Customer-centric Innovation propels growth. But how do you make customer focus and constant, cyclical innovation part of the machinery of your business? How do you build it into the culture of the organization? How do you graft innovation into your DNA?
First, recognize that “culture” is an output, not an input.
Act, and your culture responds; culture emerges as an equal and opposite reaction to every claim your leaders make, and every action your organization takes.
20 years ago, Baxter Healthcare challenged our team to help transform their culture. Having spent the prior decade as an organization and instructional design specialist in the Change Management practice at Accenture, I was confident my colleagues and I could help them realign their business for growth in a changing industry — an early specter of cost containment waves to wash over US healthcare.
We took two false tilts at Baxter’s culture and realized we were charging through vapors.
It dawned on me that, like Don Quixote’s windmill, we were attempting to lance the wind when we needed to slash the blades. We eventually got it right. We crafted the Propeller Model™ to explain this insight. (Don’t worry if you’ve run across a more detailed version of the Propeller Model. Todd McCullough incorporates it into his strategy & innovation curriculum at Vanderbilt’s Owen School of Business, and Chicago’s Institute of Design. I use it in my syllabus at New York’s School of Visual Arts. We’ll keep it high-level here.)
Straighten up and fly right.
If you aspire to propel growth in new ways or through uncharted markets, you need to redesign the means of propulsion. Let’s shift from windmills to a different kind of propeller.
Think of your organization as an airplane.
You want to propel your craft toward a vision somewhere in the future. It should be specific. Claim your unique destination; no one ever attempted it before, because no one ever started from your position. There’s no map to chart your path. You can’t see wind shears. But they’re out there. Please return your seats to the upright position.
Your mission or “purpose” serves as the hub, the center of force. It points the organization toward your intended destination. Your strategy maps the route, and leaders constantly reorient in the face of buffeting market headwinds. Strong captains inspire confidence in the face of unknowns. Announce your mission and the challenges you expect. Publish a visible and consistent mandate. Update your passengers along the way. The propeller blades describe the alignment of the organization to pull forward as one – talented, dedicated people equipped with a clear, shared innovation process, enabled by an integrated structure that allows them to operate seamlessly across businesses and markets.
Culture is always the result – the vortex left in the propeller’s wake. Imagine symmetrically honed blades cutting effortlessly through the atmosphere. Perfectly engineered for a smooth take-off and a comfortable ride.
Now imagine the more probable reality.
Your innovation process is haphazard and undocumented. That propeller blade’s cracked right down the middle. You have not reorganized your business to align with new growth goals. Your structure blade is bent. Your disgruntled people won’t say it out loud, but they don’t really trust your resolve. Your people blade is dull and twisted. Brace yourself to fly this jalopy. Spin the prop.
Welcome to the bone-jarring cacophony that rattles your fuselage apart at the seams. Your culture reflects what you build — smooth alignment or exhausting turbulence. Align your business, or suffer a very choppy ride. And don’t forget to pack your ‘chute.
Winners share one trait.
The world’s leading practitioners of customer-centered innovation propel through different markets with different offerings for different customers. But they all share one very sophisticated trait. They align around a singular purpose – a shared worldview and mission. And they organize themselves to pursue that purpose rigorously and relentlessly.
Amazon did not aspire to be the world’s largest bookstore. Jeff Bezos declared a vision to build the world’s most customer-centric company. Their dedication to continuously learn individual consumer preferences is built on an agile learn-and-adapt organization, constantly reorienting vast, expanding infrastructure to serve evolving consumer insights.
Designers know that form follows function. Harvard professor Alfred Chandler observed in his ground-breaking 1962 Strategy & Structure that “Structure follows strategy.” Markets change; so must strategies, with the organization to follow. Rigid structures cannot flex and ultimately fail.
Clayton Christensen captured his observations of disruptive innovation in the Innovator’s Dilemma. A central theme of his work: to understand the underlying “job” that your customer tries to do so that your products best match their need. Designing the capacity and demand for deep consumer empathy is essential to sustainable innovation success.
Thomas Edison described the genius behind successful innovation as “one percent inspiration and ninety-nine percent perspiration.” General Electric still practices Edison’s ethic of insight-driven invention, where innovation is organized as a cross-functional management system. When designed into your operations, and practiced as an integral discipline, innovation can give you the engine to open new markets, serve new segments, and build a more profitable portfolio of growth products. Here are the steps.
1. Declare your mission.
Your mission, at the center, emanates from leaders’ real intent. Many executives pay lip service to the need to innovate, along with other employee-friendly gibberish. Whether you speak truth or lies, your words and actions will out. So speak from the heart; it takes a lot less effort. Inspire and empower your teams to do the same. Unmask false promises and punish lies. Innovation is hard. You fight through periods of uncertainty and ambiguity. A consistent mission wins trust. Your people will persevere when they believe you see innovation as vital to success.
2. Document your process.
“If you can’t describe what you are doing as a process, you don’t know what you are doing.” ~ W. Edwards Deming
Chart out how innovation works. How should we discover new opportunities? Where do valuable ideas come from? How do we parse the few good from the many bad ideas? How do we select, fund, review, approve, renew and kill concepts as they evolve? What tools, rules, and policies inform each stage? What degree of flexibility and adaptability should we permit?
Innovation iterates. The process looks like loops, cycling continuously. That can confuse the uninitiated. Until they understand the process, it may be helpful to just draw a straight line.
Start by defining your goals in specific financial terms – the revenue or market share you need, by what date, to meet your growth goals. (“We either get $500MM in year 3 and win that market, or we get the hell out.”)
March through the specific activities, to discover unmet needs, define and prototype differentiating solutions, and test them in market. Iterate your way to success. When everyone understands the process — the same process — you have repeatability; you have accountability; you can interrogate, measure and improve. You can drive growth.
3. Design your structure.
Once you know what you have to do, you can figure out how to do it. Please get the sequence right. DO NOT start scribbling org charts before you know the process. It astounds me how executives jockey for influence by leaping to build tiny empires. It’s often more innocent. I suspect we default to a natural tendency to design around ourselves first.
Start with process. It’s easier to draw a process line than a structure tree. Structure comprises formal and informal systems, hierarchies and networks. These include infrastructure, physical plant and information systems.
Don’t forget extended relationships beyond the organization — partners, suppliers, regulators, retail channels, even competitors, and of course always with your customers at the center. You’re designing the whole shebang.
4. Equip your people.
You’ve heard the countless well-intentioned pleas to put people at the center of the organization. That’s valid, as long as we’re talking about the RIGHT people. So let’s be honest. We love our people. Don’t know what we’d do without ’em. But “the people” don’t come first. They come last. You wouldn’t pick a team before you knew what sport you were playing. Nothing like assembling a hulking squad of sumo wrestlers only to discover the race is steeplechase.
Know what you need to do. Figure out how to do it. Determine who you need to do it. Get them; direct them; support them. And remember that you may find not everyone is willing or able to make the shift.
As Jay Marhoefer, the former head of organization effectiveness at UNUM insurance once told me, sometimes, to change people, you have to change people.
Please don’t hear this as a bloodless inducement to line up the firing squad. People ARE your most important asset. But retaining the wrong people in the wrong roles punishes everyone. It really is cruel to be kind. So get it right. Trust your people to handle the truth. Line up the talent, structure the teams, and enable people to act in accordance with the goal. Don’t delegate this to HR. Leaders lead people. Think through competencies & capabilities, attraction & retention, training & development. Screw that up and you have a very expensive, very slow ride to low growth. You’ll probably clip a few hedges, too.
5. Monitor your culture.
No matter what you do, culture results. If you don’t like your culture, change the organization. Determine the values you want, then test against the values you’ve got — as a set of shared beliefs, expectations, attitudes, heritage and identity. Remember that your culture is simply the whirlwind left in the wake of your propeller. It’s hard to get your arms around swirling mist. Even harder to measure. But you can, and I’ll describe how it’s done using the Innovation Maturity Model™ in an upcoming post.
“Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.” ~ Albert Einstein
Mind the gap.
Of course, unless I’m catching you right out of the gates, your organization already exists. You care about innovation because the original ideas that spawned your company no longer yield sufficient growth. You don’t enjoy the entrepreneur’s luxury of designing your organization from scratch. Your job then: diagnose and redesign. The same steps apply; just add one. Draw the Process you need, for example, and then measure it against the processes you have. Same with Structure. Same with People. Or jump to the end: describe the Culture you want, then assess the one you’ve got.
Find the gap. Fill it. In an upcoming post I will describe how Todd McCullough and our colleagues at Ampersand help clients like SC Johnson fill their innovation gap, using the Innovation Capabilities Matrix™.