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Why Most Companies Fail at Innovation (And What to Do Instead)

Recognize This! – Innovation is not just the big, market-transforming end result, but the little ideas along the way.

What’s the most powerful word in business today? Innovation.

Read any blog, any news source, any prospectus and you will quickly stumble over “innovation.” How the company pursues innovation, how innovative the products are, how “innovation” is a core value of the company. And this is all well and good – innovation truly is what propels industries and markets ever forward.

But the real question smart companies should be encouraging every employee, in every role, to ask is: “What can I do, in what I do every day, to be more innovative? How can I innovate our product, our service approach, to better serve our customers, change the market, or push the company forward?”

Unfortunately, too many people think innovation is too big for them or “not in my job description.” I believe that’s because we as leaders have failed to explain what real innovation actually looks like. David Steinberg, chief executive of XL Marketing, gives a much better definition of innovation in a recent New York Times “Corner Office” column:

“Innovation to me doesn’t have to be about creating the light bulb or the telegraph. Innovation can be very important small changes to something that’s already working. That’s the stuff that’s overlooked, and it can take things to the next level.”

Innovation is the perseverance to keep searching, to keep tweaking, to keep making something better. In reality, it’s usually many small innovations over time that result in a huge “new” innovation that gets all the press.

Kaihan Krippendorff explains it as committing to continually looking for the fourth option:

“The ‘fourth option’ is the option others don’t see and don’t expect. Your competitors contemplate three choices and feel satisfied that they are considering enough. But the strategic innovator is not satisfied. She asks, what else? What other option are people overlooking?”

So, back to my original question – how do you encourage all employees to seek the fourth option, to pursue the small changes for continuous improvement?

You must help employees see and understand what this looks like in their daily work. The quickest, most positive, and most effective way to do so is through strategic recognition. Every time an employee demonstrates an attribute of innovation in this way, recognize them for it. Say, “John, thank you for contributing to our goal of continuous innovation with your diligence on the Suarez project. The way in which you kept asking the next question to drive to not just our standard solution, but a truly unique approach in this situation not only solved the client need, but gave us an avenue to advance our solution and meet an unexpected market need going forward. Well done!”

That specificity makes the difference for John by letting him know what exactly “innovation” looks like in his daily work. When publicized through an internal social newsfeed, it also serves as an excellent training mechanism for other employees who can see why John was recognized and emulate that behavior in their own work.

How is innovation encouraged in your organization? How are you innovative in your own work?

Today on Compensation Cafe: What the Oreo CookieTeaches Us about Global Employee Recognition

Recognize This! – Never assume the local approach for employee recognition and rewards will work equally well globally.

Today on Compensation Cafe, I discuss why HR and recognition pros must seek to understand the local wants and needs of their globally distributed employees. I share an example of the Oreo cookie and how it nearly failed in the Chinese market until Oreo producers Mondelez International changed the cookie formulation to change the shape, sweetness and filling flavour (green tea is most popular in China) to align with local tastes. Now, Oreo sales in China account for nearly half of all global sales of the iconic cookie.

Click over to Compensation Cafe for the full story and how you can apply the lessons of the Oreo cookie to your global employee recognition and rewards programs.

Recognize This! – Never assume the local approach for employee recognition and rewards will work equally well globally.

Top Retention Strategy: Strategic Employee Recognition

Recognize This! – A culture of recognition is one of the most powerful means of retaining top talent.

In the last few months in my travels to lead workshops with clients and to present at various HR and strategy conferences around the world, I’m hearing a repeated refrain about employee retention. In my (admittedly unscientific) survey of these large, global companies, the importance of culture as a main component of a retention strategy is once again rising to the fore.

Some companies have maxed out their compensation and cannot compete for talent based on pay alone. Others know the only real difference between what they have to offer top talent from the competition is the strength of their workplace culture as an exciting, innovative and appreciative environment. Or, as a recent Chief Executive magazine article put it:

“If the trend of rising company earnings is any indication, the momentum is likely to continue. For employers, that means what it always has: an uptick in competition for the best talent. At the same time, barely out of the recession, companies can’t yet afford to make huge investments in salary increases or large bonuses. By developing employee recognition programs, employers can improve—in some cases dramatically—employee engagement levels, retention and performance. ‘Employee recognition is a potentially very low-cost engagement driver that can have a very, very significant impact on financial performance,’ says Ken Oehler, global practice leader of engagement at human resources consultancy, AON Hewitt.”

That’s the power of strategic, social recognition done right – it’s the fastest, most cost effective way to impact employee engagement and retention. Indeed, some of our clients have realized double digit increases in engagement and retention in months, not years.

How is this possible? It’s not just telling employees “thank you.” It’s going much deeper and telling people very specifically how they and their efforts demonstrated a core value while helping to achieve strategic objectives. It’s giving employees context for the value of their efforts within the bigger picture. We all seek greater meaning in our work. Sometimes, we just need to be reminded what it is.

And when it’s done right, the benefits are stark. AON Hewitt’s Oehler continues:

“Oehler recently studied the relationship between recognition and engagement and found evidence of a strong connection. For starters, when employees were asked to name their top drivers of engagement, recognition came in at No. 2, well ahead of pay at No. 5. Aon also looked at the lag effect of engagement to sales growth and found that companies with above-average engagement scores correlated with 19 percent sales growth vs. companies below the norm on engagement, which reported only 6 percent sales growth.”

How do you differentiate your organization to ensure your top talent never want to leave?

3 Tips to Become the Manager Employees Never Want to Leave

Recognize This! – People leave bosses, not companies. Good managers make sure their employees succeed before themselves.

We’ve all heard the truism that people quit managers not jobs. If retention of top performers and key talent is a priority for you, then one of the first places you should look for improvement is in the relationship between managers and employees. This recent article, for example, points to a recent survey showing 20% of people say their bosses hurt their career. Half of employees, on the other hand, said the boss had a positive impact.

The article goes on to share common advice we’ve all likely heard before: End micro-managing and help bosses learn the art of delegation. Help bosses feel secure in their role and the importance of leading a team so they are confident and comfortable in giving team members credit where credit is due instead of snatching it for themselves.

While that advice is quite true and valuable, I’m far more interested in why these managerial tactics work. It all boils down to these three points (supported by reams of research conducted by Teresa Amabile and Steven Kramer in The Progress Principle).

Employees need meaningful work.
Busy work kills the spirit. Yes, some work tasks are menial, repetitive and just have to get done. But doesn’t mean they aren’t meaningful. Good managers help employees see the greater value of even the most menial, repetitive tasks. Help your employees see how their efforts help move the greater mission forward.
Employees need to make progress in meaningful work.
But meaningful work isn’t enough. Employees also need to know they are getting somewhere. Good managers cast a vision for the future and help employees see where they are on the path to achieving that vision. Help employees see forward progress toward big goals by recognizing them for smaller achievements along the way.
Employees need recognition of efforts and achievements that make an impact.
All of this boils down to employees’ need for recognition. Don’t misunderstand me. This is not a grab for another trophy or a gold star. Employees simply need to know what they do matters within a bigger picture. Indeed, our Spring 2012 Workforce Mood Tracker survey showed 78% of employees said they would work harder if their efforts were better recognized.

Instead of micromanaging, micro-appreciate. Hone in on what your team members are doing and recognize smaller achievements and progress towards bigger goals. Instead of snatching credit for yourself, be the one to give credit to your team for success and let the entire company see how much you all achieve together.

What other attributes do you see in good managers? What made your best manager so good?

Useless Unless…

Recognize This! – Don’t forget the key ingredients to employee engagement and excellence.

I’ve written a few blog posts in the last couple of months where I noticed I used these two words in conjunction – Useless Unless. Two little letters of difference, yet a tremendous differentiator.

Think of the ramifications in real life:

The fastest car in the world is useless unless you put fuel in the tank.
The best education is useless unless you put it to work.
The most talented basketball player is useless unless you give him a basketball (and committed team) to play with.
An incredibly delicious dinner party is useless unless you have friends and family to invite and share it with.
Talented, high-potential employees are useless unless they know the end goal and how to help achieve it.

What’s missing that’s most important? “E”

Encourage – We need encouragement at work. Encouragement isn’t just something to be given in tough times, but also to let people know they’re on the right track – their work has greater meaning and purpose in achieving the bigger picture.
Extoll – Don’t forget the praise. Recognize people when they go above and beyond. Shout their achievements and contributions from the rooftops. Make sure they know their efforts are noticed, appreciated and valued.
Engage – If you Encourage and Extol, you’ve taken a giant step forward in creating a work environment in which people choose to engage. And engaged employees are more productive, more easily retained and more beneficial to the bottom line.

What else is useless unless… ?

3 Lessons for Employee Engagement through Recognition from XL Axiata

Recognize This! – Learning from others’ success can enhance our own efforts for engagement.

I enjoy Abhishek Mittal’s Mumblr blog. Abhishek is a senior consultant for Towers Watson based in Singapore. Recently he shared a case study on XL Axiata, an Indonesian mobile services operator and division of Axiata Group. In the case study, Xl Axiata explains four key steps they took to create an engaging work environment for employees, including a Performance-Based Culture:

“XL Axiata knew that if it wanted the employees to display the right behaviours, it had to recognize and reward these behaviours. The leaders shaped a culture where people and performance are talked about in the same breath. Employees who were creating value for the company were being recognized through company-wide emails and there was a focus on celebrating small successes in the long journey to achieve the vision. It also placed a higher emphasis on differentiating rewards based on performance. Mittal says,These initiatives helped employees build a clear line of sight to the company goals and sent a clear message that the company values high performance above everything.”

From this one focus alone, I see three clear lessons for employee engagement:

Recognize and Reward the How not just the What
Results (the What) can be achieved in many ways, not all of them positive (think Enron or any of the other recent scandals were the end was more important than the means). By focusing recognition and rewards on the right behaviours, XL Axiata is reinforcing that how the work is accomplished is as important as what is accomplished.
Celebrate progress on the way to the big win
While everyone must understand and work toward the ultimate vision and “big win,” small successes and progress along the way make the big win ultimately possible. Research conducted by Harvard Business School and reported in the book The Progress Principle by Teresa Amabile and Steven Kramer proved the single greatest motivator for employees is making progress in meaningful work. Doing so increases engagement.
Offer multiple, differentiated awards
Recognition and rewards must be differentiated based on several factors including level of effort, contribution and results achieved. Offering the same level of recognition to someone who came up with an innovative idea that could transform product direction as you also offer to someone who contributed as part of a team to a lesser initiative merely serves to demotivate those who achieve great ambitions. Offering differentiated awards (awards at various levels) ensures both proper recognition and reward activity as well as eliminating any concerns around recognition becoming expected or run-of-the-mill.

What major initiatives has your organization undertaken to encourage employee engagement?

What Makes a Happy & Innovative Employee? Big Data Tells Us.

Recognize This! – Knowing the mission, how to contribute and being empowered to do so drive employee happiness and innovation.

Regular readers know I’m a big proponent of Big Data – especially Big Data for HR. It’s catching on and in a big way. This article in the New York Times shares several examples of the benefits of workforce science, which it defines as:

“It adds a large dose of data analysis, a k a Big Data, to the field of human resource management, which has traditionally relied heavily on gut feel and established practice to guide hiring, promotion and career planning.”

In today’s workplace, we can and do measure much more than ever before. I’m not talking about employee surveillance (though that can be a component where appropriate), but rather about using the information we already gather in more effective ways. Says Erik Brynjolfsson, director of the Center for Digital Business at the Sloan School of Management at MIT, in the article:

“The heart of science is measurement. We’re seeing a revolution in measurement, and it will revolutionize organizational economics and personnel economics.”

So, what’s the data actually telling us about our workforces? Several examples shared in the article:

Past performance isn’t a good indicator of future results.
The personal warmth and quality of the supervisor is more important to employee results than the experience and attributes of the employees themselves.
Being outgoing doesn’t make you a good salesperson. The ability to persist and keep going forward, even after being told no, does.
At Google, the happiest and most innovative workers are those who “have a strong sense of mission about their work and who also feel they have much personal autonomy.”

Let’s look at just that Google finding more deeply for a moment. What makes Google employees happy? It’s not the free food or the amenities of the campus. What makes them innovative? It’s not predicated by their college degrees or prior accomplishments. No, happy and innovative employees at Google understand the big picture, know their role in helping to achieve it, and feel empowered to do so.

I know from the data gathered by our clients that this is true for the vast majority of employees in workplaces everywhere. Through their strategic, social employee recognition programs, our clients gather (in a very positive way) a great deal of data on employee accomplishments and attitudes about work.

These are the 3 keys to happy, innovative employees:

Understand the big picture – a mission statement on your website, hanging on your wall or even spelled out in your Employee Value Proposition is useless unless employees personally and individually understand what that means for them.
Know their role in achieving the big picture – Understanding the mission is one thing, but knowing what I personally can do to help achieve it is entirely another. Making lofty goals real for employees in their daily work makes the corporate mission much more personal – and achievable. Specifically and in a timely way tell employees when and how they and their efforts are helping the company achieve the bigger mission.
Are empowered to do so – Towers Watson, Hay Group, Bersin by Deloitte and others all tell us that companies who enable their employees have at least 2x higher engagement. Enablement includes communicating back to employees when and how they’ve achieved the mission.

Are you using workforce science analytics in your workplace? What results or conclusions are you able to draw?

And the Travel Travails Award Goes To….

Recognize This! – Irritating, exhausting situations can be made better by those around us who choose a good attitude. Find a way to thank those who make your day better.

A large part of my role as a consultant on strategic, social recognition is travel. And when travel is part of your work, you end up with travel horror stories. I had one myself earlier this week.

I was in Brussels leading a workshop on how to build a winning culture of recognition. My flight home to Dublin was scheduled to leave at 9:40pm for a planned 1 hour and 15 minutes…and then I landed the next day at 1:00pm! We’ve all been there with these Planes, Trains and Automobiles travel stories. Weather closed the Dublin airport, so redirected to Manchester, with bus transfers at 3:30 in the morning, a brief four hour rest in a …ahem… lovely hotel room, back to the airport, re-board, wait on the tarmac, etc.

I shared my travel travails with my team members because I had to cancel a scheduled meeting. As we commiserated together, sharing our own travel stories, one colleague suggested a recognition award for the worst travel story! While a funny idea, I think there may be merit in this.

Hear me out. One thing I notice every time I’m caught in a travel snafu is the camaraderie of many of the people caught in the same situation with me. Fellow stranded travelers – strangers one and all – tend to open up, club together, find ways to help each other. When I returned to the airport from the hotel, I noticed many folks greeting each other like long lost friends, though we’d only met the night before. It’s very much a sense of “we’re all just humans in this together.”

Think how our workplaces would be changed if we all behaved in this way towards each other more often, especially in stressful situations that just aren’t going our way.

Perhaps the award should be “Kindness Under Stress” or even “The Golden Rule Award.” After all, we choose our attitude, regardless of our circumstances. An exhausting, frustrating travel experience was made far more endurable (if not actually enjoyable) by the relaxed, friendly attitudes of those I happened to be lucky enough to have as impromptu travel companions.

Two questions for you today:

What’s your worst travel story? Did anything – or anyone – help to make it better?
If you could create a special recognition award, what would it be for?

Intentions for Building and Sustaining a Strong Company Culture Will Fail without a Process to Back It Up

Recognize This! – Give all employees the tools and systems needed to reinforce your desired culture every day for everyone.

Your company leadership makes a commitment to build a strong culture. They understand how powerful of a differentiator culture can be in the market. They know what kind of positive culture they want to instill and they take steps to make it happen. Yet over time, the culture changes into something else. What happened?

Over on the Fistful of Talent blog, Suzanne Ramsey tells a parable that ends this way:

“So, now we’re at the point in the story where the company is at a crossroads. To those who have been around a while, there is a feeling of the founding culture being unappreciated and not cared for by new employees coming in. To those newly joining, there is a feeling of having been slightly duped; that the descriptions of cool culture and being a different kind of firm, etc., shared during the recruiting process aren’t really true. Both groups are frustrated, and sad, and the early founders are befuddled. Their principles and priorities for the company, for differentiating itself through its awesome culture, have not changed. So what has?”

Read her story and it’s clear what happened – while there was every intention of sustaining and building the culture over time, there was no process to make it happen. Suzanne ends her post with these two recommendations (quoting on both points):

It is time to stop assuming that the desired culture will sustain itself as the company grows, and time to make sustaining the culture a key responsibility of ALL within the company. Identify and develop the skills (storytelling, interpersonal relationship building), programs, and actions necessary to do so. And hold everyone in the company explicitly accountable for doing so through their behaviors.

And it is time for the company to get laser focused on how it onboards and welcomes new employees into the fold, from leaders right on down to the most junior of hires. It is not fair to put the entire burden of acclimating to the new organization, a new job, a new culture, on a newly joining employee, no matter how senior. And it is not fair to have the entire burden rest on the company, either. New employee onboarding needs an overhaul.

While I agree with these two points, Suzanne has missed a key third step – the sustaining process for making sure your culture is not just understood but actively lived by every employee in their daily work. Yes, we must onboard new employees properly into the culture, and we must all own the responsibility of sustaining that culture – as leaders we must also give everyone the tools and methodology to do so daily.

So, what is the process? Strategic, social recognition focused on recognizing and rewarding employees when they live the culture. That is, when they demonstrate your key cultural attributes (your core values) in their daily work. And since this is the responsibility of all employees, then all employees must be empowered to recognize each other when they see someone living the values or embodying desired cultural attributes.

How is your culture proactively encouraged and sustained in your organization?

How to Use Words of Appreciation & Recognition More Effectively

Recognize This! -Words have power. Use words of appreciation wisely.

I’m sitting in a hotel room in New York, watching the morning news. A big story is a change to national spelling bee competition in the US. Now, in addition to being able to spell uncommon, complex words, contestants must also know the definitions in a preliminary vocabulary test. Many participants (and parents) seem to be up in arms over this change – after all, it’s a “spelling” bee, not a “vocabulary” bee.

This change makes sense to me, however. What’s the value in knowing lots of words, even how to spell them correctly, if you don’t know what they mean or how to use them correctly? Indeed, knowing more words and how to use them correctly benefits the learner with expanded knowledge as well as those who may read or hear the learner use those words appropriately because much more information can be conveyed clearly and accurately.

The same is true with appreciation. We all know the words “Thank you.” We all (I hope) know we used use the words “thank you” to express appreciation. But the value of recognition goes so much further.

When we use the words “thank you” appropriately, then expand on them with deeper explanation of what we mean by “thank you” not only do we as the users of the words benefit, but far more do those who hear the words. Consider research featured in the GloboBlog that shows:

“An increasing body of evidence is showing that the employees who are GIVING the recognition and reward may be benefiting as much or more from a recognition moment than their colleagues.”

Think of it this way: Which has more power?

“Hey, John. Thanks! You’re great!”
(or)
“John, thanks for the detailed research you did in preparation for the meeting this morning. Thanks to your diligence, we were able to show the client our commitment to solving their challenges in creative and cost effective ways. I really appreciate the time and attention you committed to supporting this project.”

Words have power, especially words of appreciation and praise.

What’s the best message of appreciation you’ve received or given? What made it exceptional?

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