Industry Week Worldwide Broadcast Interview Features Dr. Douglas Carpenter in Global Executive Roundtable on Innovation and New Product Development
How best can companies cultivate innovative leaders, managers, employees and designers?
Innovation is a tricky concept. It’s shapeless and intangible, unlike your products, and it doesn’t just roll off an assembly line. It’s an organic phenomenon dependent on your people — the very people who rely on you to set the perfect environment enabling them to create your next market-leading product. So how do you foster such an illusive thing? How can you increase an often unquantifiable asset? This month, three leaders who champion innovation within their own companies tell us how to retain and grow the people who truly make your company innovative.
HOST: In the Boardroom:
What elements are essential for innovation to thrive in an organization?
Metzger: First, you have to create and facilitate an atmosphere of openness to change. Innovation doesn’t only apply to product development. It applies to how you do business at every level, from purchasing to manufacturing to supply chain to sales — every corner of your organization. You have to constantly challenge yourself and your company to be creative in finding better ways to get the job done and satisfy the customer.
At Delta Faucet Company, we do that by encouraging our people to “Think Lean” at every level and to make recommendations for how their jobs can be done better. Then we test and refine their recommendations through kaizen events and other means. This empowerment has had tremendous benefits in improved processes and operations throughout the company.
Clay: At Z Corporation, we believe that innovation must have visibility and be recognized and celebrated throughout the whole organization. Our development teams are constantly inventing, but many of our most useful product innovations have come from our customers, our assembly team and our service technicians. We work hard to celebrate these contributions and get them companywide visibility in formal and informal ways. Our products often help us with this: We can 3-D print a new design or concept and put it on display in a central place.
Carpenter: There has to be a reason for someone to innovate — there has to be a problem that needs a solution. You have to have creative people — innovators. People need to be encouraged to innovate, and given support for their ideas. Every idea has some merit, and it is important that everyone’s ideas are heard in an organization. For example, the scientist should listen to the ideas of the fabricator, the management needs to listen to the ideas of the scientist and so forth. You need someone to examine and filter the ideas and determine what will work and what won’t. You need some method of implementing ideas. Small companies are much better at implementation because there is less “red tape,” less bureaucracy. You also need to have enough resources to put ideas into practice.
In the Boardroom :
What role does management play?
Clay: If anyone offers up an idea in the company, he or she should feel good about it afterward. If the idea becomes part of our product or process, the individual should receive broad acknowledgement and be very glad they took the risk of suggesting a change. We believe that management must set the example here by soliciting and celebrating new ideas, but also ensure that there are formal and informal mechanisms for doing this companywide. We used to be successful here without any formal process, but learned from a recent round of employee feedback that the informal methods weren’t working as well in a larger company. We are now instituting more formal recognition programs in each department.
Carpenter: Good management must trust staff to make the right decisions and must not let egos sway decisions. Management should provide time, financial support and space in which innovators can create. Allow the innovator reasonable time to complete one project before asking him to start something new and enough time to give the innovation a chance to work. Management should take an active role in bringing ideas to fruition — i.e., hold weekly status meetings to see where a project stands and, if there are snags, offer to help resolve them. Provide the opportunity for innovators to stay current and competitive in their field — allow them to attend relevant classes or conferences and to give them time to read current journals. Above all, managers need to eliminate the negative methods of power and control from their management style: fear, finger pointing, blame-fixing and ridicule do not foster a spirit of innovation.
Theriault: High taxes and less R&D spending make for less innovation.
Guardino: Government doesn’t directly create technology jobs — but it can foster an environment where innovation can thrive. For example, the U.S. government is currently debating whether to require the expensing of stock options. Such a requirement would limit innovation because it would make options so expensive that many rank-and-file workers would no longer receive them. This would stifle the environment that encourages innovation.
Metzger: Management has to be the facilitator, even the cheerleader. Plus, you have to give employees the tools. Let everyone in the organization know that not only are their ideas welcome but expected. And also that there will be some action taken. Then, have processes in place to test and/or put the ideas to work.
This is where initiatives like kaizen and Lean Manufacturing come in. We take ideas and test them out in real situations to see if they work and how they can be improved. Once this is done successfully they become a part of our operations. Be assured, when we say “Lean” we aren’t asking employees to help us eliminate jobs. We are asking them to help us help them do their jobs better, faster and with less wasted effort and resources to ultimately better serve our customers.
Plus, we don’t restrict “Lean” thought to just manufacturing. We also encourage the same process in office and management operations and have had kaizen events focused on these operational processes.
In the Boardroom :
How can manufacturers retain key innovators, patent holders, and other creative individuals?
Clay: Many of our most creative people came to the company to invent, but as the company grew [they] found themselves in a more traditional engineering role optimizing a piece of a program. Our solution has been to create an invention lab that has a few permanent members but allows for developers at all levels to rotate in for a short project as they transition between major programs. This invention lab has a series of well-defined targets and is subject to a budget and schedule like everyone else — the difference is that the projects are fueling our next-generation 3-D printers and bring together developers from different disciplines. The knowledge that a developer will have a continuing role as an inventor throughout their career with us is a powerful incentive. (As an aside, our invention lab now has an impressive track record of significant product advances and is regarded as an excellent financial investment.)
Metzger: Obviously, compensation is one way, but not the only way and maybe not the most important way. Possibly the two most important things for creative people are an atmosphere that supports and encourages their creativity and recognition for their work. They need to know that management is open to their ideas and that they are truly valued for what they bring to the organization.
Carpenter: Offer competitive wages and benefits suitable to the local economy. A company should compensate innovators just as it would chief administrators. Also, administrators should let the innovators know what’s going on with the company, especially if there are issues about which the employees feel insecure. A happy, secure employee is much more creative and productive than, for example, someone who’s worried about whether he’s going to lose his job. Oh, and cash bonuses are good, too!
In the Boardroom :
Can innovation become instilled in a company’s culture? How is that culture spread across the organization and sustained?
Metzger: It absolutely can. Again, it is up to management to foster a feeling that everyone is working toward the same goal, everyone has something to contribute and everyone can have a valuable idea for change. From a worker on the coating line to the head of design, anyone in the organization can have an idea of how to do the job better. The individual in the plant milling brass for faucets has more knowledge of what he/she needs to do that job than I or anyone else in the organization could possibly have. Employees need to know that we understand that and value their input.
Carpenter: Everyone in the organization should benefit from innovation, not just the boardroom members. There are always better ways to do any job and the people who are doing those jobs are the best at recommending changes. It helps if everyone has a vested interest in seeing the company succeed [for example, offering] partial ownership. There should be rewards for successful innovation that are celebrated throughout the company and no penalties for failure. Employees who are excited to come to work and are ready to make a positive impact in the workplace will infect the company with success.
Clay: Our journey as a company began when everyone designing, selling and building the equipment shared the same room and ate lunch together every day. In that environment we all felt a responsibility to point out problems and propose solutions to anyone and everyone sitting at the table. Our focus has been on sustaining that culture as our company has grown. Our lesson has been that we must supplement the natural recognition that happens in small groups with active company programs that make explicit the value our company places on innovation. Our plan to sustain our culture of innovation is based on more systematically recognizing and celebrating new ideas and improvements among each individual’s peer group and across the company.
Our panelists agree that managers and corporate leadership contribute greatly in creating a robust environment for employees to innovate. Developing the next, great product comes in large part from:
- An atmosphere that encourages and demands employees constantly review products and processes; .
- Managers who provide the tools for innovation — time, resources, technology, education — and then get out of the way; and
- Inducements to keep innovating, for example recognition, putting workers in different environments and the time-honored prize — cash.