Thursday, August 30, 2012

A Culture of Innovation or Learning - Which Do We Need More?

Do organizations want to establish a culture of innovation or a culture of learning?  Put another way, is it more meaningful and realistic for an executive to ask his or her people, "What have we innovated this week?" or "What have we learned; what insights have we gained this week?"

It's very easy to get caught up in the buzz surrounding innovation.  After all, who doesn't want to be innovative?  A Google search of the term "culture of innovation" yields about 3.4 million hits while a search of "culture of learning" yields about 1.3 million hits.  This provides some perspective on what the current emphasis is.

Yet, while innovation (a change in the way people do things because of a new product or service accompanied by the significant adoption of that new or changed product or service) is by definition, an outcome, an organization's culture is not an outcome.  Instead, it is a performance enabler and many would say, the most important enabler.  The values reflected in an organization's culture enable outcomes like innovation.

Therefore, the meaningful question is:  What core cultural values should an organization that values innovation emphasize?

There are three cultural pre-conditions / values for innovation.  These are critical thinking, discovery, and learning.

Critical thinking is not just about questioning the status quo.  It's about reframing the situation and imagining the possibilities through deeper and more probing questions to achieve those possibilities.  Phil McKinney (@philmckinney), former vice president and chief technology officer for Hewlett-Packard's personal systems group wrote:  "There are many ways to generate new input, but the most effective is to learn to ask the kinds of questions that can lead you to a real discovery. This is true both of the kinds of questions you ask other people, and the ones you pose to yourself."

Critical thinking skills that drive the right questions can be a differentiator in today's business environment.
  • What's the change / impact that we want to achieve?
  • What can be improved to achieve this impact?
  • How can it be improved?
  • Is a change likely to resonate with one customer or market segment more than others?  Why?
  • What improvements have been previously attempted?   Can those efforts be leveraged?  Why did those efforts fall short?
  • What are the risks with this change?
  • What are critical success factors for this change to succeed?
  • Are those factors within our control and can risk be effectively mitigated?
  • If not within our control, how can we effectively mitigate risks?
  • Who's likely to embrace such a change?
  • Who's likely to challenge it?
These are just some examples.  Most importantly, critical thinking recognizes that there are consequences and implications associated with actions and seeks to proactively determine what those are and what additional actions might be needed - within reason.

Discovery via experimentation, research, and reflection is the linchpin that connects critical thinking and learning.  Questions posed during the critical thinking process should be addressed by structuring experiments or pilot projects to discover what the possible answers and insights are.  There is a rigor that should be applied to the conduct of experiments.
  • What insights are sought as a result of the experiment or pilot?
  • What's the current performance baseline?
  • What people and processes should be involved in the experiment?
  • Who are the stakeholders who will be interested in this experiment?
  • What is each stakeholder's involvement?
  • What resources are needed?
  • What data is needed?  Is the data accurate?
  • What conditions should be replicated?
  • What are the hypotheses?
  • How will these hypotheses be validated or invalidated?
  • Is there a common agreed upon definition of success and failure between the key stakeholders?
These questions are presented because it's important to recognize that valuing and emphasizing a culture of learning requires investment and the commitment of resources.  Such a culture recognizes that there are also likely to be failures.  Most importantly, failures and successes need to be accompanied by learning.  Celebrate and value learning, whether it be from failures or successes. The learning that results from experiments and pilots can be a risk mitigator in the actual product or service roll-out or implementation.

Apple is often referred to as a successful innovating company.  It's worth remembering that Apple also had some notable failures such as the "first commercial PC [named Lisa] to use a graphical interface and then-cutting-edge concepts such as preemptive multitasking" but with a $10,000 price tag, "Lisa was slow, ungainly, and amazingly expensive."  The Apple Newton had an "ungainly size, woeful battery life, and hard-to-read screen."  Nevertheless, Steve Jobs ensured that Apple learned from these failures to produce the Macintosh personal computer and the iPhone.

Peter Sims (@petersims), the author of "Little Bets:  How Breakthrough Ideas Emerge from Small Discoveries," in addressing the importance of discovery to innovation, wrote:  "Leaders, managers and collaborators ... must to be willing to learn from mistakes. Affordable risks should be encouraged, and small failures celebrated - these are the mark of learning organizations. Otherwise, risk aversion will lead to stagnation and decline."

Discovery can also result from querying front-line employees and customers, conducting customer and market research, monitoring social media platforms, analyzing data, and putting one's self in the role of a customer purchasing products and/or services from one's company.  Although these are some examples of discovery actions that may be conducted separate from experiments, it is critical to track, coordinate their execution with other discovery initiatives (Are there elements common to more than one discovery initiative?), and share knowledge gained from these actions.  The worst kind of discovery is that which is siloed and whose results are not shared.

Another important but often-times undervalued means of discovery is the knowledge that can come from being part of relationship-based formal and informal networks that provide an opportunity for reflection and exposure to ideas and information that one might not necessarily learn outside of these networks.  Reading books, journals, and newspapers about what others have done and are doing can also provide an opportunity for reflection and discovery.

Steven Johnson's (@stevenbjohnson) book, "Where Good Ideas Come From: The Natural History of Innovation" has great examples of people who who valued discovery and leveraged the insights of others in the development of their innovations.

Per Bill Gates' (@BillGates) review of Steve Johnson's book:  "In the 1870s, a French doctor, Stephane Tarnier, saw incubators for chicken hatchlings at the Paris Zoo and hired the zoo’s poultry-raiser to build incubator boxes for premature newborns at his hospital. Other hospitals at the time were using devices to keep babies warm, but Tarnier was the first to conduct research showing how incubators significantly reduced the infant mortality rate, leading to their widespread use in Paris and beyond."  The impact of this 1870s discovery has had a huge ripple effect in the years since.

Adam Hartung (@adam_hartung), a Forbes columnist, CIO magazine columnist, and the Editor of the International Journal of Innovation Science, in the wake of Neil Armstrong's passing, wrote an excellent column about the importance of discovery via the NASA space program.  He cites a number of NASA innovations "that have driven economic growth" and created ripple effects.  These include the microwave oven, frozen food, water filtration, high powered batteries, and scratch resistant lenses.  When President Kennedy articulated the goal "of landing a man on the moon and returning him safely to the earth," we did not foresee these innovations.  Yet, as Adam writes:  "The journey of discovery unleashes opportunities which create their own benefits – for society, and for our economy." 

Taking what has been learned, extracting insights, and determining what decisions, actions, and adaptations should be taken may be the most challenging step that accompanies the establishment of a learning culture.  Decisions, actions, and adaptations may require changes in a product or service line, lines of business, associated profit centers, and intra- and/or inter-enterprise relationships, to cite a few.  Another challenge is recognizing and accounting for biases that may exist that can affect the actions decided upon.  Nevertheless, the application of critical thinking, discovery, and learning in getting to this step provides leaders with a solid basis for making informed insight-driven decisions.

Leaders recognize the importance of innovation.  This is not enough.  Recognize, value, and institutionalize the pre-conditions for its success to have organizations be seen as innovative market leaders and influencers.  Look no further than to Steve Jobs for the importance of learning.  "After creating great products that only reached the few, he returned, learned and adapted his vast creative talents to create whole new product categories, distribution models, creative platforms and customer experiences that have positively impacted the lives of millions."

Don't just celebrate success.  Take the harder steps to learn from success as well as failure and build a culture of learning to be truly innovativeTeaching an organization to learn how to learn can result in an important legacy with meaningful ripple effects.

Friday, August 24, 2012

Strong Leadership Makes Core Competencies Work

Daniel Rasmus posted an intriguing article on Fast Company, "How Clinging To Core Competencies Is Breaking Your Organization’s Heart."
The focus on an "organization's heart" and its "emotional infrastructure" is good but an emphasis on core competencies does not break that "organization's heart."  Instead, a lack of leadership will do that.

A leader's two most important qualities are authenticity ("Walk the talk") & credibility ("Do the do" / be competent).  If leaders profess to care about their employees but don't back that up via their actions, that's what breaks hearts.  If leaders don't know how to take care of their employees, that breaks hearts.

Likewise, strong leadership makes core competencies work, not just by leveraging knowledge and skills but by inspiring people to understand, see, and believe in the impact of their work.  Per Daniel's post, "passion and dedication creates value as much as seamless execution."

A focus on core competencies does not necessarily result in organizations "becom[ing] less able to adapt." A core competency's value should be evaluated not just on its execution but also its market value.  Assessing its market value should be driven by two questions:  1) Does it resonate with customers?  2) Are there market changes that can impact this competency?

If the answer to the second question is yes, then possible adaptation and change issues should be addressed.  Successful adaptation cannot be accomplished without knowing what to adapt to and how to to adapt.  This requires knowledge and learning.  Speaking of core competencies, learning to adapt one of the new ones.  This is a leader imperative and responsibility - especially now given the increasing speed and frequency of changes in market dynamics.

Daniel's point that "emotional infrastructure is the binding element that keeps an organization together in times of challenge, and facilitates celebration in times of plenty" is excellent.  An organization's "emotional infrastructure" can either enable or degrade its performance.  It also doesn't happen by itself.  Leaders create that infrastructure - for better or worse.

Marketing differentiating core competencies supported by a positive emotional infrastructure creates a compelling value proposition.