“Progress comes from a satisfactory philosophy of ignorance.”

Richard Feynman

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G.O.L.F. T.E.EG.O.L.F. T.E.E

CEO’s role in Innovation

Bill Burnett

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G.O.L.F.G.O.L.F.

Great Organizational Leaders Facilitate…

? T.

? E.

? E.

to deliver innovation.

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Manager or Leader?Manager or Leader?

Almost all books on innovation come to the same conclusion. – Innovation depends upon the right

‘innovative’ culture.Does the right culture in a company

develop from leadership or management?

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CEO Leadership RoleCEO Leadership Role

Abandon practices that inhibit innovation.

Believe in the workforce.Innovation is our natural state.Innovation develops on the front line.

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What Business Are You In?What Business Are You In?

Tuned In

Question: “What business are you in?”

The answer for every business: “We’re in the business of continuous

problem solving for our market.”

Craig Stull, Phil Myers, and David Meerman Scott

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Business -- Problem-Solving Business -- Problem-Solving vs. Innovationvs. Innovation

What is the difference between regular “problem-solving” and innovation?

Why do we innovate?

We innovate when we want a competitive advantage: otherwise, any old solution will do.

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Power of KnowledgePower of Knowledge

“…acquiring and applying knowledge will become the key competitive factor.”

Peter Drucker“…creating new knowledge will

become the key to competitive advantage in the future.”

Nonaka and Takeuchi

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Business Innovation DefinedBusiness Innovation Defined

We innovate to Gain competitive advantage by creating new

knowledge that solves a market problem.

We seek to protect this new knowledge.

Innovation can start with a problem, or a solution.

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The chicken or the egg?The chicken or the egg?

Start with a problem, look for a solution.– When painting a car with two tones, the paint

bleeds.– 3M Masking Tape

Start with a solution, find a problem.– Invented a glue that sticks hard to one surface

then can be stuck and removed from a second surface.

– 3M Post-It®

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Business Innovation DefinedBusiness Innovation Defined

We innovate to Gain competitive advantage by creating

new knowledge that solves a market problem.

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How to Create How to Create NewNew KnowledgeKnowledge

“New” means new to the human race.– Discovery• Charcoal burns hotter than wood

– Experimentation• Build kiln technology to make charcoal

– Synthesis• Waste: Natural Fibers + Starch = Briquettes

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Idea and ImplementationIdea and Implementation

Innovation requires two things:– The ability to come up with the idea.– The ability to implement the idea.

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The ideaThe idea

What kind of person is good at problem solving?

– Has the ability to see the “Big Picture” and how all the details fit together.

– Is broadly knowledgeable.– Seeks truth.– The “Supersynthesizer”

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What kind of person is good at What kind of person is good at problem solving?problem solving?

James March – StanfordStereo type: Problem solver character traits:

– Avoid contact with co-workers– Have high Self-Esteem– No respect for “Authority”– Low Self-monitor– “heretics, deviants, eccentrics, crackpots,

weirdoes, and original thinkers”.

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What kind of person is good at What kind of person is good at problem solving?problem solving?

Low Self-Monitor– Unable/uninterested in reading non-

verbal (and verbal) signals.– Gives off wrong non-verbal signals.– Guided by inner compass – not

influenced by others.–Won’t be following the herd.– The Individualist

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What Do You Care What Other People Think!

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Solving the ProblemSolving the Problem

Define the ProblemSee how everything fits:– Big picture– Smallest relevant detail

Define criteriaEvaluate alternatives against criteriaPick solution

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Ideas plus ImplementationIdeas plus Implementation

It is not enough to have ideas about good solutions, the ideas must be implemented.

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Implementation CompetencyImplementation Competency

Willingness to take risks where there are lots of unknowns.

The passion to drive over obstacles.Persistence.

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Culture is KeyCulture is Key

The single most prevalent theme in innovation literature is around the critical nature of culture.

Without the right culture, innovation will not happen.

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CULTURE and INNOVATIONCULTURE and INNOVATION

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Culture and InnovationCulture and Innovation

Model of Cultural DifferencesGeert Hofstede:– Power Distance Index (PDI)– Individualism (IDV)–Masculinity/Femininity (MAS)– Uncertainty Avoidance Index (UAI)

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Culture and InnovationCulture and Innovation

Model of Cultural DifferencesGeert Hofstede:– Power Distance Index (PDI)– Individualism (IDV)–Masculinity/Femininity (MAS)– Uncertainty Avoidance Index (UAI)

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Uncertainty AvoidanceUncertainty Avoidance

Degree of tolerance for uncertainty and ambiguity.

Feeling either uncomfortable or comfortable in unstructured situations.

Degree of tolerance of opinions different from what’s long established.

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Uncertainty Avoidance ObstaclesUncertainty Avoidance Obstacles

Uncertainty avoiding cultures try to minimize the possibility of situations that are novel, unknown, surprising, different from usual They establish strict laws and rules, safety and security measures, and philosophy and religion are based on belief in absolute Truth; “there can only be one Truth and we have it.” They have little need to look further for truth.

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ObstaclesObstacles Problem Solving and Innovation mean change. Change carries some risk. Problem solvers are not always risk takers.

“Problem-solving doesn't correlate with risk-taking or willingness to be on the margins” -- Mitch Kapor, founder and former CEO of Lotus.

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First Leadership ResponsibilityFirst Leadership Responsibility

TrustTo overcome fear of risk the CEO

must build a culture of trust.Trust is a two-way street.Trust will follow you around.

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Building TrustBuilding Trust

Tell the truth, be transparent.Truth trumps everything.You cannot solve problems if you

don’t face them honestly and completely.

No tolerance for politics.– Includes withholding information

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Building TrustBuilding Trust

We are all equal in our adulthood.– Change the lexicon – eliminate

distinctions which imply adult to child relationships.

• “Superior-subordinate”• “Senior - Junior”

– Change to:• “Colleague”• “Team member”

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Building TrustBuilding Trust

Eliminate Power and Prestige in the hierarchy.

Hierarchy is just a decision making tool. Remove marks of distinction – Perks,

Privileges, Executive dining rooms, etc.,.

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Build TrustBuild Trust

We are in this together:Establish a Layoff as Last Resort

policy. First we will:– Eliminate bonuses– Cut Executives’ salary– Reduce salary across the board

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Build TrustBuild Trust

We are all unique.Differences spur innovationTherefore, we value our differences.

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Second Leadership Responsibility Second Leadership Responsibility

Build Engagement– Engaged employees self-motivate.– Engaged employees seek excellence.– Engaged employees solve problems.– Engaged employees self manage.

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Build EngagementBuild Engagement

Link personal values to the work.Toyota’s 5 “whys”.

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Build EngagementBuild Engagement

Create small teams of shared purpose linked to personal values.

Allow task and job rotation.Listen; ask questions; coach;

support; help; find resources; don’t order.

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Build EngagementBuild Engagement

Set team goals.Set objective measurable goals as

only measures of performance.Adjust goals for unpredictable

events.Welcome passion

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Build EngagementBuild Engagement

Define leadership behavior.Allow the led to police leadership.

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T.E.E.T.E.E.

Great Organizational Leaders Facilitate…

Trust

Engagement.

? E.

to deliver innovation.

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Third Leadership Responsibility Third Leadership Responsibility

Empower employees–Match responsibility to authority.– Take all offers.• Never kill an idea.• Let teams make decisions.

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EmpowerEmpower

Save ideas:– Build a “problem” database– Build a “solution” database

All great ideas look bad at first.– “When an employee comes to me with

an idea, how do I know a good one from a bad one?”

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EmpowerEmpower

Reduce Smaller Risk– Encourage team formation.– Idea can only be presented by a partner.– Allow minimal investment thresholds.• 2 sponsors (minimum) - $ 5,000• 3 sponsors - $15,000• 4 sponsors - $ 25,000• …

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EmpowerEmpower

Reduce the Big Risk– Identify your Supersynthesizers who are

least familiar with the problem.– Ask them to evaluate the problem

definition.– Ask them to evaluate the solution

alternatives.

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EmpowerEmpower

Pull in everyone:Marriott’s “Red Tape” for everyone.– Tag problems and they get fixed.– Everyone sees it working.

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T.E.E.T.E.E.

Great Organizational Leaders Facilitate…

Trust

Engagement

Empowerment

to deliver innovation.

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CEO Leadership RoleCEO Leadership Role

TrustEngageEmpower

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Trust

Engage

Empower

Problem-Solving Employees

Competitive Advantage