Growing an Innovative Culture

An innovative culture requires strong leaders who realise that changes in the culture start with themselves. Innovation is usually a small idea or adjustment that people start with and continually change over time, which requires a disciplined approach and an environment where it is safe to question how things get done. To make innovation happen you need to consider the investment portfolio at enterprise level and focus on customers and the core operations.

Joanne Molesky, principal associate at ThoughtWorks and co-author of the book Lean Enterprise: How High Performance Organizations Innovate at Scale, spoke about growing an innovative culture at Lean Kanban France 2017. InfoQ is covering this conference with write-ups, interviews, and articles.

Technology has become a strategic capability to get new customers or serve existing ones. The business is technology, argued Molesky.

To grow an innovative culture, you need people and processes. According to the article Dismal Employee Engagement Is a Sign of Global Mismanagement on Gallup, the majority of employees are disengaged:

According to our recent State of the Global Workplace report, 85% of employees are not engaged or actively disengaged at work. (...) Eighteen percent are actively disengaged in their work and workplace, while 67% are "not engaged." This latter group makes up the majority of the workforce -- they are not your worst performers, but they are indifferent to your organization. They give you their time, but not their best effort nor their best ideas. They likely come to work wanting to make a difference --- but nobody has ever asked them to use their strengths to make the organization better.

We hire all these smart people with high education, but we have a bias towards action and expect them to do things the way we tell them instead of think for themselves, said Molesky, "Imagine if you can get disengaged employees to become engaged, then you can innovate.

Molesky suggested to hire for aptitude. She showed how ThoughtWorks hires people who have a broad experience from having worked in different organizations and roles. They look for people with high emotional intelligence. In their job interviews they use pairing, for instance having developers and managers doing interviews together, and people from the US and India.

Instead of being focused on outputs and the volume of work we complete, we should measure outcomes and explore the consequences - what happens as a result of all the work done, said Molesky. She suggested to break the cycle by using good measurements and taking evidence-based decisions on outcomes to pivot, preserve, or stop.

To make innovation happen you need to change the funding model. Instead of isolated investment decisions, Molesky suggested to consider the investment portfolio at enterprise level and focus on customers and the core operations.

InfoQ spoke with Molesky after her talk.

InfoQ: How does an innovative culture look?

Joanne Molesky: An innovative culture is one that actively embraces change and seeks out new ways to get the work done and deliver better value to customers and other key stakeholders. This includes being able to change processes, services, products, or organisational structure and communication to meet changes in market forces in a timely manner. To achieve this, there are three key elements required:  

• Empowered people with an open mindset who can work together to reach shared goals. They need to be able and willing to learn from each other and actively engage in the work on a day-to-day basis.
• Operational excellence in the the delivery of products and services. If quality products and services can't be delivered in a reliable, and repeatable fashion, the majority of, if not all time, is spent on fixing things that are broken. That leaves no room for experimenting with new ideas and figuring out how to grow them into viable products and services. Operational excellence also enables a faster feedback mechanism, providing important data on which to base decisions on how to continuously improve products and services. More importantly, the feedback and data should be used to decide on what work can be stopped.
• Leadership - strong leaders who will inspire others to learn, grow, and try new things for the benefit of customers and other stakeholders. The leadership role is more about communicating the vison and goals for the organisation, rather than telling people how to do their jobs. 

InfoQ: What makes innovation at scale so hard?

Molesky: I think the core problems for most large organisations is that traditional management practices, organisational structures, and processes are designed to perpetuate the status quo and perceived efficiencies they bring from a financial perspective. Unfortunately, they are not designed to consider how they affect the overall ability to get the work done well, and test out new ideas. There is no end-to-end view of how work flows through a system with the goal to continually improve or free up time to work on new ideas. 

Organisations also have a preoccupation with appearing to be successful, doing activity over thinking and learning, and measuring outputs rather than outcomes. As humans, our natural inclination is to fit into the tribe. If we observe and experience people's behavior, most of us will mirror that behavior. Questioning the outcome of how things are done and experimenting with new ways are viewed as threats by others. Most of us will willingly change our behavior to fit in, even when we know it is not the best way to work. Additionally, we develop unconscious biases which nudge us towards selecting new members most like ourselves, and choosing methodologies and tools which we are most familiar with through past experience. Thus, we perpetuate the status quo until we are forced, or collectively force ourselves, to change.  

Creating an innovative culture requires strong leaders who realise that changes in the culture has to start with themselves. We speak to many executives who think they can change the culture by creating a special team to foster innovation. This is not a "make it so" change. It requires everyone (including the executive) to behave differently in order to change the culture. Most executives and upper management are not motivated to change their behavior, as their rewards system is usually based on short term financial measures and not value delivery to customers and other stakeholders.

Organisational risk aversion is another big barrier to innovation. We are frequently asked to provide stories to executives on how their competitors or other organisations much like themselves have implemented innovation. No one wants to be the first to try something new or different for fear of failure. However, how can you guarantee success on something that no one has tried before? Even if you are following another organisations' example, it is bound to fail if you don't adjust to the characteristics and conditions that are unique to your organisational situation. The key to overcoming risk aversion is to reduce risks by experimenting in small batches and using information collected from these to help determine what the next step should be.

InfoQ: What are the fundamental principles and values that support innovation?

Molesky: The basic concepts and principles of lean and agile ways of working apply here. Innovation rarely happens with brilliant spontaneous eureka moments. It is usually a small idea or adjustment that people start with and continually change over time. It requires a disciplined approach and an environment where it is safe to question how things get done. This is not to say that everything should be questioned and is open to change. There are boundaries that must be clearly established, particularly when it comes to issues like safety and maintaining operational excellence. 

Whether you use agile frameworks, the improvement kata, Deming cycle, scientific methods or various visualisation methodologies, the principles are the same. 

• Set a goal - know what it is you are trying to achieve or learn
• Generate ideas on how you might achieve the goals
• Set up a short term, time boxed experiment to collect information on the assumptions and viability of your idea
• Review the information gathered
• Decide on the next step you need to make to reach your goal 
• Be willing to recognise most ways of working have limitations and must be adapted, as your situation and what you know changes 

InfoQ: How can we change the culture and structure to foster innovation?

Molesky: There are so many things that can be done. As we are talking about innovation, I am sure I don't know them all and these will change over time as I learn more.

• Provide fearless leadership that uses the principle of mission for getting the work done. Top executives need set overall org goals and communicate these clearly and effectively, but allow teams on the ground to determine the best way to reach those goals.
• Stop relying on consultants and special task forces for all the answers and responsibilities for implementing innovation. Cultural change must come from within, and is only successful when leadership assumes the responsibility to change the way they work and all others to work within the organisation. 
• Hire the right people. Look for people who have a history of learning and applying those learnings within their career. Experience and knowledge are good things, but it is the ability to critically analysis work and a willingness to try out new ideas that drives innovation. Seek a diversity in the mix of people you have working on teams. This generates new ideas and ways of looking at problems. 
• Maximize use of the talent and knowledge of our well educated work force by letting them try out new ideas. Create an environment where learning and experiments are is celebrated.
• Allow small experiments, especially in areas of great uncertainty. We recommend using alternative funding models (to the big project, annual budget process approvals) for new work, based on complexity and the level of uncertainty you are dealing with. Collecting measures on the outcome of the experiments and adjust your course and ideas as you learn more. 
• Set boundaries and criteria for stopping work when ideas are going nowhere.
• Foster creativity by limiting resources available for experimentation and generation of new ideas. A sense of emergency and lack of resources encourages people to approach problem solving in simple, novel, and ingenious ways. People are really good at hacking existing materials and resources to fit new purpose with very little effort when they have nothing else to work with.
• Measure outcomes of the work, not outputs. This is particularly true for internal processes.  Lengthy proposals, reviews and approvals rarely result in better work getting done. In fact, these are likely inhibiting innovation because they are designed to maintain status quo and control the way people work.
• Removing incentives for executive and top performers that are based on individual performance and short term financial goals will also help in fostering innovation. This is really hard, because most leadership has come through a system that rewarded performance this way, and they were very successful in it. Therefore, their unconscious bias is to think that is the best way to motivate people. Organisations that look at rewards based on overall performance, and distribute these to everyone within the organisation, are more likely to be successful in innovation. People are more likely to consider how their individual and team decisions and learnings can benefit the entire organisation. There is greater collaboration cross functionally and willingness to try different ways of working. People in an organisation should be working together to complete with their competitors in the market, not competing amongst themselves.

About the Interviewee

Joanne Molesky has extensive experience in IT Governance, Risk and Compliance and takes a practical approach to reducing risks in technology use by organisations. She is currently part of ThoughtWorks internal IT management team and has performed global leadership roles in the area of Security, Continuous Delivery Practice and IT Governance. She is coauthor of Lean Enterprise, How High Performance Organizations Innovate at Scale, published by O'Reilly Press.