Creative People Must Be Stopped (12 page)

The Strategy Is Risk Aversion First, Innovation Second

Some organizations adopt a strategy of pursuing new products only
after
the market is proven and the technology has been mastered. Most car companies are taking this wait-and-see approach toward the electric car, preferring to sit on the sidelines as Nissan launches the LEAF. Seeing the battery technology to be immature and the market risk as high and unknown, they won't pursue this innovation until they see whether it actually works. The problem for firms that might like to be “fast followers” is that they may not be fast enough to ever catch up. Surprisingly, many of these same car companies had just recently learned this hard lesson with their wait-and-see approach to Toyota's launch of the Prius hybrid car. When it did take off quickly, other firms struggled to respond by developing their own hybrid technology, which they learned was harder than it looked, and they never caught up. In 2011, Toyota remained the hybrid market leader, having sold more than three million hybrid cars.

When a genuine willingness to assume the risks that come with innovation isn't part of the organization's DNA, then innovation-as-strategy will not be valued, no matter what the strategic plan says. The risk-averse types (and there are always plenty of them in an organization) will act to stifle efforts to innovate on the grounds that they are a waste of organizational resources.

Overcoming Strategy Constraints

Innovative organizations make innovation a guiding principle and core part of their strategy. They also demand the participation of all employees in pursuing it. When the organization is aligned toward innovation, employees are less frustrated because their innovation efforts will be directed toward ends that are truly valued by the organization. Employees also know that everyone has an obligation to support their innovative ideas, reducing the likelihood that those ideas will be arbitrarily maimed or killed.

Know the Strategy

Do you know your organization's strategy? If you think you do, go ahead and write it down. Then ask other people in your organization to do the same. Do an honest “compare and contrast.” If you have clear articulation, fair agreement, and coherent alignment, then this is not your constraint. However, if the strategy statements are so vague that they cannot give direction, if they disagree, or if they are likely to drive different parts of the organization in different directions, then you have work to do.

Without clarity about the strategy, people may aim their innovation efforts in completely different directions, resulting in unnecessary conflict that can kill innovation. At Xerox, the strategy that the people in PARC assumed to be operational and valued was completely different from that on the East Coast. With HQ insisting on a strategy of protecting the copier business at all costs, PARC scientists and engineers couldn't support or understand it, and as a result they left to join Apple after realizing that the strategy there was one they could value and that could value them. Had Xerox executives been able to articulate earlier what they later realized, that they were in the document management business, they might have seen the immense value of what PARC was doing, and the PARC scientists might have been able to show how their ideas were relevant to the strategy of the company.

Tell the Story

Senior managers should work to ensure that everyone understands the goals of the organization and, ideally, that they are willing to help achieve them in valued and meaningful ways. To achieve this understanding, no one needs (or wants) a four-inch-thick binder full of the strategic plan documents. Those documents were already out-of-date by the time they came out of the printer, given the months-long time lag between the analysis that drove the insights and the bureaucratic approval process used to authorize them. Rather, most employees would do better with a simple understanding of how the company competes and why.

There's a story I've been told by executives and senior leaders at Nissan that they share in response to fear among managers over the riskiness of the LEAF electric car initiative. In the mid-1970s, the Datsun “Z car” was introduced to the U.S. market and took it by storm. It was a high-performing, inexpensive Japanese sports car that proved that Nissan could do something bold and amazing, much more than simply make cheap economy cars. Resting on its laurels, Nissan didn't do anything so meaningful for a long time afterwards. As a result, the late 1990s found Nissan on the verge of bankruptcy. An alliance with Renault and severe austerity under the “Nissan revival plan” brought an unbelievable turnaround in its financial health. But what would Nissan do about its psychic health? Executives tell the managers that it's been a long time since the company did something so innovative, radical, and amazing that it changed their world. “The LEAF is our chance, now, to change the world again. Are you ready to help?”

The story is compelling. The timeline is simple and easy to follow. It is a clear demonstration of the villainy of resting on your laurels and the high price of the climb out of difficulties of your own doing. It gives us perspective by showing that Nissan is now financially healthy and stable, but still longing for something. Finally, it insists we make a choice: rest on laurels once again or satisfy the longing by changing the world.

Take the time to tell your story and make it compelling, too.

Trust the Doers

The people who are going to be sources of innovation in the organization (and there may be many more of them than managers imagine)
want
to do things that are valuable in their organizations. They want to innovate in ways that help the company and that advance their own careers. And often those who are in the trenches have a better understanding of where the opportunities are, given that they are closer to the problems and more versed in the details of those problems. Yet too often their leaders don't trust them to be the loyal, smart, and determined employees they were hired to be.

At some point we have to trust the doers. If you're a manager, your role is to get people to a point where they are competent and empowered and where they are willing to give their best ideas to the cause. If you are able to communicate the strategy (and show how it leads to the achievement of the organization's goals) and if you can articulate what considerations to account for in a meaningful and acceptable solution, you have the problem mostly solved. Then get out of the way. With a clear sense of direction and the feeling of being trusted to figure out what to do, most people will take to the problem with great gusto and work hard to solve it. Instead of micromanaging, focus your efforts on helping remove the individual and group constraints on innovation you have already read about. And think about this: you can't get a promotion until someone can do your job.

Understand (and Communicate) the Risks

Even when the strategy is clear, the risks associated with specific ways of achieving it may not be. Initiatives that look like good ideas to people in one place in the organization may create problems for those in another.

In a consumer electronics company whose strategy was to be first to market with the most innovative products in a fast-moving competitive environment, Noah, the head of the R&D group, approached Connie, the CEO, seeking permission to purchase a rapid prototyping machine that would allow them to cut
weeks
off a tight development cycle, but that was also very expensive. Connie immediately said no once she heard the price. Questioned, she could give no satisfying reason for saying no, but that was the answer. Noah went away frustrated, confused, and slightly demoralized. After all, this purchase clearly supported the strategy, and for all he knew, the company could afford it. Was she not in support of her own strategy?

Only a year later did Noah learn the real reason for the refusal. At the time he asked, the firm was experiencing a shortage of working capital (cash). The CEO had worried that sharing this information about the company's precarious financial situation might drive Noah right back to the lab, where he would polish his resume in anticipation of the company's impending demise. But Noah suggests otherwise. He says that had he been told the true reason for the denial, he would have gotten creative about cutting costs in less value-adding areas and then working on a financing arrangement with the machine vendor.

Ironically, not communicating the real level and nature of risks can
create
a culture of paralyzing fear instead of preventing it. Once this culture starts to take hold, it can require an immense amount of work to undo.

Structural Constraints: Efficiency and Control

In early 2011, Steve Jobs, cofounder, chairman, and CEO of Apple Computer, announced that he would take a medical leave of absence from the company. Immediately, the debate started about whether the company could continue to be successful without his leadership. Much of the debate was about where the amazing ideas would come from without Jobs. But this may be a misreading of the situation. Although Jobs's creativity may have contributed to Apple's resurgence, perhaps his greatest value was as a hard-charging, bulldozing roadblock remover. There must have been countless conversations inside Apple that went something like this:

Innovator: I'm going to need help from a bunch of people to move this new idea forward, including a few from other departments.

Manager: Sorry—the idea is interesting, but everybody in our group is maxed out, and getting help from other departments is out of the question.

Innovator: But Steve wants this done yesterday!

Manager: How many people do you need?

In many organizations, conversations like this would only turn up a litany of reasons why the innovator's request was impossible. What are the sources of this inertia that so often stifles good ideas?

The Price of Efficiency

The magic of an organization is its ability to coordinate the behaviors of large numbers of individuals. Efficiency is served by breaking down the work into distinct pieces that individuals perform routinely and reliably. The hierarchy fixes inputs to and outputs from any particular individual's role. With fixed inputs, a defined role, and predetermined outputs, reliability is the desirable result. If you work in the sales department in a large company, for example, your input might be a list of who wants how many of what. Gathering orders from across all the sales force, you enter these into a spreadsheet to determine how many of X to make and how many of Y. You send part of your output to the production group to start making the stuff and the other part to the distribution group to prepare to ship it. This can be very efficient and reduces the possibility of all kinds of errors.

But when all the vital communications among the parts of an organization begin to take the form of standard reports and electronic data interchange, they can constrain the possibilities for innovation that might be generated by chance encounters between information and people. Standard reports are designed to remove all ambiguity about the information contained within. Although it may be important to fix communications in this way to achieve routine outputs, innovation can suffer. Imagine if Art Fry of 3M, instead of having seen firsthand what Spence Silver's idea was, had been given a standardized report that said something like “Item 43; Formula X developed; mediocre adhesive that only sticks to itself; no known use.”

The Downside of Size

Hierarchical structures allow organizations to grow extremely large and to become distributed across a wide geography. To grow large, organizations divide and coordinate the thinking and the labor that is to be performed, among various functions and specializations inside. But increased size and spread can be a mixed blessing. On the one hand, the organization potentially gains access to more kinds of information and multiple perspectives that could inform innovation. On the other hand, larger size means more coordination and communication difficulties, and having multiple perspectives means a greater likelihood of significant divergences of opinion about the desirability of one decision or another.

To solve the problem of supervising a far-flung operation, Xerox did what many organizations do: require that headquarters approve any large expenditures or new programs. Although solving the supervision problem, this approach did not solve the information-sharing problem. To make good judgments, especially the kind of tacit and nuanced judgments that would be required to decide the fate of early-stage and revolutionary programs like the Alto, HQ executives would need to see the full spectrum of information that the PARC researchers themselves had seen that led them to believe that this was the way of the future. Unfortunately, accounting statements or even progress reports are not sufficient to communicate the information. This exemplifies the problem of generating ideas in one context but requiring they be approved in a completely different one.

Rewarding Survival Instead of Experimentation

Other things being equal, we get the behaviors we reward. Handing someone a bonus for coming up with a great new idea is one way of rewarding innovation, but it won't go that far if the more powerful incentives in an organization fail to reward innovative behavior. Over the long term, who tends to get raises and promotions: the individuals who are rich sources of ideas, only some of which succeed, or the ones who survive as long as possible without a single failure?

Regardless of what an organization espouses, you can get a good read on how much the organization values creativity by asking individuals which workplace behavior is more likely to result in advancement: putting yourself on the line on behalf of potentially risky ideas, or keeping your head down and doing exactly what you're told.

Overcoming Structural Constraints

In 2011, Steven M. Anderson, a retired brigadier general in the U.S. Army, wrote about how the military could reduce battlefield casualties by conserving energy. A great many lives are lost feeding the military's ravenous energy appetite: at last count, more than a thousand American deaths in Iraq and Afghanistan could be attributed to fuel-related missions. Not only that, but the fuel itself is very expensive. Answering his own question about why the Defense Department does not address this important issue, Anderson suggested that the reasons for aversion to change were the same as those in any big organization: “Passive leadership, lack of accountability, competing priorities, skepticism about environmental concerns” (p. A29). His solution? Strong leadership. Although cultivating strong leadership is clearly vital, a structural analysis suggests that other approaches will also be needed to overcome organizational inertia.