5 Strategies Big Businesses Use To Build A Culture of Innovation

Stephen Wunker

This post was co-written with my colleague David Farber:

As over-used as the word innovation may be these days, there

is no denying that building a culture of innovation is at the top of
most corporate agendas. After all, a companys own employees
are uniquely positioned to understand the intersection of
business operations, product development pipelines, and
customer demand. New growth should be spurred from within.
Yet attempts to build a culture of innovation where employees
share new ideas, then use fast and cheap processes to get
breakthrough solutions to market often fall flat.

Its not for lack of trying. We have seen plenty of companies try
to build that culture. They put in a foosball table and paint the
walls with bright colors. They announce that innovation is going
to be one of the companys top priorities. They even offer cash
prizes to employees who come up with great ideas. Theres a
wave of excitement, but three months later its business as usual.
General Assembly and ONEin3 (respectively, an educational
institution focused on technology, business, and design, and an
organization that connects Bostons young adults) recently
brought together a group of entrepreneurs, design thinkers, and
innovators including those from some of the worlds leading
brands to help understand what groundwork needs to be laid
for an innovative culture to survive. Although theres no silver
bullet or single right way to build a culture of innovation, our
conversation uncovered 5 strategies that worked across
industries.

1. Understand the different types of innovation that

youre trying to foster. One of the biggest problems with new
innovation efforts is that they often dont encourage employees
to think beyond the development of new products. This means
that employees with non-customer-facing roles are either left out
or forced to brainstorm new product ideas in spite of a lack of
knowledge about customer needs. Despite the product-centric
view that gets passed down to employees, business strategies
tend to align with a need for bottom-up innovation across
several domains most notably the 4 Ps: profit models,
processes, products, and policies. By highlighting the different
arenas in which employees can be involved with innovation,
companies can help employees add value in areas where they
have deep knowledge and a desire to get involved. s innovation
team now actively encourages employees to get involved with
three forms of innovation: product, business model, and policy.
Since moving beyond the traditional product focus, Microsofts
innovation efforts have taken the company in directions that
were previously unthinkable. For example, earlier this year the
process helped bring free versions of Office to the Android and
iOS platforms. The broader innovation process is also a driving
force behind the companys ongoing efforts to establish legal
precedents that push back against the NSA and EU regulators on
privacy and disclosure requirements that could have deep and
lasting impacts throughout the industry.

2. Empower champions to push back against

bouncers. Big businesses have large employee bases with clear
reporting lines. While this structure provides a number of
benefits, it can also be a roadblock when it comes to creating a
culture of innovation. While a company may preach the benefits
of innovation, middle managers are still tasked with ensuring
optimal performance in the businesss core activities. They have
little desire or capacity to jeopardize core initiatives for
unproven innovation efforts. Employees often get an early no
from their direct supervisors, return to their day jobs, and put
innovation out of their minds again. Brett Bishop,
a Managing Design Strategist for Capital One, explained how his
team beat the system. We went to people who were too busy to
pay attention. We got our quick wins while no one was paying
attention, then had the proof point to do more. Bishops
strategy is one that Capital One has now institutionalized, with
his team helping innovators find the fringe the people who
have tried, recognized that they need help, and are willing to let
you try out new ideas. Innovation champions can help
employees find friendly spaces to test their new ideas, while also
providing a level of protection against managers who are
charged with focusing on the core.

3. Redefine metrics and incentives. New ventures often

struggle because they are judged by the same metrics used to
evaluate activities that the business has been involved in for
decades. New initiatives cant compete at the same level, and
they are killed off before theyre given a chance to prove
themselves. Performance metrics often suffer from the same
problem. While employees are told to be innovative, their
performance goals and compensation packages dont create the
incentives to do so. Cathy Wissink, a Senior Director at
Microsoft, shared how the organization went from a
performance system reminiscent of Game of Thrones with
teams bringing on sacrificial lambs who could be easily cut
come review time to an atmosphere where senior management
provides air cover to those willing to take on important
innovation challenges.

4. Give employees the tools they need to make their

case. Even the best ideas arent going to get any traction if the
value they bring to the organization isnt made clear. And thats
often where companies fall short. They invest in innovation
programs to bring in new ideas, but they dont give individuals
the tools or frameworks to show why those ideas are
worthwhile. , a leader in 3D design and engineering software,
built a strong culture of innovation by bringing its employees
through a series of innovation workshops. Employees are taught
not how to come up with new ideas, but rather what to do with
the good ideas they come up with, from knowing who should
hear the idea to what that person should be hearing. Autodesk
employees are given both the training and resources to create
business pitches that highlight the value of their ideas and
demonstrate why Autodesk is uniquely positioned to implement
the solutions.

Do What You Love To Do

andMake a Difference
We dont get a chance to do
that many things, and every
one should be really excellent.
Because this is our life. You've got to find what you
love. The only way to do

great work is to love what
you do. If you haven't

found it yet, keep looking.
Don't settle. As with all
Im convinced that about half of
matters of the heart, you'll
what separates the successful
know when you find it.
entrepreneurs from the non-
successful ones is

pure perseverance.

Your time is limited, so don't

waste it living someone
else's life. Don't be trapped
Get rid of the crappy stuff and
by dogma which is living
focus on the good stuff.
with the results of other
people's thinking. Don't let

the noise of other's opinions
drown out your own inner

voice. And most
important, have the
Learn continually there's
courage to follow your heart
always "one more thing" to
and intuition. They
learn!
somehow already know

what you truly want to
become. Everything else is
secondary.
Customer Care

Our DNA is as a consumer
company for that
I was worth over $1,000,000
individual customer whos
when I was 23, and over
voting thumbs up or thumbs
$10,000,000 when I was 24,
down. Thats who we think
and over $100,000,000
 about. And we think that our job
is to take responsibility for the
complete user experience. And
if its not up to par, its our fault,
plain and simply.
People dont want to just buy
personal computers anymore.
They want to know what they
can do with them, and were
going to show people exactly
that.
Innovation
Innovation distinguishes
between a leader and
follower.
Were gambling on our vision,
and wed rather do that than
make me-too products.
Creativity is just connecting
things.
when I was 25, and it wasnt
that important because I
never did it for the money.
It turned out that getting
fired from Apple was the
best thing that could have
ever happened to me. The
heaviness of being
successful was replaced by
the lightness of being a
beginner again, less sure
about everything. It freed
me to enter one of the most
creative periods of my life,
a Do you want to spend the
rest of your life selling
sugared water or do you
want a chance to change
the world?
Heres to the crazy ones,
the misfits, the rebels,
the troublemakers, the
round pegs in the square
holes the ones who see
things differently
theyre not fond of rules
You can quote them,
disagree with them,
glorify or vilify them, but
the only thing you cant
Innovation is the ability to do is ignore them
see change as an opportunity because they change
not a threat. >>> things they push the
human race forward, and

while some may see them

as the crazy ones, we see
genius, because the ones
Ive always wanted to own and who are crazy enough to
control the primary think that they can
technology in everything we do. change the world,
are the ones who do.




Innovation has nothing to do
with how many R&D dollars you Why join the navy if you
have. When Apple came up with can be a pirate?
the Mac, IBM was spending at
least 100 times more on R&D.
It's not about money. It's about
the people you have, how you're
led, and how much you get it.
I want to put a ding in the

universe.

To turn really interesting ideas

and fledgling technologies into a
company that can continue to
I would trade all of my
innovatefor years, it requires a
technology for an
lot of disciplines. >>>
afternoon with Socrates.




My experience has been
that creating a compelling new Sometimes life hits you in
technology is so much harder the head with a brick.
than you think it will be that Don't lose faith.
you're almost dead when you
get to the other shore.


There's an old Wayne Gretzky

quote that I love. 'I skate to
where the puck is going to be,
not where it has been.' And
we've always tried to do that
New Product Development
at Apple. Since the very very
beginning. And we always will.

You can't just ask customers
what they want and then try

to give that to them. By the
time you get it built, they'll
Sometimes when you innovate,
want something new.
you make mistakes. It is best to
admit them quickly, and get on

with improving your other
innovations.

Its really hard to design
products by focus groups. A
Idea Management lot of times, people dont
know what they want until

you show it to them.

Theres a phrase in Buddhism,

Beginners mind. Its wonderful
to have a beginners
mind. >>>
Some people say you have

to be a little crazy to buy a
Mac. Well, in that craziness

we seegenius and thats
who we make tools for.
So when a good idea comes,
you know, part of my job is to

move it around, just see what
different people think, get
people talking about it, argue
with people about it, get ideas Design is not just what it
moving among that group of looks like and feels like.
100 people, get different people Design is how it works.
together to explore different
 aspects of it quietly, and, you
know just explore things.


In most peoples
vocabularies, design means
veneer. Its interior
People think focus means saying decorating. Its the fabric of
yes to the thing youve got to the curtains of the sofa. But
focus on. But thats not what it to me, nothing could be
means at all. It means saying no further from the meaning of
to the hundred other good ideas design. Design is the
that there are. You have to pick fundamental soul of a
carefully. human-made creation that
ends up expressing itself in
successive outer layers of
the product or service


Im as proud of what we dont
do as I am of what we do... Our Quality
leadership comes from saying
'no' to 1,000 things to make
sure we dont get on the wrong
track or try to do too much....its Be a yardstick of quality.
only by saying 'no' that you can Some people aren't used to
concentrate on the things that an environment where
are really important. excellence is expected.

Quality is more important

than quantity. One home
run is much better than two
doubles.

Steve Jobs Success Story

Inspirational Lessons from Steve Jobs

Do What You Love To Do and Make a

Difference

Steve Jobs' 12 Rules of Success

Steve Jobs Turns Apple Back To

 Profitability

Creative Marketing Lessons: Sell Dreams

Synergistic
and Emotional Benefits
Organization and Inspired
Steve Jobs vs. Others
Team
Apple Innovation Strategies

Apple's Design Process

I have one of the best jobs

Apple's New Business Models Venture
Acquisitions by Apple in the world. I get to hang
out with some of the most
talented, committed people
around, and together we
get to play in this sandbox
and build these cool
products. Apple is an
incredibly collaborative
company. You know how
many committees we have
at Apple? Zero.
We're structured like a start-
up. We're the biggest start-
up on the planet. And we all
meet once a week to
discuss our business,

Part of what made the

Macintosh great was that
the people working on it
were musicians, and poets,
and artists, and zoologists,
and historians who also
happened to be the best
computer scientists in the
world.

The only thing that works

is management by values.
Find people who are
competent and really bright,
but more importantly,
people who care exactly
about the same things you
care about.

The people who are doing

the work are the moving
force behind the Macintosh.
My job is to create a space
for them, to clear out the
rest of the organization and
keep it at bay.

Its not about pop culture,

and its not about fooling
people, and its not about
convincing people that they
want something they dont.
We figure out what we want.
And I think were pretty
good at having the right
discipline to think through
whether a lot of other
people are going to want it,
too... We just want to
make great products.

My job is to not be easy on

people. My job is to make
them better.

The people who are doing

the work are the moving
force behind the Macintosh.
My job is to create a space
for them, to clear out the
rest of the organization and
keep it at bay.

When I hire somebody really

senior, competence is the
ante. They have to be really
smart. But the real issue for
me is, Are they going to fall
in love with Apple? Because
if they fall in love with
Apple, everything else will
take care of itself. Theyll
want to do whats best for
Apple, not whats best for
them, whats best for Steve,
or anybody else.

Steve
Jobs about
Apple's Culture
Corning
"I have one of the
best jobs in the Corning has a long heritage of inventing new
world. I get to hang technologies and creating new businesses. It
out with some of presents an excellent example of harnessing the
the most benefits of the in-company venturesand
talented, committed the business systems approach to new product
people around, and development and project management. Research,
together we get to development, and the innovation process are the
play in this sandbox lifeblood of Corning. It is an integral part of
and build these cool its culture and values-driven tradition.
products. Apple is
an incredibly Corning is oriented around innovation, built
collaborative on constant reinvention. "Discovering
company. You know Beyond Imagination" is a corporate slogan that
how many embodies literal truth... More
committees we
have at Apple? Dell Inc. Questioning
Zero. Everything
We're structured
like a start-up. "I wish it were possible for me to interact with
We're the everyone at Dell as I used to. But it's not possible
biggest start-up on to scale the number of interactions to be
the planet. And we consistent with the growth of the company",
all meet once a says Michael Dell, the Founder of the Dell
week to discuss our Inc. "We've found there are, however things you
business," said can do to bridge the distance between you and
Steve Jobs at the your people in a larger organization, and develop
company's the fast-paced, flexible culture that's a source
Worldwide of competitive advantage."... More
Developers
Conference. >>> "How we manage to maintain the attitude of a
challenger, even as we continue to grow at record
Winning speeds? Culture is, by far, one of the most
Corporate enigmatic facets of management that I've
Culture encountered. The best way I know to establish and
maintain a healthy, competitive culture is
Silicon to partner with your people through shared
Valley Firms objectives and a common strategy."... More

Silicon Valley firms "Mobilize your people around a singe goal. All of
have flat and our experimenting and questioningand learnin
participative g is done in pursuit of one goal: finding the next
management frontier of value that we can create for our
structures In a customers... Make failure acceptable as long
meeting rooms at as it creates learning opportunities. There's no
most Silicon Valley risk in preserving the status quo but there's
companies, the mix no profit either"... More
of people,
expertise, and ages P&G: Making Innovation the
is striking. More Norm
importantly, the
degree of candor is When asked 'What's the one thing you've done
tremendous. You that most inspired innovation in your
don't expect to find 7
organization?' Craig Wynett, the General Manager
such level of of Future Growth Initiatives at P&G answered 'What
frankness in we've done to encourage innovation is make it
hierarchical ordinary. By that I mean we don't separate it from
companies. the rest of our business. Many companies make
innovation front-page news, and all that special
Freedom To attention has a paradoxical effect. By serving it up
Fail as something exotic, you isolate it from what's
normal. You don't trumpet your ordinary business.
NobleFailure The same has to be true of innovation. For
innovation to be reliable, it needs to be
In more direct addressed systematically, like any business issue
cultures, such as in which you define the problem and then solve
Intel or Sun it."... More
Microsystems, you
can witness easily Innovation IsLove
an intense
argument between Value Innovation: Yin-Yang Strategies
a senior executive
and an entry-level The Jazz of Innovation 11 Guiding
engineer. Status Principles
and seniority aren't
based on age or Loose-Tight Leadership
position; they're
based on what you
know and can
deliver... More

Innovation-
friendly
Organization

Google

"We run the

company by
questions, not by
answers," says Eric
Schmidt, the CEO
of Google. "You ask
it as a question,
rather than a pithy
answer, and that
stimulates
conversation. Out of
the conversation
comes innovation.
Innovation is not
something that I
just wake up one
day and say 'I want
to innovate.' I think
you get a better
innovative culture if
you ask it as a
question."... More

10
Commandments o
f Innovation

GE: Energ
izing People

Jack Welch's
goal was to make
GE "the world's
most competitive
enterprise." He
knew that the the
current business
environment
requires an
energized,
energizing leader:
"You've got to be
live action all day.
And you've got to
be able
to energize
others. Your cannot
be this thoughtful,
in-the-corner-office
guru. You cannot be
a moderate,
balanced,
thoughtful, careful
articulator of policy.
You've got to be on
 the lunatic fringe,"
urged Jack Welch.

Welch urged
everybody
to stretch.
Stretch targets
energize. "We have
found that by
reaching for what
appears to be the
impossible, we
often actually do
the impossible; and
even when we don't
quite make it, we
inevitably wind up
doing much better
than we would have
done."... More

Systemic
Innovation: 7
Areas

http://www.1000ventures.com/business_guide/cs_
innovation_culture.htmlDon't Innovate. Create a Culture of

Innovation

Scott Edinger

While many organizations focus on addressing problems, the

most successful focus on raising the bar. One of the ways they do
this is by creating a culture where innovation thrives. When this
organizational strength is magnified, it can become a source of
competitive advantage.

One of my clients asked me to help identify the best practices of

leaders who were the most innovative in his organization. In
many interviews and meetings, there was very little discussion
about brainstorming, generating ideas, prototyping, and the like
the kind of things most of us think about when we consider
institutionalizing innovation. Instead, I heard what many of us
would call excellent practices for leadership. My one-sentence
conclusion: Excellence in leading innovation has far less to do
with the leader having innovative ideas; it has everything to do
with how that leader creates a culture where innovation and
creativity thrives in every corner. Okay, maybe I cheated by
having a sentence with a semi-colon but you get the gist in short
form.

So if that is the conclusion, then what are the things that leaders
must do to foster innovation? Here are five strategies that make
a profound difference.

1. Focus on outcomes

I was struck by the fact that leaders of these teams put a great
deal of effort into clearly envisioning and talking about the
outcomes in a given scenario, rather than directing how those
outcomes would be achieved. They did not micromanage, nor
did they abdicate. Rather, they painted a picture of the future
and held their teams accountable for how to get there. Clearly,
one of the ways that innovation is cultivated is by having leaders
who make sure everyone involved knows the outcome and
strategic goals of any objective. By focusing on outcomes and
results, these leaders free up a lot of energy for the creative
process of making it happen.

2. Develop reciprocal trust

Not the garden varieties of trust, but complete and shared

confidence in one another. I use the term reciprocal trust in
these instances because it was very clear that this was not simply
confidence that someone could be counted on to do a good job--
there was a much more palpable sense of trust that permeated
the relationships. Direct reports and close colleagues often
described their leaders as protectors and I frequently heard the
comment he/she covered my back." Certainly consequences
existed for going outside the parameters of a project, but never
for trying something that didnt work.

3. Challenge the status quo

The leaders I spoke with were by no means rebels, but they were
also not afraid to challenge people higher up in the management
chain. I did hear in a number of cases that they are fearless, or
that they possess a willingness to take on difficult issues, even
when it means expressing disagreement with higher levels in the
organization. They separate issues from people and are able to
disagree, without being disagreeable. Doing so cultivates
tremendous respect from their colleagues. One peer in particular
used the term healthy creative tension when describing the
atmosphere of meetings led by the innovator.

4. Be inspiring

For innovation to exist you have to feel inspired! said one

source. Based on the research in the book I co-authored, The
Inspiring Leader, (McGraw Hill 2009) I was not shocked to hear
so many comments related to this topic, because most of the
data indicate that no other leadership competency influences
productivity and engagement more profoundly. Similarly, when
people feel inspired by a leader they are more inclined to give
more effort and go the extra mile on a project. That extra effort
and commitment is often what produces innovation.

If the goal is easy to achieve, there is not much need to innovate.

A trend that I observed was that these leaders set stretch goals
that were very difficult to achieve. Moreover, they were able to
get members of their team bought in to the power of achieving
those goals. The goals set within these innovative groups
required entirely new approaches in order for the goal to be
achieved. The combination of need for innovation and
commitment to the goal fueled creative change.

So the next time you are wracking your brain to come up with
the idea that will save the day, or the innovative solution to your
problems, or just a better way to do something, put your efforts
into fostering and promoting innovation within your
organization. A culture where innovation thrives in every corner
is exponentially more valuable than a culture which anoints one
or even a few people as the innovative ones. If you create an
environment of innovation, who knows where your next great
idea will come from?