This article is part 3 of a 5 part series where we take a deep dive into the 5 common challenge to innovation that an organization faces. This article focuses on the common struggle of identifying and pursuing ideas that align with the corporate direction, while ignoring others that are a distraction.
Don’t Build a Car When You Need a Canoe
One of the detriments of soliciting ideas from everyone is that many won’t be viable options. And that’s OK, because in the early stages of our InnoSpecting Framework we want to encourage everyone to participate. We want to encourage everyone to be a part of the process and be engaged. Its a natural part of growing a Culture of Innovation.
But it doesn’t mean that you’ll use them all. It doesn’t mean that you’ll use 99% of them. Heck, you may not use 99.99% of them. But considering that ONE good idea can set you on a decade of prosperity, what you don’t want to do is limit them.
The art of leadership is saying no, not saying yes. It is very easy to say yes.
– Tony Blair
To avoid drowning in an ocean of unfocused, whimsical ideas, what we coach our partner clients to do is establish a process that allows for the review of the ideas. And then identify a rising star within the company and put them in charge of it.
The role we have identified for that effort is what we call the InnoSpecting Champion. And that position may be the single most important role within our entire InnoSpecting Framework.
This role doesn’t make the “yes” or “no” decisions on the various ideas, they often don’t even have the power to do so. Instead, what they are responsible for is understanding and tracking the “pulse” of the industry (Where are your customers going? Where are your competitors going?) and tracking the “pulse” of the company (What separates you from your competitors? What challenges is your company facing?).
To do this, they need to understand the intent of the submitted ideas. They need to be forward looking and be able to understand how or if that idea may fit into the corporate direction set by the Executive staff. They also perform an initial priority ranking, and then pitch the Executive team and/or Board of Directors during the regular Innovation Pulse meetings about which ideas should be considered for funding based on that priority ranking.
Hopefully, with that as a backdrop, it becomes clear that the role of InnoSpecting Champion is tough. Luckily, there are a few ways that executives can help set them up for success.
Communication Is Key
Many companies build and execute a communication plan to attract new customers. But very few we have worked with put as much thought in communicating with their staff. Somehow, that falls to managers or coworkers to spread the word. Which then leads to an awful game of Chinese Whispers and can probably most succinctly be expressed in the below Dilbert cartoon.
A good communication plan needs to outline the direction of the company, and then relate how each employee aligns with that direction. Our approach, which we work with our partners to implement, was heavily influenced by Verne Harnish’s book Scaling Up. It focuses not only on establishing and identifying the corporate direction, but outlining goals and communicating how well (or not) the company is executing those goals.
Our point is that a culture of innovation must be one of those goals. And we urge our partners to outline, not only their commitment to establishing one, but why it is important, how it will have a positive effect on the work lives of everyone at the organization, and then to hold their staff accountable for executing.
By setting the direction, identifying goals, and providing benchmarks, organizations can encourage their employees to submit ideas on how to push the company down that path. And to encourage those submissions, we also promote the idea of an incentives package.
Incentive Employees Without Resulting to Bonuses
We suggest that employers implement a program that rewards individuals for submitting innovative ideas that lead to increased profits. However, what we don’t recommend is using extra money as a sole means to motivate employees. We advise against that for a number of reasons; including:
- It gets costly.
- The positive effect of a cash bonus has proven to ware off more quickly than that of a gift bonus.
- See #1.
One of the main lessons that businesses seem to have taken away from the Great Recession is just how important it is to keep cash reserves on hand. Economies are made up of diverse but connected sectors, and when one tanks, as the housing market did in 2008, it has a spill-over effect that can drag the others down with it. So, the lesson was to have cash reserves on hand to be able to ride out the unexpected downturns, and is touched on in many articles including one in The Economist that focuses on the tech industry and in an article by the New York Times.
Paying out big bonuses…often…obviously goes directly against that idea. Luckily, non-cash gifts and bonuses have been proven to be more effective over the long term than cash bonuses. Slate has a nice article on the diminishing effect on raises and bonuses. In an article on Forbes, they point to 5 “other than cash” ideas to motivate employees, and Dr. Gustavo Grodnitzky goes farther in his book Culture Trumps Everything as to the how and why gifts and culture norms leave longer lasting impressions.
One last thought about providing non-cash bonuses. If done right, it can be beneficial to promote these gifts through the communications plan. One, it highlights the effort of individual employees and gives them something to feel proud of. Two, shows how important the program is to the corporate executives and how dedicated they are to fulfilling their end. Three, it will make other employees competitive, and get them thinking that they can submit better ideas, and when they do, they’ll be in line for a bonus as well.
Wrapping Up and Putting it all Together
Our approach to aligning innovations to the strategic direction of the organization is a three-pronged attack. First, we want to incentivize workers who submit ideas that are funded and ultimately employed. Second, we promote an InnoSpecting Champion to act as an initial buffer, and kill any ideas that are clearly not aligned. And third, we leave it to the Executive Staff to make the final funding decisions during the Innovation Pulse portfolio reviews.