Idea-ocracy: Unleashing Creativity and Innovation
How do we create an environment that is founded in continuous innovation, where everyone is aligned and motivated to make sure that the best ideas that serve the most people always win? In this space, honesty, data and experimentation will be the ideology. The relentless pursuit of building better customer relationships will be the unifying tenet and our continuously improving best practices will be the foundation for execution and success. It starts with understanding where innovation comes from.
When a powerful innovation occurs in business, the result can be measured through customer behaviors. When customers demonstrate that there is an improvement in the relationship between us and them, measurable increases in the loyalty ladder metrics: trust, loyalty and/or advocacy; are the result. Those improvements create momentum for an organization. It is, of course, reasonable to argue that there are other types of innovations, such as those that improve our profitability, but don’t impact our customers directly. There are all kinds of impactful innovations that can make our organization more profitable or more efficient. There are also innovations that improve our organization’s relationships with our employees. At the end of the day, however, those gains ultimately be put to use improving our relationships with the customers who provide our revenue. Even those gains that improve our employee satisfaction will ultimately serve to improve our relationships with our clients whether through more efficient or happier employees.
Maximizing the trust, loyalty and advocacy that you earn from your customers for your firm, is the prime directive. This is called momentum.
An innovation, with this argument, could be defined as:
Any idea or tactic that measurably improves an organization’s momentum.
The following graph describes what it looks like when an innovation occurs that measurably improves the organization’s relationships with its customers. When we plot momentum (a measurable increases in trust, loyalty and/or advocacy) vs. time, the graph describes the generalized life-cycle of serial innovations.
If we operate our business without innovations, we will continue to have the relationships that we have. That is, until a competitor comes up with a better innovation. Competitive innovation will result in a decay in our ability to improve trust, loyalty and/or advocacy over time. It is still possible for our company to grow and achieve a modicum of success, but new innovations accelerate of our organization’s ability to improve customer relationships and fuel the growth of our businesses.
When a new innovation occurs (at point I-1), an increase in momentum results. The area under the curve represents the value that we get out of that single innovation. It will continue to grow until it becomes an expectation, a competitor copies our innovation or a competitor comes up with a substitute innovation that reduces the impact of our initial innovation. Although the timeframe for each innovation will differ and the shape of the curve for each innovation will be different, each innovation will have a limited lifespan. The cycle repeats itself when another innovation occurs in the future (I-2).
If we don’t innovate, and we simply follow our predictable processes, day in and day out, we will get exactly what we predicted and nothing more. If the business is truly a cash cow, and we are happy with that, then it makes sense to install a clear and invariable process to drive the predictability of that ongoing revenue. But how many of us have that kind of cash cow business? Even if you have a cash cow business, you should still be looking for innovations that will improve your customer relationships.
Grace Murray Hopper, a computer scientist who worked on COBOL in the 1970’s used to have a clock hanging on her wall that ran counter-clockwise to remind her team that things can always be done differently. This quote, that you often see written on the walls of modern businesses, is attributed to her:
“The most dangerous phrase in business is ‘We’ve always done it that way.’” — Grace Murray Hopper
Grace Hopper observed that children are generally uninhibited by this mindset, while as adults, we often become allergic to change and seek out the safety of a process. As the father of four children, I have shared this observation at home. Another phrase that I hear in business when things go awry, all to often, is: “I was following the process.” Even if the result of following the process results in a frazzled and upset customer when there were plenty of common sense alternatives available.
Our leadership imperative is to align, motivate and empower our people to constantly be looking for innovations that will measurably improve our customer relationships. If our culture is one of managing to a restrictive process, we will have trouble soliciting innovations from our team. Our people will not have the autonomy, nor the creative space to even think about innovation. However, if our culture is one of best practices, experimentation and ongoing learning and mastery, then setting the right metrics will give our people the guidance they need to unleash their creativity.
“It doesn’t make sense to hire smart people and then tell them what to to , We hire smart people so they can tell us what to do.” — Steve Jobs
When something appears to be working well today, it is easy to get caught in the trap of managing for the holy grail of predictability. If we are not careful with that philosophy, it can stunt innovation and be detrimental to morale. In fact, the more creative and intelligent your staff is, the more dangerous it is to force predictability and process at the expense of innovation.
Innovation thrives in a culture of best practice. It can be stifled by process.
We need enough process to maximize predictability, but not at the expense of innovation. Our people need to know what our shared goals are and they need to know that the “process” can be changed if it will result in an innovation.
The following graph demonstrates what happens to an organization’s momentum when we have continuous innovation.
As business leaders, it is our job to create an environment that supports and rewards the ongoing and continuous flow of innovations over time. We want innovations that drive more trust, more loyalty and more advocacy from our customers. We want to maximize the number of thoughtful ideas that are brought to the table and to optimize the experiments that we run to meet the prime directive of building stronger relationships with our customers. The graph shows the desired, ongoing improvements in momentum. This is called Continuous Innovation.
Unfortunately, profound innovations rarely happen on purpose at the precise moment that we want them.
Chance Favors the prepared mind — Louis Pasteur
Thus, business leaders find success fostering open ideation and innovation when individual autonomy and ongoing mastery is supported. When we institute an overbearing and creativity stifling process, we reduce or in the worst cases, eliminate, opportunities for innovation. Research from all corners of the social sciences support this strategy.
- Dr. Mihaly Csikszentmihalyi’s research on human peak performance across industries and disciplines demonstrates the need for sustained periods of “Flow.” From athletes to artists and engineers to sales people, flow is essential for peak performance.
- Dr. Richard Ryan and Dr. Ed Deci have spent decades and written many books on their theory of human motivation, called The Self Determination Theory. Their work clearly demonstrates the powerful and foundation need for individual autonomy. People need to feel a sense of control and autonomy in their work to maximize their motivation to achieve any goal.
- Even the world of artificial intelligence and the study of neural evolution has proven that innovation cannot be forced. Dr. Kenneth Stanley, in his book “Why Greatness Cannot Be Planned”, quantifies how “Novelty Search” works in artificial neural networks. He says the wrong metrics can be deceptive. They can make you blind to the important underlying discoveries that be required to achieve success. He says that “this kind of deception is universal across all kinds of endeavors.”
- When I interviewed the world renowned artist Sebastian Errazuriz for the Product Momentum Podcast, he said “the best way to begin solving a problem, is not to begin by looking at the problem itself, as most people would do.” He went on to talk about how to prepare the mind to be open to innovation.
- Daniel Goleman‘s work on behavioral science and emotional intelligence led him to write the book “Focus”, in which he describes an ideal state called “Open Awareness.” Innovation is most likely to occur when the objectives are known and the whole brain has the opportunity to ponder the multitude of possible solutions. He demonstrates through powerful examples how most of the profound discoveries of the last few centuries occurred while the discoverers were in this state.
Remember the Steve Jobs quote from above? We want all of those smart minds continuously thinking of better ways to improve our customer relationships and we have to give their creative minds the power to discover the next innovation.
To achieve this Continuous Innovation environment, start by creating a shared objective around which our people will have that “open awareness” that Daniel Goleman talks about. If our metrics align and unify our people around improving our customer relationships, “open awareness” will result. We want as many people on our team as possible believing that innovation is possible and looking for experiments to run and things to try.
The Loyalty Ladder will help us to create those aligning metrics for our teams. The Momentum Framework gives us the tools to motivate and create the confidence and commitment required to continuously improve our culture and deliver on those metrics by inspiring our people to innovate.
Reading List:
- Focus by Daniel Goleman
- The Handbook of Self Determination Theory by Ed Deci and Richard Ryan
- Why We Do What We Do by Ed Deci
- Why Greatness Cannot Be Planned: The Myth of the Objective by Kenneth Stanley
- Grace Hopper and the Invention of the Computer Age by Kurt Beyer
- Steve Jobs: His Own Words and Wisdom by Cupertino Silicon Valley Press
- Flow by Mihaly Csikszentmihalyi
Many other authors and leaders have influenced my thinking on this. To name a few:
- A Theory of Human Motivation by Abraham Maslow
- Emotional Intelligence by Daniel Goleman
- Social Intelligence by Daniel Goleman
- Maslow on Management by Abraham Maslow
- The Emotions of Normal People by William Moulton Marsten
- Mastery by George Leonard
- Drive by Daniel Pink
- And many, many more….
