Creating a culture of innovation success is risky business

By 27th December 2017Press

Creating a culture of innovation success is risky business

Organisations get it – and from my own experience in business, it’s clear to me that they understand the need to innovate to maintain an edge. To draw in the brightest and best. To be attractive to investors and remain happily married to shareholders. They see disruptions shaking their traditional niche markets to the core. Thriving, beyond surviving, means CEOs and directors are obligated to encourage innovation and yet… too often reality bites at decision time so that in spite of the best intentions and pioneering rhetoric, growth in fact stalls and competition intensifies amid stagnation and fear. No one wants to face that “Kodak moment” of obsolescence. When the need for radical change is taken so seriously – what kills innovation and causes stagnation? What is really required to succeed in both innovation and digitalisation as industries all around us are being transformed overnight?

As an example, close to home, the oil and gas industry faces many such timely challenges. As dwindling reserves force companies to operate in remote and difficult environments, the high cost and difficulty of extracting energy are steadily increasing and with it the need for alternative sources to meet the world’s increasing demand. With the coming year’s ONS’s (Offshore Northern Seas Conference) theme being “Innovate” it will be necessary that the industry demonstrates a real response to these issues and offers tangible profitable plans for its own survival and the communities it serves. It’s a difficult challenge to supply energy to the world, affordably, safely, securely, sustainably and with environmental sensitivity. These masters are unrelenting in their demands and will yield only to real and determined innovation. New methodologies, technology and above all transformational forms of leadership and business models are required. There will be opportunities and rewards for those who lead and embrace change. As technology evolves, leaders will need to evolve along with the expediential growth seen in automation, artificial intelligence, machine learning and digitalisation. Successful innovation is the foundation for successful digitalisation and with it a mind-set that can radically change the status quo – more ‘risk confident’, curious, outlandish, inventive and yet considerate without conservatism.

The funnel of gloom

A mind-set that is ‘risk confident’?… that in itself, no doubt raises the hairs on many an offshore sector’s neck where technical development and safety go hand in hand, and yet they also hinder and compete with one another. HSE is by its nature risk averse and organisations with a core safety dependency, can have a tendency to “say yes and do no” when it comes to supporting the innovation agenda. Experience shows that even the best intentions can fall foul to the final safety card in boardroom decision making. Project teams with radical new ideas face inevitable challenges as cautious decision makers apply their filters and lenses of gloom relating to a range of barriers from; “can we really afford it?” or “what will the authorities, regulators, stakeholders or even colleagues say” to “we can’t take risks”. Even the best of minds and talents creating the greatest of ideas may find themselves subjected to the boardroom “funnel of gloom” as I call it. Think of it as the dark side of capital value processes. It’s not about favouring risks to lives or material assets, but an attitude that is open to creating options without the filters as a mental strait jacket. Yes, there are hundreds of ways to kill off innovation in digitalisation and it’s not rocket science either when you see the data as highlighted in a report published by DNV GL in 2017, where the main barriers to digitalisation included: lack of funding, old- fashioned organisational culture, lack of skills, legacy systems, bureaucratic procedures and most notably, a risk-averse culture and out of date leaders. What can we do instead?

Fortune favours the brave

Success requires a stomach for failure and a head for reinvention. In Silicon Valley, risk is what drives success, CEO’s are outspoken optimists in their quest to shape the world. Elon Musk and the late Steve Jobs were both fired by their boards yet went on to disrupt the world as we know it today, from finance, car, space and energy businesses to computing, music and smart phones. These guys are/were unrelenting risk takers but with incredible attention for detail, learning from each failure which propelled them to stardom with their success stories. You don’t disrupt the motor industry or evolve humans to being a “multi-planetary species” with ambitions on settling on Mars without taking a few risks.

Creating an innovative culture

Winners teach us that an innovative culture requires an ambitious vision and a style of leadership to match. It requires a different type of working environment. It takes an environment and a leadership model, where crucial competencies can come and interact with leadership freely and informally. Ideas need to be tried and tested quickly and not buried in bureaucratic procedures. Where questions should be asked, where there is a “start-up” tempo and the feeling of experimentation is in the air. Whilst all the time learning through external collaboration. Transformational leaders identify where change is needed, creating a vision to guide and change through inspiration, active encouragement and an appetite for risky thinking. Leaders need to encourage followers to challenge the status quo, take risks, fail, learn and collaborate beyond boundaries to enhance the collective innovation in an organisation. This serves to amplify performance, attracts the best, and fosters followers with a sense of real identity and ownership to company success. Front runners in the innovation space live this “talk” e.g. Google is run in this fashion, where questions are encouraged. Apple places an onus on playing together, often, and is very much structured like a start-up internally. Dell accepts that failure is part of this iterative creative process. 3M encourages their team to ping-pong new ideas and allocates 15% of their time to facilitate this, more often than not, away from their desk. This style of leadership is being adopted by household brands from Unilever to GE to P&G. What can the oil and gas sector take from these examples to nurture an even stronger innovative culture?

The lessons from the innovation and digitalisation winners tell us it’s not just about new technology but that thing we call ‘culture’. Here’s my pick of some of their best tips along with some of my own observations in working with businesses – let’s call them:

The 11 commandments of innovation culture

1. Connect outside:
Co-creation is a strategic and economic win-win. The sharing economy is already radically changing business models globally. Connecting beyond your silos and sectors will stimulate more ideas than sitting in your own office.

2. Reward collaboration – formally:
Place more onus on team performance and measure it. If you want collaboration then it’s simple… you need to both task and reward the group rather than the individual.

3. Buy the right tools and people:
If you need new competencies, systems, or technology to get the work done… then invest early. Don’t let the availability of resources limit new ideas and possibilities. Transformational leaders need followers who can fulfil their vision, and blossom in a nurturing environment.

4. Experiment:
Build an MVP (Minimum Viable Product), test it, experiment and learn. A theory is great but theory, as with power point, will never rock your world.

5. Fail fast – learn faster:
Failure needs to occur or you’ll never know if there was an even better way. The trick is to fail fast and re-work the idea and learn from the findings… before your competitors do.

6. Park the ego:
Creative teams don’t prosper when an ego has centre stage. If you already know best – why innovate? Maintain an open mind.

7. Casual collisions:
Get out of the silos. Bases, departments and talents need to mix, meet and exchange ideas – you can’t force them but if you design common areas and physical environments where informal collisions between people occur – the ideas will flow.

8. Flip the filters:
Think like a child -without limitations and with a fiercely curious mind-set. Imagine there were no filters, no funnel of gloom and funds were endless. What would you create then? Ensure there is time to throw around bold ideas, visualise the ridiculous, dream and ask outrageous questions. Creativity rarely occurs following a workflow process or a tightly structured agenda.

9. Hunt for risky ideas:
Push your comfort zone and challenge the norm, be risk confident. When the rocket engineer, Wernher von Braun designed the first super-booster that propelled the Apollo spacecraft to the Moon in 1975, it was hugely over-engineered because he had one eye on Mars.

10. Live like a start-up:
The high tempo, energy and creative thrill of a start-up is infectious. Innovation can be fun.

11. Finally, and most importantly, break the rules and make your own!