The 5 Pieces of the Innovation Culture Puzzle [Book Intro]

by Yoram Solomon

My 8th book just came out. To celebrate it, I thought I would share the introduction chapter in its entirety. Enjoy!

Introduction

One day in the summer of 2007, I flew over to Israel to meet with the local Texas Instruments team. After a few business meetings and a lecture I gave, one of the engineers asked to speak with me privately. Later that afternoon we met. He sought my advice. As it turned out, he was a very creative individual with many creative ideas. However, every time he presented his ideas to his management, they kept finding reasons not to implement them. He was very frustrated, and asked me why I thought management didn’t want to implement any of his ideas, and what could he do about that.

My answer surprised him.

“Your ideas were killed not by management, but rather by you.”

“How do you figure that?” he was now visibly frustrated with me, as well.

“It’s simple. Do you think your ideas were really great?” I asked.

“Yes! Definitely!”

“Do you think management failed to see the value that you saw in them?” I pressed.

“Of course!”

“So what did you do about it?”

He didn’t have a good answer. He paused for a few seconds.

“What could I do about it? Once management said no, that’s the end of the road,” he replied, “Isn’t it?” He was hoping that I will tell you that it wasn’t the end of the road. Which I did.

I explained to him that management was highly unqualified to evaluate his ideas. He knew the technology much better than them, and they haven’t done any serious market study to know the value his ideas had with potential customers. Furthermore, research showed that for every single successful market launch of a product, 3,000 ideas were conceived, and through a process of elimination and natural selection, 2,999 of them were eliminated[1].

If we let management determine the viability of new ideas, not only that we burden them with an overwhelming number of ideas to screen, but due to their lack of qualifications (and I say this in the most respectful way) they run the risk of high rates of false positives and false negatives.

“So why was I the reason my ideas failed?” he wanted to know.

“Because you took no for an answer,” I explained to him. “You knew your ideas were good, and you let management stop you.”

Two years earlier, I stepped out of the office of a senior vice president in the company, after he refused to allocate resources to what I believed was going to be the next generation of connectivity technology: USB 3.0. I didn’t take no for an answer, and with the help of a few, highly qualified engineers, we’ve put together a prototype, presented it to Intel, and the rest is history. More than 4 billion USB 3 ports are shipped every year.

◆ ◆ ◆

This book represents the third stage of my thinking about innovation in the workplace.

The first stage started when I conducted my doctoral research from 2008 to 2010 (which was published in my book From Startup to Maturity). The purpose of that study was to understand why people were more creative in startups than they were in mature companies. The results overwhelmingly pointed towards culture. Startups have cultures supportive of creativity and innovation, while mature companies have cultures that are less supportive, if not even preventing innovation. While studies before mine showed quite a few factors affecting organizational creativity, they really boil down to four groups of factors. Two at the corporate level and two at the team level. At the corporate level, those were autonomy (with a positive effect on creativity) and bureaucracy (with a negative effect on creativity). At the team level, those were the ability to conduct constructive conflict (with a positive effect on creativity) and office politics (with a negative effect on creativity). So now I knew. The question was: what do I do with this new knowledge?

Shortly thereafter I found a new mission for myself: I became committed to helping Corporate America (and large companies in general) change its culture, and make it supportive of employee creativity and organizational innovation. That’s when I founded Large Scale Creativity. This was my second stage. My focus remained on corporate culture. I recalled a quote that was attributed to Peter Drucker:

“Culture eats strategy for breakfast.”

I began delivering workshops to Fortune 500 companies on how to change their culture so they could become more innovative. Consistently innovative. In 2016, I published my fifth book: Un-Kill Creativity: How Corporate America can out-innovate startups. In that book I laid out what mature companies had to change in order to create a culture supportive of employee creativity and the resulting consistent innovation.

In that book I developed a model of the vicious cycle of trust and innovation (below) between management and employees.

 

As the model shows, the cycle starts with the trust that management has in employees, making them (management) feel comfortable giving employees the autonomy so desperately needed for creativity (and, at the same time, reduce the bureaucracy that prevents it). Once employees get the autonomy they need, both quantity and quality of their ideas increase, as well as their willingness to try new things, and to pursue experiments further. The trust that management has in employees is also required to allocate resources (often scarce) to implement those ideas. The implementation of creative ideas results in innovative products, services, processes, and/or business models. If this culture of trust and autonomy is engrained in the company, then innovation will be consistent. Research showed that consistently innovative companies achieve market shares that are six times higher than the average company. They make three times the profit, and perform 50% better during recessions. In fact, it also showed that if the profitability of the consistently innovative company and the average company were normalized for year 1, then by year 5 the innovative company would generate 300% higher profits than the non-innovative company, and 400% more in year 20[2].

And what would those financial results of innovation do? Well, they will further increase the trust that management has in its employees, and thus autonomy will grow further, while bureaucracy will be reduced. And the cycle continues.

Of course, if management lacks the trust required, there would be less autonomy, more bureaucracy, less creative ideas, which would not be worth implementing, and the vicious cycle would become the long spiral death of a company through a thousand paper cuts.

There are several problems with this model, though. First of all, it appears to put the entire burden of creating a culture conducive of creativity solely on the shoulders of top management. This would explain why that Israeli engineer blamed management for the lack of support, vision, and willingness to take risks. The model above supports his position. The second problem was that I could think of quite a few instances in which employees took initiative without their management’s support, or even knowledge. In fact, in some cases employees took initiative after their management specifically told them not to. I was part of some of those. One of those stories is included in this book.

And hence my third stage of thinking about innovation. The vicious cycle described above can be kick-started at the autonomy block, without requiring management to trust employees. In fact, this autonomy is not given to employees by their managers—it is self-proclaimed by them. What would happen if employees took the liberty to do what’s right for their company, without permission? What if the role that management plays in creating a culture for innovation was limited to staying out of the way? To simply refrain from punishing employees for trying new things and failing? After all, those who never try will never fail, but they will never succeed, either. The answer is obviously somewhere in between. Both management and employees have the responsibility to create a culture for creativity and innovation in their company. None of them can wash their hands from this responsibility. And this is exactly what Culture starts with you, not your boss is all about.

◆ ◆ ◆

When it was time to write Un-Kill Creativity, I had a wild idea. Instead of writing it as a classic non-fiction business book, why don’t I write it as a fictional story that delivers the message, but in a less business-like manner?

I ran this idea (as I do with almost every idea) by a few trusted friends and advisors. The majority of them talked me out of it. As a result, Un-Kill Creativity was published as a classic business book.

And then, one day, I came across Patrick Lencioni’s book The Five dysfunctions of a Team. It was a business book written as a fiction story! Not only that, but it is a very successful book that helped Lencioni launch his consulting firm, The Table Group. It is a very engaging book, easy to read, and drives the message well. I enjoyed reading it, as much as I enjoyed reading a few of his other books: The Ideal Team Player, and Getting Naked, both written in the same manner, as fiction.

As my thinking slightly shifted toward assigning the responsibility for corporate culture to the employees themselves, it was time to write this book. However, this time I decided to write it as a fictional story. The advantage of writing it as fiction is that I had more freedom with the story. Instead of telling true stories, I could tell stories that were inspired by real life, but in a way that would help me make the points clearer. Some of them are closer to real events that took place, and some less. I had a role in most of those stories in real life, but here they are told in third person. All the names are fictional.

Instead of writing the entire book as a single story, I decided to split it into nine short stories. To me, a culture of creativity and innovation comes from people. For that reason, each story is named after one of the main characters, and not the companies, products, or anything else. To help discuss the main points in each story, I added hypothetical interviews with one or more of the characters in each short story.

After you read the nine stories, read the chapter that describes the model that emerges from them. Then read the Epilogue: building trust. After that, read the stories again. You will be able to identify all the elements of the model in them. I enjoyed writing this book. I hope you will enjoy reading it. And remember…

Corporate culture starts with you, not your boss.

[1] Stevens, G., & Burley, J. (1997, May). 3,000 raw ideas = 1 commercial success! Research Technology Management, 40(3), 16.

[2] The Profitability of Innovating Firms, Paul Geroski, Steve Machin and John Van Reenen. The RAND Journal of Economics Vol. 24, No. 2 (Summer, 1993), pp. 198-211; and—

Product Innovation, Product-Market Competition and Persistent Profitability in the U.S. Pharmaceutical Industry, Peter W. Roberts, Strategic Management Journal, Vol. 20, No. 7 (Jul., 1999), pp. 655-670

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Dr. Yoram Solomon is an inventor, creativity researcher, coach, consultant, and trainer to large companies and employees. His Ph.D. examines why people are more creative in startup companies than in mature ones. Yoram was a professor of Technology and Industry Forecasting at the Institute for Innovation and Entrepreneurship, UT Dallas School of Management; is active in regional innovation and tech transfer; and is a speaker and author on predicting technology future and identifying opportunities for market disruption. Follow @yoram

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