no relevance for experimental projects.
Effective innovation management practices are built around an entirely different life cycle and portfolio management model. The assumptions are much more “Darwinian” in that only a select number of funded projects is expected to move forward after each round of funding. Projects that don't move forward can still add tremendous value to the organization by virtue of having tested assumptions and delivered lessons learned. The commitment is to maximize organizational learning and growth rather than meet preset project delivery expectations.
The IBM Way
I asked Linda Sanford, senior vice president of enterprise transformation at IBM, how IBM perceives and manages for potential failure when pursuing innovative ideas or new businesses. Here's her response:
Like any successful organization, IBM is organized and managed to drive execution and results. However, we also realize that we need to have an explicit management system in place that is focused on innovation, testing new ideas and new businesses. Within this part of the management system, you have to plan for some failure, because if you don't, it probably means you are not pushing the envelope enough.
IBM has made significant progress in changing the way it manages new, emerging businesses, and it has deployed a range of approaches to support this. A good example is the program called Emerging Business Opportunities, or EBOs, a structured program that helps identify, fund, and shepherd new businesses from ideation through growth.
Once a business opportunity is selected as an EBO, we give it special care and feeding, including A-team leadership, sponsorship by a senior vice president, protected funding, and strategic milestones that are measured differently than existing businesses.
The EBO process produced some outstanding success stories, including our Linux and life sciences businesses. But not everything was a home run. There were some ideas that didn't get off the ground. The key is we didn't punish the leaders and the teams involved in EBOs that didn't pan out.
We've learned that you take a risk, you learn from it, and these leaders benefit from that experience. You can't be a company that makes markets, a progressive organization viewed as an innovation leader, unless you are willing to risk some missteps. Setbacks and failures are a necessary part of innovation . . . you just want to manage them in a controlled way.
Funding as Commitment
Establishing funding for the kinds of efforts we are discussing here is in itself an important and highly visible commitment to innovation. It provides an important signal to the organization that top management is serious about innovation. Normally, when departments experience budgetary challenges, their innovation projects are often the first expenses to disappear. This is why an enduring commitment to innovation from the top is critical for organizations to continuously progress toward improvement. One very effective and visible way to do this is to separate innovation funding from the general operating budget. Depending on organizational culture and preferences, centralized and/or decentralized management processes are implemented to assess innovation project business cases, oversee funding, and define the governance model for executing and evaluating projects. After a proof-of-concept or pilot, the innovation project can then be moved out of the innovation program and be funded and managed using more traditional processes.
For companies, the critical factor in managing innovation projects is the concept of early failure, so that the reasonable but ultimately unsuccessful attempts at innovation do no irreparable harm to the company and at the same time make learning possible. One way to do this is through vigorously testing assumptions up front. These can be assumptions regarding customer or market interest, competitive positioning, costs to develop and produce, technology readiness, and more. I'll speak more about this in Chapter 7, Execute, but for the Commit discipline it's important to note now that, over the course of an innovation initiative, various opportunities to test the idea's viability will occur. Taking advantage of those opportunities will provide multiple points of validation throughout the process, and will either confirm the initiative's continued viability or alert project sponsors that the time has come to focus attention and resources elsewhere.
This is true in the nonprofit world, too. Gerald Chertavian, founder of Year Up, puts it this way:
I think companies signed on to Year Up's intern program with the intention to help their community and did not recognize we could help them with a challenge they are facing. But what we knew, and they found, is that not only is it good for the companies, but they can start using Year Up as a talent pipeline, and this is very different from doing it because it happens to be a nice, charitable act.
Although Year Up first gained traction from the charitable aspect of the program, with minimal funding, their commitment to corporate citizenship grew into a clear economic benefit as well for the company. Gerald continues:
In fact, in the model pitch, we discourage people from doing this as a charitable act. Instead we price it in a way that forces someone to ask is this valuable? And the proof of that is that we typically get money from the company's line functions, rather than the corporate foundation, and the line person doesn't have money to waste. They won't do something that isn't in the company's interest, even though they see that it's good for the community, which is another benefit. I think the corporations are also beginning to see this as a way to increase employee satisfaction and company morale. It's been demonstrated that people working with interns are actually happier with their companies.
At first tiptoeing into the program, companies then had an opportunity to observe and measure its continued viability, and then began to embrace it more fully. In some cases, the results of these observations may not be definitive, but there may still be value in sight. So it continues. The initiative needs to come to a quick end, however, if we learn that our key assumptions were wrong, or that the economics to support continuing our efforts just aren't there. It's also possible that, while everything is going exactly as planned, another way to achieve the goal—better, faster, or less expensive—comes along and we see the need to change course.
Nathan Myhrvold has seen countless ideas come to fruition and also many that never made it. He believes that the question of whether to stay the course with a project or give up on it is one of the most difficult to answer:
Probably the hardest thing in technology is to know when you should keep pushing on a project—because maybe in the next version or the next turn of the crank or in a year, it will take off—versus when do you give up. I don't think there is any perfect way to do that. It's a question venture capitalists struggle with, entrepreneurs, people in companies. You have to make the best judgment you can relative to understanding what's out there in the market and why you got into this thing in the first place.
A common mistake, for example, is that when people get into a project, their initial hypothesis about the market or about the product is wrong. Oops, it isn't successful, nobody wants it, or nobody is willing to pay for it or whatever. That's a really good time to step back and say, maybe we should quit. But a lot of people don't because they are embarrassed and say, well, maybe we can pivot—that's the trendy term—we are going to pivot.
When a young entrepreneur told me he was going to pivot, I said, “You mean you are totally wrong and you are now going to change your mind?” And the entrepreneur laughed and said, “Well, yeah, but these days we call that pivoting.” Well, that's fine, but you have to make sure that what you are going to do next is something that still makes sense.
There is a strong human desire and a human need to say, “I am so far into this, I am not going to quit now.” And so you wind up talking yourself into something that might still kind of make sense because of X, Y, and Z. Well that's a tricky thing to do, because you can fool yourself for a long period of time and dig a very deep hole.
I was recently talking to an entrepreneur. He had a cool idea, raised the money, got the people. Oops, the idea doesn't work. Well, they then had this clever idea and said “Well, hey—what is our current thing useful for?” They found a second application. It's too early for me to tell, if that was a really smart idea or a dumb idea. So I asked the entrepreneur, and he said, “You know, it's great because we could use all of the stuff that we already did.” And I said, “Yes, but would you have started that way to begin with, or are you just afraid of admitting that you screwed up the first time and you should actually go do something better?” He said, “Well, I hadn't thought of it that way, I will think about it.”
And since this is a young, proud, wonderful guy, he is probably going to convince himself, that, “Oh yes, it still makes perfect, perfect sense.” But my guess is that it doesn't make any sense, and that if he was trying to do this up front, he would say, “I am not going to go in that market at all.” So I think he's probably kind of pushing it because he is too proud to admit that he should quit. And to a point, that's okay.
The reason I say that is because you don't want quitters. You don't want people who are going to fold at the first sign of adversity, because almost every new idea has carried some adversity. The new, innovative idea that is suddenly welcomed with open arms by everybody is extremely rare. So rare that it almost doesn't exist. So, you want some perseverance.
And the whole question then is to ask, when do you keep going for it? When do you say, “It's going to motivate the team, they want to be successful, they had a setback, and the investment is long gone” versus saying, “We just think this is hopeless”? And again, I don't have any simple way to do that. You just have to make a decision for yourself, trying to be intellectually honest, that you ask yourself, “Is this really worth doing? Does my thesis still make sense? If I'm starting from scratch, right now, would I go do this?” And if the answer is that if you were starting from scratch you'd never do this, but you're doing it now because you're kind of stuck, then I'd say, “Really? Shouldn't you rethink this?”
Dean Kamen gave me an interesting answer when I asked him how we can recognize ideas that will ultimately create business value:
You can't.
You have to begin by accepting failure. Most people hear only about the successes. The failures are far more frequent, but can be considered part of the process of innovation if they come to a quick end once there is no value in sight. But the process that produces more failures than successes still has to be encouraged in order to eventually discover new strategic value.
Dean's words, then, confirm the need for unproductive efforts to be quickly redirected, and when there is clearly no prospective opportunity for adding value. Another aspect we should mention here regarding Dean's comment on failure as part of the process is that failure should be regarded as an important part of learning. People need to be comfortable openly discussing what failed and why, so they and others can learn. It's important, then, for our organizational culture to encourage us to acknowledge our failures, rather than cover them up.
Effective innovation management processes define approaches to manage risk, develop and assess proposals and business cases, allocate funding, test assumptions, deliver business value (whether through project success or learning), and reward the right behavior as well the right results.
Tarkan Maner provides another perspective on decision-making and commitment. It is a lesson he learned as young man at a crossroads in his life. At the time, he had to decide between two very different options, and he knew that either choice would dramatically impact his future direction. He was struggling greatly with this important decision and asked an older, trusted advisor for advice on which was the better path:
I'll never forget what he said, and I have heeded his advice ever since. First, he pointed out that both paths had integrity and were not as different as they appeared. Then he told me that the real question is not which path to choose. It is a question of ensuring that whatever path I take, I make that the right path. I learned that the one you choose doesn't matter. You just work tirelessly to make your decision the right one.
Personal and Team Commitment
Legend has it that the Spanish conquistador Hernando Cortes ensured the commitment of his troops by destroying the ships on which they had sailed to the new world, thus preventing his crew from escape or retreat. There is a similar story from ancient Chinese history about a rebellion against the Qin dynasty in which the leader sunk the boats and burned all but three days of rations in order to motivate the army in their fight against overwhelming odds. While these examples are not very effective risk management practices and certainly not recommended motivation techniques anymore, they have led to the concept of burning the boats: taking action that demonstrates your commitment.
In 2009, for example, State Street Corporation issued a press release announcing its commitment to saving $575 to $625 million over the next five years. It takes strong leadership to undertake such bold and decisive action. This public commitment energized the entire company. Our top leadership team and every employee took on the challenge, bonding together to achieve that commitment.
Innovation leaders must, in some similar way, commit themselves if they expect the company to come together, commit to, and accomplish major goals. As Admiral Mullen indicated earlier, leaders must be the first to take the risk.
Early in my career at State Street, I took that risk. At the time, we were using a network that did not have a continuously available architecture and was challenging to expand and manage. Although it served our business needs at that time, I knew that network availability and resiliency could be improved and disruptions minimized.
I became an advocate for migrating to a new virtual network technology that some believed had not sufficiently matured for most large corporations to implement companywide and/or globally. Several members of my own team didn't support the idea, either. There were risks, and anything less than complete success could have vast negative consequences.
Executives from corporate support functional areas assembled in a conference room to discuss the business case. After reviewing a report prepared by an outside consulting firm, the group agreed with its findings that the capital investment would be excessive, the return-on-investment insufficient, and the risk far too great. All the executives—except for me—concluded that there was no compelling case for us to move forward with the project.
I was not persuaded. I didn't think the study's numbers were correct, but I didn't argue with the group or express anger about their decision. Like Tarkan Maner and Hannibal, I believe that, “There is always a way! We will find the way! If there is no way, we will build the way!” So, I left the room quietly, and in everyone's mind—except mine—the issue was closed.
After leaving the conference room, I went straight to see my boss, Joe Antonellis, State Street's CIO. I knocked on his door and walked in, and started asking some pointed questions.
“Joe, who would you call if there was any network issue?”
He pointed at me and said, “You!”
So, I asked him, “If I am the one you would call, then shouldn't I be the one to make this strategic network decision?” Before he responded, I asked again, “Why should this decision be made by people who are not responsible for the network and are not the ones you would call?”
Joe looked at me and said that the team thought the risk and impact of redoing the entire network was too big. Evidently someone had already spoken with him. I responded that their concerns were certainly justified, but there were ways to mitigate the risk. I explained that my goal was to build a continuously available network with a generous capacity for growth. I asked Joe to allow me to do a study with my team to see if we could do the job and save the company money.
Joe asked me how much time I would need to complete the study. I thought for a few seconds and answered, “About 90 days.” Then I added, “I'll bet we can find a way to save three times more than the consulting firm's study projected in our annual expenses.”
He then asked me, “If I approve the study, will you guarantee that you'll find that amount of savings?”
I said, “No, I can't guarantee it, but I'm pretty certain.”
Joe laughed and jokingly complained, “Well, if you want to bet, you've got to bet something!”
I thought fast and responded, “Okay. I bet my job. If my study can't find three times the consulting firm's projected savings, you can fire me.”
Joe grinned and told me he liked the bet. He flipped his calendar forward 90 days and wrote, “Madge bet her job if she doesn't deliver the savings she committed in the 90-day study.”
We both liked the bet, so we laughed and shook hands on it.
I needed to assign someone to lead the study who would be objective and credible. I asked one of my direct report managers, who was not the overall network manager, but rather managed the service delivery function for one business unit, to lead the study. He would be working with a worldwide team including members from finance, procurement, our network engineers, and representatives of many related functions worldwide.
The team got to work immediately. With the 90-day deadline approaching, my team had not come back to show me their business case yet. I began to worry that I might not be able to deliver the study in time. And I began to wonder if maybe the amount of savings I had committed to wasn't there. Would Joe really fire me? I wondered.
When I asked the team leader what was holding up the study, he said, “I'm having some problems with the projected savings.” Then I really began to worry.
“You can't find the savings?” I asked.
He smiled. “It's not that—the savings number is way too large. I think there must be mistakes in our calculations. I have asked the team to check all the numbers again.”
Now I got excited and asked him to review it with me immediately. We got the entire team together with finance, procurement, and the engineers to review the business case. We went through the numbers together in detail and made a few corrections. When we finished, we were showing our expense savings to be nine times what the consulting firm had projected! Needless to say, I was relieved, and the entire team was absolutely thrilled with our results. We knew we were ready to present our business case to my boss, Joe Antonellis.
The scheduled meeting day finally arrived. The team was really excited, but we tried to keep straight faces, not wanting to tip Joe off. I asked the project leader to review the overall study, and asked our finance person to review all the business case numbers. At the end of our presentation, Joe expressed his surprise and pleasure with the results. He told us to prepare to present them to Ron Logue, our CEO. We did, and Ron's response was also very positive. He accepted our business case and approved the project immediately.
When we finished the project, the yearly savings were twelve times greater than the consulting firm projected and more than four times greater than what I committed to in my bet with Joe. Our new network technology allowed us to develop all kinds of new capabilities; provided better network resiliency, availability, and capacity; and positioned us for meeting the requirements of accelerated business growth worldwide.
And I kept my job!
Timing and Commitment
I have always been fascinated by the concept of a self-fulfilling prophecy, in which the beliefs that people hold about the future are what actually bring that future into existence. I think this concept holds particularly true for innovation. If we have confidence and are ready to commit ourselves to overcoming challenges, viewing them merely as tasks on the path to success, we will succeed. With this kind of approach and mind-set, effective team members keep each other focused on the goal and what can be gained, and they do not retreat when the going gets tough.
In traditional Western marriage ceremonies, anyone who could show why the couple should not be lawfully wed was asked to “speak now, or forever hold your peace.” In the same way, the practice of inviting fact-based objections and concerns before commitments are made should be built into standard processes—and into the culture itself. People can only commit when they know they have been heard and their input has been thoughtfully considered. Of course, if we try to address every concern or requirement in advance, we risk becoming paralyzed. On the other hand, if we are dismissive of others, commitment will be impossible to achieve. Leaders must keep a delicate balance, listening closely and respectfully to what people are saying. Significant concerns don't need to stop progress. They can often be translated into “risks” and actively managed on an ongoing basis. True commitment comes once collaborators understand each other's requirements, interests, concerns, and the capabilities of their constituents—and develop plans that reflect them.
Once the strategy and plans are in place, leaders have the right to expect every team member's support and commitment. Suggestions can still be made along the way, and legitimate concerns addressed whenever they arise. But committed team members will take ownership of the problems they encounter and do their best to solve them.
The following graphic shows one of my mother's favorite sayings, “Resolve the problem before others make it worse,” and it still comes to mind whenever I see that it's time to commit to early action, before positions become unshakable and momentum shifts.
Resolve the problem before others make it worse
The issue of timing is critical where committing to innovation is concerned. If we attempt to commit too early—or inspire others to commit too early—we may be disappointed if the pieces of the puzzle are not yet ready to be assembled. On the other hand, if we move to commit too late, the path we are trying to take may already be so crowded that we won't be able to make any headway, maintain a course, or have our voice heard above the crowd.
Preparing ourselves and our team to commit at the right time also depends on positioning the initiative within the organization's overall strategy, and, when necessary, presenting the business case at just the right time. The appropriate executive or executive committee in the organization, after all, will have to commit to funding and staffing the innovation, and presenting our case too early or too late in the budget cycle or without taking other initiatives into consideration will greatly reduce our chances of success.
Effective leaders know how to lead by example, to engage others, to encourage them to commit. But, as important as it is to commit to a path, commitment shouldn't be confused with inflexibility. In fact, the two are incompatible. Leaders and their teams must be both committed and flexible about new ideas, new learning, and changes along the way.
Let's now turn to our levels of effectiveness we associated with the discipline of commit, and let's frame it in the context of risk.
Commit: Levels of Effectiveness
Level One: Avoids Risk
At Level One we are overly cautious about risking change in order to avoid “egg-on-the-face” issues. We don't differentiate between personal risk and business risk—it's all personal. Typically we add to—but do not change—as a way of hedging bets. We are unlikely to persevere in the face of great difficulty or impending “failure.”
Level Two: Minimizes Risk
At Level Two we are willing to take a stand about what needs to change, and we set about changing it. But we are focused on minimizing risk rather than managing it. We recognize the roller-coaster life cycle of innovation projects and do not bail out when the going gets tough. We soldier through when obstacles appear—we don't retreat. We are decisive and accountable.
Level Three: Manages Risk
At Level Three we know how to manage business and financial risk, leveraging experimentation, fast-failure, and other strategies that significantly reduce it. Our risks are calculated, not avoided. We put ourselves on the line, carrying personal risk in a way that inspires others and makes others feel safe. We anticipate difficulties, and we under-commit while always trying to over-deliver.
Commit—Concrete Steps for Putting This Discipline into Action
Individual
As innovators, we commit to change by putting ourselves on the line. In effect, we have to stand up and say, “I think we can do this better, and this is the way I'd like to try.” We don't have to bet our job or career every time we propose a new initiative, but we do have to make it clear that we're willing to take a calculated risk. Then we can better engage the support and commitment of our organization and the team on which we will rely.
Team and Organization
Teams and organizations commit to innovation by providing employees with a culture of safety that welcomes ideas and recognizes that not all of these ideas will pan out. This requires a shift in the processes, controls, and other cultural signals that shape behavior. Teams and organizations must recognize the types of results that their current practices reward and the types of failures that are penalized. Then they can redefine them to better support a culture of innovation. By changing these cultural signals and implementing clear guidelines and practices for managing innovation risks, funding, projects, and learning, teams and organizations demonstrate their own commitment to innovation.