What’s Innovation Got to Do with It?

Have you ever wondered how Amazon keeps up its rapid-fire pace of launching new products and services or how they routinely make the top ten of Forbes “Most Innovative Companies?” At the core, is a focus on innovation and an obsession with its customers. Amazon’s theory is that innovation starts with hiring great people who at the core of their DNA want to innovate. Every employee is expected to innovate and this message is broadcast loud and clear during employee interviews.  

Once hired, employees are mentored in the innovation process Amazon calls “working backwards” which starts with one of Amazon’s leadership principles – Customer obsession. Leaders start with the customer and work backwards. For new initiatives, product managers start by writing an internal press release announcing the finished product.  Press releases focus on the customer problem, how the current solutions fail, and how the new product will blow away the existing solutions, says Ian McAllister, Director at Airbnb. If the idea is well received, a group of managers are tasked to answer the question, “How do we accomplish everything it would take to get there?”

If you’d like your company to make the Forbes list of the “Most Innovative Companies,” start with the following 10 tips to build a culture that thrives on innovation and continuous improvement rather than lowering prices to beat out competitors. Competing in a price war is a losing battle. Instead, compete with continuous innovation. 

1. Hire innovators. Advertise for innovators and then focus interview questions on the applicant’s previous experience with innovation and examples of ideas they have generated.  Make it clear in all job descriptions that innovation and continuous improvement are part of the job.
2. Make innovation everyone’s responsibility! For an organization’s brand to prosper, innovation and continuous improvement needs to be everyone’s responsibility. To be a competitor, or better yet, a pioneer in the organization’s industry, innovation should be the responsibility of every employee. As a leader, it is important to remember that each employee, regardless of job title, will have a unique view and valuable feedback about the company’s products or services. Make it part of everyone’s job description to provide constructive feedback and participation in brainstorming, complete with performance goals for each area of influence. Every employee needs to be thinking of how to improve a product or service and better yet, how to create a product or service that is currently not on the market.
3. Focus on customer needs. Like Amazon, start with the customers’ needs and challenges. Solve their problems. Give them new and innovative ways to do business. Make their lives easier. Don’t start with a new product and try to sell it to them; start with a customer solution and create a demand for it.
4. Set and communicate clear goals. In many organizations, innovation is considered important, but not urgent, and tends to get postponed into next year’s strategic plan. Ensure that everyone in the company knows that the organization has made a bold decision to out-innovate the competition. Employees need to know what percentage of revenue is coming from existing products that compete solely on price, as well as the predicted revenue percentage derived from new products the organization hopes to produce in the next one, three and five years.
5. Provide training and resources. The more innovative an organization is, the more change it creates. Change creates the need for people to learn as well as to create new relationships, principles, policies, programs, processes, practices, products and services. Are you providing your employees with the necessary training and resources to cultivate innovation?
6. Promote cross-functional teamwork. In one department or division, people tend to think alike. It is only when multiple departments, divisions, suppliers, customers, cultures and multi-generations work together, that something truly innovative can be created. The old adage applies here, “If two people in the same room think identically, then one of them is not necessary.”
7. Celebrate mistakes! To create anything new, there will be mistakes. Even when you upgrade software or your cell phone, there are always mistakes as you try to learn the new ways of making the product or service work. When people in your organization try to implement new or innovative ideas and a mistake happens, how do the leaders in your organization respond? Do we publicly blame the employee, or do we praise the employee for taking the risk to improve something, knowing there will be missteps and that not every innovation will be a success? Just ask Apple’s former CEO, John Sculley. After he fired Steve Jobs, he made his pet project, Apple’s first PDA, the Newton, which Sculley believed would define the digital age. It flopped. Even Apple has a list of mistakes… but they continue to out-innovate their competitors.
8. Learn to love ambiguity and make decisions quickly. When it comes to innovation and continuous improvement, there is no guaranteed success. Waiting for all the data to come trickling in to guarantee that decisions will be correct, only leads to analysis paralysis and offers a great window of opportunity for your competitors who are willing to take a leap on guts and faith. The most innovative companies drive decision making down to the lowest possible level and remove whatever obstacles that may stop people from communicating new ideas and making decisions.
9. Do not focus on growth! Growth and profits is an outcome of innovative products being in high demand from customers. Focus on innovation now and growth will come later.
10. Reward team success. Many creative people are focused on how many ideas they can get trademarked or patented and approved under their name. As fast as the world is moving, recognizing that it took a cross-functional team to take this innovative product or service to market and beat the competition, will generate more speed and synergy than recognizing individuals. Can individuals still be heroes? You bet. But over time, creative, high functioning teams will almost always out produce any one individual. Place your recognition on the team.

What’s innovation got to do with it?  Everything! Make this a year for continuous improvement and innovation.