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How to Define & Build a Culture of Innovation.

Jon Boggiano

I returned to the Digital: Disrupted podcast and had a follow-up conversation with its host, Paul Muller, about how organizations should define their goals surrounding innovation. We also talked about how people, problems, and processes aid in building a culture of innovation.

Listen to the episode here or continue reading for a summary of the discussion…  


Technology is often a synonym for innovation. ie, let’s rub AI on what we’re doing, and that’ll fix our broken business. How do you feel about that?

To me, innovation is the process and the art of solving problems more creatively than maybe they’re being done now. And so, innovation is doing something new, better, or different. Technology’s an enabler. IT itself is not innovative. Innovation is a process, and it’s a mindset that anyone can learn to do. Innovation starts with people and having empathy to understand the obstacles they face and then thinking creatively to remove that frustration and find a better way of doing things.


Why is innovation as a term used so frequently by businesses and people?

I have a love-hate relationship with the word innovation. It's used flippantly in a lot of places. I mean I hear it everywhere. “We want to be innovative…” “We are innovative…” I mean it is amazing how I hear it everywhere because I'm attuned to it. But I think in most places it's not defined. It's usually described as an adjective that really doesn't have any meaning. It's a virtue signaling thing. There’s no practicality behind it. And if I could come up with a better word for it, that was universally understood, I would. But yeah, it's the challenge is, you're fighting a lot of noise that has just burnt people out. So, they hear it, you tune it out and you don't even think about it.

The first step in the cultural innovation process for the company or the leadership is to define what they mean. You routinely read CEO statements or board statements about a company that wants to be innovative without defining what that means. If you’re Ford Motor Company, does that mean you’re going to improve the fabric of the seatbelt, or does it mean you’re going to design the flying car? Those are two very different examples of innovation. And they just say, “We’re going to be an innovative company.” Okay, well, what does that mean?


You talked previously about the innovation mindset. What is that?

As an individual, it comes down to curiosity. Curiosity drives learning and experimentation. And a good analogy as an individual would be if I gave you a math test like 1+1, there’s a right answer. It’s 2. But if I gave you a bunch of Legos, and we do this in a lot of our innovation bootcamp sessions, we’ll put Legos on the table and we’ll take this glass marble and have it drop from the table to the floor without breaking. And you build a Lego structure. If you had five teams in a room, there’d be five different ways of doing that that would all accomplish the objective. So that’s an example of experimentation of play. The structures fall over and then you could say, “Okay, now that you’ve built it, reduce the number of Legos to make it more efficient to be able to do that.” And so that’s an example where five teams can accomplish the task very differently without it being the right answer. That innovation mindset is more like playing with Legos and less like doing a math test in school. And everybody’s got a piece of that in themselves.

For the organization, it’s a slightly different challenge. It is encouraging that curiosity. Every organization has creative employees within it already. And a part of the innovation process is finding them and empowering them to go learn things and solve problems. It really comes down to enabling your curiosity-seekers to learn new things and conduct experiments. In the business world, we have a bad habit of thinking that every project must succeed. We don’t tolerate failure.And that’s the antithesis of innovation. If it can’t fail, it’s probably not going to be innovative.


If you ask five teams to design something with Legos, you’re probably going to pick only one of those as the big idea, which means 80% of your work’s going to be thrown away. How do you get leaders’ heads around the idea that innovation is risky and wasteful?

Innovation is all about people. It’s inspiring and motivating people to want to solve problems. And the organizational leader’s responsibility is to define a process for that to happen. And the way that you constrain that waste is you stage gate it or sandbox it. You start really, really small. You conduct very small experiments that are low cost, very quick, low effort, and you conduct lots of them. And then as you move forward, you then conduct bigger ones and bigger ones to the point where the company starts to have to make the decision to commit serious resources. But you constrain it by basically stage-gating the process so it’s very, very small. By making it very small, you de-risk it. And then as those experiments teach you something, you come back and say, “Okay, we’ve learned X. Now we want to spend X to validate these core concepts.” And you work your way up the value process there. But it all goes back to people focused on a problem following a process. And a lot of times that process needs to happen outside of the existing organizational structure.


What does that mean?

Very commonly you have responsibilities for any one project split across multiple departments. You have purchasing, you have a business unit, sometimes you have multiple business units, you’ve got a PMO office, you’ve got the IT department – you’ve got all of these stakeholders responsible for any one project, big or small. And any of them will slow things down. Purchasing can slow things down tremendously. And every time you slow it down, the curious person who’s trying to conduct experiments slows down their learning, and they lose momentum. So especially in the early stages of innovation, if you can pull them out of that process where they’re given the authorization to disregard the purchasing rules, to make decisions quickly… Let them make decisions at a very small micro scale. Now at some point, when you start to beyond prototyping and you want to scale, it needs to come back into the capital planning and all that type of stuff. But for the most part, you need to have a process that enables them to experiment quickly to learn and experiment very, very quickly and outside of the process. So the leadership needs to set a process for innovation that is outside of the existing norms. Because if you have to wait six months for approval to conduct an experiment, the person that’s motivated to do that is probably going to lose interest in that six months.


When we talk about process here, is there a prescriptive set of processes or methodologies that I can pick up off the shelf and apply to every organization? Or is it going to have to be handcrafted each time if I’m trying to build that culture?

The innovation process works across organizations. Doesn’t matter whether you’re Mattel Toys or an energy company or a government organization or a startup. I like having this structure because once it’s there, when you have a change in middle management, senior leadership, you have personnel turnover, you have a new CIO, you have a newCEO, it’s more definable for them to grab onto. Innovation is usually driven by someone comes into an organization and wants to “make it innovative.” So you have an individual that’s driving this process within a company, they have a set lifecycle, they’re probably not going to be there more than 2-4 years because that type of person typically gets bored and wants to solve new problems.And so they’re going to move on. Their challenge is to get enough of this process and enough of these tools in place so that it has longevity within the organization.


What are the motivating factors behind building a culture of innovation?

Innovation typically has to relate to the bigger why. Why does the company exist? What is the problem it’s solving in the world, and how do we do that better? In the case of Mattel Toys, it’s bringing joy to a child’s life. And then you want to inspire your employees to that bigger why. In the case of a utility, a lot of them are driven by either security because they’re worried about as the grid changes, threats to the security of the grid, they’re motivated by climate change or how we generate power has to change and it has to change quickly to overcome climate change. And so if you want to solve a problem, framing it that way, so it inspires employees. So tome, creative an innovative culture arks back to what’s the purpose and the mission of an organization? Why does it exist? And connecting that why to the employees, which by the way also leads to recruitment.

If you want to recruit more innovative employees, more inspired employees, innovation ties directly into the purpose, that the reason that organization exists. Like it’s great if you want a job for paying benefits and stability, but a lot of people also want to be motivated. They want to know that what they work on matters, and it matters so much that we need to find a way to do it better.

When you think about the word problem, which is something you ground your definition of innovation in, it’s looking for problems that would have value if they were solved. There’s a lot of boring stuff that can be fixed through innovation. And that’s not necessarily the domain of a product creator. It could be an administrative assistant who’s looking at something, thinking “This process is bad for employees, it’s bad for customers, let’s fix it.” Tell me your thoughts on this.

With most of the organizations we work with, innovation doesn’t start at the CIO or the CEO level. It can start at just about any level. It can start small, and it can grow bottom-up, and it can ultimately get the attention of the executives who can latch onto that. You don’t have to wait until you as an individual are an executive, in a position of power to be able to implement a lot of these organizational strategies.

I’d say that frustration is one of the roots that drive curiosity and innovation and innovative culture. Everybody gets frustrated. If I’m filling out a form, if I’m waiting on purchasing, if I’min IT and the business unit’s giving me a hard time because something didn’t go right, all of those are making my individual day worse and I’m now frustrated, and I should be asking the question of how do I make this better? How do Ia void this in the future? How can I be closer to the business unit? How can I solve the purchasing? How can the project be better? Every one of those would spark curiosity in me. Every time I submit a form to a government agency, and I know they’re manually processing it on the back end, I’m like shaking my head.I’m like “Oh my God, you’re going to take six weeks to give me a yes or no on something that’s a simple decision. Come on! Business has been automating that20 years ago, let’s get on with it!” And so I would say that’s an example where individuals have the power. That executive, that administrative assistant that can go talk to the person they’re submitting the form to and say, “What are you really doing with this? I’m filling out 20 fields here. Are you using all of them, or is this just what you’ve done historically? Can I just give you the two that you’re actually using?” That’s a form of innovation right there. It’s maybe not world-changing, but it’s going to change her life and make her life easier.That really is defining innovation. Anything that frustrates you is an opportunity for improvement.


One last thing about the culture of innovation is creating a safe culture, where people can ask “dumb” questions and not feel like their questions and ideas will be squashed by another. Can you speak to that?

About a third of the work we do is mindset and empathy-oriented. With individuals, what are my self-judgments, myself-critical judgments that keep me from sharing authentically? So arming people with the knowledge that, hey, just because you’re young, just because you’re different, just because you’re new, doesn’t mean your contribution isn’t valued. Instead of viewing those attributes as weaknesses, we view them as benefits. When you get the beginner’s knowledge, the beginner’s mindset is so much more powerful than what we call the curse of knowledge. The person who’s been doing a job for 30 years can’t see how to do it differently, whereas the brand new person that comes in can ask the dumb question.

The empathy piece is really important because that gets back to the problem you’re solving. Understanding the problem means you get to go out and talk to people. And when you talk to people, you need empathy to talk to them because you need to understand what they’re actually saying, not what you think they’re saying, that you’re not projecting what you think, you’re trying to understand how they think.

Empathy-building exercises can make founders and leaders better at project management, product management, and at acquiring employees. I’m a big believer in empathy, and I think that empathy is the core of innovation. And diversity, I absolutely think diversity when done in an empathetic setting, leads to more innovative outcomes. You want five different people at a table that have five different points of view to get a complete picture.

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