“An innovative culture focuses on how your organization differentiates itself through its people, not how your individual products or services differentiate from the competition’s,” Heather Yurko told CIMS sponsors recently. Yurko carries the Cultural Architect title at Cisco, in Research Triangle Park, North Carolina. Describing herself as a builder of people, process and organizations, she has been tasked with building an innovative culture for her team. In this article she lays out the process she follows when starting to build a new culture – one that can be replicated by others who wish to do the same.
The first thing to know about building a culture on innovation is that you will need to have patience. It takes time to change an organization’s culture. This is one of those long-term investments; it usually takes six months to a year at a minimum before a team is equipped to implement the kind of change you are trying to make.
Furthermore, it's really based on personal relationships, one-to-one relationships where you’re talking with this individual and that individual over time in order to shift their minds in a new direction. It's like that with any kind of change management but especially when you're trying to build a new culture. This is about changing the business, looking to new organizational models, new ways of working, new processes, new tools, and new behaviors that you're trying to build into a team.
That takes a lot of effort and that effort has to come in addition to the ongoing work of running the business. There really has to be a strong commitment from the people involved to put that extra effort in.
Find the Leaders and Influencers
Generally speaking, no one person is going to move an entire organization in a new direction, and so the more people you can bring along with you in building that culture of innovation the better. If you're coming into an organization as a new team member and starting from the ground level, you will need to learn who the key leaders and influencers are, recognizing that their leadership may have nothing to do with their job title or role.
The first thing I do is simply ask around: “Who would be a good person to talk to about new ideas?" "Who's really open to hearing about them?” “Who on the team promotes and supports ideas, and helps them see reality as a project?"
When I find those people they become my first lieutenants, so to speak. They are the first people whom I'll speak with about the kind of work they do and the key innovations they have been able to push through on the team. It’s important to get an understanding of how they operate and to know what has been significant to them in the past.
Beyond identifying those first movers, I also approach all of the leaders in the organization based on their job title. I ask about their principal pain points, their top priorities, and the key issues or problems they are trying to solve right now. When you can speak to them in that kind of language, tying any innovation or new idea into problems that would be solved for them or for their clients, you get a lot more support for the work you are trying to do; now the innovation efforts you’re trying to build within that organization are helping them achieve their goals.
Trying to understand these key things as you come into a team, along with partnering with and speaking to leaders in their own language, are key to the success of any kind of change effort like this. That’s because you are building trust with this process. I believe that no truly effective change management effort happens without a lot of relationship building and a lot of collaboration and trust as the foundation.
It's Not Just Checking In
You only build trust through true collaboration. If you're just spending time checking the boxes, so to speak, like "Did I talk to them? Yes. Have I told them what we're going to do? Yes,” it becomes more a checklist of activities rather than connecting with and understanding the people. The people are your culture, your team, your organization. If you're not connecting with them personally, and you're not connecting to what's important to them, you will never succeed. I honestly believe that.
Find the People with Ideas
After you’ve gotten to know your lieutenants— your natural change leaders who really embrace innovation and push for new and different ways of doing things—and you’ve learned the problems facing the rest of the managers and leaders within your organization and how you can help solve them, you need to find those people who have the ideas.
One way I do this is to lead Innovation Days. We spend one day each quarter identifying problems that, if we solved them, would lead to better scores on our KPIs. We talk through the key things that need to get solved either for us as an organization, for our clients, or for our customers. We involve people at all levels, especially individual contributors, interns and new graduate hires—all the way up to directors and V.P.s, who will bring the problems they want to solve.
We then narrow the presented problems down to the one we think would have the most value to the team if we solved it. That's our focus for the next month. We'll talk through the problem and look at a number of different angles on it: Will it make us a first mover? Will it significantly impact a critical business priority? Then we'll start to work through some potential solutions.
When it comes to innovation you need to keep in mind that no idea is a bad idea. That's one of the key things in building a true culture of innovation: training yourself to be non-judgmental in the beginning. When your team is in the idea stage you don't want to kill anything. You want to keep it all alive and be very open and accepting to anything that's coming in. When it gets a little farther down the path, after you've gotten a lot of the ideas out, that's when you start to critique them. There are ideas that are more relevant to problems you’re trying to solve, and you can use that relevance as a means to start critiquing.
After the idea generation stage is over, we look through the ideas and judge them through applying criteria around it. We ask questions like, “How much revenue could it generate? How much cost could it avoid? How many clients could it impact?"
Funding the Ideas
After we’ve identified maybe two or three really solid ideas that we believe can solve the problem on the table, we start to discuss “ring-fenced” funding: money that’s set aside specifically to fund innovation. We speak with the leaders who are contributing money to that ring-fenced pool and pitch these ideas to them.
These leaders are your idea incubators. They select which idea they want to invest in, based on client needs and how much it will cost to implement. That’s why we do a Proof of Concept; we want to make this idea real and test it to see if it really could work. We want some metrics on what success could look like.
We usually test over a quarter or so. We get some solid data points and then decide whether or not to fully invest in developing a product or process for our teams to implement.
Because this is a repeatable process, something we do consistently, it becomes part of our culture. By going through this process every quarter we are creating a very real engine of innovation. We’re continually looking to problems and solutions and then funding proofs of concept and deciding which things we want to fully implement.
As you do that again and again and again it becomes a natural cycle and a part of running the business.
Senior Leadership On Board
Funding is always the trickiest part. This is where you need to get your key C-suite leaders on board. I've seen this work in a couple of different ways.
If someone on your leadership team is naturally inclined to look at new and better ways of doing things, funding may not be much of a problem. However, if your leaders are uncertain and need to be sold on innovation, I recommend taking the time to go through a couple of cycles from the bottom up, saying, “Here are the problems we’re seeing, here are some solutions that we've come up with, here is what we are predicting will be the outcomes of a Proof of Concept.”
We get people to volunteer their time who are passionate about the problem or solution. Employees who love the idea are eager to work on their own time because they believe very strongly in the solutions.
In many cases, you will find some people who are just naturally drawn to this kind of work. However, it is almost always better to have funding so that it becomes a “real” project that is “legitimate” and people are able to work on during regular hours. It’s a great boost of recognition for the people involved from the beginning to have their idea turned into a solution that others can use and to have leadership recognize that effort through funded and verbal support.
In order to obtain funding, you’ll need to partner with some of the senior leadership in your organization and help them understand how this is going to move the company forward and show the business value (revenue generation, cost avoidance, improved customer satisfaction scores). One of the things I've talked about is the productivity loss through disengagement. Gallup estimates that employees who are not fully engaged and excited about their work cost U.S. companies about $300 billion a year.
When you tell that to senior leaders they pay attention because they want to keep their employees engaged and excited about the projects they're working on. They quickly recognize that you’re talking about their bottom line. Regardless of the amount set aside for innovation, the key is to ring-fence it, to set it aside as “untouchable” (meaning that the money cannot be used for anything else). One of the biggest mistakes I've seen companies make is that when they start to tighten their belts, the first thing to go is innovation. They'll throw R&D out the window. They say, "Yes, we know we need to innovate, but we have to run our business."
If you cut out R&D or innovation when times are tough, by the time things get great you've now collapsed your entire innovation pipeline. It doesn't exist, and it will take a long time to rebuild. If you’ve taken a year to get your pipeline fully operational, then you’ve just lost another year—and in a year your company could be so far behind your competition that you can’t come back. So if you're really serious about building a culture of innovation and that means funding it as well.
Rewards and Recognition
Make sure that the people involved in your innovation program are rewarded and recognized for the hard work they've put in— submitting the ideas they've generated, executing on those ideas and creating the proof of concept. Measurement of your innovation process is critical to understanding what you're producing and what business value results from the ideas generated.
One of the key measures we have as a company is “Innovation + Excellence.” We literally ask people to rate their work teams on how well they believe their manager supports the development of new and innovative ideas and approaches. We ask questions like, “Do you feel encouraged to come up with new and better ways of doing things? Are you able to set time aside every month to work on innovative ideas or products?”
We do this on a regular basis to create a predictable cycle. We check every quarter on how the work is going, and we also report the results so the team knows where we stand; for example, “88 percent of our team either agrees or strongly agrees that we have a culture of Innovation + Excellence.”
Each team sets targets and if the scores fall below the targets, we ask the people doing this work what would help improve it, what actions or behaviors would they want to see in order to agree or strongly agree with these statements. A lot of this sounds like common sense but being able to set aside the time to make this common practice is the hard part.
Our rewards run the gamut: organizational and site awards (trophy/bonus), public praise through email, newsletters, announcements or posts on our internal social network, the opportunity for a stretch assignment that helps advance their career, time with key executives, and the more common promotion and raise.
Culture is an Ecosystem
To conclude, you need to recognize that culture is an ecosystem in which all the components are interconnected, as shown in the accompanying illustration from Cris Breswick. This means it’s not going to work if there are huge parts missing. Consider the “Strategy” component. People generally think about the Vision, the Mission, the Purpose— why are we doing this? — The planning—how are we going to get there? But Communication is another key part of strategy. If Communication isn’t there (as it wasn’t in “A Cautionary Tale”) then the strategy is worthless.
You can have fantastic strategy and purpose—and even communicate it to people—but if you don’t talk with people to get their input and involve them, which in turn motivates them and wins their hearts and minds, they are not going to be on board to execute any of that strategy.
Culture is an interconnected web and you need to leverage all parts of it. You need to check in with the team and find out if you are hitting all these key areas. Do we have the right environment in which to do this kind of innovation work? How much risk are we willing to take? Are people feeling comfortable with risk or are they risk-averse? That’s going to determine what kind of solutions the team can bring to the table. You need to understand all these different elements before you move forward to build a culture that will be successful.
Cisco Cultural Architect