How to cultivate a culture of innovation

October 8, 2010
| By Pete Daly |
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Nate Young has dealt with many companies that decided they needed to innovate to drive profitability. Often, however, companies that make that decision “only want the team and the leadership piece.”

There’s a lot more to it than that, he maintains. Innovation is a company-wide process — and it can be cultivated, but it takes work.

Young was keynote speaker at a business seminar, Innovation: Solutions 2 Drive Profitability, at the Western Michigan University Conference Center in downtown Grand Rapids last week. The program was sponsored by Plante & Moran, Warner Norcross & Judd and the Grand Rapids Business Journal. Accountants, business advisors and attorneys presented several condensed sessions on technology, tax incentives, attracting and incentivizing top talent, capital formation and growth strategies, all designed to help companies with $10 million to $200 million in revenue take the next step in their growth plans.

Young’s presentation, “Creating a Culture of Innovation,” is based on a distinguished career in some of the top design-related jobs in the country. For the past year, he has been president of the NewNorth Center for Design in Business, a nonprofit institution established in Holland, Mich., a few years ago as an educational resource for business executives.

Young has worked with several West Michigan companies, including Herman Miller, Whirlpool, Hudsonville Ice Cream, Kilwin’s and Zondervan.

His previous position was provost of the prestigious Art Center College of Design in Pasadena, Calif., which he also attended. He co-founded TWISThink, a successful product design firm in Holland, after having worked for 13 years in design at Prince Corp.

The NewNorth website describes Young as “an intellectual Switzerland” — meaning neutral — who has survived in a conventional corporate setting without choosing to align with the right-brained camp (design, marketing and other “creatives”) or the left-brainers (accountants, CFOs and other “suits”).

Indeed, his explanation of how to create a culture of innovation absolutely includes both camps.

For example, one member of the audience asked him just how important the workplace environment is in fostering innovation. Does it have to be a funky, loosely structured workplace like the Google offices to be successful?

“Some of that really gets overplayed,” replied Young. “I know accountants who would freak out in that environment.”

Of course, that was a joke and it did get laughs, including from the Plante & Moran accountants in the room. But his point is that accountants also are necessary for successful innovation, and if everybody is expected to be funky, that is “really a wrong approach.”

Imagination, he said, is the ability to think about things that haven’t existed. Creativity is the process of harvesting imagination, and innovation is the process of delivering the results of that creative process.

Young emphasized that creativity can be a rational operational system: a process.

“Creative discipline is not an oxymoron,” he said. “It’s something you have to work at” — a process of leveraging creativity.

The key components of innovation are: leadership, process, team, knowledge, environment, axioms and orthodoxies — meaning the norms, standards and philosophy that the people in an organization believe to be true.

There are constraints and impediments to innovation, said Young. He can live with constraints. Actually, he said, “I love constraints.” The wise accept that there will be constraints and why not work with the constraints rather than allowing them to become impediments? he asked. It’s important to define constraints clearly and not let them become impediments to innovation, he said.

During World War II, noted Young, America faced many constraints yet had to innovate tremendously in industry to help the Allies win the war.

Some of the most serious impediments are a “provincial attitude,” under-funding the inventions and micromanagement, said Young. Some organizations will decree that their innovation belongs to one specific department, which Young said is a serious impediment: “Why give your corporate imagination to one group of people?”

When he was at Prince Corp., which became famous for its innovative automobile visors and other interior trim, Young said the hourly workers on the plant floor were invited to offer their ideas on visor innovations. Some of the most interesting ideas came from the third-shift, which in a factory tends to be those employees with the least seniority.

“No one needs to learn how to use their mind,” he said. Every individual has three components: expertise in something, a creative capacity and character. These three components can be used to imbed a creative discipline throughout the organization.

Young stressed the importance of character in innovation: It is the degree of passion, motivation and ethical standards that drive that person.

“You can also talk about (character) on a corporate level,” he said. If there is no character, you get “lots of talk but no deep commitment” to really drive development of new ideas.

If there is no creative capacity, he said, an individual or a company ends up copying or “optimizing” someone else’s ideas, and the outcome becomes too predictable. There is no creative breakthrough.

There are several basic steps in the innovation process, including observation, investigation, incubation, the solution or “eureka!” moment, the decision and, finally, the validation (will the customer actually buy it?).

Individuals tend to focus on two or three of the steps at the expense of the others, according to Young. That’s OK, he said, but if three people are named to a project team and all three share the same “focus portfolio” — the same two or three steps — that’s not good. “Hire the three (different) portfolios, not just the one,” said Young.

The organizational environment is a key component that can silently speak volumes about a company, said Young.

“No matter what you have, treat it with respect,” he said.

He told an interesting story about his years at Prince Corp. that touched on that concept. In the men’s room, after washing their hands, it was routine for employees to dry off the countertop around the sink with a paper towel. Young said there was never any mention of it; it was just something they did.

Once there was a visiting delegation of representatives from the Renault automobile company in France. Prince was hoping a major contract would result. One of the Renault men noticed the Prince guys wiping up the water droplets around the sink and asked why.

Young replied that it was just something they did.

According to Young, that minor attention to detail in the Prince Corp. men’s room impressed the Renault delegation, and they got the contract.

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