THE INC. LIFE

Amazon, 3M, and Google All Have this Invisible Advantage

These five steps can help any organization gain an unseen edge over the competition.

Share on
BY Soren Kaplan - 10 Jul 2017

PHOTO CREDIT: Getty Images

We've seen the problems that "toxic" organizational cultures create - just look at Uber. On the flip side, we've also seen how innovative cultures like 3M, Amazon, and Google drive dramatic growth.

In today's world, products, services, technologies, and business models become commoditized overnight. Fostering a culture of innovation is the only way to gain a competitive advantage today and successfully evolve to maintain that advantage tomorrow. It's something I've covered extensively in my book, The Invisible Advantage.

Here are five ways to create an "invisible advantage" through your culture:

1. Be Intentional With Your Innovation Intent

Most corporate visions and missions sound alarmingly alike: Become the #1 provider of blah, blah, blah. A better approach? Frame how you want to change the world, and make it about the customer. The software company Intuit - the developer of Quicken, Quick Books, and TurboTax - makes its mission abundantly clear: "To improve our customers' financial lives so profoundly they can't imagine going back to the old way." The public television and radio station in San Francisco KQED describes its innovation intent a bit more broadly: "Doing the right thing for our audience, the community, our staff, and our organization by continually assessing, prioritizing, and improving what we do and how we do it."

Making it clear to everyone how you'll transform people's lives for the better demystifies innovation and gives employees strategic focus.

2. Give Employees The Tools Of The Trade

You can't just tell employees to "go innovate" and expect results. People need the tools of the trade. The good news is that there are a lot of great open source innovation toolkits out there to choose from, and customize. Many toolkits have their roots in design thinking, so it's not surprising that one of the best toolkits comes from Stanford Design School. Companies like Adobe and Intuit have customized their own toolkits but also make them freely available. And if you're in the public sector, the Australian Government recently got into the innovation act and created a toolkit for its own civil service employees.

Some companies provide training on their innovation toolkits while other simply make them available as workbooks or digital files. The goal is to empower employees with ways to get inspired, generate ideas, test new concepts, and start adding value right away.

3. Hit Snooze On The Corporate Time Clock

Many leaders lament that they simply don't have time to innovate. They're too busy running today's business to think about what they're going to do in the future. Here's the painful reality: time is a critical ingredient for innovation. That's why iconic brands like 3M and Google give their employees up to a day of "free time" each week to experiment with new ideas. Intuit gives its best business innovators three months of "unstructured" time that can be used in one big chunk or spread out over six months for part-time exploration of new opportunities. Using time wisely creates a major incentive to get more time to play with.

Carving out time doesn't mean radically completely remaking the corporate time clock. Simply setting aside 20 minutes in a weekly meeting to explore "new ideas for making things better" can be enough in many organizations to start getting more innovation. Of course, something must be done with those ideas or you risk creating a culture of "lip service."

4. Measure What's Meaningful

Management guru Peter Drucker said, "what's measured improves." Said another way, "you get what you measure." For many organizations, generating ideas isn't the hard part. The challenge is turning them into something real that makes a difference.

Early on, Facebook measured how often users returned to its site and focused maniacally on increasing that single metric. While customer-centered measures like this are important, other indicators can drive internal innovation, as well. After Procter & Gamble realized the importance of outside partnerships in driving disruptive innovation, the company decided to measure (and increase) the percentage of new products that used breakthrough technologies from third party partners. Externally driven innovation jumped from 10 percent to more than 50 percent and resulted in new products like Mr. Clean Magic Erasers and Tide Pods.

Other metrics that promote organizational innovation include:

Percent of revenue from products or services introduced within the last two years.

A pipeline of new ideas that includes a mix of both enhancements and game-changers.

Percent of employees who have been given innovation training or toolkits.

5. Go Big With A "Biggest Learning" Award

Successful innovation cultures overcome the pervasive risk-avoidance that plagues many organizations, but promoting innovation isn't about promoting "risk-taking" directly.

The most innovative cultures reframe personal risk-taking as an opportunity for organizational learning. Pharmaceutical company Eli Lilly hosts "failure parties" where employees come together to share their stories of failure and discuss what they learned from them. The large Indian conglomerate Tata Group gives out an annual award for the "best failed idea." Tata's goal is to recognize and reward the valuable intelligence gained from failures, which is often the key ingredient to future successes.

Use Your Invisible Advantage To Deliver Visible Results

The reality is that most business leaders aren't the ones personally creating new products, services, processes, or business models themselves. Leadership's job is to create the environment where innovation becomes everyone's job, no matter what function or role they're in. Unlike technology, products, and services, a company's innovation culture can't be copied by competitors. That's the ultimate invisible competitive advantage.