If your organization isn’t meeting its innovation goals, take a close look at the past year. Answering a series of questions about your innovation investments and activities can show you where things went wrong, and start you on a better path for the year to come.
1. Did we dedicate appropriate budget and resources to innovation? To establish innovation as a priority, put your money where your mouth is. At Capital One Financial, for example, CEO Richard Fairbank invested heavily in the launch of an internal innovation sandbox, Capital One Labs, which is staffed by entrepreneurs-in-residence who work solely on reimagining the banking experience.
2. Did we enable cross-discipline brainstorming? Make sure employees across the organization work together, rather than in silos, to achieve a collective goal.
Southwest Airlines doesn’t limit generation of ideas and solutions to just one division: It gathers workers from its in-flight, ground, maintenance, and dispatch operations together to come up with new ideas. Employees meet for 10 hours each week to discuss the highest-impact changes that can be made to its aircraft operations. Of the 100 ideas recently generated over a six-month period and ultimately sent to senior management for review, three have resulted in sweeping operational changes.
3. Did senior leadership participate in innovation decisions and projects? Mandate the attendance of C-level executives at meetings where innovative ideas or projects are being evaluated and reviewed, and at internal innovation competitions. A.G. Lafley, CEO of Procter & Gamble, tracks the ideas, challenges, and solutions that 7,500 R&D people in nine countries share on an internal website. Once a year, he evaluates how ideas are shared between scientists and marketers, and conducts half-day innovation reviews with each business unit.
4. Did we fund our risky projects in small phases? Instead of providing infinite blank checks for your innovation program, fund projects in clearly defined phases and determine upfront the indicators—budget, resources, feasibility results—that could halt the project. The American Cancer Society (ACS) minimizes risk in this way. A strong idea is initially funded with US$2,000. It is quickly explored and, if it shows potential, another $25,000 is provided for feasibility testing. The project then has 18 months to demonstrate viability, and if it doesn’t, ACS shelves it.
5. Did we publicly reward failure? Create a safe, open environment that gives employees the confidence to share ideas, failures, and the learning points in between.
3M holds formal meetings called “failure forums,” which gathers together staff who worked on unsuccessful projects to discuss barriers to success. When plastics company W.L. Gore & Associates kills a project, they host a celebration with beer or champagne, just as they would if the project had succeeded.
6. Did we challenge any industry norms? Think about the unshakeable beliefs surrounding your category. What can you change about your product, service, or business model to disrupt your industry and better serve customers? JetBlue disrupted the U.S. airline market with its customer-centric approach to affordable travel, while Airbnb’s home-sharing marketplace upended the hotel industry. Start exploring and testing ideas that speak to disruption.
7. Did we explore our customers’ needs beyond surveys or focus groups? To gain more insight, ask your managers to shadow customers for a few days every year, or to try stepping into their shoes. To better understand issues that older clients face, Barclays outfitted a group of employees with age-simulation suits and asked them to report back on their experiences. This resulted in high-visibility debit cards for visually impaired customers, pens that are easier to grip, and the installation of induction loops in branches to amplify sounds for customers with hearing aids.
8. Did we break down organizational barriers between employees? You can boost innovation between disparate groups by enabling impromptu sharing of ideas. Zappos’ new headquarters in downtown Las Vegas was strategically designed for collisions between colleagues: communal trash bins, a single passageway to the cafeteria, and only one building entrance. The increase in face-to-face conversations has fueled collaboration—a key ingredient in innovation—and organically reduced superfluous meetings and calls.
9. Did we offer unconventional learning and enrichment to staff? Recognize that employees need more than just traditional leadership training to develop vital, right-brain skills. At Pixar, for example, every employee—from animators to security guards—is invited to spend four hours per week taking classes in painting, juggling, and belly dancing, among other subjects.
Employees need more than just traditional leadership training to develop vital, right-brain skills.
10. Did we reward innovative behavior with financial or experiential compensation? Build an innovation benefit into your incentive program. Employees at the biotechnology company Genentech receive a check ranging from $1,000 to $2,500 for contributions that played a role in achieving the company's mission and strategic goals. Starwood Hotels’ Westin brand has been known to award an exotic, five-day trip to the employee with the quarter’s best idea. If vacation packages aren’t possible, consider awarding extra vacation days instead.
This list isn’t exhaustive, but it will help you determine where your missteps were last year, and how to correct them. Note the questions for which your answer was no: These are the action items to prioritize. By taking a head-on approach today, your organization should find itself in the thick of actual innovation by 2016.