Steve Blue is President and CEO of Miller Ingenuity and author of the forthcoming book, American Manufacturing 2.0: What Went Wrong and How to Make It Right. As a nationally recognized business transformation expert and speaker, Blue has been featured in Forbes, Entrepreneur, and The Wall Street Journal. He is founder and contributor to American City Business Journal’s “League of Extraordinary CEOs” series. Visit milleringenuity.com.
Not a blockbuster hit. Rather, Blockbuster, the company that owned the video rental market until it was upended by an innovative competitor, Netflix.
One thing is for certain: If your company isn’t innovating, all of its products or services eventually become commodities. Or they are toppled by the next Netflix. When that happens, you have no margin left to spend on research and development, new product initiatives or anything else that could provide a competitive advantage. Then, your customers will start playing you against the competition, and it’s just a race to the bottom for further price concessions. By that point, you are left with reducing costs, overhead or profit—ending in a death spiral headed toward going out of business.
So how, exactly, do you spark new innovation within a company? What’s more, how do you do it at an already established business?
1. Make innovation part of everyone’s job description
The first line item on every job description should state that a primary duty is to introduce innovative ideas into the company. This means job descriptions of all employees—not just a select few. From the trailer floor to the executive door, mandate that the entire organization offer ideas to improve products and services.
Innovation must be one of the company’s core values—so much so that it is tied to performance appraisals. Determine a means to best measure innovation in your company, and incentivize innovative thought by making it part of the performance review process. By doing so, not only do you give kudos and raises to the employees that innovate, but you also say goodbye to the ones that don’t. It may seem harsh now, but a lack of innovation is what clobbered Blockbuster and dozens of other industry icons that bit the dust.
2. Invest in innovation
Contrary to popular belief, everyone is creative on some level. The key is to understand how to unlock that creativity. Get started by training every employee in the principles of brainstorming and innovation. Take your employees on field trips to highly innovative companies outside of the construction industry. Hold an “innovation fair,” similar to a science fair, to expose new ideas or channels of revenue.
3. Provide the time to innovate
It isn’t always enough to set the expectation to innovate. You must provide the time—or at least the parameters—for innovation. To really push the innovation envelope, you should encourage your employees to spend 20 percent of their time innovating and brainstorming new ideas. But if you still expect your team to accomplish the same amount of work in the remaining 80 percent, that would be unfair, and in the end, would never work. So you will have to bite the bullet and hire more people to cover that 20 percent. You need to set the expectation that thinking about things is really just as important as building things.
4. Provide the space to innovate
Asking employees to innovate and brainstorm without providing a space to do it in can squelch creativity. Once you have established the practice of innovation, devote a location within your organization where they can meet regularly and without interruption.
This can be as simple as an empty cube dedicated to innovative practices, or as involved as an off-site location where the round-the-clock focus in innovation. Above all else, you must make it abundantly clear that these spaces aren’t just for white collar employees. They are for all employees. Allotting space serves two purposes: 1) It provides an assigned area in which to innovate, and 2) It shows employees how serious your company is about the process. Keep in mind, there is no magic in this space. The magic is in unlocking the creative genius in every one of your employees. The innovation space only facilitates this. Before you build your space, be sure you have taken the above steps in creating the culture and providing people the tools and training to innovate.
5. Celebrate, recognize & reward innovation
Find ways to celebrate and recognize innovation every chance you get. It has a way of changing workplace culture for the better and reinforcing positive behaviors. Potential rewards include significant cash awards for innovation, professional photos taken of the team marking the achievement or even making the accomplishment public by taking out a half-page ad in an industry publication detailing the innovation. Recognize innovative efforts every chance you get in every way you can imagine. Be creative in how you recognize innovation. Often, crazy ideas further the process of more innovation.
6. Fight fear & resistance
Do you remember Woolworth, the five-and-dime retailer? No? That’s because it was out-innovated by Walmart and went belly up. Likely this happened because it stayed in its comfort zone until there was nothing left to do but close the doors.
Regardless of how long your company has been around, it is imperative to keep the creative wheels turning and staying ahead of the innovation curve. The logistics may seem daunting, yet the biggest risk isn’t a technical one; it’s organizational. People fear what they don’t understand, and they’ll kill a project they’re afraid of. You have to get out in front of that and fight the fear and resistance early and often.
Innovation is no longer an option—it’s a necessity. As you move your business toward more innovative thought, be prepared for some pushback. Also, be ready to restructure your organization and even cut people loose if you have to. You need to surround new developments with people who believe in innovation.