A steady stream of the right changes WILL put innovation into the fabric of your company.
This story was written as one of the requirements to obtain the Innovation Mentor Certification as part of CIMp. The CIMp program is part of iVia, The Way of InnovationTM, founded by the University of Notre Dame, Whirlpool Corporation, and Beacon Health System. Learn more at http://innovationcertification.nd.edu.
This organization is a large energy company that works in every stage of the energy business. This particular story’s scope includes a specific subset (“the OpCo”) of the business. The organization was formed through a series of mergers and acquisitions over the past 20 years. As with many traditional energy companies, the parent organizations are all in the 100-year-old range. The OpCo operates in the de-regulated US energy market.
The OpCo employs over 8000 employees, and operates in a highly-structured environment. Overall sector leadership and business success has been attributed to the strength of structured management model, where all locations use the same organizational methods and processes. Leaders of adjacent sites are highly competitive, and a comprehensive performance indicator program supports high levels of performance. Annual compensation for leaders is influenced by both short and long term performance.
The OpCo has also been a nearly two decade-long leader in innovation, consistently winning industry awards for dramatically changing methods for better results.
A changing energy landscape, both in the generation marketplace, as well as in changing consumer expectations, has driven the company to embrace innovation as part of a fundamental business strategy, both for marked efficiency savings and to remain relevant to both consumers and potential employees.
Fostering engagement in a whole new innovation structure with clear links to company strategy is no small task. Utilizing a series of planned shifts to organizational structure, adjustments to the motivators for leaders and a plan for education and communication can result in the shift you need.
An accelerated stream of management practice, structure and process changes began in mid-year 1, with the overall objective of gaining employee and leader engagement in innovation in a more meaningful way within the OpCo. The changes can be grouped into categories:
• Creation and revision of process structures
• Resource designation and education
• Communication strategies
• Accountability measures
• Crowd engagement events
To generalize the discussion, the timeframes discussed below cover four calendar years. Going forward, they are referred to as year 1, year 2, as well as 1QYr1, 2QYr2, etc.
The adventure begins in the middle of year 1, when senior business unit leadership recognizes that a step increase of engagement in innovation requires dedicated leadership, and a full –time director (mid-level manager) position was staffed with a dynamic, experienced leader. START WITH SOMEONE FULL TIME
To reach further into the organization at all of the geographically spread OpCo locations, an innovation point of contact was created as a leadership development opportunity. This collateral duty role was given the designation of Site Innovation Ambassador. Local leadership confirmed the individuals who volunteered, and a diverse group of individuals became the first OpCo innovation organization. Toward the end of year 1, this group begins to meet regularly to understand upcoming innovation events, raise awareness of the shift in innovation focus and begin work on an OpCo innovation framework. GAIN INITIAL AWARENESS
Creation of a process document was prioritized high early on, based on the OpCo’s heavy focus on business process. Implemented in 2QYr2, the original process was designed to mimic a combination of other existing process documents to create a framework to manage a stream of employee innovative ideas. PROVIDE INITIAL STRUCTURE
Application of internal crowdsourcing was applied across the whole corporation for the first time, also in 2QYr2, looking throughout the organization for new revenue opportunities. The OpCo subset of employees submitted ~20% of the ideas, versus their strict representation percentage of ~35%. The OpCo did sponsor one idea finalist through the subsequent year (year 3) as the business opportunity grew and developed. This sponsorship created multiple learning opportunities for the leadership team to understand the resource commitment necessary for innovation, and how different it was from core business (level of uncertainty and risk). SHOW THEM INNOVATION IS DIFFERENT
During 3QYr2, the CEO challenged the organization to truly be collaborative through utilization of a central location for the collection and management of innovative ideas. As a result, representatives from each operating company worked together to select a common, commercially available idea management platform, that was subsequently rolled out to the OpCo, through the innovation ambassadors and a traditional “road show” communication method. PROVIDE A PLATFORM TO COLLABORATE
Throughout year 2, it became apparent that additional dedicated resources were needed to support both innovation program management and investigations into larger-scale potential innovative solutions. Over the course of about 4 months, additional full time employees and one college co-op were added to the full-time innovation team. PROVIDE RESOURCES FOR SUPPORT
The OpCo also committed to creating a higher level of expertise in innovation process and techniques through enrolling a subset of innovation ambassadors in the Notre Dame-sponsored Certified Innovation Mentor Program. Through year 4, a total of 8 OpCo participants will have been part of the program, greatly expanding the expertise throughout the corporate and site locations. TEACH THE EARLY ADOPTERS
To increase awareness and allow for better measurement of leader engagement, specific categories of innovation were added to the company rewards and recognition program. This allowed innovation leadership to understand what and where innovation was being rewarded in the organization beginning in 4QYr2. In addition, an OpCo specific recognition event was held at the end of year 2 for ambassadors and those employees who were extending extra effort and taking risks to innovate within the OpCo. This group was energized by both the reward and the executive recognition of their efforts. REWARD AND RECOGNIZE PEOPLE WHO ENGAGE
A common set of behavior and activity-based metrics was created for comparison of innovation engagement and performance between the operating companies. Starting in early year 3, the largest effect of this change was to create competition among company executives around innovation. MEASURE PROGRESS
In mid-year 3, the annual OpCo business strategy meeting provided a platform to educate a broad swath of OpCp leadership (~200 leaders) on the current assessment of innovation culture and the leader behaviors needed to influence that culture in a positive way. Interactive techniques were utilized in small groups, within a video-based, story-telling format. Feedback told us that the review of survey results was impactful, as senior leaders were able to reflect on how best to amplify their impact to accelerate positive culture changes. MAKE INNOVATION PART OF BUSINESS
The corporation Innovation team hosts large employee-focused Innovation Expos annually. This all-day session is packed with motivational speakers, workshops, key technology displays, and, most importantly, employee idea display booths to create a dynamic venue for collaboration. Feedback from both employees and leaders always includes excitement and motivation to continue support for all the great ideas they encounter. This has materialized in additional resource and financial support to drive the best ideas forward. SHOW COMMITMENT and GENERATE EXCITEMENT
In the first half of year 3, an OpCo-specifc internal crowdsource challenge sought out employee innovative ideas in a number of cost-saving areas. Employees rallied to provide over 50 ideas. As a post-challenge learning, we ramped up communications about all the parallel cost savings and innovation solutions under development across the OpCo. ASK FOR EMPLOYEES’ INPUT
As more and more individuals and groups began to propose isolated use of various available digital platforms and applications, an executive oversight body was created to approve overall digital strategies and direction. During 3QYr3, a digital strategy and vision were developed. We conducted multiple ideation sessions, yielding a series of connected, potential digital solutions to be discussed with the new oversight body. To support acceleration of the strategy, leadership committed to the formation of a dedicated team for a period of time. Since formation, this team has increased the pace of prototyping and introduction of innovative digital solutions by an order of magnitude. They have an operating model and financial commitment to explore and implement solutions of significant value to the organization. EXPAND AND ADJUST YOUR STRATEGY
In mid-year 3, a side-by-side comparison of site contributions to the OpCo innovation metrics was added to the standard oversight meeting template. This included a site-led discussion of local actions being taken to improve innovation culture. Site leadership became more versed in the activities and language of innovation. Over the course of year 3, OpCo overall scores in this metric increased from a year start in the mid-60’s to a year end value in the mid-80’s. MEASURE SO IT MATTERS TO EVERYONE
In 4QYr3, a commitment was made to create an innovation workshop in a corporate office area to facilitate the digital team’s operations and inspire others in the organization to think freely and collaborate to develop yet more innovative ways of doing business. This space is like no other in the company in its use of color, unusual furniture, collaborative capabilities and multipurpose areas. INNOVATION NEEDS DIFFERENT SPACES AND TOOLS
As the innovation organizations became more mature, we improved the metrics at the close of year 3 to focus on results and ongoing investment in innovation to create sustainability. Leaders could now see more clearly how they needed to influence their organizations to create positive metrics results for the long run. One addition specified a dollar value commitment for rewards given for innovation-related activities over the calendar year. CREATE SUSTAINABILITY METHODS
With the launch of the digital innovation team, a more formal communications strategy was created in late year 3 to raise awareness of the team’s mission and its connection to the overall innovation initiative and our core business. COMMUNICATE THE INTENT OF CHANGES
The innovation ambassador group identified opportunities to improve the process document over its first 12-18 months of use. A more flexible approach was needed, based on the scope of the ideas submitted to the portal and the potential solutions being investigated within the organization. A team began work on process improvement at the end of year 3. CHECK AND ADJUST
A company-wide redesign of talent management practices created a greater focus on innovation as “Drives Innovation” became one of just six personal core competencies for all employees beginning in year 4. REINFORCE THE IMPORTANCE
Assignment of site level ambassadors and the adoption of metrics in regular review meetings led to additional desired behaviors, such as broader interest in innovation training, additional idea generation, and status of investigations. Expansion of the accountability for the metrics beyond the sites led to assigning innovation ambassadors to the corporate organizations in 1QYr4. SPREAD THE ACCOUNTABILITY
With an improved set of metrics for year 4, continued executive commitment was garnered through inclusion of an objective to meet key innovation metrics in goals for the year. Discussion between corporate executives and site leadership in review meetings has shown that mid-level managers are now involved and recognize the need to understand what is required to be successful. REINFORCE THE IMPORTANCE
Dedication of resources for the Digital Innovation Team required continued focus and follow through, as one would expect any significant change in priorities and resources would necessitate. This activity had the added risk of much less certain ROI. Additional and frequent communications with all stakeholders as this several-month process unfolded would have made it happen more smoothly.
The amount of red boxes (negative scores) on the first draft of the metrics for site-by-site comparison turned some leaders off to the whole concept. A more gradual phase-in of judging success may have engaged more people initially.
The first process document was put in place without having significant in-house expertise on innovation methods. This contributed to a document with more specificity than is required. Less is more in the case of innovation process structure.
Executives are now reaching out to innovation ambassadors and innovation program managers to understand what they need to do to meet goals. The same group is volunteering to support appropriate risk-taking through sponsoring investigations. Employees are finding that their leadership supports their involvement in innovation activities on a regular basis. Executives are sponsoring their own innovation investigations that appear to have business value.
We now have a steady stream of new ideas coming into the idea pipeline. Over the span of approximately 18 months, participation in the employee idea pipeline for the OpCo has grown to an average of 30 new ideas per month being captured in the platform.
Site leadership reports a clear connection between the ability to try new things in the innovation process and overall employee engagement. The OpCo overall commitment to support investigation of innovative ideas has increased from less than 1 per month to nearly 4 new commitments on average per month by the end of year 3.
To implement any large management method change, recognize what drives your organization to change behaviors quickly, and leverage that. For this organization, the change in metrics and accountability for meeting them drove the largest, fastest behavior change on the part of the OpCo leadership team.