The Problem: Managers ask for innovation yet they struggle in enabling innovation because they excel in creating environments that restrict creative thought
Why it Happens: Historical management theory and practice have focused on organizational control which consequently runs counter to behaviors that enable innovative thought
The Solution: The focus of the future leader will be on developing creativity inducing environments where the managers’ role will be a facilitator of innovation rather than attempting to control organizational complexity
Key Words: Enabling Innovation, Creative Environments, Operational Workflow, Team Dynamics, and Leading Innovation
Hostess Brands, amongst different name variations, originated in 1919. Quickly, they had become a staple of American diets throughout the rest of the century. Bringing to the public Wonder Bread, Dolly Madison, and the jewel of the packaged dessert, the Twinkie. As a result, most houses and nearly every lunchbox in the 1970s contained a Hostess brand product. Yet, 30-years later their company is an apparition of the past.
Hostess was never able to effectively move into their second phase of the corporate lifecycle. Because they never introduced new products that would align with the changing customer base their game clock started counting down. As America became more health-conscious, Hostess products were targeted as a direct contributor to the obesity epidemic. Instead of introducing a new line of health-oriented snacks to combat this threat, Hostess maintained their posture of continuing to try to wring every dollar out of their historic products where they should have been focusing their efforts on their second life. This culture of maintenance over innovation was the first symptom of their eventual death.
By the time of their company demise, Hostess had over 18,500 employees, 600 distribution centers, and 36 bakeries. After navigating through a handful of bankruptcies, buyouts, and acquisitions the company had found themselves in a poor strategic position. Having 372 separate union contracts to adhere to and 5,500 overlapping delivery routes throughout the United States that were controlled by collective bargaining agreements handicapped Hostess. Consequently, increasing costs in gasoline, flour, and sugar, depreciating equipment, and unmanageable pension plans compounded their issues.
In 2012, Hostess finally capitulated as their costs continued to overwhelm their revenue. While this is a specific example of a company faltering from a failure to innovate and reinvent themselves, it is more of a precursor to a multitude of organizations operating for the time being. This article will focus on the leadership contribution to facilitating innovation within an organization. A leadership skill of the future will be the ability to create an environment that actively encourages and enables innovative thought. As a result, this ability to facilitate creativity throughout the organization will prevent the next great corporate meltdown.
Chan Kim and Renee Mauborgne in 2004 wrote about competitive marketplaces coining the terms Red and Blue Oceans. The Red Ocean is the analogy that represents contested markets where there is a constant fight for dominance. However, a Blue Ocean represents an uncontested marketplace because it is newly created. Through their research, they identified that the companies that have succeeded over the long term are the ones that have continued to prioritize the creation of new Blue Oceans instead of fighting wars of attrition in trying to maintain a hold of market share.
Blackberry is an example of achieving the Blue Ocean by pairing their cell phones with an e-mail service in 1999. For several years, they dominated the mobile market and maintained a stronghold in business sales. The market eventually became saturated with competitors. Instead of trying to create a new evolution, they chose to fight for the maintenance of market share. Their corporate death followed.
Most MBAs leading organizations will repeat these stories of failing to innovate and continue to fall into similar traps. As organizations grow, their expectations with shareholders, analysts, and executives verbalize innovation but their behaviors stress stability and repeatability. Hence, they have a desire to create a foreseeable performance leads to the development of safe evaluation models. As a result, models that are predictable in nature which directly leads to favoring incremental over disruptive initiatives. It is easier to predict incremental innovations. Empirically grounded initiatives are easier to recover from if they fail.
The disruptive and Blue Ocean initiatives fall into a different category, one of unpredictability. Financial modeling, returns on investment, and customer adoption are all unknowns with proposing a disruptive initiative. Because the data is poor, the market is yet to be defined, and the risks are significant which leads to organizations inherently guiding back to choosing safer incremental projects. However, these incremental gains are only tactical maneuvering to win a battle in a war that will continue for years. The disruptive model is the strategic approach that will lose a handful of battles in sacrifice to win the longer-term war.
It is easy for an executive and management team to tell their teams to be more creative. Bring forward disruptive ideas, and to be the beacon of innovation. There are two specific occasions where these plans fail. Starting with roles built for standardization and not for innovation. For example, a pharmacist technician refilling a prescription would not want to be creative when following a standardized procedure. This would be targeting the creativity to areas more apt for innovation versus providing a generalized notion to be creative.
Secondly, to kill an idea as it is brought forward. Because the organization doesn’t have the capability, capacity, or courage to act on those ideas. As a result, the innovator becomes dejected. Due to this, they lose faith in the organization that the organization will act upon the best ideas.
The dejected creator can be a dangerous force in an organization. The successful ones continue to pitch new ideas. They celebrate the one out of ten ideas accepted. In contrast, the less resilient innovators typically quit trying and become silently disengaged or they can shift into a passive-aggressive culture killer. Consequently, they use emotional stories of rejection to shape the actions of the people within their sphere of influence.
These stories turn into folklore legends that are embellished and fester in commonly heard statements.
“We’ve tried that before and it didn’t work.”
“They only want you to agree with them and they are not really interested in what you have to say.”
“Watch, you will put together a list of great things to do, and not a damn thing will happen.”
This is how a negative culture takes root and becomes nearly impossible to resurrect. Before long, the organization will have behaviors and ideas driven by safety and a desire to not rock the boat. With these weak voices of thought, multiple perspectives become extinct and ideas become stagnate. These predictable ideas then lead to protectionism and eventual organizational deaths.
Borders took a strong foothold in the publishing and retail environment with their revolutionary inventory tracking system. This drove such a high level of efficiency that Borders could expand significantly. In the early 1990s, the Border’s brothers sold their company to Kmart which was then made independent four years later. During that time, both Barnes & Noble and Borders were growing aggressively during the dawn of the internet. Barnes & Noble chose to develop their own eCommerce platform to sell books, while Borders chose to focus their efforts on global expansion and decided to outsource their online book sales to a small start-up, Amazon.
During this timeframe, Borders experienced significant management turnover and their original culture of aggressive innovation had turned into passive maintenance. Another side effect of the rotating management team was that the company leaders no longer had industry expertise. Having a limited ability to diagnose the key issues their company was facing. The culture built to silence the insight of their staffs. The same staffs that had the ability to diagnose the issues. For that reason, Borders was over-extended. They were slow to get on the web. They never developed an e-reader. By 2011, store closings and layoffs were inevitable. Within three months, the company was insolvent, only living a short 40 years in corporate existence.
At the root of this phenomenon is that innovation is hard to manage. Simply put, the majority of leadership and management practices have focused on bringing clarity, order, and alignment which runs counter-intuitive to the creative mindset. The distinguished psychologist, Mihaly Csikszentmihalyi, captured the traits of the creative person noting that: they are highly energetic, they are smart and naive, they are playful and disciplined, their reality is rooted in fantasy, they are highly independent, curious, questioning, open to new ideas, and divergent thinkers.
Taking those attributes and evaluating them against behavioral models that begin in school shows a wide gap between school conformity and student creativity. Numerous studies have validated these findings that teachers show preferential treatment to the students that show the traits that are counter to creativity: conformity, unquestioning acceptance of authority, and compliance. The studies also point out that teachers routinely suppress creative traits and in some cases label creative children as obnoxious misbehaviors. Progressing from schooling to organizational settings, the leadership behaviors of creative suppression parallel each other.
A staple of solid management is sound discipline and order. Looking back on Napoleon’s Army to Fredrick Taylor’s view on industrial management, there are little variations as the goal is to have repeatability, standardization, and as little deviation as possible. These practices are still in place today and stretch into the area of knowledge workers for a solid manager was one that had a firm blueprint of how their organization worked and they were the central player in its functionality. To maintain that level of control, however, eliminates the usefulness of a curious employee always asking why and experimenting with different ways to do the same task.
Performance reviews, bonus structures, and promotions reinforce this stifling behavior. Individuals that rock the boat the least are the ones that can be depended on. The oppression of the innovative persists, boredom and stagnation set in, then disengagement and attrition follow. Those that create leave while those that adhere to process stay in the organization with a culture that has the inability to create and to disrupt the marketplace. Fortunately, a revolution in the world is occurring where complexity is growing exponentially. Some work models and processes change each iteration. Work is becoming more ambiguous that it is impossible for a centralized leadership figure to control everything. This new reality is bringing forward a new manager, not one of a product, but a manager of complexity, one that will famine if their focus is on control and will feast if their focus is on facilitating innovation.
Instead of attempting to map the architecture of how a dynamic organization operates to gain control. I propose not a different approach, but a different mindset towards leading innovation. This model puts the focus on creating the optimal environment for specialized experts to succeed in managing through ambiguity in their areas of complexity. Due to this, the call is for the manager to release control and to give authority to the most knowledgeable. In this paradigm shift are the founding cornerstones of innovation enablement. To simplify the concept of an innovation environment, imagine an organization broken into four intertwined quadrants of culture, workflow, team dynamics, and facilitative leadership.
Culture is the backbone of an organization. It drives both good and bad behaviors while also being the lynchpin on how work gets accomplished. In the context of innovation, culture holds the key to organizational encouragement or discouragement of innovation. All great innovations begin with a sound vision which will provide two key facets of the creative process. Firstly, is that it sets a tangible target for people to strive for. While also having a vague direction to guide them.
The second aspect is predicated on the organization’s ability to execute the idea by establishing and sharing a picture of the future to the organization, ultimately helping to align the internal resources needed to bring the idea to fruition. Next, there needs to be an organizational emphasis on being able to express ideas safely. The creators should not feel pressured or threatened, but more preferably relaxed and alert. This has a direct tie to Maslow’s hierarchy of needs, where before an individual can achieve their peak performance, they need to have their physiological and safety needs met.
Lastly, a culture is defined by the behaviors that it rewards and punishes. The key to this is not the rewarding of the outcome but the rewarding of individuals taking risks. Through this mechanism, individuals can take greater social risks. This will inherently lead to more creative ideas. Netflix has taken painstaking efforts to skillfully craft their culture where innovation is its necessary heartbeat. Captured within their notable culture deck is their ability and freedom to take risks. The emphasis is if it doesn’t work fix it quickly, learn from it, and keep innovating.
If culture is the backbone of an organization, then the flow of operations is the circulatory system that keeps the body moving. The Lean mythology will look at this organizational flow searching for constraints to the flow pattern to improve efficiency and effectiveness, the same can be said for the flow of innovation. When designing an office work model or a timebound workshop an important facet is to ensure a smooth flow of ideas that don’t become constrained. This creates the facilitation of more ideas, or a mass of ideas, which in turn has a direct correlation to better ideas where quantity breeds quality. This falls into the camp where individuals start their idea processes with the easy solutions or ideas that are close to the top of their mind, and the more ideas they must produce, the greater the depth of creativity they will be forced to explore.
The second aspect is that while innovation is noted for being optimal as an individual experience, the outcomes can be parochial in nature. The genesis of the group collaboration includes the infusion of multiple perspectives. By applying a variety of inputs, ideas can take a different form and address solutions with greater assurances of achieving customer satisfaction (West, 2003). While this can create the opportunity to stop the flow of ideas, it will also build the opportunity to have the team combine and scaffold their ideas together resulting in a higher quality of ideas.
Lastly, is creating the process where your team can go into deep and focused thought. Typically, office work consists of busy and shallow work, this is the work that can be done with distractions and via multitasking. Deep work is the all mental encompassing work that ultimately challenges the team to stretch to new heights, this is where ideas are born. Deep thought is absolute for creativity; it is necessary to eliminate added interference so that individuals may be able to achieve a higher level of deep thought, ultimately inducing innovation.
The Dunkirk and Batman director, Christopher Nolan, emphasizes these points on his movie sets by banning phones on his sets. Under the belief that there are bubbles of creativity in which people will get lost in engaged, creative thought. The main culprit of bursting those bubbles are the distractions created by phones taking them out of their deep level of concentration.
Noted earlier in the article and throughout the body of research, a single individual produces greater innovation that a group of people. There are several causes of this from groupthink and a lack of safety in sharing ideas to not incorporating all the perspectives and having an overly dominant opinion take over the group. With this known, a team of innovators still has the potential to create powerful ideas if they are guided correctly. Unique to individual innovations, team creations account for multiple perspectives built off multiple expertise’s increasing the chances of the solution addressing the issue and overall idea adoption. The key to achieving this state is refining your team dynamic to enable this level of innovation. This starts with balanced team participation and not letting one person dominate the discussion, as this will negatively impact the ability to gain the participation of all attendees.
Secondly, there is a need to create a team environment where they are playful, trusting, and vulnerable. Ensuring a safe environment to share ideas elicits the most ideas from most people. Associated with vulnerability is the team’s level of playfulness. Their willingness to have fun with one another, creating a joyful environment. Similarly, where people are not only comfortable with their teammates but happy to be among them.
Lastly, a leader will want to create a team that is cognitively diverse and comfortable debating with one another. Creativity is improved by incorporating the ideas of people with different technical specialties and cognitive thought processes. Cognitive diversity, or different ways of thinking, provides the condition for convergent and divergent thought. Having a diversity of backgrounds enables a range of individual cultures within the team, creating opportunities for cognitive diversity. This will also elicit debate and argument in the group to challenge the merits of ideas and to ensure a full perspective is taken.
One of the main concerns with a group or team brainstorming is the prevalence of groupthink. As a result, his phenomenon negatively impacts effectiveness, as the goal shifts from creating originality to achieving consensus. One of the main issues of achieving a majority view is that people naturally gravitate toward consensus. Even if it is the wrong decision or choice. Research has found that the application of friction, debate, and dissent stimulates the thought process to help achieve multiple perspectives on an issue. The goal of a team should be achieving candid discussions. Wilbur and Orville Wright had the advantage of being brothers but maximized this approach. During the build of the first airplane, the brothers believed that they thought as one. However, it was common for them to fight and debate for weeks over pivotal decisions.
Leadership is many things to many people, and to innovation, it is the culmination of creative success. Encouraging leadership can inspire just as quick as pessimistic leadership can silently mute innovative initiatives. Focusing first is on a leader awarding autonomy and then being judgment-free of the process. Being innovative and creating out of nothing is a masterful art and one in which a person needs to have the autonomy to experiment and explore on their track towards mastery. This mental activation can come through in many forms ranging from walking and taking naps to play video games and doodling.
As the creator refines their process to innovate, it is also key for the facilitative leader to encourage this behavior. In contrast to fixating on the abnormal deviations from the normal. This releasing control to explore ambiguity enables the creator to delve into their deep and focused work. This is in contrast to the shallow work that resides in the structured norms of an organization results in benchmarking competitors and maintaining the status quo. Above all, deep work that explores ambiguous relationships, social connections and complexities lead to the market shifting disruptive innovation.
This comes to the last emphasis to encourage creativity and being patient enough to let it develop. Not every gamble will pay off and neither will every initiative. Venture capitalists bet on ten companies with the expectation that only one will achieve greatness. The company that achieves greatness covers the wagers placed on the organizations that don’t come to fruition.
Pfizer went through this same process in the early 1990s. While on a quest to create a high blood pressure and chest pain medication. Because the trials proved to be unsuccessful the product became close to being shelved. Fortunately, they found that it could address erectile dysfunction. Furthermore, patience played out resulting in a dramatic market shift from the original vision. As a result, this led a twenty-year, $32 Billion-dollar revenue run for Viagra. While the intent was specific in the beginning, the innovation cycle is never a straight path, nor does it ever end exactly as perceived. Above all, maintaining patience to see the outcome can pay huge dividends in the end.
| Culture | Flow of Operations |
| Vision | Quantity of Ideas |
| Safety in Sharing Ideas | Applying Multiple Perspectives |
| Rewarding Risk Taking | Deep & Focused Work |
| Team Dynamics | Leadership |
| Balanced Participation | Autonomy & Judgement Free |
| Team That is Playful, Trusting & Vulnerable | Creativity Encouragement & Patience |
| Cognitively Diverse & Candid Debaters | Releasing Control & Exploring Ambiguity |
Tips and insights on how to be more innovative are interesting and anecdotal. They are also difficult to put into action that leads to behavior change. Therefore the priority is to understand what the impediments to being creative are and how to implement cultures to disrupt. Linking awareness to change can be a powerful approach to awaken an individual to their reality.
The typical response from a client when asked how innovative their culture is, they err on the side of positivity. Stating that they are more innovative than most and attempt to make a direct link to how their culture is the cause. Using quantitative surveys, qualitative focus groups, and observations, an independent assessor can accurately triangulate a picture of the culture. This helps determine how well the leader’s assessment aligns with the team’s. This also creates an understanding of where a team can be innovative and where a team must be process-driven and standardized.
Assessment is a valuable component of the key stage of changing behaviors. My mother’s philosophy that “people don’t change after kindergarten,” runs counter to this approach. However, it captures accurately that behavioral change is one of the hardest tasks an organization can undertake. Therefore, many clients will look at the number of weaknesses pointed out and will either disregard everything and do nothing. Similarly, the other clients will build a massive corrective action plan in the attempts to solve everything. Consequently, these gyrations both end in the same result of no progress accomplished.
A healthier approach would be to follow the guidance of Richard Thaler’s Nudge Theory. The theory focuses on small, incremental and almost unnoticeable changes. These nudge people in the direction of making a better decision. For example, to encourage healthier eating, Nudge Theory would suggest placing fruit or vegetables at eye level, near the checkout counter of the grocery store instead of displaying candy bars. Using this same approach, as a team, choose one behavior or cultural aspect to change. Then design how each other can be nudged into the behavior that would help enable innovative thinking. Make this one behavior the focus of the team for the next few weeks. Practice feedback on performance with each other to get it to stick and after six-weeks, if the behavior has changed, then move to the next weak area.
This approach came to life when consulting with a manufacturing organization whose executive staff kept focusing on tactics and operations. This led to a stagnate business model. With phones, messages, and interruptions constantly occurring, the team was never able to achieve a level of deep and focused effort, nor were they able to define a long-term growth strategy. Using this process, they were able to build a two-hour block of time at the end of each day. There they established expectations enabling them to shut off their phones, close their e-mails, and decline meetings so that they could dedicate their efforts to build a long-term strategy. While this was intended to be a short-term resolution to build a strategy, it soon became ingrained into the culture of the organization with the time blocks moving into the management and engineer levels.
Lastly, try to build a comprehensive working prototype as a team that would take your team through a simple project. Because you will be able to define your creative process and begin to prepare yourself to handle greater levels of ambiguity. Choosing a safe project to practice on, design and build a flow of operations for the project with a specific focus on how the project can be run with the greatest inspiration of creativity. This will provide the opportunity to understand the team preferences for how they will be able to unlock their reserved insights as well as establishing behavioral guidelines to operate with. This experience will help the team explore the pros and cons of the model with the intent to design a future operating model that will unlock innovation during the projects that matter most.
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