(Co-authored with Ken Gray, Director of Innovation, Caterpillar, Inc.)
The vast majority of managers and leaders I meet face the same challenge: they want to innovate but live in an organization that values execution. How can they change the culture above them to accept and tolerate innovation? In a recent session with UNICEF, working with leaders responsible for protecting and helping children around the world, the importance of resolving this dilemma came home to me more powerfully than ever. Although I don't have a silver bullet, our discussion together led me to conclude that the only way to create innovation in an established company is to find a champion who can protect your innovation; or, more likely be the champion that protects others.
Let me illustrate with a discussion I had with Ken Gray, Director of Innovation at Caterpillar, about his experience developing the 336E H hydraulic hybrid excavator. Initially, Ken and his development team spent millions of dollars developing a diesel-electric hybrid excavator based on a leadership directive. But as the team neared the decision point to scale up to production, competitive customer interviews revealed that customers didn't want to buy electric hybrid excavators. Several months before this point, Ken and a co-conspirator had quietly authorized a passionate team of engineers to pursue a hydraulic hybrid. Ken couldn't give the team a budget, or the antibodies might discover the project and shut it down. So instead he provided them an old prototype machine in a sequestered location near the Illinois river, and the parts to test their core idea as quickly as possible. The team worked many nights and weekends, relying extensively on time outside normal office hours, to develop what they called "Medusa" because it was so ugly with all the components strapped to the outside of the machine, rather than carefully integrated. But the machine worked, and as Ken brought executives one-by-one to use the excavator and meet its passionate team of innovators, eventually the tide of leadership opinion shifted and authorized development of the hydraulic hybrid excavator--a product that now compromises nearly 1/3 of large excavators sales and outperforms competitors by over 50%.
As it turns out, Ken's experience isn't an anomaly. Toshiba introduced the laptop only because a champion protected Tetsuya Mizoguchi, hiding him in a factory 25 miles away from headquarters while he developing the category-creating computing innovation. And Charles House at HP received the award for "Unusual Contempt" after refusing a direct order from David Packard to stop development of a high definition monitor that eventually sold tens of thousands of units. What these and other experiences teach us is that we cannot wait for the top to change in order to innovate. In fact, in the vast majority of cases, innovation starts at the bottom and works its way to the top. But we can learn a few crucial lessons from Ken's experience.
- Innovation in established companies can be difficult. But you cannot wait for innovation to come to you. You have to find the champion or be the champion that you wish you had for the teams you lead
- Leading innovation inside a company involves showing tangible proof rather than selling grand visions and asking for a budget. Hide out and find the proof before you try to get permission or budget
- Motivating innovators has more to do with trust and recognition than money. Research and experience suggests that innovators want recognition, acknowledgement, and freedom to pursue their ideas more than their paycheck
- Trust is also a two-way street. Almost by definition, an innovative idea is understood by a small passionate team or individual who find it difficult to explain to leadership why the idea is so great. It takes courage for leaders--especially when they do not fully understand a new idea -to trust in their teams enough to grant them the creative freedom to experiment to demonstrate that their idea will in fact work.
- The role of the leader in an innovative culture really is that of servant. The pyramid of leadership flips upside-down and the leader's role is not to make decisions about the future but to provide a haven for passionate people with great ideas the time to experiment to determine whether or not the idea really has value.