Change, Innovation and Strategy Insights for Emerging Leaders Jack Jordan

Questions to Run on What can you do you to encourage more innovation? Directly Indirectly What does culture have to do with it and how do you foster it? Transparency Shared vision Permission to act

Type of Organizations that Succeed Resilient Nimble Evolving Innovative The challenge is what do you to to foster those aspects?

How do you Speed Change? Know who you want to change Know where your client is at related to change Listen to reasons for resistance Be patient and step thru the process

Prochaska’s Change Model Pre-contemplation (Not Ready)- People are not intending to take action in the foreseeable future, and are unaware the opportunity Contemplation (Getting Ready)- People are beginning to recognize that an opportunity exists, and start to look at the pros and cons of their continued actions Preparation (Ready)- People are intending to take action in the immediate future, and may begin taking small steps toward change Action – People are actively using new process or method Maintenance – People have been able to sustain action tracking results and developing new rationalization of situation Termination – Individuals have developed a new world view related to the topic

Evert Rodgers Diffusion of Innovation Five Items Speed diffusion Relative advantage Compatibility Simplicity Trialability Observeability

Taylor Strategy to Situation

How do you Improve Innovation? Experiment Give Permission Expect Experimentation (Make it risky to not try new things) Cheerlead for Change (Praise and reward trying, Celebrate failure) Broad Points of view Collaborate with others Look for people with unusual connections Read broadly Encourage Collaboration

Model for Generating Innovative Ideas Courage to innovate Behavioral skills Cognitive skill to synthesize novel inputs Questioning Observing Networking Experimenting Challenging the status quo; Taking risks Associational thinking Innovative business idea Adapted from Christensen, Clayton M.; Jeff Dyer; Hal Gregersen, The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators. Harvard Business Review Press, July, 2011.

“What a person does on his own, without being stimulated by the thoughts and experiences of others, is even in the best of cases rather paltry and monotonous.” —Albert Einstein “Successful innovation is not a single breakthrough. It is not a sprint. It is not an event for the solo runner. Successful innovation is a team sport.” —Quyen Nguyen The Lone Innovator

Observe Real People in Real-life Situations “Innovation is powered by a thorough understanding, through direct observation, of what people want and need in their lives and what they like or dislike about the way particular products are made, packaged, marketed, sold, and supported.” Tim Brown, CEO of IDEO

InputsProduction processesDistributionCustomers Design & Redesign Customer feedback Customer research Support Needs Adapted from Figure 6, p. 58 The New Economics, 2 nd Ed. Customer Research - Deming

Customer Research “It’s not the customers’ job to be visionaries. Customers may lack the vocabulary to explain what’s wrong, or what’s missing.” - Tom Kelley, IDEO

“Every company prides itself on giving customers what they ask for, but the problem with listening to customers is that when companies ask customers what they like, customers are sure to answer by naming products and services that already exist. This form of research is really just being an order taker, not an innovator.” ̶ Thomas Lockwood, Design Thinking: Integrating Innovation, Customer Experience, and Brand Value, Skyhorse Publishing, April Customer Research

“We have found that observers are more successful at figuring out jobs to be done and better ways to do them when they… actively watch customers to see what products they [use] to do what jobs, …” Customer Research ̶ Christensen, Dyer, and Gregersen, The Innovator's DNA

- Tom Kelley, The Art of Innovation IDEO’s Five Step Methodology for Innovation 1. Understand the market, the client, the technology, and perceived constraints. 2. Observe real people in real-life situations. 3. Visualize new-to-the-world concepts and the customers who will use them. 4. Evaluate and refine prototypes 5. Implement the new concept

“I haven’t failed... I’ve just found 10,000 ways that do not work.” —Thomas Edison Experimenting The best way to get a good idea is to get a lot of ideas. - Linus Pauling

“Experiments are key to innovation because they rarely turn out as you expect, and you learn so much… I encourage our employees to … experiment. If you can increase the number of experiments you try from a hundred to a thousand, you dramatically increase the number of innovations you produce.” ̶ Jeff Bezos, Amazon Experimenting

Thank you Special thank you to Dr. Gipsie Ranney for her conversations on innovation and sharing content from her InThinking Network lecture

“They will not let us” Organizational myths keep people from trying things Who is the “Boogie Man” in organizations Transforming care at the bedside was a program to kill this myth.

Experimenting Structured Focused Rigorous Documented Limited Unstructured Free Form May lack rigor Varied Documentation Nimble

P DS A The Shewhart Cycle for Learning and Improvement The P D S A Cycle Act – Adopt the change, or abandon it or run through the cycle again. Study the results What did we learn? What went wrong? Plan a change or a test, aimed at improvement Do – Carry out the change of the test (preferably on a small scale). Deming, The New Economics

Richard Farson and Ralph Keyes, “The Failure Tolerant Leader,” Harvard Business Review, August 2002 Competition within Organizations “The idea that achievement is maximized when we go at one another tooth and nail is engraved on our national psyche. But when the road to success requires making others fail, innovation gets left by the wayside. Competition infects coworkers with a desire to win rather than to solve problems and move projects forward. In the process, employees inhibit the free flow of information so vital to innovation. Those who feel their work is being judged on conventional concepts of success and failure, and who feel they're competing with coworkers for the brass ring, will want to protect information rather than share it. This is a textbook way to squelch innovation.”

Complicated vs. Complex Complicated May have many steps and components Many actors may need to accomplish role in the work Results are replicable Building a Building etc. Complex May have many steps and components Actors need to accomplish tasks with communication and feedback loops Results are not replicable Raising a child

How are the two managed differently? Complicated problems benefit from tight definition Complicated problems can be planned many steps in advance Complex problems can be fundamentally changed by over definition Complex problems require course corrections and solutions to issues emerge from observation

Constancy of Purpose – Test of a Leader Deming’s first Point “All human organizations will disappoint” – Nadia Bolz-Webber You will have to make decisions that take you away from your core values. The test of a leader is not abandoning those values.

Strategy Staying a Step Ahead Connect yourself with broad set of ideas Read many points of view Hire people different from yourself Listen to those resisting you Look for the subtle Lead and crime / test scores Single use zoning and sprawl Common is not always better Deming and batteries

Connections Matter “Disruptive innovators shine best at associating when actively crossing all kinds of borders (geographic, industry, company, profession, discipline, and so on) …” ̶ Christensen, Clayton M., Jeff Dyer, Hal Gregersen, The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators, Harvard Business Review Press, July, 2012.

Connections Matter “Many companies rigidly separate functions such as research, design, marketing, and manufacturing, creating walls between groups that have much to teach one another.” “Build bridges from one department to another, from your company to your prospective customers, and ultimately from the present to the future.” ̶ Tom Kelley, IDEO

Leverage Points for Engagement and Innovation What connects people to a larger purpose? How do they keep tapped in to discovery? How are they connected? What are the implications?

Loss of Community “Beneath the current economic crisis lies another crisis of far greater proportions: the depreciation in companies of community – people’s sense of belonging to and caring for something larger than themselves.” Henry Mintzberg, “Rebuilding Companies as Communities,” Harvard Business Review, July-Aug, 2009.

̶ Christensen, Clayton M., Jeff Dyer, and Hal Gregersen, The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators. Harvard Business Review Press, July Delivery versus Discovery “…large companies typically fail at disruptive innovation because the top management team is dominated by individuals who have been selected for delivery skills, not discovery skills. As a result, most executives at large organizations don’t know how to ‘think different.’”

̶ Ronald S. Burt, “Structural Holes and Good Ideas” American Journal of Sociology, September, 2004 Structural Holes “… behavior, opinion, and information, broadly conceived, are more homogeneous within than between groups. People focus on activities inside their own group, which creates holes in the information flow between groups, or more simply, structural holes.”

Networks in Organizations -Ronald S. Burt, “Structural Holes and Good Ideas” American Journal of Sociology, September, 2004

“People with connections across structural holes [gaps in social networks] have early access to diverse, often contradictory, information and interpretations, which gives them a competitive advantage in seeing and developing good ideas. … People connected to groups beyond their own can expect to find themselves delivering valuable ideas, seeming to be gifted with creativity. This is not creativity born of genius; it is creativity as an import-export business. An idea mundane in one group can be a valuable insight in another.” Import - Export ̶ Ronald S. Burt, “Structural Holes and Good Ideas” American Journal of Sociology, September, 2004

Networks in Organizations

What Education Does an Emerging Leader Need? System of Profound Knowledge (Deming ~1990) Understanding Variation Psychology Appreciation for a System Theory of Knowledge

Discussion What did you hear that is actionable? What challenges do you have to change and innovation? What can you do you have to do experience more innovation? Directly Indirectly