Category: Innovation

Can movies innovate with only seven stories to tell?

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:

  1. Novelty
  2. Creating a value
  3. 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 vs The Artist - similar but yet so different!
Avatar vs The Artist – similar but yet so different!

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!

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Innovation Strategy: Do you innovate or renovate?

Innovation Strategy: Do you innovate or renovate?

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!

Innovation confusion

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?

Innovation Strategy: a Matrix of Roles

We introduced and discussed the role of the ‘Executive Champion’ in the post “How to become the strategic innovation leader? (part 2 of 3)”.  The Executive Champion fills the organizational gap to connect the Technical Champion and the Business Champion, so ideas become reality.

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.
Innovation Strategy Roles Matrix (roles)
The 4 roles in strategic innovation

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.

Innovation Strategy Roles Matrix (innovate vs renovate)
Innovation strategy: innovate or renovate?

Final thoughts

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!

How to create innovation culture with diversity!

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.

MIT
MIT

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.

Open Innovation

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!

Bottom line

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:

  1. Innovation is novelty and its application.
  2. Bring ‘thought diversity’ into expert teams.
  3. Incentivize by establishing a ‘meritocracy’.
  4. Use open innovation to speed up research.

Links on innovation in the OrgChanger.com blog:

Next-generation ERG learn from U.S. Army recruitment!

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 Want You"
Uncle Sam

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.

"Today's Army"
Who expects “Today’s Army” to be a fun crowd playing football?

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.

"Join the People who Joined the Army"
All serious in 1973

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.

"This is the Army"
Blends people & duty

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.

6 Be all you can be ad
Personal growth

“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.)

 

3 "Army of One" logo
Self-reliant GenX

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.

 

Image result for image top gun free online
Top Gun (1986) movie

 

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!

“Army Strong” also suggests contemporary leadership, personal empowerment and strength building that found on shared values.
(Read more on managing Generation Y at Generation Y for managers – better than their reputation?)

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.

Army Strong
“Army Strong” since 2006

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.

Print ad for "Army Strong"
GenY pride and social values

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:

  • Target Characteristics

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.

Starting an ERG as a strategic innovation engine! (part 3 of 3)

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’…

> For more general insight on complexity as a leadership challenge, read this: ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?

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.

> A previous post discusses the business model behind the ERG approach in more detail: Build ERGs as an innovative business resource!

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.

    > More on the virtues of Generation Y as I experience it in NxGen under: Generation Y for managers – better than their reputation?

  • 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.

References and additional reading

How to become the strategic innovation leader? (part 2 of 3)

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.

(To get a better flavor where I’m coming from, please check out my previous post “What does it take to keep innovating?”)

Champions for innovation

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!

‑ Please share your thoughts or questions!

References and additional reading

What does it take to keep innovating? (part 1 of 3)

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.

So, please watch this video before you read on: http://www.youtube.com/watch?v=M66ZU2PCIcM&feature=youtube_gdata_player

Learning from IDEO

What did you observe about how IDEO works?

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.

In case you want to get involved yourself in innovating with IDEO, check out their open innovation network!

I plan to discuss more aspects of strategic innovation soon such as what it takes to be the innovation leader in your organization…

– Stay tuned and please share your comments!

References and additional information

Build ERGs as an innovative business resource!

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:

1.       Strategy

2.       People

3.       Processes

4.       Organization

5.       Metrics/Rewards.

Dimensions of a business model
The five dimensions of an ERG business model

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).

1. Strategy

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).

3. Processes

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.

4. Organization

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.

Additional reading

Why too much trust hurts innovation

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.

Leadership vs Management? What is wrong with middle management?

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!

‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?

In IBM’s 2010 CEO study, the high-profile interviews revealed a game-changer for the next 5 years: mastering the increasing ‘complexity’. Yet, less than half of all CEOs feel prepared for the challenge! – Read what is meant by ‘complexity’ and what the CEOs look for in successful future leaders!

‘Complexity’ is the 2015 challenge! – Are leaders ready for ‘glocal’?

What is the key challenge in the coming years and how to prepare future leaders.

IBM released its high-profile annual CEO study with interview results from 1,541 CEOs worldwide. The focus is on ‘complexity’ as newly identified challenge that CEOs face increasingly over the coming years.

(Note: the study results are no secret and available in the public domain:  http://www-935.ibm.com/services/us/ceo/ceostudy2010/index.html)

Complexity is what develops when a company tries to make their product and services easier to use for their customers and clients. – Why? Look at what we customers expect of the products that we buy these days:

Example – let’s take cars: New cars these days are highly integrated products that go far beyond only ‘taking you from A to B’. As added features we find WiFi and DVD players installed for entertainment. The radio receives traffic reports feed into the car’s navigation system to guide you around heavy traffic. There are distance sensors that automatically sound alarms and engage the brakes should we get too close to an obstacle too fast. Collision detection systems adjust your seat belt and deploy airbags to keep you safe and then call help through the car’s mobile phone system automatically while directing emergency rescuers to the car’s crash scene.

Integration entails inter-dependencies
These technological marvels in a car are integrated to run smoothly ‘behind the scenes’. They also pose significant challenges for the manufacturer that needs to keep the features as easy to use as possible for the customer or run even completely invisible to the customer. Nonetheless, all these components must work together seamlessly in an integrated way that create complex inter-dependencies among them.

This requires the manufacturer to integrate services and products outside their typical ‘automotive’ spectrum and ability. They need to collaborate with other suppliers that may not even have established ties to the car industry.
Note that the traditional product ‘car’ has undergone change to become an integrated ‘mobility and lifestyle’ product.
This increasing technological complexity at an increasing speed translates into the manufacturer’s organization and challenges its leadership.

Is there a ‘magic bullet’?
“The vast majority of CEOs anticipate even greater complexity in the future, and more than half doubt their ability to manage it.” – This fundamental statement strikes me most IBM’s 2010 CEO Study though it does not hold true though for a minority of outstanding organizations, which found ways to deal with complexity and produce 20% profits over their competitors nonetheless!

The ‘magic bullet’ facing unpredictable uncertainties seems a mix of

  • Creativity (it’s the highest ranked leadership quality by all CEOs!) that allow to react fast to a changing environment
  • Integrating customers into their processes
  • Simplifying what organizations do and produce.

Perspective of CEOs in Life-Sciences
Now, how does this translate into our daily work? Most of my professional life I spent in different areas of the Life-Sciences industry in Germany and the USA that I chose as an example. What caught my eye here are the responses by CEOs from Life-Science organizations in Germany and the USA in comparison. – How do they rate the upcoming complexity challenges, how prepared do they feel and what do they look for in future leaders over the next few years?

The 3 Needs
US CEOs (86%) more than German CEOs (81%) expect higher complexity in the years to come but only 45% (in both countries) feel that they are prepared to cope with this new challenge successfully. This opens a larger-than-ever ‘complexity gap’ reflecting the uncertainty on how to operate in the volatile and murky waters of the new business environment.

1. Creativity
Interestingly, the German CEOs rely confidently on creative leadership making decisions quickly (over thorough decisions) in the future by 18% above all CEOs sampled. The US CEOs, in contrast, seem more pessimistic by relying on quick decisions slightly less that CEOs overall. Both, the German and US CEOs equally make integrating customers to better understand the customers’ needs their highest priority

2. Simplification
The CEOs take different approaches to how and how much to simplify: While the Germans seem more radically simplifying products and operations more than CEOs overall, the US CEOs focus on reducing fixed costs willing to increase variable costs to allow for up-scaling ability as need arises.

3. Focus in Emerging Markets
The study including all CEOs proves that 76% aim at the rapidly developing markets. It is not surprising that market factors is their #1 external focus followed by technological and macro-economic factors.

Key Attributes of Future Leaders
What kind of leadership we need to manage complexity successfully over the next 5 years?

The CEOs agree on the following three attributes:

  • Creativity (60%) ranks highest overall followed by
  • Integrity (52%) and
  • Global thinking (35%).

What CEOs are looking for are leaders that understand and collaborate closely with the customers, show strong people skills and have a deep business insight with intelligence data.

The future leaders are innovators able to think on their feet and open to experiments when speed needs to rule over correctness. The capacity to simplify for the customer is crucial. This entails reducing the resulting complexity by stripping what matters down to the core and focus on that. Sound planning may have to give way to situational yet strategic management to avoid information paralysis and gain competitive advantage.  – The coined term ‘glocal’ means to integrate globally using all resources available worldwide while doing locally only what is necessary.

What do you think – are we ready for the complexity challenge? Any suggestions how to prepare?

Why do companies need business-focused ERGs?

Changing the organization from within by engaging employees in business-focused employee resource groups (ERGs) – the practical “how-to” guide!

Why do companies need business-focused ERGs?

The answer can be as simple as this: Because it makes good business sense!

But what makes this answer so simple? – Well, because it’s made up of a few simple aspects:

First of all, every company, unless it is classified as a non-profit, is in business for one reason: to make money by providing some sort of product or service to its customers.

Simply put, if a company fails to rack up profits it will go out of business. That’s why focusing on the business benefits, the “bottom line”, the return on investment (ROI) makes not only sense but is key for successful employee resource groups (ERGs). It’s the bottom-line arguments, the financial benefits, that open the doors to executive support, buy-in, and funding.

Second, to take advantage of the diversity and capabilities of the human capital readily available.

Let’s look at companies, its workforce and its markets today: We live and work globally – everyone is connected. Our markets today are just as diverse and multi-faceted as our workforce should be. It takes all we know and who we are as diverse human beings (coming from different cultures and ethnicities, religious beliefs, physical characteristics, sexual orientation, and so on) to understand what our customers need and how we can give it to them.

Therefore, it makes sense not only to diversify the product portfolio to mitigate risk and seize opportunity but also to diversify the workforce for the same reasons. Not tapping into all of your workforce’s diversity and capabilities puts you at a disadvantage to companies who know how to maximize their human capital effectively.

Are you still with me? So, the next question is how to meet this goal.

Stay tuned for practical advice, keeping it simple, and examples taking you through the steps on how to build a business-focused ERG.

– Any questions so far?

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