Jerald Hage, co-director of the Center for Innovation at the University of Maryland and author of Restoring the Innovative Edge: Driving the Evolution of Science and Technology
Companies seeking to generate technology innovations should give their STEM professionals—those with a science, technology, engineering or mathematics background—a say in decisions. This includes a voice in strategy matters as well as how they accomplish their immediate jobs. "The more innovative organizations have more decentralized decision-making," he says.
Select four or five high-risk, high-payoff projects and stick with them for five to 10 years. The iPhone is a case in point. "If you really want great breakthroughs, that's the only way you're going to get it," he says.
Precise formulas for innovative products and processes vary by industry sector. But CEOs across the board should avoid a penny-pinching mind-set. "Stop emphasizing productivity and cost. It leads you to think the best thing to do to reduce costs is to fire workers."
Assess innovation achievements. Metrics may look different depending on the sector of the economy. But take stock in some fashion. "A simple measure for a manufacturing [company] is what percent of sales stem from new products introduced in the last five years," Hage says.
Innovative leaders tend to have five "discovery skills": associating, questioning, observing, networking and experimenting
Leaders seeking to foster an innovative workforce should focus first on demonstrating these behaviors themselves. "Walking the talk when it comes to innovation is critical," Gregersen says.
Don't expect big results overnight. Building a culture of productive innovation—where employees practice the five discovery skills—takes time. Just opening the floor to suggestions can lead to a flood of low-value proposals. "Those organizations will get lots of ideas, but most of them aren't worth pursuing."
Less is more when it comes to team size. A group of six to eight people—a team that can be fed by two pizzas—is best for solving tough problems. Larger groups can get bogged down in bureaucracy. "Big problems get tackled by small teams in innovative companies."
Shake up the status quo with a dose of "harsh reality." Managers of a food supplier to hospitals believed their customers had no loyalty. When the managers were brought to hospitals to try the food they supplied, "They gasped. Now they understood why there was no loyalty." This prompted the food supplier to rethink its food items.
Focus on fairness. "Fair process builds trust and commitment," Mauborgne and Kim say. In turn, trust and commitment produce voluntary cooperation. And voluntary cooperation leads people to "go beyond the call of duty in executing strategy and in sharing their knowledge and applying their creativity."
Allocate and utilize resources wisely. Rather than lower their ambitions or fight for more resources, managers should concentrate on "hot spots and cold spots." "Hot spots are activities with low-resource input but high-potential performance gains," the authors say. "In contrast, cold spots are activities with high-resource input but lower-performance impact." To in effect create new resources, "Shift resources from cold spots to hot spots."
Find the pivotal people. "To trigger an epidemic movement of positive energy, the key is to concentrate efforts on your kingpins," Mauborgne and Kim say. Kingpins are natural leaders, who are well-respected and persuasive, or who can unlock or block access to key resources. "When they are influenced, the rest of the organization follows fast."