Written by by Nathan Waterhouse, Founder Umbel Ltd
In their CEO Pulse Survey, PwC asked CEOs what they thought were the most important ingredients for successful innovation in their business. The results are here:
Having seen what works and what doesn’t when it comes to innovation and change management – from early days at Richard Ellis, Lendlease and Tesco through to 11 years at IDEO – the innovation consultancy who designed the first mouse for Apple and the world’s first laptop.
Today, when consulting with senior leaders in real estate and beyond, we begin with a simple game called ‘Innovation Behaviours’. Here the seven qualities of highly innovative organisations are brought to life with clear examples everyone involved can grasp.
THE SEVEN QUALITIES BEHIND THE WORLD’S MOST INNOVATIVE ORGANISATIONS
How aligned is your organisational purpose and strategy to the change you want to make? How much do your employees “get it”?
Smart leaders know that Generation Y – and what we are seeing from Generation Z too – have a strong preference for organisations whose higher purpose runs through everything they do, from product development to brand voice and customer care, with everything in between held together by this purpose.
This is seen in the example of CEMEX, a now multinational building materials company which began humbly in 1906 in Mexico and serves as an inspiration to those in PropTech in how to radically transform themselves. Most of CEMEX’s rapid growth came in the 80’s and largely through acquisition. Many organisations that growth this way suffer from a lack of cohesiveness and sharing between acquired businesses. CEMEX recognised the value of creating a single global culture to increase knowledge sharing and innovation and help them compete in a rapidly global market.
CEMEX’s radical growth and profitability has been attributed to its innovation capability, initiated by their CEO Lorenzo Zambrano in the early 1990s. This began with creating networks across the firm to enable individuals’ interaction regardless of position, location or function. Networks are geared towards strategic imperatives, functions, and common interests. The transformation led to a corporate wide innovation program delivering sales and profit growth and operating margin over the last 15 years to over 20% – twice as high as its competitors.
How effective is your organisation at enabling and supporting employees to try new things?
Nucor, steel business and third most profitable in the US, empowers its workforce to think of new ways to innovate steel production, by encouraging a culture of experimentation. The signs that hang around the factory asking employees to “Have a questioning attitude” and “Analyse [their] job” continually reinforce this behaviour. Nucor’s values also encourage making a positive environmental impact. Thanks to this focus, they have been implementing non-traditional steel making techniques that use 90% less energy, surpassing many American energy requirements.
How efficient is your organisation at generating and implementing ideas together, both internally and externally?
With the rise of today’s connected workforce, gathering insights from front-line staff and feeding those through to departments responsible for decision making dramatically increases your organisation’s innovation strengths. Connecting staff to each other to share lessons and insights about the way they work, even if geographically miles apart on different continents, is rapidly seen as a necessity to stay commercially competitive. But it’s not just about how well you connect internally, but also how well you embrace ideas from your customers and suppliers that will help give you the edge over the competition.
How do your people collaborate within your organisation to ensure ideas aren’t overlooked or poorly developed? Whilst at IDEO, I co-founded a software platform called OI Engine that helped organisations to engage their employees to share their insights and ideas to help push the needle on innovation. We worked with clients such as British Airways and Hewlett Packard to create cost savings and new revenue in excess of tens of millions of pounds from the direct contributions of employees and customers. This is an important trend that is worth paying attention to and can particularly help accelerate progress towards a more global offering.
How equipped are your people at garnering insight and inspiration from beyond the company’s walls?
What binds a culture can also make it an introverted one, and keeps it from looking out beyond its four walls. The Spanish bank BBVA recognised this as a threat to staying commercially ahead, and so runs an Open Talent competition to seek ideas from startups. Toolmaker SnapOn spends time observing how existing and future customers work: shadowing, and immersing themselves in their world. Input from customers has shaped everything from the configuration of toolboxes to new features such as powered compartments. They also frequently test new prototypes with customers for feedback.
How skilled is your organisation at learning?
Being able to explore new ideas quickly and inexpensively, while consistently documenting and sharing learning is truly invaluable. It’s hard to put a price on just how valuable it is. Innovation consultancy IDEO created a platform to encourage impact in big social challenges. OpenIDEO.com is a space where ideas can be shared a tested. It enables social-impact entrepreneurs across 190 countries to get rapid feedback and accelerate their progress, often receiving funding to move their ideas to the next stage. This method is industry agnostic and is a process real estate, property and construction companies can adopt and practice too.
How well does your organisation refine ideas while retaining their original vision as an idea progresses towards launch?
Sometimes creativity is thought of as an ‘anything goes’ activity. Yet, good ideas need to be refined to survive. Pixar, the studio behind hit films such as ‘Toy Story’ and ‘Finding Nemo’ has a culture of ‘creative abrasion’, which encourages ideas to compete, promoting open feedback of what works and what doesn’t. The best ideas often come from diverse opinions rather than from those who think the same way we do. The challenge is that most companies hire people who are like them, and as a result, little new is brought to the team. Pixar, like many other firms such as Nissan, actively hires diverse team members for its creative teams. In addition, it encourages ideas to be challenged in a way that keeps them alive, while also evaluating what might make them fail.
How good is your organisation at scaling innovations seeing initial market success across the firm?
Greater competitiveness comes from leveraging a winning idea across your existing markets so its reach is capitalised upon. This is increasingly important in a highly mobile and connected world, as market incumbents like Uber or Airbnb show. Their growth rapidly expanded far beyond their nascent Silicon Valley. Established organisations with the existing advantage of global reach find challenges lie in how effectively they mobilise their people with these new ideas and the right accompanying mindset.
Culture is talked about a lot as if it’s something “out there”. This is simply not the case. The beauty of culture is that it is created and reinforced daily, by every employee. Every organisation is a product of how its people think and interact day in, day out. Culture only changes when we have new experiences – and it’s these experiences that lead to new beliefs, fresh perspectives and stories, shifting assumptions. Only with new experiences can we adapt our way of thinking and innovate.
Nathan Waterhouse, Innovation Consultant