Jeff Standridge:
Hey guys, Jeff Standridge here. Welcome to another episode of the Innovation Junkies Podcast.
Jeff Amerine:
Hey, it’s Jeff Amerine. Glad to be back on with you.
Jeff Standridge:
Yes, sir. Me too. Me too. Last episode, we spent some time answering listener, viewer and client questions, kind of frequently asked questions, if you will, around leadership, teamwork. We’re going to continue that today, but we’re going to focus on organizational change and innovation. That sound all right?
Jeff Amerine:
That sounds great.
Jeff Standridge:
So let’s throw a question here at you. What are the most common pitfalls that organizations face during major change initiatives and how can those pitfalls be avoided?
Jeff Amerine:
Yeah, I would say one specific area that we talk a lot about and think a lot about is the senior executives will decide that change is important and they won’t have done anything, whether it’s implementing new technology or new process or new policy about impacting the behaviors that need to go along with that. So they won’t really work to build consensus. They won’t communicate it well. It will just feel like, where did this come from and why are we doing it? I mean, there’s got to be a fair amount of communication, evangelizing, consensus building that goes right along with any kind of major change that you want to do in an organization. And, and, and to some extent, you got to realize it’s going to take some time. These things can’t be done instantaneously, particularly in larger organizations.
Jeff Standridge:
Yeah. You know, I think you’re right. And you say, you talk about senior leadership or someone will decide that a change is necessary. And, and this is where I think there’s a real effective or potentially effective interplay between innovation and organizational change is someone comes up with an idea or they come up with a solution and they decide that that solution or that idea needs to be implemented, but they don’t step back to take the time to identify what’s the problem we’re trying to solve, what’s the impact that the problem is having on the organization, and can we solve it in a manner that will be worth the effort or worth the expense or worth the time and distract, potential distraction and what have you. Kind of the real win worth, is the problem real? Is it, can we win in affecting a solution and is it going to be worth our time? So, agree with you on those.
Jeff Amerine:
Yeah. Yeah. A hundred percent. Yeah. A hundred percent.
Jeff Standridge:
And, you know, as part of our process in working with organizations, we kind of have a three tiered process. That’s, you know, number one, when you, when you’re talking about assuming that you’ve defined the right change initiative and it is validated because you know what problem is you’re trying to solve. You’ve quantified the problem, you’ve qualified the problem and you’ve developed an appropriate change initiative that will solve the problem.
then number one, you create the right climate for driving change by making sure you have the right team. You’ve got the right destination, the right vision, if you will, that you’re pursuing for the change initiative. You’ve got an actual plan and it’s a well -thought out plan and execution of that plan will by necessity take you to the achieved desired result. You’ve got the right cadence around pulling that team together, working through challenges to the change initiative. And then you…
You know the critical measures that you need to be looking at as you go through the change initiative. That’s kind of number one, creating the right climate and then building this basis of support by, you know, activating your early adopters and, and end users. So my experience in leading change initiatives is you have to identify who are the primary beneficiaries or the end users or the primary stakeholders of that, of that change initiative.
Who are the economic decision makers or technical influencers if it’s a technical initiative or an ERP program of some sort or what have you. And then finally, who are the potential saboteurs that you need to get in the boat with you? And I believe it was Covey who said sometimes to go fast, you have to go slow. So slow down a little bit, get some of those early adopters and those potential saboteurs in the boat with you.
because they will help to influence the others as well. And then finally, after we build that base of support, how do we make it stick? We face the brutal facts, we’re always assessing, we’re always evolving and we’re celebrating the wins and correcting any deficiencies.
Jeff Amerine:
Yeah, I mean, it’s a good process. It’s a methodical way of thinking it through. And it’s something that requires a commitment. I mean, it requires a commitment at the top level. And I’d also say that it’s better when there’s elements of grassroots or broad support for it. And so we bring in those people that are informal leaders kind of regardless of level and you get them on board early so that they can champion.
what you’re doing. I think that’s so critical to any kind of important change.
Jeff Standridge:
How can leaders measure, effectively measure the success of a change management initiative or strategy?
Jeff Amerine:
Yeah, good question. I think it’s good to have KPIs, OKRs, whatever sort of metric or measure you’d want, things that are meaningful and not so numerous that they don’t make sense and some kind of regular cadence of reviewing them to see are we heading in the right direction? Is it having the desired impact? So many times major change initiatives, good example would be major corporation says we’re going to implement some type of ERP.
And the rationale was, well, we need consolidation. We need one system. But it’s as much as anything else driven in some instances by, well, this is all what our competitors are doing. And so they haven’t thought it through. They haven’t brought people on board. They haven’t assessed the impacts. They haven’t thought about incrementally rolling it out. They haven’t gotten the people on board whose lives are being impacted because processes are changing. And that’s a good route for senior leadership to get fired. And I’ve seen it many times because you die in a multimillion dollar implementation that really doesn’t achieve the objectives and you don’t have good measures for what success looks like or what the time frame, realistic time frame should be for implementing such.
Jeff Standridge:
Yeah, you know, I think you hit on a real, real critical topic there is, is defining success early in the change management or change initiative definition stage to say, because how do you develop KPIs if you don’t know what you’re ultimately tracking toward, right? and say, you know, and I know that when, when we’re in a client engagement, when we are at our best, it’s easy to forget. It’s easy to not, not do this, but when we’re at our best, we’re having conversations with our clients about, let’s talk about how you’re going to measure success. What’s going to make you say at the end of this 12-month engagement, dadgum, that was really, really successful. And let’s, let’s draw that line in the sand and then let’s reverse engineer from there. The KPIs, the OKRs, objectives, and key results, the other milestones, and things that we need to do in order to make sure darn sure that we deliver against those success criteria throughout the implementation or throughout the change management initiative.
Jeff Amerine:
Super important because if you can’t measure it, you’re not likely going to be able to achieve anything meaningful.
Jeff Standridge:
Well, let’s shift over and talk a little bit about innovation and start with the first questions. What defines innovation in today’s business environment?
Jeff Amerine:
It’s simple, right? It’s just ChatGPT and it’ll do all the thinking for you. Now, if only it were so simple, right? You know, we talk a lot about this and there’s been lots written about it. There’s been lots of philosophy around it. And really that word innovation is probably overused. But if you think about a dissatisfaction with the status quo, looking to create something better than what currently exists, just that urge that you know there’s a better way. I mean, that kind of defines in many respects innovation. And then you talk a lot about the idea of incremental innovation, that mindset of 1 % better every day is things that sometimes you can look at that as total quality improvement. That’s certainly a form of innovation. Then there’s things that can be disruptive, really big changes that are going to change an entire market, maybe change the entire way you operate. And sometimes there’s things you think about, major breakthroughs, it’s a completely different way of looking at innovation. So understanding what it is and why it matters, I would add to that, there’s a distinction sometimes between innovation and being affected at applied commercialization. We’ve had some conversations like that. Sometimes people categorize as innovation, the idea that you’re adopting something you haven’t done before to improve your situation. It may not be particularly innovative, it may already exist, but if you’ve done a good job bringing it to market, it’s more in the realm of commercialization of something you had not yet as a team implemented. But what are your thoughts on it?
Jeff Standridge:
Yeah, I go back to that incremental breakthrough and disruptive, right? So incremental, I think of extensions to existing product lines or service lines, you know, Coke, real Coke, Coke light, Coke, Diet Coke, lemon Coke, vanilla Coke, et cetera, right? Just incremental things. And many times that incremental innovation is not customer facing. It can be internal process-oriented as well breakthrough innovations where we have an existing business model and we apply new technology to it. So for instance, Uber would be a breakthrough innovation because taxi cabs have existed for a long time, right? Or smartphones. Cell service had existed for a long time with analog, you know, the razor phones, the flip phones, and then the smartphones came along. And so you take an existing business model and you apply new technology to it.
And then the disruptive innovation where something gets replaced, something gets disrupted. So the prototypical example there, I think, is video streaming services that are causing people to cut the cord of traditional cable or the rabbit ears with the foil on it that we used to have when we were kids. I don’t know about you, but I was the remote control in my family. And so those are kind of the different examples of that incremental breakthrough and disruptive innovation. But it’s really about creating more efficient, more effective, more pleasant ways of doing things than past or present, or doing things in a way that substantially reduces the transaction cost of doing whatever it is we’re trying to do.
Jeff Amerine:
Sure. And it’s a lot of companies will, and this probably gets to a related area, but a lot of companies will say, well, we need to be innovative. And there’s the risk of it being innovation theater where they’re just checking a box and going through the motion. There’s times when companies will say, well, we’ve got to isolate the innovators because it’s going to be so disruptive internally that we can’t have those innovators throughout the organization. Ultimately, you’d like to believe that you can create a culture of innovation where it’s integral to everything you do, whether it’s incremental, whether it’s breakthrough, or whether it’s disruptive. It becomes pervasive throughout the organization.
Jeff Standridge:
What are the most significant barriers to innovation that companies face today?
Jeff Amerine:
It’s like the Hippocratic Oath for doctors, do no harm. And one of the major barriers is you’ve got a great book of business, you’ve got great clients, you’ve got decent margins. Why would we want to change anything? And Detroit very much had that attitude in the 1950s and 60s, and it opened the door for a better way, actually, in terms of lean manufacturing and high-quality, and so I think it’s just the organizational friction of a resistance to change in general is one of the greatest barriers.
Jeff Standridge:
Yeah. Yeah. I would say another one is there’s just not bandwidth in the organization to think outside the box. I know we’re working with a couple of organizations who’ve communicated that to us is that we’re, you know, everything in our organization is so bespoke or everything in our organization is, you know, we’ve got, you know, so little technology underlying our, our delivery of products and services that we don’t have a penny’s width of margin in our time and thinking processes to be able to think about innovation. That’s one I would agree with as well.
Jeff Amerine:
Yeah, bandwidth is a big deal for sure. And if people have the ability to say it’s just one more thing, it’s going to be the one more thing that doesn’t get done.
Jeff Standridge:
Yeah. What about innovation culture? How do we, how do we create? What’s the question here exactly? How can we foster an innovative culture within organizations?
Jeff Amerine:
I think it has to be more than lip service. It has to be more than innovation theater and just checking a box. I think you have to having a CTO or chief innovation officer that can be the keeper of that mindset and then pushing every single department to figure out how do we get a little bit better? How do we put ourselves out of business by creating a new business within the business that will do things differently? I think it’s just one of those things that has to start at the very top. It’s kind of ingrained with leadership and it has to become second nature to everyone in the organization. We’re going to constantly look for another way. We’re also going to reward some reasonable, considered risk-taking because you’re not going to be innovative if you don’t take some risks and aren’t willing to accept a few failures along the way.
Jeff Standridge:
Yeah, you know, we work with one organization that about once every couple of years, they will take their extended leadership team off site and run through an innovation, kind of an innovation day and they’ll pose some challenges to them and they’ll form into teams and they’ll kind of a sprint of sorts, an innovation sprint. And at the end of the day, those teams will come and present the business problems that they’ve framed up the credible facts and statistics behind those business problems, the rudimentary customer discovery or the qualitative validation of those business problems, and then a very high-level solution structure. And based upon just that limited amount of research, the senior executives will usually select two or three, maybe four teams out of 10 or 12, and we’ll work with them over the course of the next two or three months, and they will ultimately present to the board of directors. And after they’ve done considerably more research and more work on fleshing out the business problems and the, the, the size of those problems and the innovations. And, and then the, the board will select one or two top winners and then put several tens of thousands of dollars behind the creating of the MVP or what have you of that. And we’ve seen some pretty great success in driving innovation and building that culture of innovation. And we’ve heard from the executive team of that organization that by and large of everything that they do as an extended leadership team, that’s one of their most favorites.
Jeff Amerine:
Yeah, I wouldn’t doubt it. I mean, it’s, you bring together those interdisciplinary cross -functional teams. You do a good job of harvesting ideas. It’s much more than the sort of lame suggestion box where stuff goes in and who knows if anything ever happens. It’s an intentionality around, in some ways, of thinking like a startup. You know, how can we create a new business or new product or service within the business in a very creative and time efficient, cost-effective way.
Jeff Standridge:
You mentioned the word risk taking a couple of moments ago. So expound on that a little bit in terms of the role of risk-taking in innovation.
Jeff Amerine:
Yeah. Well, it’s, you know, sometimes I think there’s a mythology around entrepreneurs and innovators are taking all kinds of wild risks. And that’s not really true. It’s a, it’s a spiraling process of taking measured risks at every step of the way. And so part of it is if you think about a lean canvas methodology or, or design thinking, it’s about looking at what the key assumptions are and figuring out early on how you would validate or invalidate those assumptions and through that process, identifying the risk, prioritizing the risk and understanding what risks are likely to occur. Now, if you do that, you’re constantly taking risks, but they’re small, and they’re well qualified and they’re well understood. And so sometimes you’ll hear the words of fail fast and iterate. These are very small failures where you’re getting feedback on what works and what doesn’t work and you’re fixing it really quickly and you’re moving on to the next step. It’s much better than an overall waterfall approach, which most large organizations have used in new product development, where they think they have to have everything figured out before they build anything. This is a little bit about understand what the target is, try a few things, and iterate quickly through the process until you get it right. That’s the way we think about risk, managing risk.
Jeff Standridge:
Absolutely. And, and understanding that, choosing to kill an idea or, or a product or a project or a potential innovation is every bit as much a success as, choosing to continue with one past certain stages or milestones or what have you. Absolutely.
Jeff Amerine:
And it should be rewarded. It should be rewarded. There should be a mindset that says a win is if the first month into an assessment of going through this sort of process that we use all the time with Lean Canvas and Customer Discovery, we have enough ammunition to kill the idea. So therefore it doesn’t take on the sort of institutional inertia that keeps it moving forward, even if it’s not well considered, even if all the evidence begins to point to, it’s not going to work.
Jeff Standridge:
Yeah, I can’t remember if I heard Astro Teller speak of this or if it was written about Google X and that the reward for making the decision to invest in a new innovation and the decision to kill a new innovation, the reward is the same for innovation managers in Google X. Now that was at one time. I don’t know if that’s still the case, but I thought that was a prototypical example of what you just said, right? That there’s rewards in place for having the courage to say, my idea is not going to work. Let’s kill it. Based upon the evidence.
Jeff Amerine:
Yeah. Well, and think about what that does. That defeats the human nature predisposition towards confirmation bias, not wanting to hear that your baby’s ugly, so to speak. And it rewards the kind of behaviors where you truly are a consultant to your own initiative in a way, in that you’re not afraid to kill it if it’s not going to make sense. And there’s also not a disincentive for doing so.
Jeff Standridge:
Yeah. Last question. How can leaders encourage their teams to think and act more innovatively?
Jeff Amerine:
I think leaders set the tone. I think that if they realize that, like we just talked about, there’s going to be support for taking risks, for following good processes. There’s going to be support for thinking creatively and also being constantly curious. Creative, innovative, and entrepreneurial people are curious. They’re going to ask questions a lot. It’s a lot of why questions. Why do we do it this way? What’s coming next? How should we be thinking about this?
I think being open-minded to that as a leader, that then begins to permeate the organization in a way they get it. And it’s balanced. I think it’s got to be balanced too. We got to take care of today’s business. We also need to be thinking about what’s coming next year, next three years, next five years. And that’s a difficult balance that’s constantly at odds, but it’s critical. The half-life on publicly traded businesses in terms of how much time they spend in the DOW is lower now than it ever has been. And that gives you an idea that there’s creative destruction happening out there all the time. Things are accelerating at an accelerating rate, and you’re either gonna adopt an innovative footprint or you’re gonna be eliminated by those who do.
Jeff Standridge:
Now, I think you’re right. And you also said that leaders kind of modeled the way, right? They set the tone and, and, you know, helping your team with an innovation process that you carry out once a quarter, twice a year, even annually to take them off-site for a day, run a sprint with them, maybe, maybe give them a heads up two or three weeks in advance to say, you know, I want each of you to come to the table with the single greatest business problem that if we solved it would be a game changer for us or the single greatest opportunity that we’re not positioned to take advantage of today. I want you to clearly define the problem or the opportunity. I want you to gather some credible facts and statistics that’s that that’s substantiate the size of the of the problem or the size of the opportunity. And I want you to bring that to our offsite next month, next quarter, what have you and take them through a process where the team then flashes through each of those, picks one, and executes it to completion is a way that leaders can certainly model the way there.
Jeff Amerine:
Having a framework and a roadmap is really important. I agree with you.
Jeff Standridge:
That’s right. Very good. Anything else on organizational change or innovation you want to talk about? Good stuff. Good stuff. Well, this has been another episode of the Innovation Junkies Podcast. We appreciate you for joining and we look forward to seeing you next time.