The Rise of the Intrapreneur How to become an ‘Intrapreneur’? Why are Intrapreneurs needed? What is the difference to Entrepreneurship? – The future of innovation within large organizations lies within, if you know how to tap into it with intrapreneurship!
What is Intrapreneurship?
Did you know that ‘Intrapreneur’ and ‘Intrapreneurship’ are not new terms but were coined nearly 35 years ago by Elizabeth and Gifford Pinchot in 1978?
As a definition for our purposes, an intrapreneur takes responsibility in large organizations for turning an idea into a profitable finished product through assertive risk-taking and innovation. In contrast to an entrepreneur, the Intrapreneur operates within an existing organization with an internal focus. Intrapreneurship requires an organization of considerable size for an intrapreneurial role to become applicable in the first place.
What is the difference to Entrepreneurship?
‘Intrapreneur’ is not as well known as the more established term ‘Entrepreneur’ which it derives from. It even takes a deliberate effort to pronounce the word Intrapreneur so doesn’t sound like and get confused with Entrepreneur.
The word ‘Entrepreneur’ has been around since the 19th century with its functional roots reaching even farther back into the 16th century. According to the original definition, an Entrepreneur is “one who undertakes an enterprise […] acting as intermediatory between capital and labour” or in other words, to “shift economic resources out of lower and into higher productivity and greater yield.” (source: Wikipedia)
The role of an Entrepreneur is not so different from the Intrapreneur but many differences exist relating to the environment they operate in and the approach they take. An Entrepreneur founds a new venture, a business, or company, as an independent economic entity. This new entity then typically competes for profit in a market with other companies. Today, Entrepreneurship has fanned out to include specializations such as lifestyle, serial, or social Entrepreneurship that also expanded in markets (in lieu of a better word) previously dominated by non-for-profit, clerical or government institutions.
As a bottom-line, Entrepreneurship roots in competition between companies or organizations by introducing and building a new entity that grows as a company to stand alone in an economic marketplace – while the Intrapreneur connects “capital and labour” using somewhat entrepreneurial methods within an existing organization. You can even see Intrapreneurship as a downstream evolution for a successful and matured entrepreneurial venture.
Why do we need Intrapreneurs?
With increasing size, an organization slows. Inertia and paralysis set in to replace agility and effectiveness. This is often caused by the organization’s own success: The focus shifts towards delivering with increasing efficiency (cost, time) and consistency (quality). You can easily observe the results in many organizations – it looks somewhat like this:
Business functions specialize and sub-optimization to become more efficient and productive; they thereby form ‘silos’ with communication and interactions thinning between them to the detriment of the organization as a whole.
Hierarchical structures become steeper to manage more employees; they effectively disconnect the executives on the top from the workers at the bottom of the hierarchy.
Promising innovation ideas from the grassroots don’t get through to the executive level for backing or funding to be developed and implemented; the ideas starve and innovation suffers overall.
More rules and procedures regulate the growing workforce and detailed aspects of work processes; governance, red tape, and bureaucracy pour over the organization like concrete and become obstacles to change.
Career paths become linear, job profiles and responsibilities narrow, entailing an equally narrow view and mindset of the staff that eats away motivation and creativity over time.
Talented and creative employees are the first to leave or become hard to retain, as they are always in demand and easily find interesting work elsewhere.
Innovation suffers while competitive pressure increases when nimble competitors and start-ups outpace the organization.
Management used to command-and-control eagerly seeks fresh talent and ideas externally, i.e. ‘hiring the best and brightest’, to reanimate the organization – yet the leaky pipeline continues bleeding talent, as also the new ‘super stars’ find themselves trapped and escape to new adventures elsewhere.
It takes a jolt to overcome this inertia, revive it, and get an organization moving nimble again ‑ this is the hour of the Intrapreneur!
How to become an Intrapreneur?
It takes a new role in the organization to jump-start it, so we “Innovate to Implement“. Sometimes, a new CEO is hired to turn the corporate ship around from the top; sometimes it works. The Intrapreneur, however, also considers working bottom-up by pulling the loose ends together and connecting people again across all functions and levels of hierarchy. The Intrapreneur bridges the various gaps within the organization vertically and horizontally.
It takes a different approach to include, and engage all employees in ways outside their immediate job description that makes best use of all dimensions each individual brings to the (work) table. The Intrapreneur inspires and spreads a new sense of enablement throughout the workforce.
The Intrapreneur looks differently at how we conduct our business and unlocks innovative value chains, new business models, or propositions. It takes a strategic lead to become a facilitator for the organization, to adapt continuously and make best use of the changing environment. The Intrapreneur builds networks and alliances to help actively moving the organization towards its business goals.
Now, as a word of warning, being an Intrapreneur is not always easy: You tent to step on many people’s toes if you want to make a difference. It can be so risky, that Gifford Pinchot even formulated The Intrapreneur’s Ten Commandments starting with: “Come to work each day willing to be fired.”
It is not always easy to become an Intrapreneur. It takes skill and persistence as well as courageous leadership and risk taking. Truly making a difference and reviving an organization though is rewarding in itself – at least you will learn a lot and make new friends. ‑ Most of all make sure you have fun!
Vasa’s historic project management lesson Building a battleship is a huge project today as it was hundreds of years ago. Yet, as project managers, do we learn from the past or stumble into the same pitfalls over again? ‑ Learning from the ‘Vasa’ project disaster, the grandest battleship of its time sank just minutes into her maiden voyage!
Sweden’s Great Power period
In the 17th century, Sweden was at the top of its game. It emerged as a leading power in Europe during the so-called ‘Great Power period’ (1561–1721) characterized by a constant state of war with its neighbors in the Baltic Sea.
When King Gustavus Adolphus (1611-1632) inherited the Swedish throne, he was out to change naval warfare entirely earning him the later title “father of modern warfare” for revolutionizing naval tactics.
In those days, boarding was common practice, i.e. pulling side by side to an enemy ship, enter it, and fight man-to-man to take over the ship. The King found these tactics outdated. It was time for a new era of large battleships, which demand the enemy’s respect, serving as firing platforms for mighty cannons to fight from a distance, and project Sweden’s power even beyond the Baltic Sea. The firepower of its guns would now decide the outcome of the battle at sea and bring victory. Thus, the ambitious Gustavus Adolphus needed a new class of heavy ‘ships-of-the-line’ to exchange devastating salvos from afar.
Setting sails to a new era!
After severe setbacks in the war with Poland, Sweden’s naval superiority in the Baltic Sea was in jeopardy. In 1625, the King commissioned the Royal War Ship ‘Vasa’ as the first and grandest of four ships of the new era. The Vasa was planned with an overall length of 69m (226ft), 1,210 tons displacement, 10 sails, dozens of cannons and the capacity to hold 450 men (150 sailors and 300 soldiers). It was a bold statement: the Vasa was the most powerful battleship of its time, no expenses spared!
Spoiler alert, the unthinkable happened: Three years later, on 10 August 1628, the Vasa sank just minutes and a mile into her maiden voyage with over 100 men aboard; over 50 sailors perished.
Putting on the Project Manager’s hat
From a project management perspective, building the Vasa was the most expensive project ever undertaken by Sweden and it was a total loss. – What had gone wrong?
Humankind throughout history has undertaken large and innovative construction projects many times and with success. It is safe to assume that the people in charge applied the best project management practices known at the time to increase the likelihood of project success, i.e. delivering a product to the sponsor’s satisfaction.
Naturally, it is easy for us standing on the ‘hill of the presence’ and look back down into the ‘valley of the past’. Today we have access to sophisticated and detailed procedures for project management, which are generic and serve as a guide to run projects of any nature and size successfully. For example, the Project Management Institute’s Body of Knowledge, PMI’s PMBOK is such a general and proven framework that everyone can learn and follow.
Starting a project
In my experience, it is important for a project manager to have strong sponsorship commitment and ability to control the project scope.
The king himself was the principal stakeholder and sole sponsor of the projects to construct the Vasa and the other three ships to follow with all power and wealth concentrated in the sovereign’s hands. What a great prerequisite to getting the project moving! On the downside, however, this powerful sponsor can also take more influence over the project than is good for the end product, the Vasa.
Therefore, managing the scope is crucial. It includes clarifying the project scope up front and controlling possible changes to the scope throughout the project. Controlling scope does not mean that no changes are possible after the project starts – this would be unrealistic. It means that foreseeable risks and impact on resources, time, quality and other factors need to be evaluated and made transparent to the stakeholders for their approval. It means avoiding ‘small’ changes finding their way into the scope without evaluating risks and adjusting for impact. This communication is a major aspect of the project manager’s job.
As a rule, changes late in the project will increase the cost dramatically, so avoiding ‘scope creep’, i.e. uncontrolled changes late in the game, is crucial.
In January 1625, King Gustavus Adolphus commissioned four new ships over the next years in two sizes, the longest keel length measuring 41m (135ft) and shorter one still an impressive 33m (108ft) keel. He entrusted Admiral Fleming to oversee this program, as the King himself chose to tend personally to the ongoing wars abroad instead. Hybertsson, a competent and experienced shipbuilder was put in charge to manage the Vasa project as the first ship to be built.
The wood for Vasa had already been cut to size when a devastating storm destroyed 10 Swedish ships. Facing his losses and struggling to fill the gap, the King changed his order: He now wanted the smaller ships first to replenish his fleet faster.
This way the Vasa started out to as a smaller ship with a 33m/108ft keel in 1625 but -as we will see- became as a scaled-up vessel again with a long 41m/135ft keel over the course of the project. This was just the first of the King’s frequent and profound design changes during the construction phase and after the keel for the Vasa had been laid. Like the foundation for a house, the keel is a most critical part of a ship’s design; it sets and limits many following structural and other technical characteristics.
Building up to the tipping point
Time pressure from the King and a constant stream of significant alterations continued. Hybertsson did not seem to find time to get the plans for the ship adjusted and re-drawn every time anymore. With the ship’s dimension increasing again over time and adding innovative specifications, Hybertsson left his known terrain and ventured into the unknown of ship-building. Faltering under time pressure, the layout for a smaller ship was simply scaled up to become a larger frame to house the newly specifications. Changes hardly found their way into documentation anymore.
The changes affected not only the length but also the width of the ship. It had to be widened to accommodate more superstructure, another innovation that shifted the ship’s critical center of gravity higher making it less stable at sea. Given the original shorter keel layout, there was simply not enough space to add ballast to give the ship the stability it needed to counterbalance its increasingly heavy top.
Bringing in heavy artillery
The situation got worse. Sweden struggled to win the upper hand in the ongoing war when news arrived that rivaling Denmark planned a large battleship too. The King swiftly ordered adding a second gun deck to triple the armament from initially 24 to now 64 heavy guns plus some smaller guns! The center of gravity rose even higher with the second gun deck, the widened hull, and the added weight of the heavy cannons.
Only 48 of these guns were on board during the maiden voyage ‑ because the gun manufacturer was running behind schedule as were the shipbuilders.
Next, the King ordered hundreds of artisan outfitting sculpted in heavy oak wood and painted lavishly to impress with splendor. It made making the Vasa not only the most impressive and expensive ship of its time but also added more to its instability at sea.
In summary, frequent change orders were issued under time pressure. Changes remained undocumented and without deeper consideration of their consequences. The project schedule and milestones slipped, while the Vasa became larger and heavier than her layout could safely support.
From bad to worse
By now, the project was in serious peril. ‑ But wait, it gets even worse!
One year before completing, the shipbuilder Hybertsson fell ill and died. His assistants, Jacobsson and Ibrandsson, would share the responsibility to continue but only after a period of confusion on who was in charge and direction the workforce of now 400 men. The project management was already poor but suffered even more in the vacuum of accountability and the continued absence of reliable plans and documentation.
Stability is critical for the seaworthiness of every ship. Unfortunately, knowledge and underpinning for reliable calculations for stiffness and stability were not yet developed. The only way to find out if a ship would heel over and sink or not was to try it out in as so-called ‘lurch’ test: 30 men ran from one side of the ship to the other back and forth to make it rock. It took only three runs for the Vasa to rock so violently that the ship risked tipping over – the test was discontinued.
Now, due diligence was obviously applied as good as possible by conducting the stability test as an experiment with observable outcomes. – Having a previous post in mind, “How to apply metrics?” this experimentation deserves a heartfelt “Bravo!”
The circumstances of the test, however, also tell the story of lacking communication and coordination within the project team and with stakeholders: While Admiral Fleming and Hannson, the future Captain of the Vasa, were present during the test, while the shipbuilders, Jacobsson and Ibrandsson, were not present. They were not even informed about the outcome! It raises the question if the builders even knew the test was conducted in the first place. Yet, the Admiral insisted the ballast was too heavy, as it pulled down the hull with the gun-ports coming dangerously close to the water line.
Modern calculations confirmed that the ballast was only half of what was needed to stabilize the ship, but proper ballast would also have drawn the lower gun-ports under water.
The impatient King did not come in person to inspect the Vasa project progress (or its issues) but simply demanded challenging results from afar: He set the deadline for the Vasa launch to late July 1628 and threatened subjects who would not comply with his royal demand ever increasing the pressure.
The bitter end of a prestige project
The day of the maiden voyage came in mid-August 1628, several weeks after the King’s final deadline had run out. The outcomes were horrifying for the King’s prestige project: Just a mile or so into her voyage a light gust of wind caught the sails. The Vasa heeled over on its side and water poured in through the gun-ports. The mighty ship sank on the spot in Stockholm’s harbor ‑ a total and tragic loss of ship and lives.
From a project manager’s perspective, just about every error imaginable was made over the course of this doomed project: ‘Scope creep’ from frequent change requests, no process to address the consequences of the changes, a distant yet overpowering sponsor, intense time pressure on the project schedule, poor communication all around, a lack of documentation, unclear responsibilities, ignorance of risk and impact of unfamiliar innovations, disregarding (or covering up?) results from the failing stability test, and so forth. The absence of project documentation leaves many details in the dark to date.
Following our human nature, whenever a project fails the search for a scapegoat begins: Captain Hannson was jailed immediately. However, the following investigation concluded that nobody was to blame! No reasons were specified for the sinking of Vasa. Perhaps even more interesting, the question was never raised during the investigation whyVasa became top-heavy. It reflects a negligence to learn from past failures for future success, so the fate of ships and crews were left to trial-and-error.
Scope, Change, and Communication
Coming back to the earlier discussion on what is most important to control as a project manager, major issues in the Vasa project arose specifically from:
Stakeholder (dis)engagement – The stakeholder’s perception from afar is prone to dis-align with the situation the project manager faces on the ground. This gets amplified easily by poor communication between sponsor/stakeholders and the project manager, whose primary task is actually communication over anything else – quite contrary to common belief.
The King gave orders from afar without visiting the construction to connect with key players and make more informed decisions; apparently, also his communication with the Admiral, the King’s representative ‘on the ground’, was not effective either.
Admittedly, in those days consequences for failure could be severe and go far beyond what we can imagine today in a corporate environment. The pressure felt by the Vasa‘s project manager and reluctance to speak up may be hard to fathom today.
‘Scope creep’ – The project plan for Vasa was established with a schedule and a projected timeline by when the product would be available; in this case, when the Vasa would swim and be ready for battle. Typically, early estimates found on or favor best-case scenarios. They are outdated only a few weeks into a project of the Vasa size. They need to get updated periodically taking account of changes requested and unforeseen obstacles encountered. A specific finishing date should not be offered at the beginning of the project without careful communication about the associated risks, so as not to nurture unrealistic expectations by sponsor and stakeholders. It needs to be closely managed, adjusted and communicated transparently by the project manager.
The King demanded significant changes throughout the project’s duration that translated into time and money lost. Bear in mind that the King does not know every task that goes into each change and the risks it induces. It demonstrates, even more, the importance of a controlled change management process that reflects the impact of each change transparent and realistically. This gives the sponsor or stakeholders a chance to reconsider whether the change should then be approved or not. As an iron rule, you cannot have it all: cheap, fast and with high-quality, so it is important to choose accordingly.
Unrealistic expectations – The common belief prevailed for several hundred years that a bigger ship, tall and impressive, carrying more guns, etc. would also be ‘more indestructible’. – Too much ambition and the deceiving belief of ‘too big to fail’ sank also another world’s largest ship marking a superlative disaster in 1912: the Titanic.
Nowadays, a project management office (PMO) can help to define project management standards and processes to achieve consistency across projects, which also helps to educate the sponsor on risks and help them set expectations realistically.
After the Vasa disaster
Today, scientific methods, as well as refined and formalized project management methodologies, exist, such as the PMI’s PMBOK, which prepare project managers to deliver the project results reliably and with satisfying scope, time, and quality. However, there is no silver bullet for project success since we are all humans prone to make mistakes often based on assumptions, beliefs, and unhealthy ambition. Even the best method is only as good as the degree to which it is applied and enforced!
In the end, large and heavy double-deck gunships were built and launched successfully. They ruled the seas for a long time, among them the USS Constitution. This ship was launched in 1797 with firepower comparable to the Vasa but nearly twice the displacement of 2,200 tons. This well-measured ballast made the ship safe, seaworthy and successful. With reconstruction completed in 1995, the USS Constitution is on display in Boston today as the world’s oldest commissioned naval vessel still afloat.
The Vasa today
The Vasa lay in the shallow waters of Stockholm harbor for centuries. Early attempts to salvage it remained fruitless. The wreck was located in 1956 and finally raised in 1961, a full 333 years after Vasa sank.
Usually, organisms such as worms eat away the wood of ships over time but not so the Vasa. It remained in the same condition it sank due to the inhospitable waters off Stockholm. The adverse environment preserved the Vasa so well that it was even able to float with its gun-ports sealed and after water and mud were pumped out of the hull!
The Vasa is on now display in Stockholm and housed in a dedicated museum specially built for it. Around 30 million people visited the Vasa as one of Sweden’s most popular tourist attractions – a late glory for the grandest battleship that never saw a battle.
Can movies innovate with only seven stories to tell?
How innovative are movies really – if at all? While AVATAR and THE ARTIST appear to be polar opposites, they share a similar story, so where is the innovation?
Following my passion, I happened to visit the ‘Berlinale’, the international film festival in Berlin/Germany last week: Over 20,000 accredited participants from around the world share their professional passion and trade movies in one of the world’s biggest market places for films.
In midst the bustle, I couldn’t stop my mind from wandering off and asking myself this question:
Is a movie an innovation?
Each film is an entrepreneurial venture, a financial and personal risk that filmmakers take and often sacrifice years of their lives for. As the audience, we enjoy to immerse in ever-new stories and characters to touches our minds and emotions.
However, is a movie really an innovation? One can argue.
The generic definition of innovation from the “What does it take to keep innovating? (part 1 of 3)” post states: “innovation is different from a novelty: it is the combination that translates a novelty into a marketable product (or service), so an innovation brings together the newness, the value it creates and the adoption to something marketable”.
Therefore, also a movie would have to demonstrate these same three requirements in order to be innovative. So let us look for a match along the lines of:
Creating a value
Capturing value in a marketplace.
Seven stories to rule the world
First, is a film a novelty? Of course, you may think. Every film is new and different, even a re-make!
What I find interesting though is that many experts agree there are “seven stories that rule the world” as Matt Haig lays it out. It means that there are only seven plots, which are being re-told in different ways over and over again. ‑ How can this be innovative?
AVATAR – a high-tech pinnacle
AVATAR, for example, took 3D cinema to a new technological level and colorful experience for the audience just a few years back. James Cameron made this movie “with the intention of pushing the boundaries of what was possible with cinematic digital effects (…) blending live-action sequences and digitally captured performances in a three-dimensional, computer-generated world.” (Read more: James Cameron’s Avatar – 3D and CG Movie Technology With Avatar – Popular Mechanics)
The humongous $500 million total investment was a huge risk to take but the gamble of this big Hollywood production worked out: AVATAR broke the sales record (formerly held by TITANIC) by earning nearly $2 billion within 39 days at the box-office. Not a bad 1:4 return of investment (ROI) ratio!
Looking at our definition for innovation, AVATAR meets all three requirements by inventing new technology and processes for an enhanced viewing experience and by meeting an audience demand as we proven by its commercial success. It is not surprising to see the sequels AVATAR 2 and AVATAR 3 already on their way.
Nonetheless, the AVATAR story is based on the ancient ‘rebirth’ plot of the protagonist and put little emphasis on artistic performance of its characters.
THE ARTIST – so old, it’s new again?
Now look at the ongoing award season: THE ARTIST keeps racking up one trophy after another. Both movies, AVATAR and THE ARTIST could not be more different: THE ARTIST comes in black-and-white and is a silent movie from France!
Neither the story line of an artist’s comeback (yes, it’s the ‘rebirth’ plot again, just like in AVATAR) nor the century-old cinematic format bears any news. Is this really an innovative movie? One can argue.
Let’s look at value creation and value capture first; this is an easy one: The commercial value of THE ARTIST reflects $60 million or so in box-office sales the last time I checked. It draws crowds of paying audience and proves to be a very successful production (with the same 1:4 ROI return ratio as AVATAR) on the original $15 million investment! It is also the runaway winner converting nominations into awards internationally. Check.
Certainly, producing a silent movie for theatrical release these days is an enormous risk and considered unthinkable before THE ARTIST came along. In fact, it came at a high risk for the filmmaker, Michel Hazanavicius. He was not even taken serious and was laughed at when he presented his idea to raise funds for the project. It looks like a hopeless project from the Stone Age compared to AVATAR!
Let’s face it; movies have become a commodity that is available anytime and anywhere and on every gadget like smart-phones or gaming consoles. As mass-marketed products, movies often don’t even make it to the theater screen anymore; instead, they go directly on DVD or on-demand channels with only little returns for the filmmaker and investors.
What is new about an old concept?
With THE ARTIST, we have a movie that follows a plot line known for centuries and shot in the old-school and boxy 1.33 celluloid format about as old as the movie industry itself. Yet it became a smash success overnight as the first theatrical silent movie release in 35 years. Remember Mel Brooks’ SILENT MOVIE comedy in 1976? ‑ Something must be different! What has happened?
What it comes down to is the question whether a black-and-white and silent move has innovative potential in the ‘novelty’ category.
THE ARTIST gave ‘rebirth’ to this narrow and thought-dead category of silent black-and-white movies at a time where technology over-kill ruled the house!THE ARTIST brought back the glamor of the old Hollywood to present day: A glitzy world of the famous and the beautiful, celluloid dreams on the silver screen. It reminds us that movies can be special and not just a commodity.
Thus, the plot may not be new, but the way it is presented can very well be original. This is where we find the novelty of innovation or, as Matt Haig puts it: “It comes from style and voice and the imagination that brings language and characters and settings to life (…) It’s how you carry these universal plots into the present age that’s the challenge.”
It is not the plot alone that attracts the audience but the unique way to tell a story with high artistic quality and at the right time, when the audience matured and is ready for it. THE ARTIST re-discovered the glamor, elegance and artistic focus that seemed lost and brought it back to life. It answers to the silent yearning of its audience and lets us feel the magic of movies once again.
The Bottom Line
No matter if you agree or disagree with me that movies can be innovations, if you have not seen THE ARTIST yet, watch it and enjoy. It is just magical and delightful like movies are meant to be!
Not everything new is an innovation and some are more renovation than in innovation. Here is a framework that helps to distinguish an innovator from a renovator and works for entrepreneurs and intrapreneurs alike. It is important to understand which role to play and when; it all depends on what you need to achieve and critical to reaching your goal!
The word ‘innovation’ is used inflationary; few seem to understand though what they mean when they demand or offer ‘innovation’ in an organization. What adds to the confusion is that not everything new is also innovative.
Let’s continue with the generic definition of innovation from the “What does it take to keep innovating? (part 1 of 3)” post: “innovation is different from a novelty: it is the combination that translates a novelty into a marketable product (or service), so an innovation brings together the newness, the value it creates and the adoption to something marketable”.
So, where does the ‘renovation’ come in and how does it affect your role as an innovator?
Goal clarity comes first
Whether you are an innovator or not depends on several criteria and mostly along these four dimensions:
Objective – “what” is your starting point? Are you creating a totally new business or reinforce an existing business?
Scope – “where” you focus on: Are you looking into (specific) new products, processes, and services, or into (general) new business models or systems?
Intensity – “how much” you change the status quo: Are you taking incremental steps (evolution) or bringing about a radical change (disruptive)?
Boundaries – “with whom” you are collaborating: Are you using resources and partners within your organization with or without tactical out-sourcing? Or, perhaps, you collaborate with external partners to complement your internal capabilities strategically?
As an Executive Champion, you take an active part in the process – but even as the champion, there are different roles needed for different scenarios. The four dimensions (Objective, Scope, Intensity, and Boundaries) open up a matrix that points to four different roles, one of each suited for a specific scenario:
“Sponsor” – You are a sponsor when you create a totally new category of products or services. This role focuses on the bigger picture, the vision, and sees it through within the organization (which includes tactical out-sourcing). A sponsor guides this endeavor while nurturing and empowering the staff. For example, broad usage of the MP3 format revolutionized the music industry in unforeseen ways. MP3 players where a disruptive technology that made your CD collection obsolete, which has had replaced your cassette tapes and vinyl records markets some time ago.
“Architect” – It takes an architect to build a new and never-before business model or system. The architect forms coalitions, alliances, and strategic partnerships with the big picture in mind and providing win-win incentives for all players in the business model. While entrepreneurial examples come to mind easily, less obvious is an architect who operates within an organization as an intrapreneur. For example, the NxGen business model (as outlined in “Build ERGs as an innovative business resource!” and “Starting an ERG as a strategic innovation engine! (part 3 of 3)”) disrupted the common paradigm and mental model of “how-business-is-done” within a company by engaging and leveraging employees in new ways.
“Coach” – You need a coach to get a new-and-improved product or service on the way within an organization – just like this tough but supportive sports coach you remember from school or try to forget… A new car model, for example, has more bells and whistles than its predecessor and may outrun the competitor’s model by a tad. In the end, however, it remains to be a car. It offers the same common way of transportation we are already used to, i.e. it is an evolutionary, an incremental improvement.
“Orchestrator” – Imagine a conductor directing an orchestra: The orchestrator brings to life a new-and-improved business model or system in concert with strategic partners outside the organization. It takes skill to interpret and continuously integrate the moving parts. Ducati it an Italian high-end motorcycle manufacturer well-known internationally for its performance bikes that consistently win races. Very early on, Ducati outsourced nearly all company functions to focus on their core competency: design and engineering. Even manufacturing is outsourced! Ducati became the first company to offer a new motorcycle model exclusively on the internet – and sold its entire production before the first bike was even built! This does not only prove the enormous brand power and marketing skill, Ducati also proved they can be a leading and very successful motorcycle company by engineering and outsourcing.
So, do you innovate or renovate?
The core of innovation and entrepreneurship is around creating new businesses around completely new products or services, or even entire business models that are disruptive to the status quo. So, this points directly to the roles of the Sponsor and the Architect as strategic innovators and game-changers.
In contrast, reinforcing or enhancing an existing product, system, or business model with incremental steps is a renovation, just as you would renovate an older house to bring it up to modern standards. It is the Coach and the Orchestrator role, who fix to improve or come up with the next new-or-improved product or way of doing things.
Now, there is nothing wrong with being a renovator. It is most important to be clear about what it is you are trying to achieve and remain flexible, so you can deliberately assume the best role to get to your goal. Consider also that these roles are not mutually exclusive, so over-stepping boundaries at times might just be what you need to lead your venture to success!
Job description for an Executive Sponsor Executive sponsorship is an important prerequisite for the success of employee groups. The challenge is finding a great sponsor, so what should you look for? What would a job description for an executive sponsor look like? ‑ Here are some practical ideas that have worked.
Why executive sponsorship is critical
Employee groups consist of volunteers with good intentions. They work, typically, in addition to their day job and after hours driven by the desire to address a need close to their heart. Together with colleagues, they seize opportunities to complement the organization’s objectives and goals and to improve the workplace. In most cases, employee groups are not an integral part of the organization: they don’t show up in organizational charts and have no formal authority.
For most group members, this voluntary work is ‘on top’ of the regular job and not reflected in their professional goals or performance evaluation. What makes a difference is having a strong ally: the executive sponsor.
From the organization’s perspective, some governance is needed to:
Prevent the employee group left to operate in a void or detach from the rest of the organization
Align the goals of the group with the needs and strategy of the company in a complementing and synergistic way
Ensure the group’s practices comply with company policies and other regulations.
The leaders of employee groups owe their members to:
Focus the group’s work to make a meaningful impact on the organization (instead of wasting resources and the member’s time on projects or activities that do not create value, are meaningless or even harmful to the organization)
Get funds, active support, and political backing in the organization.
Both, the organization and the employee group benefits from the connection with an executive sponsor.
No silver bullet
When you are looking for an executive sponsor, what are you looking for? What are the relevant criteria? – Executive sponsorship is a role, just like any other job, so what would a job description for an executive sponsor look like?
Bear in mind that there is no one right answer for the working relationship with an executive sponsor. The sponsor role and level of involvement varies and depends on many factors. It also shifts over time with the changing maturity of the group and its leadership, for example, or levels of involvement and autonomy of the group. A new group may turn to the sponsor for help with forming, direction, and funding where a mature group may seek business insights, refined success metrics, and leadership development opportunities.
Criteria for an Executive Sponsor
A perfect sponsor effectively leverages their personal brand, relationships, resources to enhance the visibility and credibility of the group. Look to ‘recruit’ a well-known leader, who is well-connected within the leadership team and respected throughout the organization. In an earlier post, we briefly touched on “How to attract an executive sponsor?”
Ideally, the sponsor is a top-level executive ‑ you hit the jackpot if you can get the CEO!
Overall, the group’s expectations of the sponsor’s role usually include that the sponsor:
Serves as a champion of the group
Gives strategic direction to align with the organization’s business strategy
Helps to identify measurable success criteria that support business goals
Provides advice and counsel to guide the group’s development
Connects to a broad network of relationships
Liaises with the executive team and accepts accountability
Helps actively to identify and overcome obstacles and resistance within the organization
Supports the group through communication and visibility.
The stronger your sponsor, the stronger the group! A strong sponsor
Shares valuable business knowledge
Demonstrates leadership, and is
Genuinely willing to help others.
A good sponsor encourages people to focus on how to engage others and improve communication, enhances the members’ leadership qualities and developing partnerships while helping to overcome barriers.
The sponsor you do NOT want
On the other end of the spectrum, there are also people you should avoid as executive sponsors for the group. This category includes people who:
Provide lip-service over taking action
Use the group for selfish reasons; for example, by claiming and promoting achievements of group members as their own
Do not see the potential and value that the group can add to the organization and its businesses
Do not make enough time to work with the group
Are ineffective or unwilling to support and protect the group from opposing forces.
Finally, if you have the choice, avoid the temptation to have a group of executives ‘share’ responsibility and ‘champion’ the group collectively. This tends to dilute accountability and action while increasing communication and coordination overhead.
There is much truth in the saying: ‘Too many cooks spoil the broth.’
One of us?
Often enough, sponsors are chosen or step up because they originate from the group’s affinity core, i.e. they are of the same ethnicity that ethic-focused group represents, a female for a women’s group, a gay or lesbian for an LGBT group, and so on ‑ you get the picture. I advocate against this practice for two reasons, in particular: First, with an ‘outsider’ you achieve more diversity and mutual learning experiences in the group as well as for the sponsor. Secondly, the group becomes more believable as a business driver that attracts a broader membership base instead of risking to be perceived as an ‘insider club’ limited to members with a certain ‘diversity ticket’.
For the same reasons, you may also consider rotating sponsors every few years.
Quid pro quo
What you want is an involved and effective executive sponsor. Now, this sponsor role comes with additional work, responsibility, and risks for the senior leader’s reputation and career. Therefore, this ‘job opening’ must be compelling enough to attract a senior executive to step forward and sign up.
It is important to offer a value proposition that makes clear what is in it for the executive sponsor to make this symbiosis work. It is quite similar as discussed in “What’s in it for me?” (WIIFM) for the group members.
Know your sponsor
Sponsors are humans too, so here are some thoughts on how to approach them: Get to know your sponsor first, just as you would prepare and approach to meet any other very important customer or external business partner. Find out their goals, interests, beliefs, priorities, constraints of the political and economic environment, and personal work-style. What exactly is the sponsor’s interest in your group?
Clarify your expectations mutually. Once you know your sponsor and built rapport, it becomes easy to offer what is important to them and helping the sponsor to achieve their goals too.
A value proposition that addresses the (financial) bottom line is powerful and convincing. It also enables the sponsor to communicate the benefits with the leadership team in a (business) language that everyone understands. It takes business acumen, though, to specify and articulate the financial impact. If this is not your strong suit, you need to find other compelling upsides or values that the group can bring to the business and that is close to a sponsor’s heart.
Do and Don’t: How to work with the executive sponsor
Here is some practical advice on working with an executive sponsor.
On the Do side, preparation and focus are key. Remember, this is a business meeting. The executive’s time is valuable, so be respectful of it and do not waste it. You want the sponsor to remain approachable and willing to meet with you in the future whenever you need to see them urgently.
Schedule appointments regularly (monthly, for example, if the sponsor agrees) with an agenda of topics to discuss
Provide background information on meeting topics ahead of time and come well prepared
Be on time and keep meetings on schedule
Present any problems with a proposed solution
Inform of issues in the workplace that affect the group and propose what the sponsor can to mitigate or resolve the issues
Be honest with your sponsor – do not sugarcoat, blame others, or cover-up mistakes
Give your sponsor a heads-up also before taking more public and visible action so they will not get caught by surprise – if there is bad news, share it with the sponsor first
Discuss key goals and ask them for guidance, advice or assistance – allow your sponsor to help you and the group
Reserve your requests for sponsor appearances and events to where it counts most. For example, as a speaker at a ‘headline’ event to draw a crowd, attract new members, and demonstrate the group’s value for the business. Ask if the sponsor is willing to recruit other executives or respected business partners and customers as guest speakers or participants.
The sponsor could host a luncheon or dinner for the group’s leadership once or twice a year to meet everyone in person, discuss, and recognize achievements of the group and individual members.
As for the Don’ts, try to avoid these pitfalls:
Don’t come with a hidden personal agenda – it’s strictly about the group
Don’t bother the sponsor with petty day-to-day issues – focus on the meaningful impact on the business and the group
Don’t ask for general funding or support – be specific and have data and facts ready to support your case
Don’t be afraid to ask for guidance and advice – but also don’t come just to commiserate.
Beyond the job description
Don’t underestimate the importance of the right chemistry between the group leader(s) and the exec sponsor; it is crucial to establish and foster a trustful, constructive, and pleasant work relationship.
For an employee group, executive sponsorship is more than the group’s endorsement by senior management: a strong sponsor becomes the lifeline when times get rough.
So when you go out to ‘hire’ your executive sponsor, also hire for the right attitude.
Strategic innovation hands-on: Who hasn’t heard of successful organizations that pride their innovation culture? But the real question is what successful innovators do differently to sharpen their innovative edge over and over again – and how your organization can get there!
The MIT – an institution of success
As an example, let’s look at one of the most innovative institutions in the world: the Massachusetts Institute of Technology (MIT) located in Cambridge, Boston. Since success can be defined many ways and comparing academia with industry can be iffy. Given the MIT’s extraordinary entrepreneurial spirit, however, here is a metrics that business can easily relate to: the MIT’s living alumni formed over 25,000 companies that employ 3.3 million people with revenues close to 2 trillion dollars. This resembles the 11th highest GDP in the world – compared to countries, the MIT ranks among France and Italy! – Not a bad track record for a single institution that fames 50 Nobel laureates! For comparison, France has 57 and Italy 20 Nobel laureates.
So much for a success metrics on a social, economic and personnel scale… There is no doubt the MIT is successful in many ways and quite different from the other 2,500 or so graduate schools in the U.S.
What does the MIT do differently?
What can we extract, learn and apply to our own organization to become more successful? What is it exactly that makes the MIT different and so successful?
The MIT is not a traditional university that seeks knowledge for knowledge sake. ‑ Believe it or not, this has been the mindset of many scholars and scientists since centuries and still is being lived today and taught to be carried forward. This engrained mindset became a way of thinking and approaching challenges for graduates – in the commercial workplace! Now, the workplace is different from academia as it typically must generate profit to sustain. (Let’s not consider the recent bail-outs an incentive to build business models around.)
The downside of this traditional ‘curiosity-only’ based approach is that one can easily fall in love with working towards perfection, diverting on interesting tangents or ending up with a product of academic beauty but falling short of commercial potential – ingenious, but useless. It’s like making the proverbial ever better mousetrap that hardly anyone will ever buy… (Well, in all honesty, I have seen some really cool new mousetraps just recently, but that’s a different story that I am happy to share upon request… anyway, you get the point)
Innovation is novelty plus application
That’s where the MIT is different: it backs up new ideas for tangible application with solid science. This approach is consistent with the MIT’s internal definition of innovation that also meets the commercial needs of companies outside this alma mater and comes down to this: Innovation is novelty plus its application.
A good idea alone is not enough – no matter how ingenious it is. It must be applied help solving a real-world problem effectively. Where the success metrics of traditional universities counts published articles, hence the classic ‘publish or perish’, the MIT focuses on practical and hands-on application as in ‘demo or die’! It brings together ivory tower and workbench in a most symbiotic and practical way. Less talking, more doing – and commercial success tends to follow naturally.
Do it like the MIT?
So, how can your organization become more like the MIT and making its innovation potential actionable in a reliable, robust and repeatable process?
Besides seeking knowledge for tangible application, the power of the MIT lays in its ability to bring together experts from many disciplines for cross-pollination. They work together and they learn from and with another by looking at problems from many different angles. Not surprisingly, the break-through solutions developed by these teams found on hands-on experimentation: demo or die! This often proves more creative and powerful than traditional and less diverse teams or organizations that tend to focus on incremental improvements. – Let’s take a closer look:
Does diversity matter?
First of all, what is ‘Diversity’? Diversity in organizations is often understood bluntly or interpreted narrowly as the goal to meet a certain quota of easily observable attributes like color or gender leading towards a more mixed and ‘colorful’ workforce. Voila! – Mission accomplished? Not really!
Imagine this more theoretical but possible case, where different looking staffers grew up together and shared similar experiences for a longer period like, let’s say, in an orphanage, a boarding school or an academy. The optical impression of this diverse workforce then is an illusion as they are anything but diverse except for their physical appearance. (I am not elaborating on the likelihood of this example or the need for a customer-facing organization to reflect their customers and partners in the marketplace, since I want to make a different point here.)
Why diversity matters
What counts within an organization for innovation to go beyond incremental improvement is the diversity of thought, expertise and experience for a simple reason: Locking up your subject matter experts in a room to have them come up with innovative ideas over and over is not a recipe for success.
Sitting inside a box of conformity, homogeneity and consensus does not make good ingredients for breakthrough ideas and innovation – that is why we need to enable experts, in particular, to think ‘outside-the-box’ by mixing up teams by inducing meaningful diversity.
Innovation happens at the crossroads
Since break-through ideas tend to emerge at the crossroads of disciplines and experiences, closed and less diverse groups of experts simply cannot come up with them easily – if at all!
In fact, working with non-experts or experts from very different disciplines or lines of work not only opens up your experts’ network but also forces them into a different thought processes for this fresh and different perspective we are all looking for. Many managers initially regard this as sand in their well-oiled machine that only delays or complicates getting the work done – and therefore avoid mixing in heterogeneous expertise. Nonetheless, experts thinking out of their box of expertise emerges from combining different disciplines – related or completely unrelated fields of research and application.
Outsiders or even laymen ask questions that experts would not dare to ask their peers so not to appear incompetent, inefficient, insulting or insane! Research even shows that experts tend to trust other experts too much whom they worked with closely over extended periods: They don’t question each other’s judgment and assumptions anymore – which may just be what is needed to innovate!
Why experts don’t research enough
Experts do not research enough. – Does this sound counter-intuitive to you?
Interestingly, scientific data suggests that experts research less within and on the fringes of their own field of expertise. A high level of expertise can therefore become a liability and lead to blind-spots for experts. – Why is that? Established experts in their field tend to focus rather on what they already know, assume knowing what there is to know about the subject matter and stop questioning their own knowledge. This leads to a pattern seeking to reinforce the own knowledge, thinking and point of view rather than challenging it!
What experts should do instead is exploring more what they don’t now, seeking out challenges of ideas, experiences and findings by experts of other disciplines. This cross-pollination is more likely to lead to the next breakthrough.
By the way, on the other end of the expert spectrum, the naïve laymen researches too little too, because they don’t understand the basics and don’t know what to look for or what is important. It is the ‘amateurs’ with a general understanding of the subject that research most, since they feel they need to get a deeper and broader scoop while knowing what to look for and what could be relevant.
Establish a ‘meritocracy’
A key ingredient of the MIT is championing a meritocracy, i.e. honor and progression of talented and able individuals based on their achievements rather than their status, tenure or other privileges in the organization. This levels the playing field and motivates by focusing everyone on the only thing that really counts: performance.
Sure, many companies and organizations claim to have a ‘performance culture’ or claim to ‘pay by performance’ as the primary incentive for their employees. This ‘performance culture’ often looks better on paper than in reality (except for small pockets of jobs like freelancing sales staff, who only receive a margin or commission for a successful transaction, but a low or none fixed salary otherwise).
For staff without commission incentive, how much of the compensation actually does tie to performance directly? Odds are you can get along just fine in a day job even without exceeding expectations in performance reviews.
It is difficult to compare a company with an academic institution (like the MIT) directly in a meaningful way, since students are typically in for the glory of pushing limits to try out and create things together with other brilliant minds that exceed most people’s wildest dreams. However, it is fair to say that the MIT’s meritocracy and entrepreneurial framework sets up a winning concept with commercial success and material pay-off to follow rather naturally. – Check out the MIT’s fabulous Entrepreneurship Center (http://entrepreneurship.mit.edu/) to find more on entrepreneurship at the MIT.
The lesson here is not to focus on monetary rewards alone or as the first tool at hand but to become flexible and cater to what is important to inspire your staff to greatness. Foster an environment of healthy competition, transparency, high ethical standards and consider catering to individual preferences and needs beyond handing out money broadly like watering flowers. While money is indeed most important to one, others may prefer a few days off, handwritten note by an executive or individual office decoration, for example.
Another aspect to consider is that research is costly and resources are limited. Cross-pollination can be a cost effective alternative.
Open innovation, however, works differently and is for genuine out-of-the-box thinkers. It is a powerful approach especially if you don’t have the resources or time to conduct the needed research yourself. The basic idea is that other people or organizations may already have a viable solution or approach to your problem. You don’t find and make these connections though if you don’t leave your ivory tower! Open innovation refers to looking for existing solutions beyond your usual area of expertise and even outside your industry and adapt or configure them to your problem at hand.
Sure, there are also options other than buying or licensing solutions, such as joint ventures, spin-offs or ‘skunkworks’ projects to invent outside the company. What model fits best depends on the organization, its environment and other constraints.
Classic examples of Open Innovation – and there are many, many more!
Car makers looked into making car brakes more effective by preventing wheels from blocking while braking, so the vehicle maintains maneuverable safely to prevent a collision.
They found an existing solution, anti-locking brakes (ABS), in another industry that faced the same problem earlier and with a higher urgency – the aerospace industry: Airplanes are heavier than cars, land at high speed with a need to stop fast and controlled before the end of a run-way. This includes safely braking and steering airplane wheels on the ground without blocking tires burning up or incapacitating the plane’s maneuverability.
Here is another one: with increasing concern for air travel safety, airport security organizations were frantically looking for ways to screen passengers for hidden metal objects fast and effectively. Given time pressure they looked into existing solutions in other industries.
But who had already developed experience and equipment to scan metallic objects in organic bodies? Where would you start looking?
Well, they found their solution in the lumber industry which may come surprising. It makes good sense though when you take a closer look: the saws for slicing trees in saw mills get damaged when tree trunks contain metal objects like bullets, nails, spikes, etc. So, saw mills needed to detect these objects in the tree trunks before cutting the wood. They introduced stationary metal detectors (magnetometers) that encircle a tree trunk while the trunk is being pushed through the machine and scanned inch by inch. Perhaps you even remember that the very first metal detectors for humans at airports had a round shape? Well, now you know why!
Innovation and Diversity are a dynamic duo! Both go hand in hand to wipe out blind-spots created by using the ‘usual suspects’, i.e. relying on the same team of experts over and over again.
In a nutshell, for organizations to thrive, diversity of thought and continuous innovation need an environment to flourish in and become embedded in the organizational culture:
It is difficult if not impossible to assess organizational culture directly. Instead, managers favor surveys to measuring organizational climate as a first step. However, surveys fall short in many ways and can lead to skewed results as input to managerial decision-making. Better than surveys is observing employee behavior with a meaningful metrics.
What is your organizational culture?
No matter where you work, you are a part of it: the organizational culture. Culture is understood to comprise shared beliefs, values, norms, traditions but also myths of employees about interpersonal relationships, behaviors and activities of the organization.
A (favorable) strong culture indicates alignment to organizational values and goals – some call it the organization’s personality. This is the internal glue for collaboration and outstanding results as an organization. In a strong culture, ‘can do’ stories share ‘how things are being done around here’ that inspire and motivate employees to action and ‘organizational citizenship behavior’. A strong culture supports employee satisfaction and retention as well as innovation and productivity. (See also: How to create innovation culture with diversity!)
In contrast, misalignment of values and goals in an unfavorable weak culture has an eroding effect. They easily lead to extensive rules and bureaucracy that rely on exercising control. Working in this place is not much fun. Don’t expect anyone to go the extra mile!
Unfortunately, organizational culture is a slippery and complex subject, which makes it hard to grasp – and hard to measure directly. It is easier to feel than to express.
– Try it! How does the culture of your organization feel in your gut? How about putting it in words?
How to measure culture?
A common approach is to measure a company’s organizational climate by looking at the culture’s outcomesor consequences rather than trying to grasp culture directly. Thereby, the climate is used as surrogate marker for the underlying culture, since outcomes are easier to observe and to measure.
Here we find a handle on whether the employees are happy at work and feel valued, if they enjoy their work environment and trust their colleagues, if they go the ‘extra mile’ for their team – or if they are frustrated, disengaged or even act hostile against coworkers or the organization. Factors to establish a metrics offer themselves relating to –for example- communication, accountability, behavioral standards, rewards, trust, and commitment.
Organizational climate’s primary driver is daily leadership that influences the expectations as well as the behavior of all individuals in the organization. The leadership also determines the organizational structure, another key to an organization’s effectiveness. Both enable the organization to reach its goals, but also reflect priorities and heavily affect how employees communicate, collaborate and interact with each other.
Many factors obscure the clear picture including rapidly growing workforce and geographic separation but also the way we actually measure organizational culture.
Yet another survey?
Many companies invest in surfacing climate data to ‘feel the pulse’ of their staff and to confirm positive effects or apply corrective action to adverse findings.
The most common way to measure climate is a climatesurvey and repeated to compare changes over time. Despite our daily information overload, many companies typically use surveys to collect data from as many employees as possible to paint a representative picture of the company.
Surveys seem the first tool in the managerial arsenal. They appear attractive, seem simple and powerful. Survey results are seen as straightforward, clear, quantifiable and reflecting the ‘truth’ since the workforce was asked directly.
‑ But are surveys truly the best tool available or even an proper tool at all as a starting point?
What is wrong with surveys?
Unfortunately, surveys are far from ideal for several reasons.
The first issue we face is that there is no common standard for measuring the ‘climate’. Every organization or consultant comes up with a different scale. If an organization introduces its own scale and applies their metrics consistently, it can build a database over time. The data, however, only compares directly against other client organizations or industries that were measured similarly, i.e. sharing the same scale, at a premium for this proprietary benchmarking.
Even worse, results hardly compare because surveys ask questions relying on language. A slight nuance in phrasing of a question may change the meaning and influence the responses. After all, words are ambiguous and open for interpretation – and even more so in a multi-cultural society and multi-lingual. For consistency and easy processing, they typically come with a fixed set of response options such as multiple choice, which can limit the responders’ options and influence what they respond.
Often overlooked, the real workload comes after the survey closed in the analysis, when you start slicing the data to combine questions, sub-populations or start exploratory analyses in an afterthought with all the shiny data you find in your hands that seem to open endless opportunity for finding answers. This is where you easily run out of time or budget – and where it becomes tempting to cut corners just to finish up and deliver results while sacrificing depth and consistency.
Surveys tend to be inherently skewed – Why?
When was the last time you enjoyed taking a survey?
Our email in-boxes are full of customer service surveys for a recent purchase or some service call over the phone or online. The whole world seems wanting to improve their services – and sends us a survey.
However, surveys are far from ideal for several reasons including these (and many more):
Fatigue – There is no shortage of surveys these days. Coming back to our information overload and time constraints, many people just don’t want to fill out another questionnaire or find time for it in the first place. ‑ Did you ever give random responses or skipped questions just to get it over?
Privacy – Some other questions you may not feel comfortable answering in the first place because they invade your privacy by collecting data with questionable benefit to you.
Anonymity – in the computer age, anonymity is hard to find. Even in an otherwise anonymous survey, the combination of responses can identify individuals under certain circumstances feeding privacy concerns.
Past – Surveys measure the past. Even the most credible survey questions inquire about past behavior at best, which is the most solid data you can get out of a survey. The results may be good for forensics but hardly reflect the current situation.
Diversity – a diverse workforce can come with communication barriers of language or cultural background that leads to misunderstanding. Geographic idiosyncrasies can induce further bias in distributed organizations.
Delay – surveys take time to prepare, to conduct and to analyze. Don’t expect to get the results anytime soon, especially because you cannot control when your responders choose to respond. You have to adjust to their schedule, so getting survey results removes you far from ‘real-time’.
Precision – in surveys, you can easily measure everything to a dot and even farther right of the decimal point. Some give you the tendency to ask and measure too much just because we can or we feel the results (and our work) look more credible this way. Often it is an illusion that a higher level of precision adds to clarity when it adds to inertia instead by a flood of obscure information irrelevant to the decision you want to make.
The list goes on… you got the point. The question remains what is a better approach to measure organizational climate?
Why it is better to measure behavior
A survey measures our intent – not our behavior. Unarguably, behavior is a much stronger indicator than intent. It comes down to whether we observe people putting their money where their mouth is or if we get only the lip service that a survey represents. – Think of it as the litmus test you remember from chemistry class: It shows you the truth and reveals whether your assumptions hold true!
Let us look at the benefits of measuring behavior using the same list again:
Fatigue – As human beings we can refuse to respond to a survey ‑ but we cannot stop behavior as such. Even if we refuse to respond, this is our observable behavior and becomes measurable. For example, if large parts of the surveyed staff do not respond to the survey, this tells you something about the organizational and what is important to the staff.
Privacy and Anonymity – Usually, your observable behavior as an employee is not a privacy concern, since you are out in the open and visible to your co-workers anyway. Again, you cannot not show behavior once you agreed to go to work, there is nowhere to hide.
(Let’s not derail by focusing on or encouraging questionable, unethical or even illegal intrusion of privacy at the workplace or outside.)
Past – Our observable behavior is now, it is the present. You can’t get better real-time data!
Diversity – For observations, it does not matter if your workforce is diverse or understands the questions you ask. There are no communication barriers when it comes to observing behavior. Actually, quite the opposite holds true: the employee behavior can help you to better identify communication barriers or other issues that a survey would not reveal!
Delay – observing behavior also takes time but it is mostly the time to identify what you want to observe for what reason as well as observing it and then summarizing the results. There is no polishing questions and response options. You get to results faster because you are on your schedule and do not have to wait for responses trickling in.
Precision – key is to measure only as much as needed, i.e. to establishing necessary and actionable facts. Forget the fluff and focus on the one or two most important aspects needed for effective decision-making.
How to measure behavior?
Now, measuring behavior is not always easy. It requires thinking through the cause-and-effect dependencies. – A well-known example of how not to doit is the questionable relation of using the price of butter in Bangladesh to predict the stock market in the USA…
What the right metrics is depends on what you want to find out. What is the underlying business problem you are trying to solve? Many roads can lead to Rome, so to speak, but the basic idea is to keep your target simple. Choose a target that is meaningful, robust and easy to observe.
Clarity helps. As much as we crave being informed and gather data this approach is not helpful, since it tends to produce clutter. Instead, focus on measuring theminimum you need as the basis for making a sound decision. Don’t fall for the nice-to-have and garnish data you could have in addition.
How precise do you need the results really to be? – As an example, you may be concerned about low meeting attendance. Does it make a difference for your decision-making if you find out that in three consecutive meetings “63.26%, 58.18% and 69.4% of the invitees did not show up” versus “on average, 2/3 don’t attend”? – Let me guess, “2/3” does just fine to decide slimming down who is invited in the future or to change the purpose of the meeting, right?
The key is to stick to clearly observable behavior. Some solid behavioral data may already exist within the organization. – For example, a long tenure and low turnover may reflect that employees prefer to stay with organization, while many internal job applications reflect dissatisfaction with their current position or department.
Next time you think of running a survey consider taking a close look at employee behavior first!
What do Generation Y (GenY) oriented Employee Resource Groups (ERG) share with the military? – More than you expect! A constant supply of active members is the life-blood for any ERG to put plans into action and prevent established activists from burning out. The U.S. Army faces a similar challenge every year: how to attract and recruit the youngest adult generation? Next-generation ERGs listen up: Let the U.S. Army work for you and learn some practical lessons!
The U.S. Army brand
Everyone knows the U.S. Army. This American icon has been around for well over 230 years!
The ‘U.S. Army’ is more than a well-known military force. We recognize it as a brand. Just like ‘Coca-Cola’ or ‘IBM’ portray and advertise a certain company image to sell its product, the U.S. Army needs to constantly appeal with a unique value proposition for new recruits to enlist. The ‘product’ offered if what the recruit expect to get out of it along the lines of ‘what is in it for me’ (WIIFM).
From this commercial perspective, it seems only natural that the U.S. Army hires world-class advertisement agencies to help meeting recruitment targets. Marketing and advertisement gained importance especially since the U.S. Army turned into an all-volunteer force in 1973. This is similar to a voluntary ERG membership.
Aiming at a moving target
We distinguish four generations at the workplace today. Each comes with different motivations and characteristics. The collective personality or zeitgeist influences each generation’s behavior and values. These need to be considered to adapt and effectively connect with each generation in its own way to maximize their potential and productivity for the better of the organization overall.
You can easily find this spectrum of generations reflected in the historic recruitment campaigns of the U.S. Army. The U.S. Army ‘brand’ changes over time and adapts to appeal and attract fresh recruits.
Let’s take a look at these recruiting campaigns for the four generations before we move on to extract the practical benefits for ERGs today:
1. Veterans, Silent or Traditional Generation (born 1922 to 1945)
I admit, in practice this campaign hardly affects today’s ERG anymore since most of this age group has already left the workforce by now.
Nonetheless, using the ‘propaganda’ flavor in this message proved very successful in both WWI and WWII.
‘Uncle Sam’ captures the essence of a generation of disciplined conformers with much respect for authority and an ingrained understanding that duty to the country is an obligation.
2. Baby Boomers (born 1946 to 1964)
The U.S. Army became an all-volunteer force in 1973, which changed the recruiting game entirely. Not being able to rely on a general draft anymore, the U.S. Army needed a new approach to attract a steady stream of voluntary recruits.
This coincided with an upcoming new generation of the younger Baby Boomers generally characterized as full of optimism and thirst for social engagement. To tackle the new challenge of effective marketing, the U.S. Army brought in a professional advertisement agency.
The first ads to the “Today’s Army wants to join you” campaign (1971 to 1980) suggest membership in a nice group of people sharing many similarities.
Also, women were now encouraged to enlist. It’s all about optimism, getting together and being involved!
This was a gutsy and somewhat liberal first step to attract a volunteer force. Though thinking ‘out-of-the-box’ it did not work out all that smoothly as indicated by changes following quickly.
This ad (1973 to 1976) is like a pendulum swinging back to the opposite extreme!
Tone and focus changed dramatically in this newer version of “Join the People” emphasizing the seriousness and commitment of being a soldier while also highlighting personal benefits.
The message is clear: No more playing around here, responsibility and duty is back, no more football on the beach!
Finally, the U.S. Army settled on a more balanced campaign.
Here is an example for “This Is the Army” campaign ads. The headlines read “In Europe You’re on Duty 24 Hours a Day, but the Rest of the Time Is Your Own” or “Back home, I wouldn’t mind doing the work I’m doing here” influenced also by a loss of military reputation after the Vietnam war.
One campaign or another, the U.S. Army missed its recruitment goal by more than 17.000 in 1979. This announced a new generation, GenX, coming with a different background and values that required the U.S. Army to re-think and find a new approach.
3. Generation X (born 1965 to 1980)
Birthrates cut into the recruitment pool. In addition, the smaller Generation X turns out to be tough to target.
This generation came with an inherent distrust of authority originating from geopolitical change as well as changes in western society and family structures. Despite GenX’s dominant drive for independence and self-reliance, this generation is also looking for structure and direction in life.
“Be All You Can Be” (1980 to 2001) emphasizes a personal challenge and an opportunity for self-development, i.e. taking charge of your fate to become a better individual. Note that the “we” is gone, it’s all about “me” for GenX.
The benefits offered by the U.S. Army included significant education support. (The U.S. military remains the largest ‘education organization’ in the U.S. in terms of funding tuition, in particular.)
The succeeding “Army of One” campaign (2001 to 2006) hits the true core of the independent GenX by underlining the single person in their message.
However, the campaign was also short-lived because a focus on the independent individual appeared contrary to the idea of teamwork that any military organization relies on and cannot work without.
Facing demographic decline, recruiting advertisement reached out into Spanish-speaking ‘markets’ (in a campaign known as “Yo Soy el Army”) to tap into the increasing Hispanic population.
The U.S. Army made more use of TV advertisement to reach GenX, a generation brought up in front of a TV.
Perhaps the boldest recruitment stunt was the 1986 smash movie “Top Gun” – sponsored by the Pentagon in need of a major image boost. And it worked! Think about it: Tom Cruise is a self-reliant ace who has a problem with accepting authority – a poster-boy Gen-Xer. In the end, he became a valuable team player for the greater good meeting the military’s needs and got the girl.
4. Generation Y or Millennials (born 1981 to 2001)
The ongoing “Army Strong” campaign builds on a proposition of lifelong strength through training, teamwork, shared values and personal experience. – What a change from the previous focus on independence for GenX!
Here, ‘strength’ is meant literally: The U.S. Army overhauled the fitness training to ‘toughen up’ this generation. Weakened by a more tranquil lifestyle (such as video-gaming), GenY-ers often lack experience with physical confrontation that is unavoidable and crucial for effective warriors.
Perhaps confusing for older generations, “Army Strong” caters to GenY’s interest in making a difference not only in their lives but also for their extended communities. Work is less central in this generation while individuality and leisure value high.
The campaign milks the social ties deliberately addressing not only recruits but also the people who love and support them, i.e. the people who influence the recruits’ decisions such as family and friends as well as the broader public.
Consequently, the U.S. Army presents itself more as a responsible and somewhat selfless social service in advertisements by highlighting how soldiers serve their communities and for their nation beyond executing force during a conflict.
The U.S. Army adapts its spectrum of communication channels to keep up with GenY, a generation for which technology serves as an extension of their personality and their physical selves. Constantly online and connectedness with an appealing adventurous fun-factor, the U.S. Army is present across the entire landscape of noteworthy social media these days – it even entertains its own video game to warm up GenY.
Targets on the demographic curve
Next-generation ERGs and the U.S. Army both aim to attract a specific demographic: The U.S. Army targets 17 to 24-year-old recruits, looking at the lower end, while ERGs typically look for the older end, i.e. young adults with professional training, perhaps a college degree and some work experience.
Thus, the U.S. Army’s target demographic starts just a few years younger than the typical employees entering the (civilian) workforce, so the U.S. Army operates a bit ahead of the age curve that becomes relevant for ERG membership recruitment.
Let the U.S. Army do your research!
Using this time difference to their advantage, next-generation ERGs, in particular, benefit from the U.S. Army doing the heavy lifting with regard to generational research. With the U.S. Army’s advertisement contract worth more than $200 million each year (or $2,500+ per recruit) don’t fool yourself: an ERG will never have funds anywhere close to hire a top-notch advertisement agency for attracting new members … unless you are perhaps the guys who invented Google or so… J
From a next-generation-ERG’s perspective, here is what you can reap:
Using its marketing dollars, the U.S. Army identifies the characteristics of your future demographics for you – for free! Look at how the U.S. Army is targeting today. It gives you a clear picture of what the characteristics are of your next ERG generation tomorrow.
The U.S. Army shares its findings publicly. This includes a sharp outline of the specific characteristics of the youngest employees that enter your workplace now or it in the near future. So, keep an eye on the U.S. Army’s next recruiting campaign and time is on your side!
Trial-and-Error without getting hurt
It gets even better. The U.S. Army provides you with field test results on whether their findings hold true in practice: The U.S. Army’s annual recruitment figures serve as a success criterion for the recruiting campaign. These figures are available in the public domain and found easily online within seconds.
The early warning signal
If the actual Army recruitment figure exceeds or falls short of the target figure (somewhere around 80.000 recruits each year), you get an idea what worked and what did not. The latter reflects not only that the campaign lost effectiveness but may also indicate that the next generation has arrived with a changed set of values and characteristics. – Use this as a free early‑warning system for your ERG!
Note that over the past five years the U.S. Army’s number of “accessions” (=recruits) exceeded the “mission” (=target value); note though that the “mission” bar was lowered in 2009 and 2010.
When the U.S. Army misses its recruitment target in the future, the next campaign is just around the corner. A significant change in the core message targets the next generation. So, here comes your next lesson and opportunity for the ERGs!
Back to the Future?
If the U.S. Army is not for you, don’t worry. Choose any military branch of your liking – they all face the same challenge. You don’t need to love the military to learn from it, and the lessons are valuable.
As a general yet effective approach to strategic innovation, keep an eye on industries and organizations that face similar challenges earlier than you do. Learn from them and prepare your business and ERG for the change.
While many companies demand creativity and innovation from their staff few companies seem to know how to make it work. – Is your organization among those hiring new staff all the time to innovate? The hire-to-innovate practice alone is not a sustainable strategy and backfires easily.
An alternative and sustainable way to tap deep into your employees’ creative potential and turning it into solid business value is by forming an employee resource group (ERG). A well-crafted ERG serves as a powerful and strategic innovation engine for your organization!
Losing the innovative edge?
It is the large companies that seem to struggle with innovation most. When companies grow they tend to become less innovative. When this happens we see great talent turning into under-performing employees. – Why is that and is there a way out?
Stuck in mental models of the past?
Remember the heavy dinosaurs that finally got stuck in the pre-history tar pits and starved, too heavy to move themselves out of the calamity? Mental models are the tar pits that companies grow to get stuck in – unless they find a way to shed (mental) weight and think nimble again to survive.
The mental models often originate from days past when the business started and flourished with initial success. The models worked when the company grew back then but models out-date easily over time. At some point the company began to work harder to standardize its processes to ensure the output is delivered reliably and predictably and costs are driven down: the focus shifted from innovation to efficiency. Specialized and refined business functions create increasingly complex and bureaucratic processes, ‘standard operating procedures’ rule the course of action. Things don’t move fast here anymore. Improvement ideas from employee on the floor hardly make it to the top executives and starve somewhere in between, probably in the famous ‘idea box’…
This focus on incremental efficiency also traps R&D departments to a point where true creativity and innovation get stifled, the innovative output drops. In short, the larger a company the less it innovates. Sounds familiar?
Many companies chose the dangerous and seemingly easy way out in buying new ideas from the outside through acquisitions and hiring ‘new talent’. The danger lays in applying this practice too broadly and becoming reliant on this practice, i.e. getting trapped in a vicious and reinforcing cycle. This practice also alienates and frustrates the more seasoned employees who feel underutilized and –quite rightly so see their career opportunities dwindling. Soon enough the sour side of the hire-for-innovation practice for employees becomes transparent also to the newer employees and drives them away in frustration. This organization just found the perfect recipe to turn top talent into poor performers!
Don’t waste your human capital
Bringing in fresh brains to an organization may justify mergers, acquisitions or hiring at times – but not as a strategy for continuous innovation and without also at least trying to tap into the innovative capacity that lays dormant within the organization.
Don’t write your staff off easily by following blindly the common yet wrong assumption that an employee loses the creative spirit after a few years and that new hires would be more innovative than whom we already have working for us. Haven’t we hired the best and brightest consistently in the past? Well, then this logic doesn’t add up, right?
Ask yourself: have you lost your innovative edge? Will you personally be more innovative once you change to another employer? – I don’t think so either. The good news is that even if you don’t believe it, changes are that managers and human resource experts of your new employer do, at least the ones who follow the outdated mental model! – But then, how long can you expect to last there before you get written off? It’s like getting on a train to nowhere.
Derailing the train to nowhere
But seriously, the seasoned employees’ intimate knowledge of the organization and its people can hold enormous potential for innovation not only under financial considerations but also as a morale booster for staff. Getting personally involved more and engaging them in driving change again actively leads the way to measurable and favorable results for the organization. These employees are the people who know your business, your markets, your customers and where to find resources and short-cuts if needed to get things done! Remember the “Radar” character in M*A*S*H who creatively procured whatever his unit needed by knowing how to play ‘the system’ and navigate the cliffs of bureaucracy on unconventional routes?
So, how can you motivate and (re-)activate your employees to come forward with brilliant ideas and getting them implemented to boost the organization’s profitability? How can you spread new hope and direct the enthusiasm to practical and meaningful outcomes for the company and the individual employee alike?
Facing organizational barriers
There is no shortage of good ideas in the heads of employees. Too few of them, however, actually get picked up and implemented since organizational barriers have many dimensions the need to be overcome first. Here are some examples:
A vertical barrier effectively disconnects employees from the executive level which hold the (financial and other) resources to make things happen. Penetrating this barrier means to connect the people within the organization closely and effectively again.> Readers of my previous post What does take to keep innovating? (part 1) will recognize that an executive champion is needed who brings together the technical and business champions. If you feel intrapreneurial and consider becoming an executive champion, check this out: How to become the strategic innovation leader? (part 2)
The horizontal barrier separates business functions and operating units that evolved to become silos or manager’s ‘fiefdoms’ of sub-optimized local productivity often with lesser concern to the overall performance of the organization. What you are up against here is often enough beyond specialized deep expertise but also defensive egos and managerial status thinking that led to a comfortable and change-adverse local equilibrium. As an intrapreneur you bring a much needed yet disruptive element to the organization. Since you are rocking the boat you can get caught up in ‘politics’ easily. Functional managers and their staff may perceive you as throwing a wrench into their well-oiled and fine-tuned machine that could jeopardize not only their unit’s efficiency but also their personal incentives for keeping operations running smoothly.> For more insight on the tension field of management vs. leadership check out Leadership vs Management? What is wrong with middle management?
Another barrier relates to the perceived value that your work creates for the organization, so let’s call it the value barrier: When you start acting intrapreneurial, you may be seen as someone wasting resources, incurring additional cost or generating questionable value (if any value at all) in the eyes of executives and other managers.
Therefore it is of critical importance to clearly demonstrate the business value your work adds to the organization. Based on an unambiguous success metrics the value proposition needs to be communicated clearly and frequently especially to executive management to gain their buy-in and active support.
These and possibly more barriers are a tough challenge. Now, I assume you are not the almighty ‘Vice President of Really Cool Stuff’ (that would be my favorite future job title!) but hold a somewhat lower rank. Perhaps you got stuck in the wrong department (the one without the Really Cool Stuff).
So, where do you start to innovate and ‘rescue’ your organization from a looming train-wreck scenario?
Breaking down barriers by innovating from within using ERGs
A vehicle I tried out quite successfully over the past years was forming an employee resource group (ERG). This grassroots approach has the power to crash right through the vertical, horizontal and value barriers while driving change effectively and sustainably through the organization as a strategic innovation engine.
Here are the first steps on the way to founding an ERG:
Identify a business need and build a business case, i.e. a clear value proposition aimed at executive management convincing them of the need and benefits of forming an ERG within the limits of company policies. Attracting an influential executive sponsor to gain buy-in is a key requirement for instituting an ERG successfully. The sponsor serves as a political and resourceful ally, an experienced advisor and advocate but also ensures strategic alignment of the ERG’s activities with the broader goals of the company.Since executives value their time more than yours, keep it short and to the point. Think executive summary style and offer details separately for those who chose to dig deeper and to demonstrate that you thought this whole thing through. If your organization already has a distinguished officer or departments with a vested interest in employee engagement for example then connect, collaborate and leverage your joint forces.> More on how to build a case study for an ERG at: Q&A – Case study for founding a business-focused ERG
Get organized! Seek voluntary members and reach out to future constituency of the ERG. Active members are needed as the driving force and source of ideas that the ERG turns into business projects aimed to innovate and energize the organization.
The first ERG I founded was “NxGen”, which stands for the “Next Generation at the Workplace”. The NxGen ERG has a generational orientation but is open to all employees regardless of their age or workplace generation. Nonetheless, from the start mostly the youngest employees (Generation Y) drove NxGen. In many cases they did not know of each other as the GenY-ers were spread thin across the various business functions of the company.The GenY-ers, in particular, found a forum in the NxGen ERG to get to know each other in the first place. We then focused on goals based on shared values or needs to build a strong support network within the company. At all times we kept the ERG open and inclusive to interested employees join from other workplace generations.
The ERG offers its members a safe environment to discuss issues and ideas. It also serves as an informal forum to find coaches and mentors for personal development or specific projects and initiatives. Active ERG membership allows less experienced employees to quickly acquire new skills and test them in real-life by running a project hands-on even in areas outside of their job description or business function to address needs close to their heart with tangible business value. Here, the ERG serves as a very practical leadership development pipeline and safe ground for experimentation within the organization.
Get active by launching business-focused projects. Again, you are targeting management and executives in particular to build credibility and thereby become more effective over time.Start with feasible projects of high visibility and short duration that address a significant business need with a clear and quantifiable success metrics. For each project seek executive sponsorship at the highest level you can attain from the business area that the project affects. Make sure to communicate your successes broadly and frequently to kick-start the ERG. Stick to a clear, specific and unambiguous metrics for your success; if you can tie it to a monetary ROI the better, as this is the language of business.> More on establishing a success metric under: Driving the ROI – where to start your projects metrics?
Showcasing and celebrating your successes as an ERG motivates the already active members, keeps attracting new members and builds credibility among executives to keep the ERG wheels turning as a strategic innovation engine for your organization.
On a personal note
The example of the NxGen ERG is very real. NxGen was nationally recognized as best-practices ERG within 5 months (!) of its founding and became a valued and frequent sounding board for C-level executives within one year. The ERG has no funds of its own yet runs projects and initiatives nationally and internationally that already shifted the company culture and opened it more for change.
What is an innovation leader? Is this role similar to an innovator? (The answer is ‘no’.) – Recognize the three key roles in innovation, how to find an approach and avoid critical pitfalls.
Typically, the innovation leader is not the innovator but there are exceptions such as founders of innovative companies that start out as innovators and remain innovators; think Steven Jobs of Apple, for example. However, let’s focus on more common organizations that need innovation leaders often more than they are aware of…
Conquering the world from your garage?
We all heard the stories of the sole genius inventing in a garage and a few days later they run one of the most influential companies in the world like Apple or HP. However, strategic innovation cannot rely on a one-time-wonder hoping to be repeated over and over again. Organizations become too large, technology too complex and the competitive clock-speed ever faster to leave innovation to a single genius sitting in an ivory-tower coming up with all the good stuff for the rest of the organization. Nobody is an expert in everything or savvy enough to cover all necessary angles. Even more so, many people have great ideas that can contribute to better innovative products, so make use of this critical resource!
Strategic innovation requires governance and collaboration to succeed continuously. What it takes is a process, a framework, a ‘system’ that delivers innovations consistently, timely and sustainably. ‑ Unless you believe that Steven Jobs developed your iPad all by himself, right?
He understood how to turn Apple into an ‘innovation machine’ and –over time‑ how to effectively capture the value it generates.
What organizations need when they ‘grow up’ beyond the ‘innovation garage’ stage is many innovation leaders in different functions. You can distinguish different innovation leaders or ‘champions’ in an organization by how they contribute to the innovation process.
In general, there are three essential kinds of champions:
The technical champion holds the technical know-how for innovations.
The business champion comes up with the funding to develop an innovation into a product of sorts.
The executive champion “follows the fellow who follows a dream” as a professor of mine put it, and this is what we will focus on shortly.
The roles of the technical and the business champion need little explanation. Let’s assume for now we have identified or (perhaps more likely) unidentified technical champions in our organization somewhere (try the R&D function) and will also find a business champion (in the C-level suite) to fund a great idea that has potential to produce a significant return-on-investment.
Are you an executive champion?
As the leaders we are or want to become, let’s focus on the executive champion as the critical and most complex ingredient in the continued innovation process. Perhaps, this is where you can shine as an executive champion in your organization!
The good news is that anyone can be an executive champion and propel the organization forward! Yet few are aware of what it actually takes to be an effective executive champion. I found it surprising that even people in professional jobs with fancy ‘innovation’ job titles often simply don’t know this! So let’s move on.
Executive champions focus on the value
The executive champion understands the difference between creating value and capturing value of innovations. No worries, it took even Apple years suffering through the consequences of bad decisions to finally get it right…
Creating and capturing value are not the same. A company can create value by developing new technologies, for example. However, at this stage this novelty by itself has no value for the organization unless it can also reap the profits from the novelty.
It takes innovation leaders to ensure this crucial step is taken deliberately and effectively. They ensure the idea or prototype makes it all the way to a marketable product and the company rakes in the profit.
Steps to success
How does the executive champion operate? What does an executive champion do to succeed?
First and foremost the executive champion promotes an innovation broadly, which includes to
Articulate a clear vision
Develop an actionable strategy
Develop capabilities that power the innovative thrust of the organization such as capabilities to build and foster specific skills, behaviors, creativity, values or a mindset.
Steer execution to not only generate the newly created value but also capture it throughout the value chain. This may include analysis of the value chain and its players, initiating projects, controlling project portfolios, driving the commercialization of creative products or services, establishing entry barriers for competitors, measuring performance, etc.
Fuzzy values? – Here are some how-to examples
Do you find all this ‘value talk’ too abstract? Then let’s look at an example how ‘capturing value’ works in real life where Apple, for instance, controls each layer of its vertical value chain to a point where it ‘owns the customer’:
Let’s take the phone and data network for iPhones in the USA: iPhones come only with the AT&T network which is inferior to the Verizon network. ‑ Trust me, I know and experience it every day!
Why would Apple chose AT&T over Verizon? Because customers want an iPhone so badly that they will literally walk out of a Verizon store and straight to AT&T to get the iPhone that Verizon cannot offer. Customers don’t pick another Verizon phone and use the superior Verizon network. Instead, they are willing to swallow the (AT&T) toad because Apple owns the customer! This way Apple holds a much stronger position over AT&T than it could ever have over Verizon, i.e. Apple controls this tier of the value chain. Too bad only for the iPhone customers stuck with AT&T like myself *sigh*… the gamble worked out nicely though for Apple.
The simple rule here is that if you don’t own the customer you don’t make the money!
The message is clear: It is not enough to have an innovative product like an iPhone. You need to know how to capture the value and this goes far beyond a fancy piece of technology! This can be the most challenging task of the executive champion to consider and figure out. And, yes, I know there are mobile phones out there with better technology and features but they don’t have the same ‘love factor’ that continuously attracts Apple customers and locks in their loyalty.
Why innovations fail
We have seen many times that when even the most promising innovation flopped, a flabbergasted management falls short to explain why. Therefore, let’s take another perspective and a quick look at what can go wrong (and did go wrong in Apple’s past too but Apple learned over time).
Innovations can fail for many reasons. Here are the basic pitfalls to look out for in reality:
1. Failure to create value that the customer recognizes.
Often the inventor or manufacturer sees a value in an innovation that is not shared by the customer because the customer does not recognize the value, i.e. the customer is not willing to pay premium for the special feature but only spend for what they clearly see and value.
This is a frequent trap for a technology champion and can lead to products with incremental improvements towards a state of perfection that the future target customers just don’t value.
Also business champions can make the mistake to get inspired too much by the technology and fund the product development without thinking through the value chain.
You have guessed it: the technology champion and the businesses champions are the ones that lack the explanation for the failure – that’s why we need the executive champion!
2. Missing to erect effective entry barriers for competitors.
Entry barriers are an interesting chapter on their own and widely discussed, so I’ll keep this short. Since Apple is such a rich source for examples, here is another one:
The iTunes store sells apps and other content like audio and video in proprietary formats. This is a great example how Apple established an effective entry barrier for its competition by establishing itself as the sole source. It can even control the content while raking in the profits. Other companies try the same approach but find it hard to compete with Apple’s dominance.
Victoria’s Secret, the successful lingerie company, took a different approach: They fended off competition by creating apparently competing lingerie stores under a different brand in the vicinity of Victoria’s Secret stores; this led competitors to believe the market was saturated and entering it was not attractive and attracted more customers to shop in either store adding to Victoria’s Secret bottom line – smart!
3. Failure to capture the value with vertical channel innovation.
Honestly, this is a complex and tricky topic that I might dedicate a future post also extending into strategic marketing. What it comes down to is this: how you can control the vertical value chain with the question to answer at each tier ‘who owns the customer?’ ‑ The right answer is: ‘it better be you!’
For now, let’s just say it requires cooperation and offering incentives for your channel partners to remain loyal and supportive to your strategy. The iPhone network example gives you a flavor or think of the apps providers for iTunes that engage in a symbiosis with Apple.
Leading without mandate
Bottom-line, more innovation leaders tend to be better for an organization than less. An organization cannot leave innovation to individuals or an ‘innovation department’ somewhere. Everyone can and should contribute to innovation! – Take your chance and drive it, it’s fun!
Can strategic innovation rely on creative chaos? – To make a long story short, the answer is: No! Read here what it takes to consistently innovate and give you a very cool example too.
Creativity ≠ Innovation
Let’s first be clear about what we talk about when we use words like ‘innovation’ and ‘creativity’.
In this context, creativity refers to the novelty or ‘newness’ of a product idea. However, novelties can exist without a real-world application. There is usually no shortage of new ideas in your organization but merely generating ideas alone does not lead to tangible innovations. Most creative ideas do not come to fruition because they are not feasible, too far ahead of their time or just not developed effectively to take the next step towards realization.
This is where an innovation is different from a novelty: it is the combination that translates a novelty into a marketable product (or service), so an innovation brings together the newness, the value it creates and the adoption to something marketable – or as my professors calls it: “where the rubber hits the road!”
The application gap
Some people believe that new ideas can only emerge and take shape in an environment of creative chaos or in an anarchic workplace. This may bear some truth; nonetheless, it takes more than that to propel an idea through the organization to develop it to become a marketable product.
This is where so many organizations fail and the bigger the company the bigger the challenge: good ideas emerge from employees but they get stuck and starve somewhere in the middle layers before making it through to the decision-makers in executive management. Too often there is a disconnect between ideas, decision-making and implementation.
So, what does it take to bridge the gap? What is needed to ensure ideas with potential make it through to the top to become the innovations that will drive an organization’s future success?
Bringing structure to the creative chaos
It comes down to creating a balance between the creative space and focus on the future application. Innovative organizations manage to establish a rigid process or ‘production system’ that allows their staff to be creative by harnessing the process in a way that it delivers innovations reliably, continuously and within a specific time frame. – If you don’t believe that creative chaos generates cutting-edge ideas and leads to tangible output in a clearly defined productions system: here comes the example!
The IDEO shopping cart example
A company that masters this balance between creativity and structure consistently is IDEO, a successful company and innovation leader that makes its living by developing products for others. IDEO’s successful strategy is actually quite simple and straight forward; it focuses on innovation, speed and tangible prototypes.
To get the most out of this, watch the video first before reading on. It takes 8 minutes or so and your time is well spent! In the example, IDEO’s challenge of the week is designing a new shopping cart – a product that we all know and hardly anyone seems to give a second thought about how it could actually be improved much…
While you are watching, see if you can make out how IDEO’s process works in what they call ‘the deep dive’. The guy that reminds me of Groucho Marx is actually the boss of IDEO.
Let’s compare. Here are some elements of IDEO’s process that you might have noticed and that are essential to their innovation process:
The team runs one project at a time. There is focus and no distraction by other projects or interferences.
The creative work is done in a playful environment that helps to getting to fresh ideas faster. The staff has the freedom to design their working environment themselves, the creative space.
All customer interactions take place outside this creative space and don’t interfere with the creative process. I bet some customers might be quite shocked to see how IDEO actually works if they could walk around and observe the process.
There is no hierarchy, no ‘boss’, just a commitment to follow the given creative process or framework.
The accepted attitude within the company is to dare and ask for forgiveness afterward rather than asking for permission upfront. It invites to trying out things instead of being reigned by (real or assumed) constraints from the beginning.
The team first identifies several critical dimensions then splits up to build several separate mock-ups in parallel before consolidating and converging to the final product. Trade-offs come late in the game after basic requirements have already been incorporated.
The team goes out to meet experts to learn from about relevant facts faster and shares all insight and findings they come across with the others.
The discussion or ‘deep dive’ of a team is focused and non-judgmental to allow for creative ideas to surface in a safe and trustful environment. Only one person speaks at a time and the team members support each others’ ideas while deferring any judgment.
Chaotic as it may look, the team actually follows a strict protocol or process with much discipline. One person, called the facilitator, keeps the team moving forward and was selected for the ability to be good with people, not for expert knowledge. This facilitator ensures the team remains on track, focused and follows the framework of the creative process.
There is a strict time constraint for the project to force teams to produce results. Occasionally, the facilitator acts somewhat autocratic by forcing group decisions to keeping the team on schedule.
Teamwork and trial-and-error succeeds over the plans of a lone genius.
Every team needs to produce a tangible product like a prototype or mock-up. A merely ‘theoretical result’ does not suffice. The prototypes are tested in real-life environments by the end users.
All team members vote for the best and feasible ideas while everyone contributes working towards the final product.
‘Adults’ coordinate the overall process to ensure the teams meet customers’ expectations in the end.
What you do not see in the video but you might be interested in is how IDEO selects its people, the company’s most important asset and success factor. The teams are deliberately composed of members with mixed backgrounds and expertise. Much effort is put on the recruiting process and it takes 17 or so interviews before one gets to work for IDEO. These interviews focus on the culture fit and attitude of the interviewees. Performance evaluations found on peer reviews.
Oh, and don’t miss this one: IDEO deliberately hires people that would not listen to their boss! Imagine that in the places you and I work!
So, what does it take to innovate?
What are the essential and generic characteristics of the innovation process?
Here is what it comes down to in summary to systematically and continuously innovate in an organization:
Open and conductive environment and company culture.
Carefully selected, highly motivated and diverse teams
Process aligns creativity and discipline
Leaders who demand and promote innovation.
As IDEO puts it, they are experts of the process, not of the product they start working on. – This is the (open) secret of IDEO’s success.
Still want more?
There are more free videos on IDEO and how they operate as well as on their shopping cart project publicly available on YouTube, for example.
Organizations often find themselves struggling with a dilemma: The need for employees working remotely, often from home, is at rise for many business reasons that include cost savings and the competition over attracting and retaining top talent.
On the other hand, many managers have a hard time allowing their staff to work outside their proximity and direct supervision. Their reasons often include the fear of change introducing the unknown but also a certain cluelessness of how to effectively manage a remote workforce and moving beyond their personal comfort zone.
These conflicting drivers open a tension field that organizations tend to struggle with. – Does this sound familiar to you?
No silver bullet Unfortunately, there is no ‘silver bullet’, i.e. a one-size-fits-all solution that works for everyone and in every environment. Too much depends on the nature of the work, necessary interactions and communication between team members as well as the jobs and personalities involved. It takes a close look at the individual organization to craft a remote working program that fits an organization, maximizes collaboration at a measurable performance level.
Telecommuters show increased commitment to their organization and experience more work-life satisfaction over the non-telecommuters group. No differences between both groups though on job satisfaction and turnover intent, i.e. how likely employees are to leave the company.
On a side note, the latter two findings are quite different from my own professional studies and experience, where employees working remotely reported a 57% increase in work-life balance. Increasing workplace flexibility including remote working, i.e. giving the employee more control over their schedule and location, became a driver also for employee attraction and retention.
– What are your experiences? Do you see remote work influencing job satisfaction and employee retention? Please comment.
Interestingly, the study explored also ‘personalities’ and found that more extroverts tend to be telecommuters, so people with a higher drive for social interaction and communication rather than the quiet ones.
This appears conclusive in the light of the simple finding that (a) telecommuting in many companies is not implemented consequently but rather as an “idiosyncratic deal” between individual supervisors and employees. (b) These supervisors prefer granting permission to telecommute to high-performers. This can explain a pre-selection of extroverts over introverts, who may not show up on the supervisor’s radar as much and therefore tend to receive less remote working opportunities.
Generally, teleworkers commute from farther away. They find commuting more stressful and want to avoid rush-hour traffic.
Less surprising, telecommuters were interrupted more by family members given their physical presence at their off-site work location.
This seems to suggest that working-from-home could be less effective than working in the office given more family interruptions. My own observations are quite different and based on a controlled pilot project which showed that the workers in the office feel distracted by their colleagues stopping by randomly; the workers preferred working from home when they needed focus and want to avoid distractions calling this their most productive work time.
Disruptions occur at home as well as in the office. It is the employee’s responsibility and best interest to ensure a professional work environment at their home-office so not to jeopardize their work results. Consequently, also performance needs to be measured by results and not physical presence. This levels the playing field and allows for fair comparison between all workers independent of their working location and distractions.
In the triangle of telecommuters, supervisors and Human Resources (HR) practices the telecommuters generally view the organization differently from non-telecommuters. Most telecommuters perceive technology training is available to them and that the organizational reward system as well as their supervisors was supporting telecommuting. Telecommuters also believe that there is an underlying business requirement that drives working remotely.
Once again we see that a level playing field is viewed as an important success factor for effective teleworking. Technology serves as enabler that makes teleworking possible in the first place and connects coworkers across remote locations. Offering remote working not only becomes a business necessity but also addresses increased expectations of the modern work force to telework powered by ever improving communication and collaboration technology.
Now, the telecommuters in the study seem to understand the changed business environment that pushes organizations to open up to flexible work arrangements for competitive reasons including cost savings as well as employee productivity and retention – the supervisors ‑apparently‑ did not ‘get it’.
For most of us the times are over where workers came to the factory or office only because the resources needed to accomplishing the work were concentrated in a specific location and could not be distributed (think early typewriters, heavy production equipment, incoming mail and so on). For a growing services industry these limitations no longer exist – yet this out-dated paradigm remained present in the minds of many. People tend to have a certain picture in mind what work ‘looks like’ and where it has to happen which comes down to an office with everyone present from 9am to 5pm.
From the supervisors’ perspective things look different than for telecommuters. Over 50% of the supervisors of telecommuter believe “that employees have to be high performers”. This view is shared by only 37% of the non-telecommuting supervisors. This brings us to a most critical component and success factor for making remote working work…
Management attitudes – the make or break The MTI study phrases this barrier kindly as “challenges and obstacles emanating from attitudes of individuals in the organization”. The obstacles to implementing an effective telecommuting model often originate from management itself or even the Human Resources department tasked to make a policy. The reasons for resistance can be multifold and include a lack of better knowledge, fear of change such as losing perceived control, lazy avoidance to probe outdated beliefs or taking a one-size-fits-all approach without evaluating the specific environment.
I even experienced the paradox of managers believing they can work from home just as effective as from their office desk and making use of this flexibility at their convenience while not trusting that their staff could be similarly effective or was trustworthy enough just as much. They see remote working being a ‘perk’ for their staff reserved for ‘top performers’ who deserve it – a double standard is being applied which is often enough based on murky or questionable criteria (if at all). These managers show a sense of entitlement while ignoring that (as the MTI study confirms) remote working increases employee satisfaction and commitment which tends to increase also performance; as an example, performance increased by 30% in the department I manage.
Some managers fear they may lose ‘control’ and that their staff may abuse the newly acquired freedom to control their schedule and work location. This ‘control’ is often based on the deceptive perception that staff works ‘better’ and is ‘under control’ when confined to an office location and ‘eye-balled’ by the supervisor.
More effective is the consistent application of measurable and pre-defined goals that demonstrate unambiguously, transparently and quantifiable whether an employee met the goal or not – independent from their schedule or work location. In practice, managing-by-performance showed more effective to distinguish effective performers from under-performers than a manager looking around the office space and hoping the staff is performing just by their mere presence.
What it takes to make remote working work Implementing remote working is not exactly rocket science but takes an honest and diligent approach based on trust and clear expectations. From a practical perspective, a viable model includes:
Put away with the ‘telecommuting-is-a-perk’ attitude
Closely look at which jobs have remote working potential together with the affected employee
Identify the employee’s team, i.e. the people who need to cooperate closely even across departmental boundaries (organizational, geographic, etc.)
Include employees to model how remote working could work in their team, try it out and be flexible to improve the model
Strictly rate all employees by their performance based on measurable and tangible results that are clearly defined
Apply transparent standards for all employees consistently
Treat remote and non-remote workers similarly including equal opportunities treatment and rewards
Provide effective communication technology and adequate training
Address manager concerns and prepare management with adequate training and guidance.
It is true that managing a remote working environment provides new challenges. They include in particular:
Strictly managing-by-performance by setting clear expectations and exercising transparency.
Overcoming ‘old thinking’. Questioning ones habits and beliefs to approach with an open-mind new or different ways of working. Include your staff to come up with ideas on how to make it work.
Diversifying and mastering the spectrum of communication channels. Choosing and using the media preferred by the staff to communicate effectively and efficiently with employees.
If this includes peer-to-peer video, instant messaging or texting (SMS) then learn to master these technologies. Limit face-time for confidential or sensitive topics that should better not be communicated electronically; don’t abuse face-time for routine communication.
Most of all, mutual trust is the key component in the critical relationship between manager and employee. This can be the hardest to build. For managers, taking some temporary measures can prove helpful to establish a trustful working relationship with their staff; for example, start with documenting and reviewing weekly performance plans together with the employee until the manager develops more trust and is comfortable with exercising less timely supervision.
In general, if an organization lacks trust then remote working will hardly be implemented effectively, consistently or to its full potential – but then, remote working may not be the biggest problem this organization faces…
Yammer.com is a micro-blogging platform which allowed our NxGen ERG to reach out to employees and engage them in a new way for our company.
Here is what we did and how it worked for us. – Note that my good friend and co-founder of our NxGen ERG, Dr. David Thompson, wrote this article when he was invited to guest blog on Yammer.com directly!
The proposed business model for ERGs forms a foundation for continued innovation, strategic alignment and measurable results. It turns an ERG into a true and sustainable business resource for its members as well as the hosting organization.
Summary – The increasing diversity of employees at the workplace led to employees gathering along affinity dimensions like birds-of-a-feather to form networking groups within organizations. The next step goes beyond affinity and establishes employee resource groups (ERGs) strategically as a business resource and powerful driver for measurable business impact and strategic innovation bottom-up.
Limited to social?
Employee resource groups (ERGs) emerge for various reasons. They tend to start with a social underpinning that naturally unites and organizes like-minded employees. ERGs come in different flavors mostly along the traditional lines of diversity characteristics such as ethnicity, skin color, age, gender, physical (dis)ability, sexual orientation, military veterans, etc.
For ERGs, a ‘social stickiness’ is important and can be the key integrating factor of employee populations within organizations. It may also influence the choices of ERG goals and activities to a large extent. This may result, however, in possibly limiting the ERG and its members to be seen as a ‘social club’ of sorts by others. Management, in particular, may not see the direct (or even indirect) positive business impact that an ERG can have.
This is where ERGs can fall short: when they fail to tie a strong business-focused bond that ensures continued support by leadership that in return ensures the ERG can sustain and proper for the better of its members as well as the hosting organization.
Becoming a business resource
From a management perspective, ERGs can provide social ties within the workforce that are mostly seen as favorable ‑ at least as long as it does not affect the employee performance; whether perceived or real.
Better off is the ERG that demonstrates an unambiguous contribution to the bottom line. A clear business value proposition sets a solid foundation that makes it easy to communicate with and convince executives securing their continued support. The company benefits from positive business outcomes as a direct result of the ERG activities, while it engages employees broader and deeper. This uses more of the employees’ true potential to ‘maximize the human capital’ as an important element also of employee engagement, development and retention.
This approach serves not only the company but has advantages also for its employees and the ERG in return. The ERG members benefit directly in many ways such as by interesting work outside the immediate scope of their job, by developing new skills and by increasing their visibility within the organization and continued ‘employability’, i.e. their personal market value as an employee.
So what is the key to success, how do you ‘build’ an innovation-driven and business-focused ERG?
A ‘business model’ for ERGs
My proposal is to establish the ERG as a self-propelling and sustainable system, an ongoing process that continues functioning quite independently from changes in the ERG leadership and consistently delivers innovations. Individual leaders are important for operations and make valuable contributions, but the ERG must be able to continue functioning even if key players become unavailable and replaced.
The following dimensions are generic and apply to any organization. Here, we use them to describe a general business model for the ERG:
To illustrate the model and making it more tangible I use a generic example. It is based on NxGen (for Next Generation at the Workplace), a generational-oriented and business-focused ERG that I founded. NxGen was recognized in early 2010 as a best-practices approach by the National Affinity Leadership Congress (NALC).
The strategy brings to the point the ERG’s goal and objectives. A well-thought-out value proposition is a foundation for the ERG.
For example, NxGen is a forum to develop leadership skills, networking and problem-solving that aims to open up cross-functional/cross-disciplinary opportunities for its active members through strategic business projects with measurable results. As a goal, NxGen aims to become a sounding board for management as a valued business resource.
2. People practices
People, active volunteers, are the life-blood of every ERG. Staffing and selection are crucial and continued activities to induce fresh ideas and prevent burn-out of established ERG members. What you are looking for are active volunteers who are passionate and energetic. You want members who become active change agents, role models, within the organization. Value a diverse set of backgrounds and capabilities that can complement another.
Rather than trying to recruit new members, focus on how to attract new members to engage and actively participate (in contrast to the ones signing up to receive email updates or a periodic newsletter, which is a passive form of membership). NxGen membership is open to all employees.
There is a broad range of benefits for active ERG members that can include (but are definitely not limited to):
Insight and work in other business functions and departments
Members lead a relevant project possibly in another business function
Experiment and learn in a safe and nurturing environment
Develop and apply skills like leadership, consulting, problem-solving
Build an open and supportive network with members coaching each other
Increased visibility within the organization
Potential to open new career opportunities
Making a measurable change in the organization here and now.
At NxGen, we see that younger employees (primarily Generation Y also called Millennial, born after 1980) tend to drive the ERG activities most. The explanations I offer is that GenY’ers, in particular, enter the workplace as well-educated professionals, optimistic and motivated to make a difference. GenY was brought up to believe they can achieve anything and are interested to explore lateral career moves. They are used to collaborating in teams to overcome obstacles and network while leveraging technology effectively to this end. At the workplace, GenY typically is not (yet) part of the decision-making bodies due to their junior positions ‑ but they do want to be heard (and should be listed to given their increasing numbers in the demographic shift of the population that has reached the workforce).
The ERG acts through business-relevant projects. At NxGen, the member ‘grass-roots’ identify otherwise un-addressed or under-served business needs that the ERG chooses to pursue. Based on a clear value proposition (return-on-investment, ROI) for the organization the ERG seeks executive sponsorship for each project. The executive sponsor ensures strategic alignment with the organization’s goal, expertise in the functional area, political support and funding for the project (since the ERG has no funds of its own).
The project scope often lays outside of the immediate job description of the ERG-appointed project leader allowing for broader hands-on learning opportunities. Applying professional project management methods to all projects ensures the projects deliver the specified deliverables.
The ERG core team steers and administrates the ERG project portfolio which is documented in an annual business plan and shared publicly. As resources are limited, not all imaginable projects can be conducted at once but are staged. Projects can build upon and leverage each other while making use of synergies whenever possible.
In the beginning, it might be challenging to find meaningful projects that make the best use of the ERG’s resources and capabilities with favorable business impact. It takes time and persistence to develop a trustful relationship with executive management and to gain credibility as an ERG to attracts more complex and important projects from management in return.
NxGen works and communicates openly, it acts transparently and leverages (social) media to inform and connect with its members and non-members displaying operations and result of the ERG’s work.
The NxGen ERG operates within a general framework set by a company’s office to ensure all ERGs abide the company policies. This office also provides an organizational home for ERGs within the company. It generally coordinates and supports the different activities across ERGs and ensures each ERG has a distinguished executive sponsor to connect the ERG with senior management.
A charter defines the basic roles and processes of the NxGen ERG in more detail and is posted publicly. A core team of active members guides the ERG activities and ensures ERG operability. The core team is lead by the ERG’s elected chair and co-chair(s); it further comprises the project leaders, distinguished role-holders, and liaisons to key functions in the organization. The core team members support and advise each other. The ERG provides a safe and social environment that relies on trust among the members to connect, to build relationships, to network and to run projects.
NxGen actively reaches out to other ERGs, innovative groups within the organization but also other operating units and companies to cooperate, share, benchmark and collaborate on common goals.
5. Metrics and rewards system
How do you measure success, i.e. the effectiveness of an ERG? An annual business plan covers the portfolio of ERG projects. It serves as an instrument to measure the ERG performance across all ERG activities that the ERG chair is held accountable for.
What are the rewards for active ERG members? Besides the benefits listed in the above section ‘People’, accountability and success for individual members derive from their projects or their input to other ERG activities that all have clear objectives and a success metrics attached. Driving the change and making a difference is a reward in itself.
NxGen and individual members received several awards and recognition for their work inside and outside the company which the ERG celebrates in public. Some members list their ERG involvement and experience proudly on their résumé which is an indicator that the ERG’s value proposition is effective for its members, i.e. the members value the ERG membership, projects, recognition and awards as means of their ‘employability’.
Building the ERG as an innovation incubator
The business model positions the ERG clearly as a powerful business resource for the organization but it can be even more. The ERG can serve as an ‘innovation incubator’ by combining an attractive system with creative space in an effective governance framework. The processes create measurable value for the individual and the organization that can significantly contribute to process innovation and also drives product innovation.
In an empowering bottom-up movement, the ERG directly connects its active members from any level of hierarchy with the decision-makers high up. This bears the potential to cut right through established or perceived boundaries such as hierarchy, bureaucracy, and red-tape or functional silos that may severely limit the effectiveness and innovative effectiveness of other units that were created top-down within the organization.
Herein lays the deeper potential of ERGs as a true business resource and going beyond possible self-inflicted limitation to social affinity. ERGs can well be the means that contribute to driving the future success of an organization for an organization that understands and value how ERGs open opportunities to tap into its workforce and unleashes hidden potential.
GenY for managers: look beyond the labels! Understand the drivers and grasp opportunities that Generation Y brings to your workplace!
It’s a long list to describe Generation Y with a commonly unfavorable preconception. This youngest generation at the work place (born after 1980, also called Millennials) is said to be: lazy, impatient, needy, entitled, taking up too much of my time, expecting work to be fun, seeking instant gratifications, hop from company to company, want promotions right away, give their opinion all the time and so on. But is it really that easy to characterize a new generation?
Generational clash has changed Clashes between generations were always present to some degree: Young people want to prove themselves, probe the boundaries and seek opportunity. The older are in power, hold the wealth, make the decisions and are typically reluctant to change and letting go of their well-established and comfortable status quo.
However, something significant has changed: Where in the past three generations used to live at the same time, we now see that four generations are working together simultaneously. A conflict that used to predominate the homes is now also present in the workplace (as a result of several factors that include demographic change, geo-economical impact, longer life expectancy and increasing retirement age).
While in our personal lives we may be able to avoid or by-pass some areas of generational friction these same ways may not be possible in the workplace. Here you have to get along and collaborate with your co-workers. This is challenging not only for the multi-generational workforce but also for the managers facing the new need to mitigate generational conflicts, integrate the staff, and provide a constructive and collaborative work environment.
Why managers struggle with the mysterious Generation Y For managers it is important to take a close look at GenY, since GenY outnumbers the significantly smaller GenX (born 1965 to 1980) and is the largest workforce generation. The Baby Boomers (born between 1946 and 1964) retire from the regular workforce leaving a gap. Nonetheless, given the typical career progression, higher management positions are still firmly held by Baby Boomers or their preceding Pre-Boomer generation (born before 1946) – the generations farthest apart from GenY.
Ignoring the differences between generations or addressing them in a ‘one-size-fits-all’ manner backfires. It also misses to leverage particular traits of the young generation that become critical for an organization to sustain in the face of change coming at ever faster pace and with increasing complexity (see my earlier blog: ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?).
It is Generation Y that people seem to have the hardest time wrapping their heads around. Simply pigeon-holing GenY does not do them justice and doesn’t help understanding and managing them either.
‘Kids’ entering the workplace? It is even a common misconception that GenY have not yet arrived at the workplace and that they are ‘kids’ just coming out of school or college. If you consider the demographics, however, the early GenY’ers are 30 years old now, so they are hardly ‘kids’ anymore. They come well educated and already gained some experience at the workplace for several years now. They are not ‘out there’ anymore but ‘in here’ now!
Instant gratification and fast promotions? It is true that GenY seeks fun (who doesn’t?) and grew up with high-end video games in which the players typically rack up points in fast progression opening up new levels or challenges to continue the game. But that’s only one side of the coin. It also forms a mindset to figure things out, address challenges with optimism in a playful way, master technology, compete in ever-changing surrounding as well as hooking up with a network of friends to play and succeed together – don’t be fooled, these are the critical basic skills in the world we live and do business in!
Entitled? Look at GenY’s parents that determined the up-bringing: The generation of Baby Boomer parents indulged in perks and benefits like only few before them; the succeeding GenX only saw these goodies going away when they started entering the workforce. Fortunes were racked up or inherited by Baby Boomers.
GenY kids often grew up in a world of abundance; nothing was too good for them or out of reach – and sponsored freely by the parents with enough cash in their pockets to offer their kids any imaginable aspect of a ‘better life’.
Instead of flipping burgers during summer holidays to earn their own money, many GenY kids had spare time on their hand to learn and have fun while ‘helicopter parents’ took (and continue to) care for their well-being and even professional advancement as adults. Who would say ‘No’ if you are young and your parents offered to pay for your car, your shopping dreams or set you up for a prosperous and promising career?
This way many Baby Boomer parents did their part to breed a generational culture of entitlement or at least high expectations while reinforcing the message “You can do anything and succeed!” – It does not seem fair to hold this upbringing against their kids. (Instead, it provokes the questions why Baby Boomers, in particular, seem to have such a hard time letting go to let their kids live their own lives without excessive parental hand-holding? – But that is a topic for another time…)
GenY is prepared, assertive and speaks up. They know what they want and how to get it. Don’t underestimate them as customers either, since GenY is a serious economic power and probably even more so than any previous young generation in history!
Lazy, impatient and needy? Let me share with you my first-hand experience with GenY at the workplace. I gain my insight as the founder and chair of a generation-oriented employee resource group (ERG) which gives me ample opportunities to work closely with GenY’ers on various projects. It made me probe my own biases and assumptions based on practical work experience (which, by the way, I don’t always see reflected in articles written about GenY).
What I learned is quite different from most preconceptions: The GenY’ers work hard and with ambition, they are not a bit lazy.
When we coin GenY ‘needy’ or ‘taking up too much of my time’ we are actually ignoring that they want to contribute to a meaningful cause in the most effective way. What they are asking is to understand the ‘why’ before going to work. This questions and challenges the status quo in a constructive manner – which is good! If we cannot answer their question satisfactory or insist that we already know the best way ‘how-to’ then it is us (the non-GenY’ers) standing in the way of innovation and change. As a general truth it is not their questions that can be compromising but rather our answers.
Some tasks require not only book-smarts but also experience (including managing people) that many GenY’ers cannot have made at this time in their careers. Therefore, they can be over-confident and over-estimate their abilities and effectiveness; support them and offer them learning experiences as a reality-check and growth opportunity.
Empower GenY to put their specific inherent qualities to best use given that they tend to be natural networkers and solvers of complex problems, they user modern technology effectively and approach different ethnicities and cultures with an embracing ‘color-blindness’. – Are these not exactly the qualities that we need in the world we live and work in today and tomorrow?
Engagement and empowerment drives loyalty A short while back I wrote in this forum about How to retain talent under the new workplace paradigm? It comes down to approaching the workforce differently by offering flexible career paths, support staff to remain employable and accommodate benefits to their needs instead of hiding behind archaic one-size-fits-all models.
As managers we need to consider GenY’s particular needs and expectations to attract, engage and retain them. We need to leverage their unique talents and skills for the better of the company while helping them to development and grow. Empowerment includes guidance and creating opportunities for GenY to make mistakes, learn and get active ‘their way’ in areas that wakes their interest and that are meaningful to them as well as to your organization. – Then relax, sit back and see beautiful surprises unfold!
Leverage employee resource groups (ERG) as an opportunity Some managers may ask on how to get started, what could be a first step to engage and leverage GenY? One way of doing it is by founding an inclusive ERG to focus and organize your emerging workforce.
As an example, I founded the Next Generation at the Workplace (coined ‘NxGen’) ERG that has already changed the company’s perception of employee engagement, increased ERG credibility and raised the business value seen in ERGs among managers. Our NxGen approach is to address opportunities in business-relevant projects with measurable results for the business (such as return-of-investment, ROI). Our projects often focus on relevant topics are outside our immediate field of work but are always sponsored by an executive to ensure governance and strategic alignment. These projects provide an excellent and safe training ground for up-and-coming leaders. NxGen supports the organization directly through the project’s immediate deliverables as well as indirectly by establishing a free and hands-on management development program that comes with networking, coaching, and skill development already built-in. Everyone wins!
No matter if you have a dedicated ERG or not, don’t discount GenY based on labels. Dig deeper to find the treasures that this generation has to offer. Your organization’s future relies on them!
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NxGen was nationally recognized as a ‘cutting-edge’ approach to employee resource groups by the Network and Affinity Leadership Congress 2010 (NALC), a national conference focused on training ERG leaders to align with the business goals of their organizations.
Please leave a comment and, if you are interested in ERG topics, feel free to join our ERG Leaders group on LinkedIn.com to discuss, share and learn!
Research shows that too much trust decreases innovation. Read what ‘trust’ is and how it affects your workplace and innovation.
Most managers understand that trust is a key ingredient to effective collaboration and innovation yet few actively try to cultivate and nourish trust in their own organization to achieve the right mix between trust and constructive tension.
The trust gap between theory and practice Over 80% of managers believe trust is important to have good work relationships that enable effective collaboration and superior results. So why do only 40 or so percent actually take action to build and maintain trust within their organization? Obviously, there is a disconnect between the theory and the practice. Why is that?
My assumption is that ‘trust’ is perceived as an ‘intangible’ that managers like to stay away from because they find it hard to measure and to manage. It further requires an individual to open which comes with vulnerability. Perhaps we also fall easily into the only so human trap of making over-confident assumptions when it comes to ourselves and our single-sided perception of the trust we believe to have established with people we work with….
What is trust? Let’s take a closer look – what makes up trustful work relationships? Trust is the degree that people trust one another, so trust is an interpersonal phenomenon. It comes down to three factors that make up trust at the workplace as Karen Sobel Lojeski, NYU professor at Stony Brook and CEO of Virtual Distance International, identifies:
Benevolence – co-workers have your best interest at heart
Ability – co-workers have the knowledge and ability to get the job done
Integrity – co-workers will do what they promise.
Trust is the ‘glue’
Trust is the social ‘glue’ that holds together teams and organizations. It is critical for success of virtual teams, i.e. the increasing trend of co-workers worked separated from another and spread across different countries and time zones. With a lack of trust productivity dwindles as does the willingness to share information. Instead, our energy gets wasted every day on avoiding perceived threats from others.
Innovation needs trust High trust correlates with more successful innovation – why? When colleagues trust another they open up and share information. Besides the obvious benefit of cross-fertilization that leads to more ideas and creative approaches, by giving away your views and knowledge you become vulnerable as an individual and even more so in a competitive professional environment. This openness comes with a risk to fail that people are only willing to take if failure is acceptable among colleagues and does not come with repercussions.
Sharing ideas alone is not enough though. Asking thoughtful questions, constructive criticism and mutual support lead to better solutions while curbing hostility and competitiveness. Opening up happens when a task-related conflict will not easily deteriorate into a personal conflict. Innovation within an organization relies on trust among colleagues as a key ingredient that cannot be substituted.
Too much trust impedes innovation! So, how much trust is needed? And can there be too much trust? The MIT’s Sloan School of Management (MIT Sloan Management Review, Summer 2010, Vol. 51, No. 4) offers some answers. An increasing level of trust leads to more effective innovation, as we expect, but the researchers also observed that there is a limit after which the correlation negates and where innovation declines with too much trust. What happened here?
Too much mutual trust deteriorates the innovative effectiveness of partners. Where trust sparked creativity and led to better solutions earlier constructive criticism and challenging each others ideas now suffers. Finding the ‘sweet spot’ is the tough part where a high level of trust consistently fuels innovation and leads to best results.
Take-home message for managers Should managers reduce investing in trust? Certainly not!
A high level of trust remains the most crucial requirement to build a solid relationship between people that becomes the basis for effective collaboration and innovation. Most organizations seem to suffer from a lack of trust more than anything. It makes collaboration a drag and leads to poor results and mediocre solutions.
Actively building trustful relationships is an important part of a manager’s role and even more so in virtual teams, when the team members work separated by barriers of location, time, culture, language and others. Trust must be built and nurtured actively especially when face-to-face communication is not possible and becomes replaced by using less-rich digital media (video conferencing, phone, email, etc.).
When trust is getting very high, however, we need vigilance and a reality check. You do not want to lose constructive argument and challenging dialogue between team members that turn creative ideas into innovative solutions.
Is ‘middle management’ to blame? About the differences between managers and leaders, two conflicting roles that are both needed in an organization.
What is wrong with middle management? Listen around, ‘middle management’ gets blamed all around for many things and even more so, for the big disconnect between executives and the staff and managers in the trenches.
A colleague just asked me again today – what is wrong with middle management?
Is there a systematically flaw that affects so many organizations?
Management versus Leadership?
The confusion originates from a lack of clarity over the roles: We need to look first at what the difference is between a manager and a leader: Is there one at all and are these roles exclusive or do they overlap?
Don’t be mistaken, significant differences exist between managers and leaders; yet an organization needs both, managers and leaders. It is necessary to distinguish these roles, since their focus and goals are quite different. Not only can they conflict to some degree, they actually have to for the better of the effective organization overall. ‑ Let’s take a close look at both roles:
Management role A manager typically supervises a unit that produces an output consistently (such as a product or service). The manager’s job is to improve the input (resources) and output (deliverables) and make tactical adjustments. Most changes are moderate and of an evolutionary character focused on optimization by refinement of the here-and-now.
Given their tasks and responsibility, managers do have a professional tendency and even obligation to resist changes that disrupt their well-oiled and optimized “machine” whose output is also their immediate measure of success in most organizations.
For an effective manager it is all about “doing-things-right”. The ways often get documented in procedures to solidify and guard the established processes to guarantee the reliable delivery of results. Focused on preservation and functional optimization, managers can also easily fall in the trap of judging too soon and then making an adaptive decision too late.
Leadership role In contrast, a leader takes a step back and looks at the bigger picture that aims strategically at the organization’s future. The effective leader shakes up the established structures and “does-what-is-right” by bringing about change that will position and optimize the organization for future success through transformation. (Read more on Innovation Strategy: Do you innovate or renovate?)
Leaders must stay flexible and willing to deviate from the current path to drive the needed change to successfully shift or even turn the course of the organization. Consequently, the leader must take into account major disruptions of otherwise smooth and sub-optimized operations. (Read more on How to become the strategic innovation leader)
The farther a leader is removed (usually way up in the hierarchy) from the level where the output is produced, the more abstract the work appears. It becomes easier for leaders to make game-changing decisions flexibly that may turn out unfeasible on the factory floor or other real-life business settings or that confuse the staff.
A good leader follows guiding principles and keeps the staff in the loop to prepare them for upcoming changes. Removing elements of surprise where possible is an effective early step of successful change management when it comes to implementation.
We need both! The goals of leaders and managers conflict and create a constant tension field. It requires active balancing and healthy negotiation to prepare the organization for the future while not sacrificing the ability to deliver results reliably as the organization moves ahead on the bumpy road of change and uncertainty. (More on Mastering the connected economy – key findings of IBM’s 2012 CEO study)
This makes clear that an organization needs both, effective managers and visionary leaders. It also makes clear though that both roles may not be best united in one person to avoid a conflict of interest that compromises best results for the organization overall.
Where middle management gets stuck
As you move farther down in a hierarchy from the leadership level and closer to operations, the harder it becomes for managers to balance the high-flying leadership vision with the demanded production or service targets on the ground.
So here is where you find the clash and overlap between leadership and management: The middle management gets caught in the middle, literally!
Middle management needs to bridge the gap even for self-preservation by negotiating and brokering between the workers and the leaders. It’s a tough job! Middle managers deserve some sympathy as they get torn by the conflicting needs of the organization every day and often enough not fully included by leaders while yet having to make sense of the dilemma and translating it for their staff.
Can’t do without… Thus, there is no ‘systematical flaw’ but only the reality of conflicting needs of an organization that requires both, effective managers and visionary leaders. This comes with accepting the entailing tensions and conflicts to deliver results reliably and consistently while readying the organization for meeting the challenges of the future – which puts the middle management in the hottest spot!
Do people fear change? I doubt it. See how fear relates to ‘change’ and how to harness it.
Fear of change?
An interesting discussion I got involved in recently is about ‘What gets in the way of embracing change?’
It quickly revolved passionately around whether employees like change or not.
People love change! From my experience, people love change! – Not convinced? Look around you: People love fashion, wearing different clothes and hair styles, driving a new car, using gadgets with cool new features (look at the success of iPhone, iPad, etc.!) and so on. These are all changes we embrace all the time!
Obviously, ‘change’ as such is not the issue; so what is?
Angst or fear? ‘Angst’ describes “an acute but unspecific feeling of anxiety”. There is no specific source, however, so angst is based on the abstract, the unknown.
In contrast, ‘fear’ is anxiety about a “possible or probable situation or event”. Strangely, fear of change hints at something specific and not at some unspecific angst the general term ‘change’ leads up to. Nobody seems to use the term angst relating to change. – So what is the mix-up about?
When it comes to fashion or hair styles the fear is not about the new color or cut but about how otherswill respond to it and how this will affect me.
Will the person I fancy secretly finally notice me and be attracted to me? Will I appear more daring, more professional or more ‘me’ branded – or what ever else it is you wish to symbolize or achieve through the change that you initiate.
People fear uncertainty of the consequences!
What people fear are the consequences for them that the ‘change’ entails and even more so if they have no control over the change. Translated into the workplace this comes down to what changes for the individual employee: First of all, their gotten-used-to equilibrium gets disturbed by an outside force – not by free choice of the individual. This type of change typically induces much uncertainty for an individual with little or no control over how it will play out for them. Instead, the well-established and familiar routine stops. It is replaced by something different, possibly something they don’t know or understand fully.
Now, where the fear comes from specifically for the employee is that one day the employee is competent in doing their work and delivering results, while the next day (i.e. when the ‘change’ takes effect) they may need to learn, adapt, give up comfortable routines, figure things out the hard way, may not know how, fail and struggle ‑ and be inhibited during this period to produce results again so this comes with a lack of satisfaction and appreciation or other forms of acknowledgment.
Other colleagues may adapt better, learn faster and surpass them in the ability to the work done in the new way. Then, the employee may find they got left behind and may no longer be needed by the new organization. This potential lack of professional competency is the origin of the fear possibly combined with loss of certain perks or proprietary knowledge acquired over time that helped them staying afloat and ahead of others in the good old days.
Ask yourself if you would like to be surprised today with a major reorganization, for example, that let’s you hanging in the limbo with uncertainty about your fate within the company for months or by a new process thought out in some remote ivory-tower that is unlikely to work in the reality of your workplace…
This is where the major opposing force to effective change comes from: the employee resistance. If resistance is high also the chances are high that the change will not be implemented effectively, not efficiently or not even at all.
Change as an equation Change can be expressed in an equation called Gleicher’s Formula (after David Gleicher and Richard Beckhard, 1969). Several variations of the equation exist but they all include the same three factors, which multiplied need to exceed the amount of resistance (=cost) on the other side of the equation for the change to be implemented successfully.
According to the streamlined formula (by Kathleen Dannemiller, 1992), change (C) is the product of
The dissatisfaction with the status quo (A),
The desired state (B) and
The practical steps taken towards the desired state (D).
These factors multiplied must outweigh the amount of resistance represented here by the cost of change (X). Here is the formula: C = (ABD) > X
In practice, there must be significant pressure present from dissatisfaction with the current state (status quo), a clear description of what the new state should look like in the future (vision) and effective measures taken to get from the current to the desired state (action plan).
Overcoming resistance in the changeequation Resistance may include different elements but a major contributor is the resistance originating from the people affected by the change. It is crucial for reaching sustainable results to keep this friction low by engaging these vital stakeholders actively and early on where possible.
What it comes down to in practice is having a sound plan and excellent execution of change management together with the people affected by the change. Include them to work issues out as they arise early on when alterations cost little and to buy in to the change and drive it. Don’t underestimate the impact and potential of employee empowerment and the pay-off that it can have for the organization that does it right!
Including and empowering employees effectively in organizational and procedural change projects becomes a powerful differentiator between an effective change implementation and a costly disaster.
The paradigm of work has changed – how does it affect employees and what can be done to retain them?
How to retain talent under the new workplace paradigm?
Most of us grew up with a clear understanding of how ‘work’ and ‘careers’ works: As an employee you could generally rely on job security and a pension guarantee for your loyalty and obedience to the employer. Practically, the organization ‘owned’ a human asset in a voluntary symbiosis that would end with retirement.
– This paradigm changed fundamentally and even more so in our turbulent and globalized economy. Since my current work focuses on employee retention and engagement, let’s see what has changed and how it affects employee retention.
The ‘old deal’ is gone! When it comes to employment today, employees understand that they stand alone (though this awakening may have come only recently to the more established generations). Organizations now hire people for their specific skills only as long as they need them and then move on to hire someone else for the next task.
This may well be the reason talent acquisition is often valued higher than talent retention. However, this approach also comes with losses through attrition and may not make best use of the added value that an individual can give the organization over time with through learning, personal growth, developing networks and gaining experience.
One way or another, the old paradigm no longer holds true. And the GenY streaming into the working world have not even experienced it to start with, so don’t expect them to respect and live the outdated rules!
One-dimensional career paths are out! Under the old paradigm career paths were fixed and oriented ‘upward’ following a pre-defined and linear course of advancement in the position line-up. Deviations from the laid-out career model were rare exceptions.
More likely, an employee had to leave the organization to break out of the scheme when seeking growth in a new or different dimension of interest, to apply newly acquired or dormant skills or to make ends meet along their personal needs. There was not much room to move sideways out of the fixed career track slot into a career up through a choice of other avenues.
While the fixed model made it easy for HR and management, it neglected the potential of the individual employee who can evolve and grow, who may change interests and who may seek new challenges outside their immediate or next-up job description.
Retention is more than offering money!
Employers who wish to retain their precious talent need to offer more than a paycheck and blanket perks ‑ but this does not mean necessarily that they have to spend more money. A competitive salary is expected, of course, but not the #1 driver. Key drivers for the new workforce are career opportunities and customized benefits – money follows.
What today’s workforce is looking for are choices: flexible career paths that broaden the options and offer development opportunities instead of narrowing them down. They want to take control and influence where they are heading in a multi-dimensional space of opportunities and receive recognition for their achievements – empower them! Set clear goals and allow employees to experiment and learn on the way – don’t micro-manage them!
It becomes crucial for every employee to be ‘employable’ meaning to stay attractive for the current employer as well as the next employer under the new paradigm.
When it comes to benefits the time is over for one-size-fits-all perks! Consider non-monetary benefits that cater to the individual’s needs, preferences and independence: Non-monetary benefits may range from education opportunities over a free trip with family or friends as an incentive to flexibility along the work schedule and venue including remote working options.
This flexibility and consideration of an individual’s lifestyle is becoming even more important with GenY, who entertain closer social ties to families and friends than GenX. Networking and leveraging personal connections come naturally to GenY and extend seamlessly also in their professional world.
Shared values and inclusion Employees increasingly chose employers by the values they share and reflect what they believe in.
Does your employer talk-the-talk or also walk-the-walk? Management tends to rely on communication channels to communicate to their employees that derived from marketing. These channels were originally developed to promote products to consumers through messages broadcasted one-way in a propaganda-like fashion. This practice was extended using new social media but still following the traditions of the old paradigm and without making use of the potential associated with the ‘social’ aspect, which is the power-engine behind the new media boom.
Give it a reality-check! – If your company has a Twitter account, for example, does your company account have only followers but follows nobody else? Here we are back to broadcasting!
If your company follows others, does it genuinely connect and communicate with its employees as well as with people outside the company? Does it engages in open discussions and learns from it?
How many managers and companies truly use social media tools to their full breadth as a two-way street of communication?
Transparency for talent retention Retention does not have to be ‘rocket science’ even when the work paradigm changed.
What it takes is a degree of honesty and respect from an organization to treat employees fair and help them to stay ‘employable’. Authentic and open communication goes both ways and forms the basis for building trust, employee inclusion and engagement that result in employee satisfaction, innovative creativity and retention.
There is no need to fear transparency and open communication for an organization; failing to do so though is harmful to the organization’s reputation with word spreading fast and employees avoiding workplaces that do not live up to high standards and authenticity.