How Innovative Is Your Company’s Culture?

Here is a brief excerpt from an article co-authored by Jay Rao and Joseph Weintraub for The MIT Sloan Management Review. To read the complete article, check out others, obtain subscription information, and sign up for email alerts, please click here.

Image courtesy of Flickr user reway2007.

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Today’s executives want their companies to be more innovative. They consume stacks of books and articles and attend conventions and courses on innovation, hoping to discover the elixir of success. They are impressed by the ability of comparatively young companies such as Google and Facebook to create and market breakthrough products and services. And they marvel at how some older companies — Apple, IBM, Procter & Gamble, 3M and General Electric, to name a few — reinvent themselves again and again. And they wonder, “How do these great companies do it?”

After studying innovation among 759 companies based in 17 major markets, researchers Gerard J. Tellis, Jaideep C. Prabhu and Rajesh K. Chandy found that corporate culture was a much more important driver of radical innovation than labor, capital, government or national culture. [Note: 1. G.J. Tellis, J.C. Prabhu and R.K. Chandy, “Radical Innovation Across Nations: The Preeminence of Corporate Culture,” Journal of Marketing 73, no. 1 (January 2009): 3-23.] But for executives, that conclusion raises two more questions: First, what is an innovative corporate culture? And second, if you don’t have an innovative culture, is there any way you can build one? This article addresses both questions by offering a simple model of the key elements of an innovative culture, as well as a practical 360-degree assessment tool that managers can use to assess how conducive their organization’s culture is to innovation — and to see specific areas where their culture might be more encouraging to it.

Six Building Blocks of an Innovative Culture

An innovative culture rests on a foundation of six building blocks: resources, processes, values, behavior, climate and success. These building blocks are dynamically linked. For example, the values of the enterprise have an impact on people’s behaviors, on the climate of the workplace and on how success is defined and measured. Our culture of innovation model builds upon dozens of studies by numerous authors.

When it comes to fostering innovation, enterprises have generally given substantial attention to resources, processes and the measurement of success — the more easily measured, tools-oriented innovation building blocks. But companies have often given much less attention to the harder-to-measure, people-oriented determinants of innovative culture — values, behaviors and climate. Not surprisingly, most companies have also done a better job of managing resources, processes and measurement of innovation success than they have the more people-oriented innovation building blocks. As many managers have discovered, anything that involves peoples’ values and behaviors and the climate of the workplace is more intangible and difficult to handle. As one CEO put it, “The soft stuff is the hard stuff.” Yet these difficult “people issues” have the greatest power to shape the culture of innovation and create a sustained competitive advantage.

[Here's the first of the six that Rao and Weintraub discuss.]

Values

Values drive priorities and decisions, which are reflected in how a company spends its time and money. Truly innovative enterprises spend generously on being entrepreneurial, promoting creativity and encouraging continuous learning. The values of a company are less what the leaders say or what they write in the annual reports than what they do and invest in. Values manifest themselves in how people behave and spend, more than in how they speak.

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To read the complete article, please click here.

Jay Rao is Professor, Strategy & Innovation, at Babson College. He earned a B.Engg. degree at Indian Institute of Technology( Chennai, India), an M.S. at the University of Kentucky, and a Ph.D. at University of California, Los Angeles. Joseph Weintraub is the Founder and Faculty Director of the Babson Coaching for Leadership and Teamwork Program. He earned a B.S. at the University of Pittsburgh and M.A. and Ph.D. degrees at Bowling Green State University

Does Innovation Have to Be Rocket Science?

Here is a brief excerpt from an article written by Mitra Best for the PwC (PricewaterhouseCoopers) Innovation blog. To read the complete article, check out other resources, and sign up for email updates, please click here.

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I spent a good portion of my youth imagining galactic travel, robots on other planets, and space habitats. (And yes, I watched every episode of Star Trek – a remarkable source of new inventions.)  So, when Marty Waszak, Strategic Relations Officer at NASA Langley Research Center, a kindred spirit and fellow crusader of innovation, invited me to speak to a group of senior scientists and engineers about the creative process, I was over the moon!

While thrilled with the invitation, I wondered what a lecture from me could possibly contribute to innovation at NASA — the pioneering leader in research, development and design… and an organization filled with rocket scientists.

Then, it occurred to me that PwC and NASA might have a few challenges and opportunities in common.  We are both heavily regulated organizations, obligated to deliver projects on budget and on time, staffed with highly technical people, and expected to continuously think creatively to provide clients with competitive advantage.

This realization helped me focus on lessons I’ve learned as the Innovation Leader at PwC and what I could share with NASA.

[Here are the first two of five "lessons.]

Lesson #1: Innovation can come from anyone, anywhere

Innovation is the introduction of anything new or different.  Anything new or different implies innovation can happen anywhere, not just in labs or R&D centers, and by anyone, not only scientists and researchers. At PwC, we have simplified our innovation mission into one question that is relevant to every member of our organization: “What can I do differently today to deliver more value to my client?”

Lesson # 2: People want to be engaged and empowered

At a time when user-generated content rules the web, everyone wants to be empowered to develop strategies previously limited to boardrooms in the executive suite. Employees want to be part of something meaningful and big, and they often surprise if given the opportunity.  NASA and PwC, hire some of the brightest people. Let’s give them a virtual seat in the boardroom and empower them to cultivate their own vision and contribute to the success of the organization.

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To read the complete article, please click here.

Mitra M. Best is the U.S. Innovation Leader at PricewaterhouseCoopers, leading the disciplined approach to inspire, evaluate and implement innovative ideas across the organization with the critical mission to support the development of new services and market opportunities across industries. Mitra influences and advises PwC senior leaders on new ideas and approaches to organizational strategy, works with clients and third parties to foster open innovation, and promotes the PwC brand as an innovative leader in the marketplace. She joined PricewaterhouseCoopers in April 1999 in the Office of Global CIO, as marketer, technologist and strategist. Before being appointed as the Innovation Leader for the U.S firm, Mitra served at the Technology Leader for the PwC Knowledge Services Organization and Business Strategy Leader for the PwC Center for Advanced Research.

Prior to joining PwC, Mitra’s professional roles included Vice President, Business Development at BookMark Communications, and Founding Partner at Syntext, managing technology clients for a creative agency. She began her career as a software engineer and quickly moved into product and marketing strategy. She has a Bachelor’s degree in Computer Science & Linguistics from UCLA and a Graduate Management Certificate in Innovation & Strategy from MIT.

How leaders kill meaning at work

Here is an excerpt from still another outstanding article written by Teresa Amabile and Steven Kramer, featured online by The McKinsey Quarterly (January 2012), published by McKinsey & Company. To read the complete article, obtain information about the firm, access other resources, and sign up for email alerts, please click here.

Senior executives routinely undermine creativity, productivity, and commitment by damaging the inner work lives of their employees in four avoidable ways.

As a senior executive, you may think you know what Job Number 1 is: developing a killer strategy. In fact, this is only Job 1a. You have a second, equally important task. Call it Job 1b: enabling the ongoing engagement and everyday progress of the people in the trenches of your organization who strive to execute that strategy. A multiyear research project whose results we described in our recent book, The Progress Principle [Teresa Amabile and Steven Kramer, The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, Boston, Massachusetts: Harvard Business Review Press, August 2011], found that of all the events that can deeply engage people in their jobs, the single most important is making progress in meaningful work.

Even incremental steps forward—small wins—boost what we call “inner work life”: the constant flow of emotions, motivations, and perceptions that constitute a person’s reactions to the events of the work day. Beyond affecting the well-being of employees, inner work life affects the bottom line. [See Sangeeta Agrawal, James W. Asplund, James K. Harter, Emily A. Killham, and Frank L. Schmidt, “Causal impact of employee work perceptions on the bottom line of organizations,” Perspectives on Psychological Science, July 2010, Volume 5, Number 4, pp. 378–89.]  People are more creative, productive, committed, and collegial in their jobs when they have positive inner work lives. But it’s not just any sort of progress in work that matters. The first, and fundamental, requirement is that the work be meaningful to the people doing it.

In our book and a recent Harvard Business Review article [See Teresa Amabile and Steven Kramer, “The power of small wins,” Harvard Business Review, May 2011, Volume 89, Number 5, pp. 70–80.], we argue that managers at all levels routinely—and unwittingly—undermine the meaningfulness of work for their direct subordinates through everyday words and actions. These include dismissing the importance of subordinates’ work or ideas, destroying a sense of ownership by switching people off project teams before work is finalized, shifting goals so frequently that people despair that their work will ever see the light of day, and neglecting to keep subordinates up to date on changing priorities for customers.

But what about a company’s most senior leaders? What is their role in making—or killing—meaning at work? To be sure, as a high-level leader, you have fewer opportunities to directly affect the inner work lives of employees than do frontline supervisors. Yet your smallest actions pack a wallop because what you say and do is intensely observed by people down the line. A sense of purpose in the work [See Robert Sutton, Good Boss, Bad Boss: How to Be the Best . . . and Learn from the Worst, New York: Business Plus, 2010; and Sutton’s related article, “Why good bosses tune in to their people,” mckinseyquarterly.com, August 2010.], and consistent action to reinforce it, has to come from the top.

[Next, Amabile and Kramer identify and then discuss the "four avoidable ways" or “traps” by which "leaders kill meaning at work. To read the complete article, please click here.]

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Teresa Amabile is the Edsel Bryant Ford Professor of Business Administration and a Director of Research at Harvard Business School and co-author of the aforementioned The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work.  Originally educated as a chemist, Teresa received her doctorate in psychology from Stanford University. She studies how everyday life inside organizations can influence people and their performance. Steven Kramer is an independent researcher and writer in Wayland, Massachusetts. He is also co-author of The Progress Principle. He received his undergraduate degree in psychology from UCLA, and his doctorate in developmental psychology from the University of Virginia.

Teresa Amabile and Steven Kramer: An interview by Bob Morris

Teresa Amabile

Teresa Amabile is the Edsel Bryant Ford Professor of Business Administration and a Director of Research at Harvard Business School and co-author of The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work. Originally educated as a chemist, Teresa received her doctorate in psychology from Stanford University. She studies how everyday life inside organizations can influence people and their performance. Teresa’s research encompasses creativity, productivity, innovation, and inner work life – the confluence of emotions, perceptions, and motivation that people experience as they react to events at work.

Steven Kramer

Steven Kramer is an independent researcher and writer in Wayland, Massachusetts. He is also co- author of The Progress Principle. He received his undergraduate degree in psychology from UCLA, and his doctorate in developmental psychology from the University of Virginia. Steve’s current research interests include adult development, the meaning of work in human life, and the subjective experience of everyday events inside organizations (inner work life). Previously, he researched the perceptual and cognitive development of infants and young children.

Morris: Before discussing The Progress Principle, a few general questions. First, other than a family member, who has had the greatest influence on your personal growth?

Amabile: My undergraduate mentors at Canisius College were extremely important in my personal growth. Let me describe one of several. Professor Frank Dinan, a chemist and my research supervisor for several years, helped me think through my love of science, my growing interest in psychology, and implications for my career choices. More than that, he was a model of a principled, intrinsically motivated professional – someone who obviously loved his work, cared about his profession, and nurtured the people around him.

Kramer: It is hard to choose one person. I would have to say that it was a group of women who did volunteer work at a school for children with behavior problems where I worked when I was in my twenties. From them I learned the value of doing meaningful work and the joy and satisfaction that it can bring. And I also learned much about myself and my own value through the contribution that I helped to make in the lives of those children.

Morris: The greatest impact on your professional development?

Kramer: Another tough one. There are so many, but I will limit it to two people – Studs Terkel and Peter Drucker. Although I wasn’t able to meet either one of them, their work has had a profound effect on my thinking and my feelings about work. Both of them viewed work as something that could and should help to fulfill people’s lives. And they saw the nobility in work of all kinds. My hope is that our work, in its own small way, can build onto the foundation that they built.

Amabile: I think that would be my graduate mentors at Stanford University – psychology professors Mark Lepper (who got me interested in studying motivation, and supported my early explorations of creativity), Lee Ross (who introduced me to the excitement of experimental research on causal attribution), Phil Zimbardo (who helped me learn to teach), and Daryl and Sandy Bem (who modeled passion for their work, superb writing, and balancing family life with professional work).

Morris: Here are two questions for Teresa. First, When and why did you first become so interested in the creative process?

Amabile: As a child, I overheard my kindergarten teacher tell my mother that I showed great potential for artistic creativity. When I failed to show any achievement in art by the end of elementary school, I wondered why. Years later, when I began studying intrinsic motivation at Stanford, it occurred to me that motivational state could be terribly important for creativity – and might depend on the social environment as much as on natural talent. I began to read the creativity literature… and the rest is (my) history.

Morris: What are the most common misconceptions about creativity?

Amabile: A few myths crop up frequently: creativity is only possible in certain professions (like art or science); creativity depends primarily on talent; creativity thrives under pressure or unhappiness.

Morris: Now three questions for for Steve: In 1924, 3M’s then chairman and CEO, William L. McKnight observed: “If you put fences around people, you get sheep. Give people the room they need.” Here’s the first part of the question: What must supervisors do to accommodate both an organization’s need for structure and constraints and its workers’ need for “the room they need”?

Kramer: Supervisors must provide the overall direction for the organization and clearly communicate it their people. But they should do so with input from below. The workers in the trenches are much closer to the customers than management and they have more intimate knowledge of the practical constraints in meeting those goals. The direction of the organization must also be accompanied by a purpose or meaning, since it is meaningful work that engages people in the work. By meaningful work, we simply mean that the work has some meaning or value to the person doing it. It can be a lofty goal like curing cancer, but it can also be as mundane is providing a quality product or a useful service to your customer.

Once supervisors have provided workers with clear goals, they must do two things. First, support them in meeting those goals. Give them the resources and help that they need to succeed for the organization and for themselves. Second, give them the autonomy to use their talents, skills and knowledge in meeting those goals. In other words, check in with your people and find out what they need and, to the extent possible, give it to them. But do not look over their shoulders and tell them how to do their job. This is the difference between “checking-in” and “checking-up.”

Morris: If the results of recent research studies are to be believed, on average, less than 30% of a workforce in the U.S. are positively and productively engaged; the other employees are either passively engaged (“mailing it in”) or actively engaged in undermining the company. How do you explain this?

Kramer: There are obviously many reasons for this. But we think that a critical reason is that people are not making steady progress on work that they find meaningful. We found that of all the things that make people happily engaged in their work, the single most important one is simply making progress in meaningful work. We call this discovery the progress principle. Unfortunately, when we surveyed nearly 700 managers from around the world, we found that few understood how important meaningful work is to motivation.

And this problem has been exacerbated by the economic turn down. Companies are cutting back on people and resources, and this is making it much more difficult for people to move forward. Of course, management often has real concerns about costs. But people simply cannot be expected to succeed if they are not given what they need, and this will inevitably hurt both the organization and the people doing the work.

Morris: Opinions are divided – sometimes sharply divided – about 360º feedback. Some favor anonymity, others transparency, and still others want absolutely nothing to do with it. What are your own thoughts about 360º feedback?

Kramer: I think opinions are sharply divided on this because there are both positive and negative aspects to 360º feedback. In organizations where there is a high level of trust and respect, and where 360º feedback is used primarily as a learning tool, it can have a very positive effect. However, when that trust is not there, and where it is used solely to judge people, it will be very negative.

But even when it is used well, it is most often too infrequent. Annual reviews are of little help in fostering the kind of daily progress that fuels engagement in the work. Rather, there needs to be a constant flow of communication moving up and down the organization, where all ideas are listened to and respected – and where people get the support they need.

Morris: Now please shift your attention to The Progress Principle. When and why did you decide to write it, and write it together?

Amabile: The Progress Principle arose out of a multi-year research program that looked at what really goes on inside the hearts and minds of people at work, and how this affects performance. To study that, we asked 238 professionals working on creative teams to email us a diary form each work day for the length of a project. The form included a number of scale-rated questions about participants’ progress, creativity, moods and perceptions on the day. But the most important data was an open-ended question asking them to describe one event that happened that day that was related in some way to the work. When we were done, we had almost 12,000 of these diaries.

When we analyzed this data, two related findings rose to the top. First, was the inner work life effect. Inner work life is our term for the constant flow of emotions, perceptions and motivations that people experience as they react to and try to make sense of the events that occur throughout the work day. The inner work life effect is the strong influence that inner work life has on performance: creativity, productivity, commitment to the work, and collegiality. The second was the progress principle. These are reciprocal – positive inner work life leads to higher performance, and progress leads to better inner work life.

Kramer: I became involved in the research organically. Teresa and I would talk about her research over dinner and during walks. Soon, I found myself helping with the design and the data analysis, and then coauthoring articles. As we began to see what we had in the data, it became clear to us that we needed to write a book. First, the data were so rich and complex, that the only way we could truly understand the whole picture ourselves was to write a book. And second, it became clear that we had discovered something that could not only make the lives of people within organizations better, it could help to improve the performance of those organizations.

Morris: Who brought what to the collaboration?

Kramer: I think we were complementary, both intellectually and temperamentally. Teresa is more careful and detail oriented, while I am more spontaneous and tend focus on the big picture. I am more technologically inclined and more sophisticated regarding statistics and data analyses. Teresa certainly has a better grasp of business and management theory than I do, and is a more talented writer. As a developmental psychologist, I probably help out most when we need to understand some of the more childish behavior described in our diaries!

Amabile: Steve’s description is quite accurate. Our skills our quite complementary, and so are our styles – when they aren’t clashing! Overall, I feel that our appreciation for each other has deepened through this experience. Our marriage is still strong and highly enjoyable!

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To read the complete interview, please click here.

Amabile and Kramer cordially invite you to check out the resources at these websites:

For more about The Progress Principle, please click here.

There is also a video (about four minutes in length) offering a portion of an interview during which Teresa Amabile discusses The Progress Principle.  To watch the video, please click here.

Guy Kawasaki: An interview by Bob Morris

Guy Kawasaki

After having earned an undergraduate degree at Stanford, Kawasaki embarked on a career in business (counting diamonds for a fine-jewelry manufacturer called Nova Stylings) while at work on an MBA degree at UCLA. (He had already earned an undergraduate degree at Stanford.) Kawasaki later went to work for an educational software company called EduWare Services. However, Peachtree Software acquired the company and wanted him to move to Atlanta. “I don’t think so. I can’t live in a city where people call sushi ‘bait.’ Luckily, my Stanford roommate, Mike Boich, got me a job at Apple. When I saw what a Macintosh could do, the clouds parted and the angels started singing. For four years I evangelized Macintosh to software and hardware developers and led the charge against world-wide domination by IBM.” By now, he was accumulating a wealth of real-world experience in leadership and management and well as knowledge about marketing, sales, finance, strategic planning, problem-solving, resource allocation, and customer relations. The scope and depth of his interests are indicated in the books he has published thus far. They include his first, The Mackintosh Way, followed by Selling the Dream, The Computer Curmudgeon, Hindsights, How to Drive Your Competition Crazy, Rules for Revolutionaries, The Art of the Start, Reality Check, and most recently, Enchantment: The Art of Changing Hearts, Minds, and Actions.

Morris: Other than family members, who have had the greatest impact on your personal development?

Kawasaki: I cannot exclude my family from this answer. The people who have had the most impact on my personal development are my wife and my first real boss, Marty Gruber. My wife holds me to the highest ethical, moral, and social standards. Marty Gruber was my boss when I worked in the jewelry business, and he taught me how to trust, be trusted, and how to sell.

Morris: Of all the books that you have published thus far, which was the most difficult to write? Why?

Kawasaki: The most difficult book to write should have been the easiest: Hindsights. It was a collection of interviews of people’s hindsights in life. I thought it would be a matter of turning on a tape recorder and then getting the tapes transcribed. It was a monumental effort to find the right people, get to them, interview them, transcribe the interview, and then edit it.

Morris: As you reflect upon your association with Apple, what has proven to be the most valuable business lessons you learned from it?

Kawasaki: I learned two valuable lessons at Apple. First, lo and behold, the best product doesn’t always win — Windows, to this day, vastly outsells Macintosh. I naively thought that the best product should and would win.

Second, I learned that if you enchant people with what you do, they will believe in you and provide an unbelievable amount of help. Apple would not have survived without its user groups, voluntary evangelists, and believers. They moved heaven and earth for Apple.

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To read the complete interview, please click here.

Performance Reviews: Yes or No?

Here is an article written by Deanna Hartley for the November 2009 issue of Talent Management magazine. It is followed by an article written by Erin Conroy for the Careers feature on MSNBC.com blog.

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Is It Time to Ditch Year-End Performance Reviews?

It’s almost that time of year. Managers and their teams are gearing up for a familiar holiday tradition: end-of-year performance appraisals.

“It’s probably the most hated activity for managers and employees in business,” said Aubrey Daniels, author of OOPS! 13 Management Practices That Waste Time and Money [click here]. “If you’ve got something very few people like, then you’ve got to believe it’s either a waste of time or there must be a better way to do it.”

There are a few fundamental flaws with annual performance reviews, Daniels explained. For one, no matter how good a manager is at documenting things, it’s often too late to do anything about it. Having reviews just once a year hardly helps employees improve their performance.

“Data shows that people don’t change — the same things appear in the performance appraisal every year, [which indicates that] either people are not taking it seriously or they’re not making improvements,” Daniels said. “It’s a system that’s broken, and they’ve been tweaking [it] for more than 50 years — at some point, you’ve got to say tweaking is not going to work because you’re tweaking something that’s broken. Some major changes have to be made.”

Daniels proposes organizations ditch the annual reviews and replace them with a different kind of system in which employees are more likely to be productive.
For example, meetings could occur on a monthly basis, giving a manager and an employee the opportunity to sit down and talk about the employee’s performance the previous month.

The content and the outcome of the meeting are of primary importance, Daniels explained.

“[In terms of content,] it generally focuses on their accomplishments — what they’ve done, what they’ve done well, what improvements they’ve made. It also focuses on what they might be able to do better,” Daniels said. “The manager’s job is to come up with a couple of things that would help [the employee perform] better. [Managers] have got to get away from the judgment aspect of performance appraisals and move more toward the coaching aspect.”

Similarly, a key outcome of the meeting should be that the employee knows exactly what he or she needs to do to improve performance. 
 
In any session with a manager and an employee, the latter should always come out of the meeting feeling energized and have tangible information that can help enhance his or her job performance, Daniels explained.

“A manager might meet with a salesperson and say, ‘You need to be more aggressive.’ Well, what does that mean?” he said. “[Managers should] spell it out in terms of precisely what they want [employees] to do, [like], ‘Make more calls every day.’ That might not be the critical behavior in terms of sales, but assuming it was, that is much more helpful than saying ‘be more aggressive.’” 
 
This type of feedback can lead to improved on-the-job performance, which in turn yields bottom-line impact.

“The best job you’ll ever have is one where you know at the end of every day how well you’ve done,” he said. “Behavior change without feedback is almost impossible, so the more formal and the more frequent the feedback, the more improvement [managers will] see.”

Deanna Hartley is an associate editor at Mediatec Publishing, the publisher of both Talent Management and Chief Learning Officer magazines. Click here to sign up for a free subscription to one or both.

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Want to improve performance? Cancel reviews.

Want to lower morale, reduce productivity and undermine the relationship between the boss and his or her subordinates? Give an annual performance review, say authors of a recently published book deeming the practice bogus.

Pay and performance reviews are merely tools used to intimidate employees, said Samuel Culbert, a professor of management at UCLA and author of Get Rid of the Performance Review! published by Business Plus. [Click here.] Lawrence Rout, a senior editor at the Wall Street Journal, also contributed to the book.

“It is the most pretentious, fraudulent, ill-advised exercise taking place at companies, and I can’t understand why,” Culbert said in an interview with The Associated Press.

“It does nothing but cause angst and anxiety.”

Companies administer the reviews because they feel they have no alternative for measuring an employee’s performance, Culbert said. He suggests employers should instead have “performance previews,” which would encourage dialogue and also hold management responsible for productivity.

Employers should ask workers how they think an assignment can best be done, so that the boss can offer feedback and potentially avoid problems, Culbert said.

“We want people talking and learning the lessons of their experience, not defending their mistakes,” Culbert said. “Instead of employees failing and getting fired, let’s see management roll up their sleeves and pitch in to do what needs to be done so that there’s joint accountability.”

But if there aren’t performance reviews, how will companies justify firings and layoffs?

“If people aren’t learning the lessons implied by the mistakes they’re making, it will be obvious and easy enough to get them out the door and on the road,” Culbert said. “You don’t need a checklist for that.”

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Erin Conroy is a business editor for the Associated Press.

Interview: Robert B. Tucker

Robert B. Tucker

Tucker is president of The Innovation Resource, and an internationally recognized leader in the field of innovation. Formerly an adjunct professor at the University of California, in Los Angeles, Tucker has been studying innovators and innovative companies since 1981. His pioneering research in interviewing over 50 leading innovators was published in the book Winning the Innovation Game in l986. Since then, he has continued to publish widely on the subject, including his international bestseller, Managing the Future: 10 Driving Forces of Change for the New Century, which has been translated into 13 languages.  In his most recent book, Driving Growth Through Innovation: How Leading Firms Are Transforming Their Futures, Tucker describes the emerging best practices of 23 innovation vanguard companies. As one of the thought leaders in the growing Innovation Movement, Tucker is a frequent contributor to publications such as the Journal of Business Strategy, Strategy & Leadership, and Harvard Management Update. He has appeared on CNBC, CBS News, and was a featured guest on the PBS series, Taking the Lead.

Note: This interview was conducted three years ago the KnowledgeLeadership@ThomasGroup magazine. Tucker is now in the process of updating it.

Morris: What were the most significant developments in 2006 for the field of innovation?

Tucker: For me, the most significant event was the declaration that China made that 2006 was the year of innovation.  The Chinese government kicked off a drive to transform its companies to not just the world’s 800-pound gorilla of low cost manufacturing but an innovation powerhouse. They committed to spending $115 billion a year on research and development, and on transforming their culture to be the originator of breakthrough ideas and technologies. We’re already seeing the result of this shift: A Chinese company, Lenova, bought IBM’s PC division, and Chinese companies are making cars, major appliances, consumer products for export and you and I haven’t seen anything yet.

Morris: Do you think the field is in danger of becoming overheated and over-hyped?

Tucker: There are certainly some faddish elements, but remember, this is the business mega-trend of the 21st century. I find American managers especially tend to discount the impact of this trend and think of it as just a flavor of the month or a theme. Every year I lecture at 50 or so conferences and conventions around the world and you see how conference planners think: Let’s see, we did the leadership theme last year, we’ve done innovation this year, so what theme should we pick for 2007?  But innovation is more than a theme and you can’t possibly cover it in a single conference. I’m still learning all the time and often feel like a grad student on finals – things are moving so fast.

Morris: What’s your message when you speak?

Tucker: Well first of all, I don’t have a one-size fits-all message that I get up there and deliver. We have a customization process that I’ve developed over the years that clues me in to what my message will be to that audience on that occasion. I think of my presentations and workshops as mini-consulting projects where you do an assessment and a diagnosis before you prescribe any solution. Executives and managers are my main audience and their lives are stretched to the max; so it’s my job to synthesize the latest research, case examples, and take home value mega points and really leverage their time with news they can use.

My message to CEOs as you might imagine is: you’re in an innovation arms race; it’s the strength of your process versus your competitors’ process. A cost reduction strategy alone will not cut it. I disagree with Rosabeth Moss Kanter when she says (in a Harvard Business Review article) that interest in innovation comes and goes in seven-year cycles. It may have in the past, but not today.

Morris: And why is that?

Tucker: Simply because it’s tough to pull it off. CEOs of publicly traded companies, in the U.S. at least, have attention deficit disorder when it comes to innovation.  Look, who can blame them? Their average tenure is a short three years. Either they drive growth and meet their quarterly numbers and get the stock price up, or they’re out. Thirty-five percent of departing CEOs left involuntarily in 2005, according to the Wall Street Journal! So I think a lot of them look at innovation as planting trees that will bear fruit – for the next guy or gal, not for them, so they’re of two minds.

You ask them, how important is innovation and they come back 72 percent of them that it’s one of their top three priorities. But then the knowing-doing gap kicks in.  They “know” they have to improve.  But what they “do” is often piecemeal, ad hoc, seat of the pants. If innovation was a company, and you and I were assessing growth prospects, I’d say there’s still a lot of growth to be had because most companies are still at the beginning of their journey. I wrote a piece in my e-newsletter called, “Is There a Ford in Your Future?” about how Ford, which lost over $7 billion in 2006, is suffering a classic disruption of its business model, just like Wang Labs, Blockbuster, Kodak, Montgomery Ward, and dozens of other companies. The response to that article was typical. We heard from managers who wrote, “I fear if we don’t do something in my company, we’re quickly going the way of Wang.” They want to know what to do.

Morris: You talk about how tough innovation is to pull off. A study by the Doblin Group says that only 4% of all innovation initiatives are deemed successful by the companies that implemented them. Why do you think this percentage is so incredibly low?

Tucker: Well first of all, I’d like to see that study and to know when it was conducted.  To my knowledge, Doblin has never published it, yet people frequently quote it. It’s out there. If the study accurately reflects results, it means those of us in this field are selling snake oil because a lot of those initiatives were ones Doblin and Strategos and Gen3 Partners and independent consultants like myself were involved in. So we obviously over promised and under delivered.

There’s a risk that any bold initiative will fall short of expectations.  But what about the risk of inaction? You can almost hear the naysayer in the boardroom quoting from Doblin’s research and saying, “there’s a bit possibility we might fail so let’s not bother.”  Maytag said that at the beginning of the decade; they tried to cost-cut their way to prosperity. And Whirlpool at the same time said, let’s launch an all-enterprise innovation initiative to get growth going and empower our people. Well, five years later Maytag was so weakened that Whirlpool bought ‘em up at fire sale prices – Maytag is gone!

Other studies I’ve seen that have been published indicate that there is greater achievement of return on innovation. In my book, we cited an Arthur D. Little survey of 669 global executives (conducted in the late 1990s), which suggests, “fewer than one in four believe they have fully mastered the art of deriving business value from Innovation.” And Boston Consulting Group’s survey of 1,070 senior executives last year in 63 countries found that almost half were satisfied with the returns on innovation.  While that’s hardly where you’d like it to be, it shows improvement.  When compared against the S&P 1200 Global Stock Index, the 25 most innovative companies that BCG identified (MICs) had a mean margin growth of 3.4 percent annually, compared to a .4 percent increase among the total index.  And MIC stock returns averaged 14.3 percent, compared to 11.1 percent for the mean index. So I think we’re seeing improvement in what innovation initiatives deliver to companies.

Interview: Dave Ulrich and Wendy Ulrich

Dave Ulrich

Dave Ulrich‘s work passion has been how to build organization capabilities (systems, processes, cultures) that create value to multiple stakeholders, then to help leaders build intangible value in organizations. Working with over half of the Fortune 200 and with companies throughout the world, he provides seminars, writes books, and coaches leaders to build sustainable organizations by turning customer and investor expectations into personal and organizational actions. He helps leaders move beyond employee engagement to helping employees find real meaning from work. He is a professor of business at the Ross School of Business, University of Michigan and co-founder of The RBL Group. He has written 23 books covering topics in HR and Leadership (the latest is HR Transformation: Building Human Resources From the Outside In co-authored with Justin Allen, Wayne Brockbank, Jon Younger, and Mark Nyman); is currently on the Board of Directors for Herman Miller; is a Fellow in the National Academy of Human Resources; and is on the Board of Trustees of Southern Virginia University.

Wendy Ulrich, Ph.D., has been a psychologist in private practice in Michigan for over twenty years. She is founder of Sixteen Stones Center for Growth in Utah, offering seminar-retreats on abundance. Their work with organizations and individuals intersects at helping people find meaning at work. Dave works to rethink and redefine how organizations work and Wendy works to help individuals rethink and redefine their own lives. At the same time, they are committed to the importance of the organization’s responsibility to shareholders and investors as they respond to external conditions. Her published works include Forgiving Ourselves: Getting Back Up When We Let Ourselves Down and Weakness Is Not Sin: The Liberating Distinction That Awakens Our Strengths.

Dave and Wendy Ulrich are the co-authors of The Why of Work: How Great Leaders Build Abundant Organizations That Win published by McGraw-Hill (June, 2010).

Morris: Before discussing The Why of Work, a few general questions. Here’s the first. When and why did the two of you decide to co-author a book?

Dave and Wendy Ulrich: We like working together.  Our kids joke that our family hobby is reorganizing the world, crafting lectures, and preparing talks (welcome to our Sunday dinners).  We found that we had interests that overlap.  Dave studies how organizations create value for customers and investors.  To do this he studies leadership, HR, and organization capabilities.  Wendy studies how people change and heal.  She runs workshops on personal growth.  As we talked, we found that there is a universal need for people to find meaning in their lives and organizations become a universal forum where this can happen.  As we pursued this discussion, we found that when leaders are meaning makers, it makes both sense (right thing to do) and cents (economically viable).  So, we decided to try to figure out how people make meaning in life.  This lead to a multi-year study of how diverse disciplines understand meaning, with a goal of culling diverse literatures for some basic tenets.  Then, we applied those principles to leaders to help them become meaning makers.

Morris: What specifically did each of you bring to the collaborative process?

W. Ulrich: As a psychologist I look at the personal side of this issue.  I’ve spent a lot of time trying to help people find meaning in some of the hardest and most confusing experiences of their lives so they can heal and move forward, as well as trying to help them create goals and imagine futures that will feel meaningful and hopeful.  I try to capture the personal side of the meaning agenda.

D. Ulrich: I have OCD (Organization Compulsive Disorder) and try to figure out how to redesign, reshape, and renew organizations so that they deliver value.   When I think of organizations, I think of the capabilities an organization has more than its morphology or structure.  The ability of an organization to have a shared purpose and the ability for employees to be productive are critical capabilities for most organizations today.

Morris: To what extent (if any) were there any unexpected problems or complications after you began to work together on the manuscript? If there were, how did you resolve them?

Dave: We have wall-papered together and nothing can be more complicated than that (plus raising three kids).  But, we have different writing styles.  I like ideas, frameworks, and figures.  Wendy likes wordsmithing and saying things in a poetic way.  We resolved this by brainstorming ideas, Dave drafting, and Wendy editing for many of the chapters.  But we also switched roles for some.

Morris: Of all that you learned from and about each other while writing the book, were any significant surprises?

W. Ulrich: Dave never ceases to amaze me with how quickly he can capture the gist of a complex set of issues and get to the simplicity on the other side of that complexity.  He is really gifted with innovating specific, concrete strategies for implementation; he has such broad experience with so many corporations.  But I am always a little surprised to realize again and again how genuinely humble he is about learning from others.

D. Ulrich: I like to co-author books to learn from those I write with.  While my other co-authors may cringe, Wendy has unique insights and abilities that make her a great co-author.   She has enormous instinct for how to frame ideas, to tailor ideas to the heart of a reader, and to make sure we are clear about what we are trying to say.

Morris: Hundreds of thousands of books and an even greater number of articles have been written about how to be an effective executive and yet so many still aren’t. Why?

D. Ulrich: If it were easy, everyone would already get it.  Being an effective leader is enormously complex.  It requires vision to see a future, dedication to make things happen, sensitivity to people who are quirky at times, and personal confidence without arrogance.  In some ways it is amazing we have so many talented executives.  It is a rare and unique set of skills.

Morris: In recent years, even the most prestigious graduate schools of business such as Harvard, Kellogg, and Wharton have been severely criticized. In your opinion, what is the one area of business education in which business schools are in greatest need of improvement? Why?

Wendy Ulrich

W. Ulrich: I have an MBA from UCLA and appreciate the good training I got there, but years as a psychologist have convinced me that being a leader in business is not just about understanding finance or killer marketing.  It is about tapping the enormous energy of human beings who truly believe in what they are doing and want to put their values into action.  Leadership is about making meaning, about weaving a story that helps people see how what they do connects with outcomes they care about. I never had a class in meaning-making in my MBA program, but I’ve sure had a lot of clients who were showing up for their jobs, including their senior level executive jobs, without their hearts or their souls in the game.  And companies lose when this happens.

D. Ulrich: There is an increasing gap between academic research and business application.  Sometimes the incentives for success in the academic world are not consistent with what it takes to run a company.   However, I see top business schools working to bridge this gap by respecting executive education, by having more mature students who proactively draw from faculty what they know they need, and by having faculty who are willing to leave their ivory towers for the murky world of business reality.  Unfortunately, at other times, business professors have little or not interest or savvy about business issues.

Is all the business world a field or court?

A quick stroll through the business section of a bookstore or a search through the management section of an on-line retailer will quickly reveal the plethora of  titles available from sports figures.  Working from the analogy that the activities inherent around a basketball court, a football field, or a baseball diamond simulate the activities in the workplace, many current and former athletes and coaches have penned treatises teaching us how to be successful on the job.   Topics for these books include leadership, management, motivation, teamwork, self-improvement, finance, and others.

A great recent example of this is the book by John Wooden that we featured at the First Friday Book Synopsis and that you can purchase at 15MinuteBusinessBooks.com.   This book is also accompanied by videos, manuals, and training courses.  No one can question Wooden’s success as a repetitive NCAA champion head basketball coach at UCLA.   You could say the same thing about practically any of these authors.  After all, who would read a book from a loser?  I learned a long time ago in attending conventions of the National Speakers Association, that if you want to be successful in the business, follow the path of a successful speaker, not a failure. 

Here are some others:

Rick Pitino – head basketball coach at the University of Louisville:  Success Is a Choice: Ten Steps to Overachieving in Business and Life 

Fran Tarkenton – former NFL quarterback for the Minnesota Vikings and New York Giants:  What Losing Taught Me About Winning: The Ultimate Guide for Success in Small and Home-Based Business

Mike Ditka – former NFL head coach for the Chicago Bears and New Orleans Saints:  In Life, First You Kick Ass: Reflections on the 1985 Bears and Wisdom from Da Coach

The assumption behind all of these books is that the activities and best practices which yielded success for these authors in sports are relevant and applicable to what we do at work.  Therefore, a manager can use the techniques that a head coach uses, employees are players, competitors are opponents, strategies are plays, pilots or rollouts are practices, groups should become teams, and so forth.  We can use terms and phrases such as, “she struck out today,” “this looks like a home run,” “he’s our quarterback,” and “we’re in a sand trap.”  You get the point.

I think that there is some legitimacy to this, although I can tell you that in teaching my MBA courses at the University of Dallas, students are tiring of the sports analogy in business, particularly for teamwork.  You may remember the series of silly commercials from American Express a few years ago entitled “Great Moments in Business,” where employees piled up on each other in a room after a successful presentation, and high-fived each other as if they had just won a World Series after a closed sale.

If you believe that the principles that motivate human beings are the same, no matter what the context, then you would have no problem with what these books try to do.   Who would not advocate “practice” before performance, whether that is a presentation, a draft of a document or e-mail, or a pilot program prior to a national product introduction?   The same principles and behaviors that qualify a group of people as a team on the court or field should apply on the job.  Consider trust, which is a necessary, but not a sufficient condition for teamwork.  Without trust, there is no team, no matter where it is.   We don’t have to talk about money -  that’s an issue in the business of sports as much as the business of business.  Some have a lot, and some don’t have enough.  Some even go out of existence, such as the recent announcement that the 20-year Arena Football League will cease operations.  Some look for outside buoyance.  The Federal Government keeps General Motors alive.  Major League Baseball did the same for the Montreal Expos before moving them to Washington, D.C.   Every sports franchise is as much of a business as a firm on Wall Street, or anywhere else.

And, managers and employees can go through all the motions of strategic planning, just like coaches and players study a playbook, diagram motions, and run through plays on the practice field or court, only to learn that when they face a competitor, it is considerably different.   Rarely is there a situation where the presence of an opponent is the not the cause of substantial modifications in strategy, and the possibility of failure. 

Remember when George Will told us that baseball players are not the “boys of summer,” but rather, “Men at Work.”  He argued that baseball managers, just as business managers, examine a set of complex variables in making decisions.  And, that players perfect their skills on the diamond in ways that go well beyond how employees do the same in the workplace.

In conclusion, advice from sports personalities about business is probably no worse than the lessons we can read about based upon Abraham Lincoln, Jesus Christ, Machiavelli, or General Robert E. Lee.   Like many of these sports personalities, they didn’t run or work for any of today’s companies, but authors have used their best practices to show us how to work better in our jobs. 

Is all the business world a field or a court?  Perhaps no worse than a stage.  No matter how we do it, we all have to perform.  The question is simply what resources we want to use to guide us to success. 

Let’s talk about it.  What do you think?

Interview: Paul Spiegelman

Paul Spiegelman

Paul  Spiegelman co-founded The Beryl Companies with his two brothers in 1985. As CEO, he oversees strategic planning and business development for the nation’s thought-leading company in health care customer interactions and relationship management, and is the leading provider of outsourced telephone and Web-based communications in the health care field. Beryl was ranked #2 among the best medium-sized companies to work for in the USA by the Society for Human Resource Management (SHRM). Spiegelman earned a B.A. degree in history from UCLA and a law degree from Southwestern University. He is a member of the American College of Healthcare Executives and mentors MBA students at Southern Methodist University and Texas Christian University. He is the author of Why Is Everyone Smiling? The Secret Behind Passion, Productivity, and Profit, published in 2007.

Here is a brief excerpt from my interview of Spiegelman.

Morris: Do those who call a Beryl client think that they are speaking with someone employed by the client? If so, doesn’t this create pressure on Beryl employees to be a worthy representative of each client?

Spiegelman: Yes, every caller believes they are calling into a hospital, so it is imperative that we create a seamless, positive experience for them. Our call advisors understand that the bar for customer service has been set extremely high. They have to appear local, knowledgeable and empathetic. That pressure is what drives the systems and processes we put in place to give our call advisors everything they need to succeed. The additional challenge is that a call advisor’s next call could be one of any of the 450 hospitals we work for across the country, so they have to change hats very quickly. The key is preparing them through a combination of information in the database and ongoing training in partnership with our clients.

Morris: Please explain how you train new hires for what they are expected to do when processing inbound calls.

Spiegelman: It all starts with the recruiting process. We learned long ago that our call advisors were at the top of our organizational chart, and we needed to apply great discipline and patience to make sure we had the right people representing our customers. We like to say that we are “hiring the heart and not the head.” In other words, we are looking for people with the innate compassion and desire to help others. We can teach them the system and the computer skills, but they’ve got to bring the goods when it comes to their attitude – you can’t teach that. We hire less than 5% of our applicants and put them through a rigorous recruiting and interview process. Once they make the cut, they go through a 5-week, interactive training program that is a combination of classroom training and on-the-job training where they are mentored and coached by their peers. They must pass multiple tests along the way, but they understand that we are preparing them for the job ahead. We also immediately bring them into our culture, and build a fun and engaging environment around them to support what is otherwise a very challenging job.

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To read the complete interview, please click here.

Paul invites you to visit Beryl’s website. To do so, please click here.