ROLLING OUT AN INNOVATION CULTURE

-- By Porus Munshi Innovation Culture - the underpinnings At its heart, creating a culture is about Ignition. And Ignition is triggered by stories of 'People Like Us'. What's common between British Table Tennis, BBC, Spartak, St.Patrick's School in Kenya's rift valley and Save The Children of Vietnam? They are all examples of a key insight: Tremendous transformations and change and performance happen in people, organizations and countries through stories of 'People Like Us'. Till the BBC came in, we believed that Indians could never compete in contact sports at a global level. We Indians dont have the endurance, we dont have the right kind of muscle fibre, we dont have the right mindset, we dont have the genes and so on. Then the BBC came in. And BBC here is the Bhiwani Boxing Club. A small boxing club in a small town in Haryana that has created Indias boxing heroes who are now recognized as contenders at the world level. Once a few of the BBCs initial students went on to win at international levels, it ignited a whole generation of youngsters who watched people like us being able to break onto the world stage. Akhil Kumar, Vijender Singh became heroes and triggered an almost mass movement into boxing. And all of a sudden the very logical sounding gene based explanations about why Indians couldnt box have fallen by the wayside. Spartak Tennis Academy of Moscow produced Anna Kournikova who won the Wimbledon in 1998. This set off a tremendous floodgate of young Moscow girls flocking to become the next Anna Kournikova. Many of them had seen her play, many knew her, many had played with her and they knew her to be just an ordinary girl not even the best at the academy. And if she could do it, so could they. In less than a decade after that Wimbledon victory, Spartak was producing dozens of little girls grunting like Anna Kournikova. And at a point in time 5 of the top 10 women and 7 of the top 20 women players in the world were from Moscow, specifically from the small Spartak tennis academy. The entire US at the time produced only 3 of the top 20 players. Through much of the 1980's almost all of Britain's top table tennis talent came from a single street in the small town of Reading in England. That single street produced more top table tennis players than all of Britain combined. Again a story of Ignition and 'people like us'. After a single person from that street went on to become a national champion, tremendous Ignition took place amongst the neighborhood kids. The famous and invincible middle and long distance runners of Kenya largely come from one part of Kenya - the Rift Valley, and specifically the town of Iten and even more specifically from St.Patrick's school there. And it all began in 1976 when an Irish clergyman, Brother Colm Porus Munshi 1

O'Connell went over there to teach in that school and began to encourage and train students for long distance running. If you notice, these are all extremely localized: one town, one street, one institute, one valley, one school. Sports performance isn't about genetics, it's about a culture that has to come in. Similarly breakthrough innovation isn't about talent. It's about a culture that has to come in. In innovation, when teams see one team in the organization create a breakthrough, it produces ignition. Bosch India experienced this when they created a breakthrough for diesel engines, Titan Watches experienced this when they create the worlds slimmest water-resistant watch. Ignition works best when we believe it is People like us who are doing it. As long as we believe that those who make breakthroughs are not people like us, we dont make breakthroughs happen and instead rationalize about talent or MNC culture or environment or resources. So a key step to steering change, transformation or innovation in organizations is to constantly share stories of People Like Us: Ordinary people from within the organization or industry or geography who have done the extraordinary. And that's the key to any cultural transformation. Bob Stone who was largely responsible for the amazing turnaround of government efficiency in the US during the Clinton-Gore years, says that it all boils down to one thing: "Find and publicly reward people who are doing what you want, And tell stories about them everywhere you go." Obviously to create Ignition and be able to have 'People Like Us' stories to share, potential successes have to be nurtured and enabled till they become lighthouses. That brings us to the next part: How to create the enabling environment that allows for innovation to blossom in the organization? The Process of Creating an Innovation Culture - Fission and not Big Bang A large part of culture is about ones relationship with ones boss. The first challenge is to change the dynamic and build trust. And one of the most rapid ways of changing the dynamic is for the leader to actively seek out and solve irritants his peers face and to genuinely listen to and make commitments to his subordinates that are within his power to make and to keep them. One leader had a whiteboard outside his office asking 'How am I doing?' Anybody could go up and write anonymously on the board whatever he felt the leader was doing well or poorly. Another would actively go to subordinates once a month and ask what he (the leader) was doing that was preventing the subordinate from being Generative. A third would ask people what irritants they had and solve as many as he could. All these in their own way changed the culture and the dynamic of the team. And once the dynamic changed and moved towards trust, the team could pretty much do anything.

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An Indicative Sequence to Create a Culture of Innovation at both the organizational and the department level Note: Innovation happens at 2 levels: Targeted innovation missions that the larger organization sponsors and leads, and bottom-up innovation projects that departments anchor.

1. Change the dynamic between the leader and the team to move it towards trust. 2. Create innovation awareness sessions in the team why innovation? Why is innovation an imperative? What are the larger consequences of not innovating? How innovation benefits the individual as well as the organization. The intent is to raise awareness, create urgency and highlight the personal and team benefits of innovating. 3. In each department identify 5-6 people ready and keen to take up an innovation journey the lead radicals. The lead radicals are willing and keen experimenters who want to try something new and make a difference. They are the pioneers and once they are successful they create a fission with many more keen to replicate their successes. A majority of people are often proof seekers and are quite willing to do something as long as someone has demonstrated that it can be done and that they benefit from it. They get ignited by 'people like us' stories. And it is often from these beginnings that fission happens. It's happened that way in a number of organizations like Trichy Police, the Surat transformation, Max New York Life, Tanishq and even the US government to name a few. Mandates don't create an innovation culture, fission does. 4. Train the lead radicals on innovation tools and techniques and the Process of innovation. The process is key because, in addition to creating skills and techniques, people like to know that something can be replicated on demand and that they can do it too. And this more than anything creates fission. 5. Allow the team identified in each department to choose out of projects created by the department or allow them to co-create projects based on Departmental challenges. 6. Define clearly the free time they will have available to work on the projects. Highlight the importance and imperative of the project to the department and to the organization. 7. Choose an innovation champion along with the team. Teams often choose a 'safe' or 'compromise' person especially if there are two or more strong personalities in the team. Enable them to go beyond a 'don't rock the boat' champion to someone who is willing to stretch and push and yet is good with people. Someone who's purpose driven, doesn't settle at the Lowest Common Denominator and is good at inspiring, prodding, and enabling people. Someone who's also not particularly deferential to senior management and is willing to push back for what he and the team believe in when it comes to the project. The champion is chosen not on designation but according to characteristics. 8. The team will need regular mentoring by a mentor anchored high in the department. Further, they will need a sponsor anchored high in the organization who has a bird's eye view of where they can get further inputs/resources/ideas from other parts of the organization when they run into obstacles. 9. Set up a definite review process and frequency of review anchored to the innovation process. 10. Mentor and sponsor being present and on time at all reviews sends a very clear signal about the imperative of the project. The first projects per se may not be something critical Porus Munshi 3

to the organization and hence the temptation may be to skip or reschedule some reviews because something 'important' comes up. But the reviews are not so much for the project alone as much as for creating a culture of innovation because nothing sends as clear a message about the importance of the new 'new way' as senior management making time always to be present for the reviews. It also creates a trigger in others to be involved in innovation projects themselves because they see that this creates access to top management at a far more one-on-one and focused level. The organization would need to create a consensus for senior management that in case of conflicting priorities, it's reviews first and everything else next. For senior management, this is the 'Walk the Talk' stage of creating a culture. 11. Celebrate successes. Visibilize and make the team heroes. Take a leaf out of the army from the way they create champions and heroes. Commemorate failures too as learning experiences because in the journey people have learnt something. This is also to remove the fear of failure. The US army has the Purple Heart award for those wounded in the line of duty. Create a 'purple heart' for daring to try. The Tata group has a 'Dare to Try' section in its annual Innovista awards for the best innovations in the group. The 'Dare to Try' award is given to teams who did everything right but factors completely out of their control limited their success. 12. Create "Greenballs" successful project members who speak to others and become evangelists for innovation. Greenballs should be across different levels because they influence their own levels the maximum. People listen to 'People Like Us' at hierarchical levels too. 13. Principles to follow: - Initially focus on process more than results. Adherence to the innovation process will create replicable innovations rather than the work of a solitary 'genius'. Replicability builds culture. - Celebrate failures as learning experiences to de-risk and remove fear of failure. - Create coaching, guiding and mentoring structures. - Demonstrate Innovation as a priority in the organization. 14. Once success happens and the projects are closed, repeat the above steps at a larger scale: larger project scope, larger teams, and larger impact. 15. Expand into creating an innovation school that has a 3-4 month of innovation curriculum and where students take on projects from a list available or create their own projects. Innovation Process at a Department/Project Level 1. Department head announces themes or challenges that need to be solved or projects that have been conceptualized. 2. Invites/calls for projects to solve the challenges or address the themes. 3. Chooses projects according to strict, transparent criteria: This can be 2X2 matrices of the following form (in sequence): High Impact - High Uniqueness, High Impact - Lowest Resources required, High Impact Highest Ease of Implementation. 4. Department head mentors projects through the innovation process. Co-mentoring can also happen by "Greenballs" - people who have successfully led other innovation projects. 5. R&R happens to the team, not to individuals. Porus Munshi 4

6. The organizational challenge is to pull out all the stops to create the first 3-4 successes in each department. And then use these successes to bring in many more and also to gradually increase scale of impact as well as reduce resources. About Themes and Challenges The organization sets annual themes that align the entire organization to the key strategic and innovation-area focus for the year. Key innovation projects are invited for these themes. For instance, one organization was looking at a 5-fold increase in revenue in 5 years. Lead influencers in the organization were invited to an alignment offsite and the reflection that emerged was that this could be done by adding more people along with adding capacity. But this would only be done if everyone at the offsite agreed that they already had the best processes and best equipment in place and that nothing more could possibly be done, that there was absolutely no scope for improvement. The influencers were also told about market uncertainties and risks of adding manpower and capital costs. Could a 5-fold increase occur without this? The team began to reflect on what processes could be simplified and automated systematically. And that became the theme for the year: Simplify and Automate. Different groups were formed to redesign capital and manpower intensive processes. The impact was that 10 breakthrough projects emerged, and the overall impact is that not only has 5-fold growth been achieved by existing manpower and equipment, the teams also created new-to-the-world machinery that have the potential to be sold on the global market. One process for instance currently comprising 456 people was completely redesigned so that even with a 5-fold increase, it could be done by just 47 people. The rest were re-assigned within the organization. Examples of initial themes could be: 1. 'What's New': For every department to emerge with 3 new ways of doing their work every month. 2. HOD fund: An fixed amount between 1-3 lakhs given to every HOD upfront to create and run innovation missions up to the prototype stage. The initial amount is given no questions asked and later investments in the missions can be made through a review mechanism. Many HODs often complain of lack of funds and this is a way to overcome this by giving funds up front with no explanatory note or approval required. This isn't an invitation to take the funds - it's an expectation and a requirement. Interestingly, once this is put in place, many HODs then have to be pushed hard to take the fund. But once they do, interesting results emerge. 3. A theme that an organization used was 'Leap for Lasting Leadership' where Bob Beamon's 20 year Olympic long jump record was the inspiration. The intent was to create innovations that would last 20 years and propel the organization into creating World Records in productivity, marketing, supply chain, sales et al. Targeted Challenges These are challenges created by both the larger organization at the CEO office or strategy level as well by departments/SBUs. The intent for both is game-changing innovation. Some areas may fall between department gaps and it makes sense for the top leadership to identify and champion such challenges and the projects emanating from them.

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For departments, the intent is create game changing innovation that impacts not just the department but also the organization and the industry. Every department in every organization has the potential to disrupt its industry. Innovation Triggers In addition to Themes and Challenges, a number of innovation triggers can be used. Some examples are: 1. The X-Prize kind of trigger where any department/group of individuals pursues a challenge created by the organization. It's a very specific challenge with defined constraints and outcomes. A funding mechanism can be worked out depending on the criticality and technical requirements of the project. The teams pursue the challenge and the first team to meet the conditions and deliver a working prototype with a scale up plan wins a KBC kind of mega prize in the vicinity of Rs.1 crore. Obviously the benefit to the organization has to be of a comparable magnitude. 2. The Rapid Follower Prize. Many innovations in departments don't get scaled up because employees don't use the innovation or resist it. This prize, in addition to the award already given to the innovator is given to the first 2-3 followers who take the initiative to use the innovation in daily work or who champion the innovation and add to it. This creates the conditions for rapid scale up of innovations. 3. The 'identify and replicate bright spots' prize. Not directly related to innovation but nonetheless a key area for organizational impact and in developing a culture of seeking and replicating high performance. The prize is given to individuals who find out what someone else in their department/area is doing very well and why he/she is getting extraordinary results. And then replicate that in their own work to get similar or better results. This isn't about being a fast follower for an innovation and instead is about individuals seeking excellence and replicating it and building on it to get similar or greater results. In the bargain both get recognized - the earlier invisible person who has been getting unusual results and the person who's cracked this person's performance code and replicated those results for himself. For instance at Vietnam, malnutrition in children was endemic until Jerry Sternin arrived on the scene. He began by searching out in every village, the bright spots: examples of people who though very poor had children who werent malnourished and got others from the village to speak to these folk about what they were doing differently. And when villagers learnt from their own neighbors what they were doing, they began doing it themselves. In less than 6 years, moving from village to village, malnutrition was eradicated using no additional infusion of funds. Villagers were ignited by people like us doing it. If someone externally had come in and said that they should do the very same things they would probably have been ignored. When you see people like us do remarkable things, it breaks many of the rationalizations that would otherwise arise like their conditions are different, it wont work with our people, in this industryin this country/state/city. And so on.

Rewards and Recognition for innovators Porus Munshi 6

The initial R&R has to be very specific because we want to create a belief that innovation is a matter of process rather than a hit-or-miss effort. In that regard, the following are some principles for R&R: 1. R&R happens to the entire team rather than to the individual 2. The first key award is for following the process of innovation end to end irrespective of final outcome. 3. The second key award is the successful outcome of the project. 4. The third key award is on how well teams have followed metrics: a. Number of ideas generated for the challenge using thinking tools b. Process of insight mining followed c. Enrolling of people - stakeholders and peers - how effective d. Use of the 2X2 matrices mentioned earlier for selection of projects based on objective criteria e. quality of prototypes created f. EVERY team gets rewarded for undergoing the journey. The ones with 100% compliance to process get a special mention. 5. R&R: Can take the form of cash awards, of specially crafted certificates of appreciation that look as formal and well crafted as degrees and diplomas, and most powerfully, photo sessions with the MD. For many the last is the most appreciated and memorable and that photo along with the certificate hangs on many sitting room walls. Creating Heroes Linked to the above section (R&R), a key part to any culture change is creating heroes - people who typify the culture that we want to change to. In our context, once innovation projects and small wins are achieved, it's critical to create stories of 'People Like Us' who have achieved success in the new New Way. The stories share how these individuals have created breakthroughs and achieved success. These could be 3-minute youtube type videos of people telling their stories, sharing their journey, videos demonstrating how different heroes went through and overcame different sticking points. The idea is to further create 'Greenballs' - successful innovators addressing live peer groups sharing what they did, how they did it and the benefit to them. Nothing creates enrollment more than 'people like us' telling us how we did something and how it benefited people like us. Also position these heroes outside the organization in peer communities. Position them as speakers at steel conferences, manufacturing conferences, supply chain conferences et al. Position them at every possible external management conference. Again nothing builds up people so much as being recognized by outside peer groups. It also creates a tremendous surge in others within the organization to do something similar. Create an Essar Steel (and later perhaps an Essar group of companies) Book of Innovation Lighthouses where the story of the innovation project is written about in depth and the book is widely circulated among the Essar group of companies. There is something timeless and a hint of

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immortality in seeing ones name and achievements in print and especially in the form of a book that ones children can read. And this creates a tremendous groundswell of passion for innovation. Develop an online platform where Innovation teams can post sticking-point challenges and anyone inside or outside the organization can contribute with suggestions or ideas of getting past the sticking point. Anybody can be a contributor and contributions can be tapped from university professors, subject matter experts, lead thinkers, practitioners and so on. Rather than make these facilities available for R&D alone as so many organizations do, make them available to everybody in the organization. And you know an Innovation Culture has been created when you spot a workman calling up an IIT professor to get his views on a technical challenge he's facing in his innovation project. ***

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