The Secrets of Creating an Environment For Innovation

Chris Curran: Growth Igniters Radio, episode ten: “The Secrets of Creating an Environment for Innovation.”

This episode is brought to you by Business Advancement Incorporated; enabling successful leaders and companies to accelerate to their next level of growth. One the web at www.businessadvance.com. Now, here’s Pam and Scott.

Pam Harper: Thanks Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated, and with me is my business partner and husband, Scott Harper.

Scott Harper: Hi Pam. How are you today?

Pam Harper: I’m great.

Scott Harper: That’s terrific. It’s really wonderful to be here with you today. I’d like to remind our first time listeners that the purpose of Growth Igniters Radio is to spark new insights, inspiration, and immediate useful ideas for leaders to take themselves and their companies to the next level of success.

You know, Pam, part of success is something people talk about a lot but don’t always agree on, and that’s innovation − “We need to increase innovation.” One of the things we’ve been hit with, over and over and over, when we’re talking to people and listening to people, is that there’s actually a heck of a lot of disagreement about how to harvest the full power of innovation to get to the next level of company growth.

Pam Harper: It can be confusing. And I think, on top of that, capitalizing on that innovation on an ongoing basis is another area altogether.

Scott Harper: That’s true. That’s why I’m really happy today that we’re going to be talking with Arthur Fox. Arthur is a friend and former colleague of mine. We were in Warner–Lambert and Pfizer and Johnson & Johnson together. Now he’s founder and Chief Innovation Leader of the Innovation Global Network. If you’ve ever used healthcare products like Listerine, any color, really − except the gold − Arthur wasn’t around a hundred and twenty-five years ago; Arthur has been touching all those things that you use on an everyday basis.

We’re going to dig into how leaders of companies of all sizes can create an environment that fosters the highest level of innovation, inside and outside of your company. Arthur was one of the key forces behind the virtual explosion of innovation in our companies and has taken his passion for innovation out to the world to create a virtual community of innovation for companies all over, globally. Arthur, welcome to Growth Igniters Radio.

Arthur Fox: Thank you, Pam and Scott, for having me and giving me a chance to talk with you and your listeners.

Scott Harper: That’s terrific. Arthur you’ve been up close and personal to innovation of all kinds in many different types of companies for years and years. One of the things that we have run across frequently is a fundamental disagreement about what innovation really means. This morning I did a Google search on innovation and I got about four-hundred and fourteen million hits; you’ll find all kinds of opinions about innovation. So, what’s your definition of innovation?

Arthur Fox: It’s true that “innovation” is used very loosely, and it’s been watered down to some extent. To me, innovation is about creating commercial opportunities or meaningful changes within organizations and how they do things.

Scott Harper: Okay. Can you tell a story about you’ve been engaged in really helping take innovation up to a new level, and what it’s taken to do that?

Arthur Fox: As you mentioned before, you and I worked at Warner–Lambert; I was focused on marketing research there. At one point, I was the head of market research for the oral care product category. I had been there about ten years, at that point, doing market research on all sorts of new product initiatives and other initiatives, and I made the comment to the head of the product category that the company was very poor at developing new products, and it was due to a lack of best practices and processes, and a lack of an innovation culture.

The simple truth is that when people were being asked to go out and develop new products on their brands, they really didn’t know how to do it; they weren’t trained how to do it in business school, and the company lacked best practices and processes to give to these people and to train these people on how to do it. When they got the assignment they just floundered.

Scott Harper: It was really people acting sort of in a vacuum – each one in their own little bubble.

Arthur Fox: That’s right, they acted in a vacuum, and because of that they relied on their own idiosyncratic, habits and personalities, as opposed to relying on best practices and processes on how to develop innovation.

I was told at that time that I was correct, and I was asked to develop the best practices and processes that they can give to their people to kick start innovation. I put together a team at that time of people from different parts of the organization, including R&D and manufacturing and regulatory. We studied everything that existed at the time on innovation and new product development to put together a set of recommendations, which became the strategic framework for developing new products within the product category.

Scott Harper: Arthur, the trick, as you’ve seen, and I’ve seen in the companies we were in together and separately, is that best practices make a lot of sense − but it’s not always easy to really bring them to full life. One of the obstacles that we’ve seen together has been a tremendous lack of trust of “those people”… Oh, “those people are going to do this,” or “those people will never support that.” Of course, to “them”, we’re “those people;” and so…

Pam Harper: The scientists, right?

Scott Harper: Yes − the scientists were “those people” to the marketers, and the marketers were “those people” to the scientists and engineers. To change this it really has to come from the top, because the values that bring that kind of interaction and bring those practices to life have to be part of what people are really encouraged for and they set an example for that kind of action. Arthur, is that how you see it as well?

Arthur Fox: It’s true, leadership must demonstrate through their actions that they’re serious about innovation, and that they’re open to change and to the ideas and input that’s provided to them by their own employees, or people just simply won’t bubble up their ideas to those people.

Pam Harper: Mm-hmm (affirmative). Arthur, to what extent do you see assumptions about innovation, or what everybody’s trying to do, get into this whole process of innovation?

Scott Harper: That kind of uneven understanding of what innovation is…

Pam Harper: Right.

Scott Harper: A manager or a president or CEO may say, “Go out and innovate” and they mean one thing, and other people in the company mean something else.

Pam Harper: I’ll tell you, my background is dealing with a lot of the smaller companies − the middle market companies − and so often I hear people saying, “Well, I know what innovation is,” and actually they aren’t even talking to each other about it. Half the time I uncover these things, and they’re not even speaking same language. Is this something that happens just in the smaller companies or does it happen in the larger companies too?

Arthur Fox: It definitely happens in the larger companies. As I mentioned earlier, we created a strategic framework for developing new products, and every year we would revisit that and revise it and modify it and make it better. One of the things we learned through that process is that there needs to be clarity as to what the focus is for innovation, because organizations usually have key strategic priorities and they’re looking for innovation against those priorities. They’re less accepting of innovation that falls outside of those priorities, so that needs to be made clear.

The other thing that needs to be made clear is some criteria for those ideas to be accepted, [when they are] brought to the leadership team. Otherwise people spend a lot of time focused against ideas which will never meet the criteria that the leadership may have in their heads but they haven’t verbalized to the people. That creates a lot of wasted time, and it creates a lot of frustration in the people below.

Pam Harper: The key is, it sounds like, in fostering that environment, is you really have to be so clear at every level of the organization about what innovation means, about the criteria for that innovation, and drive it throughout the organization so people can really take action that’s meaningful.

Arthur Fox: That’s right, and people become more motivated and encouraged to actually come up with ideas if they understand what the company is looking for, and really believe this is what the company is looking for. They believe that if they do this there’s a real good chance that the company will take them seriously and their ideas may actually come to fruition, and that’s very, very motivating and empowering to people.

Pam Harper: On that empowering and motivating note, we’re going to take a quick break. When we come back we’ll talk about how to overcome the obstacles that are involved in building an innovation environment. Stay with us.

Scott Harper: You’re listening to Growth Igniters Radio, with Pam Harper and Scott Harper. Brought to you buy Business Advancement Incorporated. On the web at www.businessadvance.com. If you subscribe to the Growth Igniters Community by clicking the “join our community” button at www.growthignitersradio.com, we’ll be able to send you weekly updates to help you get more value from each episode. They’ll give you easy access to each episode’s play button, show notes, guest bios, and links to resources mentioned in the episode.

Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. We’re talking with Arthur Fox, founder and Chief Innovation Leader of the Innovation Global Network, about how important it is for the leaders to build an environment that fosters true engagement throughout the organization so that your company can realize its full innovation potential. Arthur, how can people reach you?

Arthur Fox: They can reach me in several ways. People can send me email at afox@innovationglobalnetwork.com. They can call me at (973) 953-5036. If they join the Innovation Global Network at www.innovationglobalnetwork.com, they can send me messages through the network.

Pam Harper: We want to remind people that this is Eastern Time that Arthur’s talking about, because we know our listeners are all over the world.

Arthur, we know that innovation is important, but as we were starting to say in the last segment, there can also be some resistance to innovation, especially if it’s been part of what made the company successful in the first place. The question is, what can you do to make sure that this environment is a reality and not just a dream?

Arthur Fox: You’re right; resistance can show up from many sources and in many ways and in many forms. The leadership team, as I mentioned earlier, does need to demonstrate that it’s open, of course; they need to make it clear what they’re open to, and that if people present them with ideas in that area, they have to listen and they have to treat those ideas with respect, and if they turn them down they need to explain why they’ve turned them down.

Also barriers can be put up within silos within the organization; all those silos need to be broken down. The leadership team needs to encourage people to work together and be supportive of each other and show them that this is a value of the organization and it’s expected of their people to do that. People are naturally competitive in organizations, but the leadership team needs to say, “That’s okay, be competitive, but you also need to be open and supportive of each other within the organization.”

Scott Harper: I think that’s a truly important point, Arthur. Silos are something that we have dealt with over and over through the years. It’s kind of ironic, because on one hand, leaders and people in the organization say “we hate silos” and yet they exist for a reason; they don’t just pop up for no reason. Usually it’s because, as you say, there’s competition, and there’s also incentives to be focused and siloed − “this is my job; I’m going to do my job, and the heck with you.” Pam, you’ve seen organizations where people have actually been really disincented from breaking down silos when they were told to do it in the first place.

Pam Harper: That’s true. It can be something where people don’t even realize they’re doing it. Simple things like stories about who the real heroes are in the company, because this one is fostering this particular product, but not that product.

In fact, it brings a question to mind − sometimes companies can be developing many different products or services at the same time; in fact, I guess it’s usual. Do you find that there’s an optimal number [of innovation projects] that companies should develop, or how do you deal with that?

Scott Harper: Or a level of support….

Pam Harper: Right.

Arthur Fox: The number of initiatives that should be supported usually has to be consistent with the resources that the organization has. Good organizations spend time identifying how many initiatives that they should spend on. For example, when we were working on Listerine, initially, when I first took on the responsibility for heading up the oral care new products team, it was identified at that time that the company only had enough R&D resources to support one oral care initiative, at that time.

Now, having realized that, the organization then said, “Okay, we really do want to support more; let’s put together… replace programs to free up resources so we can handle multiple initiatives at one time.

Scott Harper: Okay. Of course, that causes a ripple effect throughout the parts of the organization that are having their resources cut, so it’s really important for the leadership to balance the fallout and find ways to not “cut off their nose to spite their face,” so to speak.

Arthur Fox: That’s right. By tackling this in a very deliberate manner, companies can expedite and accelerate the amount of innovation that occurs. By making sure they don’t take on too much, it preserves their resources, but also, potentially, freeing up additional resources if they’re not satisfied with the level of innovation. Because they may decide that it’s not enough to support their growth initiatives, so they really do need to go and free up those resources.

Scott Harper: Mm-hmm (affirmative).

Pam Harper: That goes into one of the issues, I would think, at times as to why trust builds or it doesn’t, because if I’m on one team and you’re on the other and we’re competing for those resources, it doesn’t matter if we say we’re all on the same team if we’re actually pitted against each other, I would think.

Arthur Fox: That’s true; different groups do compete for resources and, again, that does create that type silo behavior, you know, that “how can we make sure that resources come to us versus them” type of behavior. Again, some of that can be healthy, if it stimulates people to do constructive things to get those resources, to come up with better ideas, bigger, better ideas, more strategic ideas. But if it’s a matter of saying, “Well, we won’t help those people, and we have technologies or we have insights that could help those other groups, but we’re not going to provide them,” then that starts undermining the organization.

Scott Harper: That’s why it’s so important, again, for leaders to really be crystal clear about how those decisions are made, about why things are prioritized the way they are, because the more people understand it − that this is healthy for the company, and you’re part of the company, and so if the company does better we can all do better − that clarity is so important. It’s also important to spread the wealth when things do go well and make sure that things that might have been tabled, but that have good potential, can come back into full steam again.

Arthur Fox: That’s right. I recall when I was head of the global market research for Pfizer Consumer Healthcare, that I was told by the people working out in our regions, our international regions, that they were instructed not to cooperate so much with the global group because their time should be spent supporting the regions. They had their own objectives, a sense of you only do the minimum that you have to do to support the global group. Well, that again undermines the best interests of the organization.

Pam Harper: How did you get past that?

Arthur Fox: The way we got past that is to involve the regions in the global decisions, coming to agreement on what programs should be supported that would best benefit them − including them in the decision making and the alignment process. Once they’re aligned to a project, they become much more supportive of it.

Scott Harper: Going from an “us and them” mentality to a “we are us” mentality…

Arthur Fox: That’s correct. That’s right.

Scott Harper: … Really reinforcing and rewarding the collaborative behavior by engaging and creating that community.

Arthur Fox: That’s right. It results in smarter products being developed and for better, more informed reasons. Even the global group benefits because they get input from the regions and they get insights that they may not have had prior to that, so everyone becomes smarter, everyone becomes better, and everyone becomes more committed to the projects and decisions that are made going forward.

This idea of “we are us” and we are all doing this together and in this together and we need to act together, with respect and with a mutual best interest and actually living those values, makes a huge difference to the success of innovation and initiatives within organizations.

Pam Harper: Okay. That “we are us” mentality and doing everything you can to reinforce that, is another secret that people don’t really think about as much when they are creating that environment for innovation; so important.

Well we’re going to take another quick break, and when we come back we’ll continue our conversation with Arthur Fox, founder and Chief Innovation Leader of the Innovation Global Network, about actions you can take, starting today, that will create a highly innovative environment in your own company. Stay with us.

Scott Harper: You’re listening to Growth Igniters Radio, with Pam Harper and Scott Harper. Brought to you buy Business Advancement Incorporated; enabling successful companies to accelerate to their next level of innovation and growth. If you like what you’re hearing, spread the good word. Go to www.growthignitersradio.com, select episode ten, and use the share links for iTunes, Stitcher, LinkedIn, and Twitter at the top right of the page to tell your social media communities all about us; use #growthigniters.

Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments we’ve been talking with Arthur Fox, founder and Chief Innovation Leader of the Innovation Global Network, about creating an environment of innovation in companies of every size, but before we go on − Arthur, how can people find you?

Arthur Fox: Again, people can find me by sending me email at afox@innovationglobalnetwork.com. If you join the Innovation Global Network, at www.innovationglobalnetwork.com, you can send me messages through the network. Of course, you can always call me at (973) 953-5036.

Pam Harper: Okay. One of the things that we’ve been talking about is that innovation is highly individual to each and every company. Clearly there’s no silver bullet that changes a company into an innovation giant, and yet we’ve been talking about all the things that can be done. Let’s take a more specific focus.

Arthur Fox: One thing you can do is do a check to see if everyone in the organization truly understands what the strategic vision, goals and objectives and the challenge and issues are within the organization. Often these are understood only by the people at the top; often it doesn’t get filtered down to the people further down. People think it’s filtered down to them, but the reality is that it is not.

Also, sometimes these goals and objective become distorted on the way down; people hear what they are, but it’s a different iteration of what they really are, and so the people down below think they understand, and the people above think they understand, but they don’t really understand.

Pam Harper: You know that happens so much. I’m reminded of the old game, telephone, where you whisper something in somebody’s ear and you ask them to whisper it to the next person and the next person. I’ve even tried this with groups, and I’ll tell you that people can often times distort the message even when they’re trying to keep it straight, so your point is so well taken.

Scott Harper: Absolutely. Arthur, how can people keep the purity of that message going? How can leaders create that unity and that understanding so that people have that touch point, and that it’s not distorted?

Arthur Fox: One of the best ways of doing that is to have the middle management participate in the creation of the goals and the objectives of the organization; both create and to align to them. As part of that process, draw input from the lower levels of the organization as well, so that these goals and objectives are truly grounded in the insights of the people who are closest to the consumers and the customers and the day-to-day operations of the organization. In doing that, the people on the lower levels become involved in the process as well.

When they learn later what the results are they feel they participated, and they’re better able to support the decisions that are made. It is, of course, important when these goals and decisions are aligned to officially that they, again, be communicated down through the organization, level by level by level until everyone understands them. It’d probably be a good idea to do a feedback process at some point by doing a survey, to have people play back what they understand of the vision and the objectives and see if they played them back correctly or not.

Scott Harper: That’s a good point because, as we’ve heard many times, just sending out messages is not communication. Communication is making sure that what you’re sending out is actually perceived the way you intended.

Pam Harper: For those companies that don’t have as many layers to them, what’s interesting is that there’s still that possibility for distortion, even in a smaller company, where, say, there’s one level of management between the CEO and the frontline. I’ve seen how easy it is for those messages to be distorted. You may not have to do a survey, but you can get some kind of feedback mechanism to make sure that everybody’s communicating on the same level.

Arthur Fox: That’s true, because people listen, but they listen through the filters of their own perceptions and their own past ideas. They can hear something and change it significantly with their own minds what they actually heard, particularly if they have their own in going ideas of the way things should be done or what they think should be done and so they kind of refit what they’re hearing to fit those perceptions.

Pam Harper: Your own biases really impact what you actually hear.

Scott Harper: Absolutely. We’ve seen, in small companies especially, “well, we’re small; everybody knows what our priorities are” and so they don’t even bother to communicate them because “everybody knows.” …Wrong.

Pam Harper: In the larger companies, a department, I’ve found, can just say, “This is our priority; we don’t necessarily need to tell you what our priorities are.” And of course everything you’re telling us says …”[this is] wrong;” which we agree with − that’s right.

Arthur Fox: The other thing that happens is when you have a very strong management team, the management team often are the ones who create the objectives and the goals, because they feel they’re the closest to the consumers, the customer, they know the market. They believe they know what the company needs to achieve, so they create those goals and objectives. Sometimes they do it pretty much on an ad hoc basis, without even doing it in a formal manner; but what happens in those situations is that the people below them realize that they’re not part of that process, so they just wait to do what they’re told, right?

Pam Harper: That’s true. Including people and participating and so that everybody has a say and input − although, obviously, somebody at the top is making that decision − it creates more engagement.

Arthur Fox: Right. That’s correct.

Pam Harper: Arthur, our time is really going by quickly, any last thoughts that you’d like to share with us?

Arthur Fox: As I mentioned earlier, there really are two keys. One is what we spent most of our time on, which is focused on the communication piece − the clarity of communication downwards through the organization and the inclusion of the organization in the goals and the objectives and the plans within the organization. The second piece is the need to create a mechanism by which the employees are motivated to create change and to facilitate their capabilities to do so.

It’s important to create a supportive environment within the organization, to make clear to people how they can get required resources, what the criteria is for getting those resources and for setting expectations with the employees, that they expect them to be innovative and creative and they’re open to those ideas and we’ll treat those ideas with respect.

Pam Harper: Okay. Well thank you so much. For those of you who are listening and have questions related to today’s episode, or any episode, go to “open a conversation with us” at the bottom of this episode page.

To find out who are guest will be next Wednesday go to www.growthignitersradio.com and look in the sidebar for a schedule of upcoming episodes over the next few weeks.

Scott Harper: Thanks for listening to Growth Igniters Radio, with Pam Harper and Scott Harper. To check out resources related to today’s conversation, share on social media, and subscribe to the podcast series on iTunes or Stitcher, go to www.growthignitersradio.com and select episode ten.

Pam Harper: Until next time, this is Pam Harper…

Scott Harper: And Scott Harper…

Pam Harper: …Wishing you continued success, and leaving you with this question to discuss with your team.

Scott Harper: What can you do to create a stronger community of innovation in your company?