Beyond label-making: building a path to true innovation

The following column is from R.J. Reynolds, president/CEO of Mek client Radius Indiana. It appeared in the OP-ED section of the Indianapolis Star on August 28.

Faced with economic uncertainty, budget constraints and a set of new fiscal parameters sometimes called “The New Normal,” many executives and leaders have called on companies and regions to embrace innovation. Innovation, of course, represents a disruptive course of action, where new elements replace old ones.

The term, innovation, rightly portrays a forward-looking vision, which unfortunately leads some to simply adopt the label of “innovation” while maintaining operations that are otherwise quite ordinary. In fact, given that the term “innovation” is definitely on a major upswing in usage, earlier this year The Wall Street Journal nominated “innovation” to be officially recognized as the most overused phrase of 2o12.

So without indulging in label hyperbole, how can Indiana—particularly regions in southern Indiana—begin to embrace true innovation and ultimately build a new culture of innovation that leads to higher productivity, technology advancement and a boost in per capita income?

Real innovation obviously begins with a willingness to change or embrace change. That means getting out of one’s comfort zone a bit. Change can produce new conflict, which if kept to a manageable level, is not a bad thing.

What’s next? Consider the quality of education in our workforce and resources available to institute and embrace change. Hoosiers can have great ideas, but to commercialize those ideas and bring them into the marketplace, they need a support structure in the form of mentoring, guidance and funding.

Once these resources were in short supply. Today, the Indiana Small Business Development Center (SBDC) has offices across the state.  Both start-ups and existing small businesses can tap into SBDC resources to quickly advance their little enterprise.   Where once outside funding was virtually non-existent except through friends and family, today several angel investors within a number of different angel networks can provide critical seed or advanced capital to build a company.

Many great ideas are killed by fear of failure.  Entrepreneurs and those embracing true innovation must be fearless and willing to take intelligent risks.  The success rate for true innovation in products is often low – one source noted how a new product often faces odds of 100 to 1 to become successful. But failure, if it is harnessed as a learning opportunity, leads to success as evidenced by such legends as Thomas Edison. Edison failed thousands of times in producing the first light bulb, phonograph, commercial electricity and many other products and services. If he had simply given up the first time he experienced a setback or failure, our quality of life would likely be substantially different today.

Organizational innovation must be rewarded. If you’re in an existing company, consider how you can value and reward employees for embracing and producing innovation in your products or services.  In a company that has truly embraced and is developing a culture of innovation, not every outcome will be perfect or without trauma.

Tear down those silos – a culture of innovation is collaborative and team-building. When people learn how to pool together their intellectual, behavioral and experiential resources in a positive environment that promotes risk-taking, great things can happen.  

Building a true Culture of Innovation goes far beyond mere labeling. Valuing people, promoting risk-taking, embracing continuous improvement and partnership with change represent critical elements for achieving real innovation, whether in manufacturing, services or product development and delivery. Americans and Hoosiers already have a legacy of innovation in us—let’s work to reignite that capacity and advance our state.

2010: Sticky Ideas, Innovation and Cash

As we approach 2010, what’s in place in your space that’s going to create a remarkably welcome and fresh 12 months? We’re not talking about “rah-rah, feel good” stuff. We’re talking about the work environment that erupts when sustained positive cash flow returns, where people like coming to work, where new ideas inject bright vibrancy, where your clients and customers like doing business with you.

How can you achieve a culture over the next few months that delivers on business goals? People and companies with well-thought-through “sticky ideas” are going to win in 2010. “Sticky ideas’ are the type that people naturally embrace, find their own role in developing and executing, and go about getting it done. Those ideas are simple, clear and surprising. They can be understood by everyone from the shop floor to the executive suite.

“Sticky ideas” motivate. They foster buy-in. They’re not abstract. The key is to make them constructive.

Take for example, the statement “We’re going to maximize profit in 2010.” What’s that mean? Could that imply the cold, de-motivating thought that more layoffs await? Investors might like it, but what about the talent pool that’s going to make that happen? Instead, what about, “We’re going to re-focus our company on doing what’s truly best for our customers, whether in sales, production or delivery.”

If you’re like just about everyone else I know, you and your company executives have spent a considerable – even inordinate – amount of time working on next year’s budget and quasi-strategic plan. Many executives have told me that they’re not presently planning in terms of years – they’re planning in terms of real-time weeks and months. That’s not a bad thing, as the legacy they’re carrying with them from the last 18 months is this: focus on performance. Of course, they have a standard annual budget and goals and objectives, but they’re focused on anticipating and getting ahead of market changes. And as any light reading of the business news will tell you, our markets –whether global or local – are not done changing.

A few days ago I saw a friend on dress-down Friday whose company went through more than a few hard knocks over the last six months. He was wearing a T-shirt that said “The beatings will continue until morale improves.” It drew a chuckle, but it wasn’t entirely untrue. His company consistently waited until the last minute to announce bad news. The executives didn’t lie, but they weren’t transparent either. Now, as things were starting to improve, the corporate trust bank was overdrawn. The unfortunate “sticky idea” here was that any working day might be that person’s last.

Another management friend relayed to me how his company executives had developed a culture of partnership. “We can win through innovation – innovation in customer service, innovation in delivery of services, innovation in doing the right thing” was the dominating thought. The corporate ship might take an economic torpedo in the forward hull, but the damage control party would do everything in their power so the ship wouldn’t sink on their watch. That particular sticky idea went viral in a big way.

Ironically, the executives at both companies held the interests of their employees high on the food chain. The difference? One group clamped vital information close to their vest, thinking that if they didn’t say anything, employees would have little to worry about. The other openly communicated the challenges they faced and invited comment and input. The result? Zero trust at one company, maximum trust and highly motivated employees at the other.

I recently attended a sales management seminar by Bill Caskey where I found a most surprising element. About a third of the group was made up of CEOs of medium-sized businesses. Impressed, the facilitator asked one what was the most important aspect of his business right now. I thought they would say something like “the quality and commitment of our employees” or the like.

The answer in chorus? Cash.

Intrigued, I soon heard surprising comments about how cash comes from outstanding service, with sales professionals and product managers focusing on what the best solution and outcome is for their customers. That was a “sticky idea” for me. Why? Because of the concept of doing the right thing for your customer appears in some companies to have been replaced by “Are you making your sales goals? Are you closing any deals?”

Whether or not the jobless recovery comes to pass, the “sticky idea” that will generate innovation, trust, stability and yes, even cash, is doing the right thing consistently. Doing the right thing means high performance in providing the best for your customer, your employees, your community. What’s your “sticky idea” for 2010?