insigniam quarterly spring 2013 - innovation

Q U A R T E R LY

VO L U M E 1 , I S S U E 1 | S P R I N G 2 013

TI’S INNOVATION MANDATE

How CEO Rich Templeton is inspiring

his enterprise by changing the business model.

INNOVATION: ARE YOU PREPARED TO EXECUTE?[ONLY 15% OF YOU SAY YOU ARE FULLY PREPARED]

Is Design Thinking in Your Corporate DNA?This methodology is changing

strategies and conversations

within the enterprise

What the boardroom really thinks about innovationUnless your idea’s market ready,

the board doesn’t want to see it

The profitable side of creativityGet the culture right, and

creativity can lead to profits

PREMIER ISSUE

A commitment to innovation in all aspects of the business helps create an environment where people feel they are more valued and

where they enjoy coming to work more. That has a direct impact on the bottom line:

A workforce full of people who want to work and can contribute on a higher level is a workforce that provides your company with

a competitive advantage.

- NATHAN O. ROSENBERG

SPRING 2013 INSIGNIAM QUARTERLY 1

A

LETTER

As international management consultants for several decades, we have long said

that business needs a breakthrough, years before innovation became a catch-all

buzzword to address what’s ailing many organizations.

The reality is that many enterprises are mired in red tape, with leaders unsure

how to move the needle from complacency to competitiveness. One of our

2013 Insigniam Executive Sentiment Survey respondents puts it plainly:

“If we do not innovate in areas of operations, we will be consistently

bringing up the rear and not leading in our industry.”

This plea for transformative innovation inspired the launch issue of Insigniam

Quarterly, our thought-leadership journal designed to help businesses fulfill a

commitment to reaching unprecedented results.

Our publication is not about our story; it’s about tangible and lasting results

from leaders and their organizations around the world.

Inside, leaders who routinely move the innovation needle faster and further

share their breakthroughs, from Pete Valenti’s invigoration of Bausch + Lomb’s

pipeline to exploring growth and profit from creative leadership at Levi Strauss,

Glazer’s, and Ryan, the latter of which is poised to become a disruptive force

among the big four tax firms.

The willingness to boldly pursue strategic frontiers earns Texas Instruments

CEO Rich Templeton our first cover. Consider his take on the possibilities:

“We have a chance to sell something to every customer in the world. The

number of companies that can say that are pretty limited.”

If your company isn’t in that position, it’s time to move the needle.

Shideh Sedgh Bina

Founding Partner, Insigniam

MOVE THE INNOVATION NEEDLE FASTER AND FURTHER

in·no·va·tion - Anything novel or new that creates new value

SPRING 20132 INSIGNIAM QUARTERLY

TABLE OF CONTENTS

Strategic FrontierS:

By

J. D

ougl

as B

ate

and

Rob

ert E

. Joh

nson

, Jr.

The starting point for innovative growth

20STRATEGIC FRONTIERSJ. Douglas Bate and Robert E. Johnston, Jr.,

Insigniam

Create new value for your customers or they

will find it somewhere else. The authors of the

upcoming The Power of Strategy Innovation

provide the starting point for innovative growth.

32WHERE THE RUBBER MEETS THE ROADAllen Couture, Raytheon; Dennis Crosby,

Sabre Airline Solutions; Katherine Knowles-

Marchione, Teradata

The C-suite issues the innovation mandate,

but managers are tasked with execution. Our

roundtable shares a peek behind the curtain.

36THE 2013 INSIGNIAM EXECUTIVE SENTIMENT SURVEYShideh Sedgh Bina, Gregory Trueblood, and

Erica M. Wood, Insigniam

They want innovation, but aren’t prepared. As

Insigniam polls hundreds of executives around

the world, our analysts ask: Is short-term thinking

trading off tomorrow’s results?

42THE PROFITABLE SIDE OF CREATIVITYGordon Price Locke, D Custom

Growth during a recession. Verve that forces the

big four to take notice. A new global supply chain.

A creative culture pays off, even during enterprise

transition. A look at what three high-performing

organizations did to move the needle.

FEATURES

TEXAS INSTRUMENTS’ INNOVATION MANDATECEO Rich Templeton

upgraded the business

model of the 82-year-old

Texas Instruments. How

his innovation mandate is

inspiring a 35,000-strong

global workforce and

reigniting innovation

across the enterprise.

COVER STORY26


EDITOR-IN-CHIEF Shideh Sedgh Bina

[email protected]

EXECUTIVE EDITORS Nathan O. Rosenberg

[email protected]

Michael R. Waldman

[email protected]

CHIEF FINANCIAL OFFICER Ralph Gotto

DIRECTOR OF WORLDWIDE Karen Turner

CLIENT SERVICES [email protected]

DIRECTOR OF SPECIAL PROJECTS Alexes Fath

PUBLISHER Gordon Price Locke

[email protected]

MANAGING EDITORS Elise Anthony

[email protected]

Jarrett Rush

[email protected]

CREATIVE DIRECTOR Kyle Phelps

[email protected]

PRODUCTION MANAGER Pedro Armstrong

IMAGING SPECIALIST John Gay

ACCOUNT SERVICE MANAGER Caitlin Faubion

EDITORIAL QUERIES

750 N. Saint Paul Street

Suite 2100

Dallas, Texas 75201

www.dcustom.com

214.523.0300

Insigniam Quarterly is published by D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201. Copyright 2013 by Insigniam. All rights reserved. Letters to the editors may be sent to Insigniam Quarterly c/o D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201. No part of this publication may be reproduced in any form or by any means without prior written permission of the publisher and Insigniam. Printed in the U.S.A. Magazine patents pending. For subscriptions, please visit www.eds.com/synnovation.

Q U A R T E R LY

VOLUME 1, ISSUE 1 | SPRING 2013

“Organizations usually resist change. But they need to

know that there are startups that are hell-bent on running

them out of business. Not for making their product extinct,

but for making the need for their organization non-existent.”— JEREMY UTLEY, STANFORD

THE TICKERConferences, books, and proofpoints you need

TOP LINEInnovation by the numbers

BLOOD, SWEAT AND TEARSPete Valenti, formerly of Bausch + Lomb

Can you afford to pass up a $100 million breakthrough?

BOARDROOM POVGeorge Martinez, AllegianceBank CEO

Don’t bother pitching innovation to the board if it’s not

market ready

DESIGN THINKING 2.0Jeremy Utley, Stanford University

Why enterprises are embedding it into the corporate

DNA

THE BIG PICTURERobert E. Johnston, Jr., Insigniam

The dangers of the ‘secret’ mandate and

corporate myopia

IQ BOOSTMichael R. Waldman, Insigniam

Why commitments are more important than promises

04

08

10

14

16

18

48

DEPARTMENTS

On the coverCEO Rich Templeton

Photography by Elizabeth lavin

For Advertising Information, contact Jas Robertson at

214.937.9811 or [email protected]

Insigniam and its publisher, D Custom, distribute this editorial magazine to share the opinions and insights of companies and their leaders on impactful global business issues. Insigniam Quarterly’s inclusion of a company or individual does not indicate that they are a client of Insigniam. Remuneration is not provided for editorial coverage. Individuals appearing in Insigniam Quarterly have done so with direct consent, or provided consent by a designated authorized agent in addition to being disclosed on the magazine’s audience and purpose.


MISTAKE OR YOUR NEXT INNOVATION? YOU DECIDE …Not every innovation happens intentionally. Next time you experience an

innovation “failure,” ask if there’s a better process or product that could result

from the experience. Consider these history-making mistakes:

Could a small innovation work wonders in your industry? Sometimes something tiny —

nanotech — can change things in a big way. Consider this report from PreScouter Innovation

Journal: New “smart sutures” are being designed to speed up healing and recovery through

ultrathin silicone sensors embedded on silk strips or polymer. Researchers are working on

delivering medicine through the sutures.

NANO INNOVATION, BIG IMPACT

THE CHOCOLATE-CHIP COOKIE:

Ruth Graves Wakefield, co-owner

of the Toll House Inn, was making a

Butter Drop Do cookie recipe and

ran out of baker’s chocolate. In its

place she added a few pieces of semi-

sweet chocolate. The chocolate didn’t

fully melt, and she ended up with

chocolate-chip cookies

MICROWAVE OVEN:

Engineer Percy Spencer was

touring a Raytheon laboratory when

he stopped in front of a magnetron.

After a moment, he noticed that

the chocolate bar in his pocket

was melting. His curiosity piqued,

Spencer next put unpopped kernels

of popcorn in front of the magnetron

and watched them explode. These

experiments led to the development

of the microwave oven.

POPSICLES:

An 11-year-old Frank Epperson was

mixing powdered flavoring into his

soda water one winter evening in 1905.

He left the drink outside overnight

with its mixing stick still in it. After

record-cold temperatures overnight,

Epperson found a frozen treat the next

morning. Almost 20 years later, after

selling his frozen treat at a California

amusement park, Epperson applied for

a patent on his creation that he initially

called an Epsicle.

CORN FLAKES:

The Kellogg brothers forgot to

store their boiled wheat properly, and

once it was later processed, it came

out as flakes. The younger brother,

Will Kellogg, tried the same process

he stumbled upon with corn and

created a crispier flake.

THE TICKER

Read about other accidental innovations at insigniamquarterly.com


READING VROOMUp-and-coming publications to accelerate breakthrough success

THE INNOVATION BREAKTHROUGH THAT BROUGHT A DRUG TO THE FDA 45 DAYS FASTER

The new drug was behind schedule. With a looming crisis, one

biopharmaceutical company implemented a new strategy and not only met the

deadline they felt was impossible, but exceeded it by 45 days.

Johnston and Bate are Insigniam consultants specializing in innovation and

growth. Clients have included IBM, Kraft Foods, Intel, Procter & Gamble,

Nokia, Eli Lilly, and BMW.

THE HOME ADVANTAGE:

MOREPRODUCTIVEWant a

productivity pay-

out? Encourage

employees to

work from home

every now and

then. Even if it’s

only on certain

days, working

from home can

save employees

transportation

costs, commuting

time and

serve as an

employee “perk.”

Additionally, they

may be more

productive. An

experiment at a

Chinese company

showed a 13

percent increase

in productivity by

employees when

they worked from

home.

Read more

on page 42

Culture Clash 2.0: Managing the Global High-Performance TeamSelect Books, 2013By Dr. Thomas D. Zweifel

Since 1984 Dr. Thomas D. Zweifel has lived and worked

on four continents. Forged in the fire of clashing cultures,

he developed a fool-proof methodology for managing

across borders successfully. He has packed Culture Clash

2.0 with fascinating stories, sound research and practical techniques—the global

and intercultural competencies managers need to get the job done anywhere in

the world.

Dr. Zweifel is a management consultant, leadership professor and author.

The Power of Strategy InnovationThe American Management Association, 2013By Robert E. Johnston Jr. and J. Douglas Bate

Originally published in 2003 and ahead of its time, “The Power of Strategy

Innovation” introduced the concept of discovery-driven innovation with a

focus on the future. The revised edition, scheduled for an early-summer release,

will include successful enterprise innovation examples, updated case studies and

elevate the importance of execution.

13%Smart Sutures — like the nanofibers below — are a little innovation that could deliver abig impact.

CYCLE TIME AFTERNEW STATEGY

CYCLE TIME BEFORE NEW STATEGY

Get the full case study at insigniam.com/case-study-biopharmaceutical

6 INSIGNIAM QUARTERLY

DO PATENTS PAY OFF?

A year and a half after the

passage of the America Invents Act,

and businesses are still discussing

the implications. Consider these

perspectives:

5“I am pleased to sign the

America Invents Act. This much-

needed reform will speed up the

patent process so that innovators

and entrepreneurs can turn a new

invention into a business as quickly

as possible. I’m also announcing

even more steps today that will

help bring these inventions to

market faster and create jobs.

Here in America, our creativity has

always set us apart, and in order

to continue to grow our economy,

we need to encourage that spirit

wherever we find it.” — President

Barack Obama, Sept. 16, 2011

5“Effectively, this creates a

race to the patent office. In a

race of established, well-funded

businesses with defined intellectual

property protection strategies (and

patent attorneys in-house or working

closely with the business) versus

entrepreneurs that may not have any

experience with the patent system

and the funds to pursue robust

patent strategies, the advantage

clearly goes to the businesses.” —

Patrick Richards of Richards Patent

Law PC, at Forbes.com

5“There is a misconception

about first-to-file. People incorrectly

assume that if you give a

presentation about an invention or

idea, someone in the audience can

run to the USPTO with your idea

and patent it before you do.” — Neil

Kane, founder of Advanced Diamond

Technologies and now CEO of

GlucoSentient, at Forbes.com

DO PATENTS PAY OFF?

Join our LinkedIn discussion

at http://www.linkedin.com/

groups?gid=1775502&trk=hb_side_g

During the World Innovation Forum, hear from

industry experts such as Daniel Pink, bestselling

author on motivation, innovation, and creativity in

the workplace, and Luke Williams of Frog Design,

one of the world’s most influential innovation

companies. Sponsored by Insigniam, the forum

includes:

5 Networking with executives from 30 countries

5 12-plus mainstage speakers

5 Exploratory field trips and interactive workshops

5 Access to the online WOBI community

EVENT:World InnovationForum New York 2013

LOCATION:New York City CenterNew York, N.Y.

DATE:June 12-13, 2013

WEBSITE:wobi.com

Kevin Slavin is proving it can, saying that

the ‘physics of culture’ inspire everything from

Facebook to urban planning. Sponsored by

Insigniam, Slavin is the keynote speaker; the forum

also includes discussions on:

5 Leadership and Today’s CIO

5 360° Cloud: Failing to plan is planning to fail

5 The Consumerization Concern

EVENT:The CIO Forum

LOCATION:The Harvard ClubNew York, N.Y.

DATE:April 4, 2013

WEBSITE:cioforum.com

CAN AN ALGORITHM SPARK CREATIVITY?

CHALLENGE THE UNCONVENTIONAL

THE TICKER

SPRING 2013

Our speed-to-results process will transform your employees into an unstoppable innovation force. Learn why partnering with Insigniam helps your organization repeatedly produce dramatic results from within.

Change the game.

Speed to results is a game-changer.

Insigniam.com

Download Our App.Get To know Insigniam.

Getting a product to market isn’t enough.


MORE THAN

59KThe number of innovation-themed publications listed

by Amazon

TOP LINE

The number of dollars generated

by new, immigrant-founded

companies in 2012

— The Ewing Marion Kauffman

Foundation

The amount companies spent

on R&D in 2010, a 9.3 percent

increase over 2009 when

companies scaled back because of

recession concerns

— Businessinsider.com

INNOVATION BY THE NUMBERSCOMPILED BY JESSICA MELTON

417,000,000The number of results for “innovation” in Google

$550 BILLION

$63 BILLION


50%The percentage

increase of the

average compensation

per employee in

innovation-intensive

sectors between 1990

and 2007 – nearly two

and one-half times the

national average

— U.S. Department of

Commerce, Economic and

Statistics Administration

8,000,000

Only 8.5% of executives globally

feel “very well prepared” to

successfully execute innovation.

— 2013 Insigniam Executive

Sentiment Survey

(Survey results on Page 36)

82%The percentage of employees who

say they trust a company more

when members of the C-suite use

social media — Emarketer

The number of U.S. jobs new firms created in 2007.

Overall, 12 million jobs were added that year.

— The Ewing Marion Kauffman Foundation

My job is to guide Salesforce. I can’t sit in headquarters and pretend I’m in touch. Odds are, what we’re using today will be obsolete in a few years. The past is never the future. But it’s easy to get caught up in the continuum.— Marc Benioff, Salesforce.com,

from Forbes.com

The percentage

of CIOs who say

they’re operating

at close to their

innovation

potential

— CIO Insight

8.5%

Jobs created by new firms

Jobs created by other firms

67%

33%

34%


I

BLOOD, SWEAT & TEARS

Want innovations that pay off? Change where you look for them.BY PETE VALENTI

WHAT’S IN PETE VALENTI’S INNOVATION ARSENAL FOR YOU?

In studies by the Product

Development Management

Association (PDMA), only

one of every nine new product

concepts becomes a commercial

success. How do you increase

the odds in your favor? Take a

cue from Pete Valenti, who has

more than 20 years experience

as a large-enterprise innovator.

The former global president of

vision care for Bausch + Lomb

and former sales and marketing

executive with Covidien and

Johnson & Johnson is known

internationally for his innovation breakthroughs. From

innovating outside corporate walls to setting a bold

decree, Valenti shares his arsenal of ideas to improve your

innovation success rate.


TWO $100 MILLION

BREAKTHROUGHS THAT

ALMOST DIDN’T HAPPEN

K-Y grew into a $100 million +

brand for Johnson & Johnson after we

launched a product formerly killed

during the innovation process.

Bio-inspired housecleaning products

inspired the Bausch + Lomb’s BioTrue

line, one of the brand’s successful

launches.

A BOLD DECREE AND INTERNAL ENROLLMENT

When Bausch + Lomb was becoming too internally focused with

product development, we decreed that 40% of innovation would

come from outside our company; we forced the organization to

use outside experts and researchers who didn’t work for the company.

Employees were leery of our mandate. “They first thought we did not

believe in them or thought they couldn’t pull it off. We told them,

‘Think about how much more we could pull off with the support of

other organizations.’ ” Ultimately, they embraced it.

PROJECT STRATEGY

INNOVATION

K-Y was a big

transformation. It started

with a product “in the

closet” and connecting

it to a new position for

the brand. Placing K-Y

in a new space,“intimate

health,” and launching

products into mainstream

mass channels, K-Y is now

a $100 million + brand

and growing.

A BALANCED INNOVATION PORTFOLIO

There are incremental innovations, which keep the lights

on and drive revenue; substantial innovations—bigger plays

in a known universe—then transformational innovation,

when you’re dealing with total unknowns.

Companies often get caught up in choosing between

incremental and transformational change. With incremental

innovation, you get the short-term revenue you need to grow

and sustain growth. But if you’re only focused on that, over

time, you become a laggard in the industry.


BLOOD, SWEAT & TEARS

RISK MITIGATION

If it’s a business concept, speed it

to market by doing test-and-learns

to mitigate risk. There needs to be a

commitment to consistently invest in

and push for breakthroughs. Without

that, you become a follower.

MARKET READINESS

Re-evaluate products in the

innovation cabinet that were killed

in the pipeline or are still lingering. I’ve

done this at a number of companies; you

may find something that was passed over when the

company had been taking a short-term view or was more

focused on instant wins. Maybe the product could deliver but the

market wasn’t ready at the time.

“IT’S BRINGING IN A THIRD-PARTY LIKE INSIGNIAM TO DISCOVER WHAT WILL ACCELERATE INNOVATION AND FURTHER ESTABLISH A CULTURE THAT REWARDS NEW IDEAS AND RISK TAKING, VERSUS PUNISHING IT.”– PETE VALENTI

Pete Valenti

FAIL AND LEARN WITH VELOCITY

At Bausch + Lomb, we worked on a joint development with a

company in a different country. We were developing 24/7, back and

forth, together. Even though the product itself was not a success,

it taught us how to accelerate from design to implementation at a

transformational rate.


CROSS-FUNCTIONAL TEAMS

We created a process and forums where all

the functions could see, hear and contribute

to the process. By inclusion, we were able

to more rapidly build and optimize. People

at all levels need to be engaged to create an

innovative culture.

TWO QUESTIONS THAT PAY OFF

Why did it fail? Even after a product is killed from

the pipeline, put a small group to discover why; there’s a

lot you can learn from that. Some of the most successful

product launches I’ve been a part of were at one time

considered “failed,” including Acuvue Advance, one of

the best launches in contact lens history.

What best serves the customer? Vistakon, a

division of Johnson & Johnson, started as a test-and-

learn to help customers more successfully purchase

contact lenses. The result was a world-class customer

relationship management system that elevated the

brand to a recognized digital leader.

A VALUE PROPOSITION

If you can move the needle even a

little toward the big idea, it is worth

it. It is amazing how many

times when we swung for

something transformational

that we learned something

or gained immeasurable

value in ways beyond

what we even considered,

many times without the

transformation itself necessarily

coming to fruition.

EXCLUSIVE!Read more about Pete

Valenti’s test-and-learns at insigniam-innovation.com

CULTURE IS DECISIVE

You can’t control innovation. Allow risk and

creativity back into the culture with tools and

processes to support and accelerate innovation.

TSPRING 201314 INSIGNIAM QUARTERLY

Throughout his career, George

Martinez has examined innovation

initiatives from a number of different

perspectives—as CEO of a large

financial institution and as a director

of several corporate boards.

As the co-founder of Sterling

Bank and current CEO of Allegiance

Bank, he believes innovation is often

the very heart and soul of private

companies, many of which are formed

to develop and market innovative new

products or services. And, he says, from a board member’s

perspective, a company’s failure to value innovation creates a

competitive risk.

“If a company moves too slowly to embrace change, it

WHAT THE BOARD REALLY THINKS ABOUT INNOVATIONDirectors aren’t out to squelch the big idea; they just want to know it’s market ready, says banking CEO George Martinez

BY CHRISTINE PEREZ

THE BOARDROOM


could face pressures that could adversely affect revenue,”

Martinez says, pointing to failed bookstore chains as an

example. On the other hand, he says, if a new company relies

strictly on innovation, it could lose the game by its inability to

generate the needed revenue to remain viable, which is what

happened with many dot-coms in 2000.

Along with a few tech startups, Martinez also serves on

the board of NCI Building Systems Inc. (NYSE: NCS), a

Texas-based construction supplies

company that generated $1.2 billion

in revenue in fiscal 2012. He heads up

several financial committees for NCI,

including the audit committee.

Board members are charged with

bringing discipline to an organization,

which is particularly important when

companies are led by creative types,

Martinez says. These four areas are

critical when the board evaluates the

risks and rewards of an innovation

initiative:

5 Is the idea worth pursuing? Is

there a market for the product or

service? Does it meet a need that

isn’t already being met, or does it

improve upon existing options that

are available?

5 Will the company need to raise

more capital or does it already have

the resources to fund it? If it needs

to find money, does it have viable

channels for doing so?

5 Can management really

pull it off? Can the product be

manufactured or the service be

provided as envisioned? If so, is

the right team in place to make it

happen?

5 Is the timing right?

MARKET READINESS

IS A MUST

The potential for sales volume is critical, Martinez says.

Sometimes, even the most innovative products die because

they are before their time, and the market isn’t ready.

Entrepreneurs can also fall into a pattern of tinkering things

to death.

“Some products are never finished,” Martinez says. “Some

people can’t let go—there are always improvements to be

made. And the product never gets out to the market.”

That leaves an opening for competitors, Martinez says. He

shares a story he heard about the late Houston businessman

George Ballas, the inventor of the Weed Eater, who took

innovative steps to stay a step ahead of those who might be

tempted to steal market share.

The unlikely innovator (Ballas worked as a dance instructor)

was inspired by the spinning nylon

bristles of a car wash and wondered

if something similar could be used to

help trim grass and weeds. After early

prototypes were successful, Ballas took

his product to the market in the early

1970s. By 1976, according to The

Wall Street Journal, the Weed Eater was

generating $40 million in annual sales.

As the story goes, Martinez says,

Ballas kept competitors at bay by

consistently enhancing the product,

and releasing new models only if he

had an even newer model already

ready to go.

MEASURE THE

‘SELDOM MEASURED’

At Allegiance Bank, which has

grown from $32 million to $525

million in total assets since it was

formed in 2007, innovation efforts are

focused on operations, Martinez says.

“We measure things that are

seldom measured, like employee

fulfillment and the level of service

between departments,” he says.

“We established standards for inter-

departmental service, cooperation,

the optimization of resources, etc.

That’s not something I believe you’d

find at most other places.”

As both a CEO and a company

director, Martinez says he has found that most board members

support innovation.

“Typically what I find are directors who are really cheering

the company on,” he says. “It’s a rare minority that tries to put

the brakes on things. And, frankly, when people are that risk-

adverse, they really don’t belong on the board in the first place.”

AT ALLEGIANCE BANK, WHICH HAS GROWN FROM $32 MILLION TO $525 MILLION IN TOTAL ASSETS SINCE IT WAS FORMED IN 2007, INNOVATION EFFORTS ARE FOCUSED ON OPERATIONS...

ALLEGIANCE BANK GROWTH

20122007

$525$32

(IN MILLIONS)

3 Sterling Bank is owned by Comerica (NYSE: CMA).


DDesign thinking is experiencing

a renaissance of late. This

methodology of solving problems

with the end user in mind has

always been around in one form

or another. It is where divergent

thinking and “gut instinct” trump

incremental improvement and rigid

patterns. The inventor of the wheel

did not etch algorithms in the sand,

after all.

Engineers have long known that

emphathizing with an end user

means a better product. Design

thinking 2.0 elevates that approach

into an organized activity, a mix of

rationality and creativity. It gained

notoriety as architects and urban planners studied human

behavior to tackle issues like suburban flight.

The business world took note. Consider what happened

when Doug Dietz enrolled in Stanford University’s d.school.

IS DESIGN THINKING MISSING IN YOUR CORPORATE DNA?Formerly the domain of product designers, this methodology is changing business strategies and pivotal conversations within the enterprise. Stanford University’s Jeremy Utley explains why.BY PAULA FELPS


As a designer of MRI and CT machines for GE Healthcare,

the program’s applied methods of visualization, prototyping,

and emphathizing encouraged him to think less about the

machine and more about the plight of its youngest patients,

often so frightened that sedation was required about 80

percent of the time.

Instead of being slid into an ominous machine in a sterile

hospital room, Dietz redesigned the entire MRI experience

so that children enter an adventure, from a pirate ship to a

camping trip, tent included. The result? A dramatic drop in

sedation rates. Happier patients, caregivers, and families.

Once thought of as a nebulous, murky approach to solving

a problem, business leaders have embraced design thinking as a

creative way to innovate services and products. Relieved that a

needle-less vaccine exists? Just breezed through airport security?

That’s design thinking on the job. Today, enterprise leaders are

realizing an even more tantalizing payoff: A 2003 study by the

Danish Design Center showed that increasing design-related

employee training boosted a company’s revenue an average of

40 percent more than those not using design thinking.

“Historically, design thinking has been about products,”

explains Jeremy Utley, director of executive education at

the d.school. “But increasingly we are seeing people use it

not only to design services and experiences, but to design

[business] strategies. We are not just saying, ‘do we have

the right answer?’ but we’re saying, ‘are we asking the right

questions?’ Increasingly, we are seeing people move up the

food chain into much more strategic territory.”

OPERATIONS AND COST ROI

Organizations are also discovering how design thinking

can streamline distribution and increase customer loyalty,

among other strategic priorities. Kaiser Permanente increased

the quality of patient care by re-examining how nurses

manage shift changes, and Kraft has

used it to reinvent its supply chain

management.

“Now, you have gigantic

organizations trying to determine not

only how to create breakthroughs

with design thinking, but how to

design their organization using

design thinking,” Utley says. “They

are looking at things like, how are

our teams configured? How do we

celebrate successes and acknowledge

failure? It’s a whole new DNA.”

RE-THINKING

DESIGN THINKING

As more organizations either

adopt design thinking or debate

whether a process on creativity

might do more harm than good,

what’s not disputed is the risk of

complacency.

“Organizations usually resist

change,” Utley says. “But they need

to know that there are startups that

are hell-bent on running them out

of business. Not for making their

product extinct, but for making the

need for their organization non-

existent. Most of the organizations

we work with realize that they are

on their way out unless they do

something fundamentally different.”

And for many, that means re-

imagining the process of how

decisions are made, how innovation

occurs and how the principles of

design thinking apply specifically to

them. For each, the answer may be

different, but the questions are key

to discovering a viable solution.

“It’s a fool’s errand to try and go

against the culture; you have to find

the elements of your business culture

that support this kind of working/

thinking mindset. It’s about finding

where you have momentum and

leaning into that momentum.”

The d.school at

Stanford uses a six-

step methodology to

help organizations

and leaders

replicate design

thinking in any

setting:

1 UNDERSTAND.

Research the

problem’s

background.

2 OBSERVE.

Watch how

the affected

stakeholders

interact and react to

a situation.

3 DEFINE.

Combine

insight with a

needs-focused

approach to create

suggestions.

4 IDEATE.

Participants must

suspend judgment

and brainstorm

ideas. From the

silly to the savvy,

no idea is off limits

during this phase; a

single session may

generate hundreds

of ideas.

5 PROTOTYPE.

Convey ideas

quickly with a

sketch, flow chart,

or physical model.

6 TEST.

Modify solutions

based upon user

reaction and

experimentation.

REPLICATING DESIGN THINKING

Design thinking helped Doug Dietz reimagine the MRI. Photo © GE Medical

SPRING 2013

THE BIG PICTURE

THE FOUR PILLARS OF INNOVATIONThere are four pillars for creating enterprise wide innovation. Sustainable innovation isn’t possible

without addressing each of the pillars and their potential hot spots.

Mandates don’t work when they’re only given lip service, i.e. when you see it on the web site but there’s

nothing behind it.

Secret mandates — Leadership talks about mandates but doesn’t communicate them to

anybody else.

Demotivating mandates — There’s a mandate to innovate or everybody is out of

a job.

MANAGEMENT MANDATE

Needs to be clear, loud, broad, bold and spoken continuously. It also should be modeled by

leadership.

01

You can have too few resources and metrics that

limit innovation to being only incremental. Metrics in the

infrastructure need to inspire and enable breakthrough

innovations.

DEDICATED INFRASTRUCTURE Always mirrors the seriousness of the mandate. If there are a lot of resources

invested in supporting the mandate, it’s serious. If there are no resources invested in supporting the mandate,

it’s lip service.

02


SUSTAINABLE INNOVATION

It’s not a static process, it’s a learning

process. One size does not fit all.

The process can’t be owned by a single

“guru.” It needs to be shared.

You’re in trouble if your culture only encourages

ideas to travel from the top down – they

need to travel in every direction.

SUPPORTIVE CULTURE

It’s friendly to ideas, ranging from incremental to transformational.

Supportive culture limits corporate gravity, inoculates against the

enterprise immune system, and fights corporate myopia.

04

Pillar of Innovation Hot Spot Harmful Mandates

PROPRIETARY INNOVATION

PROCESSNeeds to reflect the unique business and assets of the company, and it needs to

evolve over time.

03

And your culture has to avoid

breeding a fear of risk and failure.

STRATEGIC FRONTIERS:

By

Insi

gnia

m

Con

sulta

nts

J.

Dou

glas

B

ate

and

Rob

ert E

. Joh

nsto

n, J

r.

The starting point for innovative growth

hen CEOs recognize the

need for adding new value

to their organizations and

commit to the creation of new internal

capabilities for growth, they are ready for

strategy innovation and the exploration

of their company’s strategic frontier.

Innovative new business opportunities

found on the strategic frontier can

provide them with the entrepreneurial

growth they need. Apple, with their iPod

technology, discovered an innovative

new business on their frontier of portable

music. Progressive Insurance used

strategy innovation when they started

sending their claims adjusters in mobile

offices to accident scenes and watched

their business quadruple in size. These

new businesses did not require decades

of dedicated R&D expenditures to

develop, just an understanding of

customer needs on their strategic

frontier and the willingness to create a

new business model to address those

needs.

The essence of such strategy

innovation is the creation of new value

for customers, which in turn creates

new value and non-incremental growth

opportunities for the corporation.

Strategy innovation can take the form

of new products and services, as in the

classic examples of Federal Express,

Starbucks, and Canon personal

copiers. Or it can be the reconfiguration

of traditional business models, the way

Amazon, IKEA, and Walmart grew their

businesses.

Editor’s note: This excerpt is reproduced with permission from

Emerald Group Publishing Ltd.,

publishers of Strategy & Leadership

magazine.

W


The capacity for strategy innovation

is within the capabilities of any

organization. It does not require a

resident genius or a wild-eyed creative

maverick. It is not something that

needs to be farmed out to expensive

strategy consulting firms. Great new business opportunities

can be created by willing middle managers working

together in a creative environment, focused on the future

and supported by top management. Exploring strategic

frontiers can be done with an ad hoc team or an on-going

department, but it all begins with the commitment of the

CEO to create a new future.

BETWEEN VISION AND

PRODUCTS – STRATEGIC FRONTIERS

Not many companies have a corporate vision that clearly

communicates a future goal or end-state that can effectively

drive new business creation beyond the current business

model. So most CEOs drive their commitment to growth

by informing the new product development, marketing,

or R&D departments that the goal is the creation of

“innovative” new products. However, if these functions are

given free rein to pursue innovative products without any

strategic guidance, the products they develop are unlikely

to fit in with the strategic direction of the company.

But outside the current business model of each company

is a space that CEOs can use to provide future strategic

direction for their companies — a “strategic frontier”

where the new growth potential for the organization is

likely to be found.

A strategic frontier might be a new market. For example,

John Deere made farm tractors, so for them, entering the

homeowners’ market for lawn mowers was a strategic

frontier. A strategic frontier can be a new technology,

which is why so many companies are currently pursuing

future opportunities in genomics, nanotechnology, or smart

materials. A strategic frontier can also be a new business

model, such as franchising, strategic partnerships, or mass

customization.

RETHINKING THE FUTURE

As a first step, the CEO should commit to the

identification and exploration of the company’s strategic

frontiers. By defining a company’s

strategic frontier, the CEO and the

senior management team clearly

communicate their commitment to

finding a corporate business model

that can be distinctly different. This

“difference from today” provides the

power of strategic frontiers. It holds the

promise of non-incremental growth

and opportunities that help motivate

and drive the organization forward.

And it threatens laggards with the

prospect of being left behind.

The identification of a strategic

frontier gives a company an

opportunity to reconsider what

business it wants to be in. Often,

this will broaden the definition of

the company business; soft drink

companies become beverage

companies, game companies become

entertainment companies, and railroad

companies become transportation

companies. Other times, a strategic

frontier will tend to focus a business.

For example, a specialty products

company shifted its emphasis from

selling primarily through retail stores

to a focus on Internet sales. Once the

company’s definition of itself changes,

new opportunities become more

visible.

Most organizations resist

discontinuous change, but in our

experience, people support change

that they help to create. Naming a

strategic frontier changes the experience

of change within a company because

it invites the managers to participate in

renewal. Asking them to help explore

the new frontier gives them a greater

sense of control over the company’s

destiny. They can help to mold and

shape the new business opportunities

that exist on the frontier. Therefore,

the eventual implementation of the

frontier opportunity will flow much

more smoothly and rapidly when

T


managers help design it.

Finally, strategic frontiers can improve corporate focus

and efficiency. With a corporate-wide, central focus on a

specific strategic frontier, the entire organization can align

its operations and spend organizational resources efficiently

on programs with a clear strategic intent.

CREATIVITY AND STRATEGIC FRONTIERS

The pursuit of strategy innovation requires a different

working environment and set of tools than a strategy of

incremental improvement. Where quantitative analysis is

usually the driving force in incremental strategic decisions,

creativity is the driving force in strategy innovation. It is

creativity that discovers a new way to deliver the value that

customers want. Creativity is required to design a business

model that will change the basis of competition in an

industry (and also turn a profit). It even takes creativity just

to determine how to explore a new strategic frontier —

who to talk to and what questions to ask.

IDENTIFYING STRATEGIC FRONTIERS

In presenting the concept of strategic frontiers to a

gathering of 30 CEOs, we first invited each to speculate

and write down what an attractive frontier for their

business might be. Most were able to identify several

different strategic frontiers that could help grow their

businesses in very meaningful ways.

However, when the best strategic frontier for a company

is not obvious, the CEO can select a team

and initiate a project to identify frontier

options. The team should first explore all

areas of future growth potential in, and

adjacent to, their industry, creating a long

list of potential options. Identifying a

breadth of strategic frontier options is more

important than a depth of information

in any one option. A team that is cross-

functional, cross-hierarchical, and demographically diverse

will provide the breadth of knowledge needed in the

strategic frontier identification process.

SOURCES OF STRATEGIC FRONTIERS

Where does this new team find options for strategic

frontiers for their company? We recommend a mix of both

internal and external sources.

The search for strategic frontier options begins inside the

company. Listed below are some internal sources to explore:

Management interviews – Talk to senior managers

about their perspectives on growth potential for the

company. What are the trends that they see taking place?

What is their experience with the strengths of the company

that could be leveraged in new ways?

Company vision – If your company has a vision

that describes its ultimate success, then it may be useful in

suggesting potential strategic frontiers that will lead there.

Corporate drawing boards – Ask around to find

new or future projects currently on the drawing boards.

R&D, Product Development, or Marketing may have

early stage projects that could form the basis of a new

strategic frontier.

Intranet survey – Employees may have good ideas

to contribute. Those who work with customers, vendors,

or suppliers are in a position to see changes, trends, and

opportunities at very early stages. Create a website to

collect these frontier suggestions.

The richest sources of strategic frontier

opportunities exist outside the company.

The team must spend time off-campus

exploring the following external sources:

Trends search – Trends signify

changes in dynamic markets and changes

create opportunities. The early detection

of a significant trend could make an ideal

strategic frontier. Team members should

In the early 1990s, the large-format

printer division of HP moved from San

Diego to Barcelona, Spain. Rather

than laying off those left behind, HP

leadership challenged them to identify

a growth opportunity. A diverse

team identified a small but growing

frontier in the establishment of “home

offices” where commuters were

spending more time telecommuting

to work. An exploration of that frontier

found that these new home offices

would need printers, but not the bulky

ones found in most offices. The HP

San Diego group responded with

the development of the first multi-

functional printer designed uniquely

for the home office.

A STRATEGIC FRONTIER SUCCESS STORY: 20 YEARS LATER

THE PURSUIT OF STRATEGY INNOVATION REQUIRES A

DIFFERENT WORKING ENVIRONMENT


immerse themselves in external data sources of trends –

publications, Internet, and research companies.

Technology search – We live in a world where

advances in technologies are constantly driving new

market opportunities. Learning of the new technologies

after they are commercialized is too late.

The team should spend time exploring

laboratories to learn what will be the next

“leading edge” developments in materials,

sciences, and electronics.

Business model search –

Entrepreneurs and proactive corporate

leaders are constantly experimenting with

new business model components to help

them meet customer needs in a better

way. Search business publications and corporate profiles

to learn what these innovative companies are doing. It

could suggest a strategic frontier for your company to

consider.

Outside experts – Consult people who make a living

by studying or researching markets. Their

different perspectives and in-depth views

could suggest new strategic frontiers.

EXPLORING STRATEGIC

FRONTIERS

Many experienced managers assume

they know what it takes to be successful

in a new strategic frontier. They make

judgments about its potential before even

In this phase, the Discovery Team is selected, key roles are identified, the objectives of the initiative are

established, and the team is prepared for the process.

The Discovery Team and senior management

align themselves on the focus and scope of

the initiative, agree-ing on the “strategic

frontier(s)” to be explored.

The goal of this phase is the collection of new insights on the strategic fron-tier that can form the basis of new, value-producing business opportunities in the future. Depending on the strategic frontier and the scope of the initiative,

teams will explore insights related to different exploration “vectors,” including Customer Value, Market Dynamics, and/or Business Model Innovation.

Using the new insights gained, the Discovery Team

will create, refine, and develop a portfolio of new business opportunities for

the future.

In this final phase, the team will create a strategic roadmap outlining key

events, trends, market discontinuities, and milestones to move the company

into its new strategic future.

STRATEGY INNOVATION

REQUIRES CREATIVE WISDOM, NOT

CONVENTIONAL WISDOM.

+

+

THE DISCOVERY PROCESS

STAGINGALIGNING

EXPLORING

CREATING

MAPPING

1

2

3

4

5


exploring it, usually by viewing the

frontier from their perspective of past

experiences or through commonly held

“conventional wisdom.” However, such

conventional wisdom tends to yield

incremental thinking and incremental

results, whether it is in current businesses

or on a strategic frontier.

Strategy innovation requires creative

wisdom, not conventional wisdom.

Southwest Airlines used creative wisdom

to develop a different business model

from the rest of the industry, one that

gained the majority of the profits in the

industry over the past few years. Once

a strategic frontier has been identified,

exploring it with an open mind will

yield insights for creative wisdom and

strategy innovation.

To explore your strategic frontier, first

establish a corporate team. Think of this

team as your corporate reconnaissance

team that you are sending on an

exploratory adventure.

This team of eight to twelve members,

usually middle-level to upper-level

managers, can be either an ad hoc/part-

time team or permanent/full-time team.

It must be cross-functional and diverse,

representing all of the major functional

areas of the company. The most effective

team members for this assignment are

those who are open-minded, curious,

and eager to collaborate with other team

members. Their working environment

during the frontier exploration should

be creative, future-oriented, and

marketplace- focused.

Most of the work of this team takes

place outside the organization. The

catalysts for innovative ideas come from

new perspectives, new information,

and new operating models — all of

which must be found outside the

company. It is our experience that

adopting an external perspective can be

a significant challenge for many teams

when the current corporate paradigm

and working assumptions are very strong

and ingrained. We refer to this ingrained

thinking as “corporate gravity.” It can

be a force so strong that team members

cannot overcome it to explore new ways

of thinking about customers, products,

markets, and business models. In addition

to getting outside perspectives, another way to

overcome the force of corporate gravity is to populate

the frontier team with people who are relatively new to

the company (especially managers from other industries)

or even include several people who are not employees.

The goal of this frontier team is to identify a portfolio

of innovative new business opportunities that exist on

the strategic frontier. The opportunities will include both

shorter-term and longer-term opportunities, smaller

opportunities and larger ones, as well as lower-risk

opportunities and riskier ones. The opportunities will

be in conceptual form with no quantitative information

provided at this point. It will be the responsibility of

another, more qualified group with quantitative skills

(strategic planners, business development) to develop a

detailed business plan and determine its profitability and

attractiveness to the company.

DISCOVERING VALUE

ON THE STRATEGIC FRONTIER

Nearly all strategic frontier teams hope that customers

will tell them what products they always wanted to have or

that marketplace experts will define the winning products

for the future. However, most customers are not able to

articulate what innovative products will meet their needs

and many market experts focus only on larger trends, not

specific products.

The focus of the frontier team must be the pursuit

and understanding of value. In order to be able to define

innovative new business opportunities, the frontier team must

understand what has value on the strategic frontier. What is

it that customers or potential customers really value? What

technologies are emerging that can deliver new value?

What are the market conditions that can create value?

How will the definition or perception of value change over

time? What forces or factors could have an unexpected

impact on value on this frontier?

MAP OUT YOUR FRONTIER

J. Douglas Bate and Robert E. Johnson, Jr. share three exploration paths for new frontier teams at insigniam-innovation.com.

TEXA

S IN

STRU

MENT

S’IN

NOVA

TION

MAN

DATE

CEO RICH TEMPLETON’S EFFORTS

TO CONTINUALLY RESHAPE THE

SEMICONDUCTOR COMPANY LEAD

TO SUSTAINABLE RESULTSBy Karen NielsenPhotos by Elizabeth Lavin


A savvy businessman and engineer, Templeton has spent

his entire 32-year career at TI, the past eight as president

and CEO. Since taking the helm, he has been steadily

reshaping the semiconductor manufacturer, moving it away

from other technologies to focus on analog and embedded-

processing growth.

Innovating the business model has helped transform the

$13.7 billion company, producing sustainable results and

strengthening its core businesses.

Dallas-based TI has come a long way since it first

began selling tricked-out calculators 45 years ago. Under

Templeton and his predecessor, the company has been

aggressively buying or selling companies to align with its

emphasis on analog and embedded processors. Since 1996,

TI has acquired 33 companies and divested at least 18 —

from defense to liquid-crystal-display operations — that

were not central to this razor focus.

Today, the company’s analog chips are

in automobiles, kitchen appliances, air

conditioners, notebook computers, and

smartphones. They make medical devices

like ultrasounds portable and enable

intelligent thermostats to adjust to user

habits and patterns. They also have vast

applications for cloud computing and

energy efficiencies not seen before.

The possibilities, Templeton says, seem endless. “Literally

every piece of electronic equipment you have at work or

home has at least one, if not multiple, analog chips,” he says.

“We have a chance to sell something to every customer in

the world. The number of companies that can say that are

pretty limited.”

§§§§ INNOVATIVE DECISION-MAKING

Many wonder how an 82-year-old company with

35,000 global employees remains nimble enough to keep

reinventing itself. Templeton says the key is to “not be

afraid of where you want to go.” His other secret seems to

be breaking through hierarchical obstacles to innovation.

Last year the company caught some industry experts

off guard when it announced it was shifting its OMAP

product line focus away from smartphones

and tablets toward a broader consumer

market.

“The outside world sees this as an event

that occurs in a more granular way,” he

says. “Our OMAP 2012 announcement

was the last step [in an ongoing plan] to

complete that. For us it’s very logical with

what we’ve been seeing in the last five to

exas Instruments CEO Rich Templeton is fond of saying that in the technology business, if you’re not changing, you’re falling behind. He knows a little something about that.

INNOVATING THE BUSINESS MODEL

HAS HELPED TRANSFORM THE

$13.7 BILLION COMPANY

“We have a chance to sell something to every customer in the world. The number of companies that can say that are pretty limited.”


Rich Templeton has shifted

TI’s focus from semiconductors

and microchips to other areas.

six years, but to the outside world it just looks like a big

momentous announcement.”

Templeton acknowledges that it’s a significant shift and

impacts a lot of people, but it’s a change that management

and employees knew was coming. In 2006-2007, his

leadership team began examining what it meant to be

an analog and embedded company — and what it didn’t

mean.

By early 2008, the company was offering hands-on

workshops for a broad section of its employees to show

them what the future looked like.

“We wanted to get everybody on board,” he says.

Templeton prefers to manage strategic direction in

a nonhierarchal fashion, delivering the message to a

broad community of employees using the company’s

communication groups. He says repeating the message

at least on a quarterly basis through broadcast company

meetings or other avenues helps engage employees. It also

prevents diluting or distorting the meaning.

“When the message is passed down, it’s potentially altered,”

he says. “You don’t know what will come out on the other

end. I don’t like to depend on hierarchal communication.”

Templeton is a proponent of involving his entire senior

leadership team in the decision-making process. Once

they’ve hashed out the issues, they pull in about 35 other

division heads to “weigh, debate, and persuade” and make

sure everyone is well aligned on the company’s direction. The

discussions are always candid and data-driven. Sometimes

they result in hard decisions to get into better businesses.

Templeton’s goal through this lateral decision-making

process is to align the company’s objectives with what’s good

for customers and shareholders.

“They’re one in the same,” he says. “If we’re making

decisions that will make the company more valuable, then

we have to communicate to (the public) why the decision

makes sense in the long term. If the company is not growing

and adding more value, then it won’t do well by employees or

customers or shareholders.”

§§§§ STRONG COMMUNICATION

Templeton has a reputation as a good communicator

inside and outside the walls of TI. Brian Toohey, president

of the Washington, D.C.-based Semiconductor Industry

Association, where Templeton serves on the board, says the

When it comes to innova-

tion and strategic change,

Rich Templeton has learned

this lesson: Don’t be afraid

to make unexpected moves

when they make sense.

“We’ve done a pretty good

job over the past 15 years,

seeing where the world is

going and knowing what

we’re good at and where

we need to move,” he says.

“We weren’t afraid to leave

businesses that wouldn’t be

successful in the future.”

MoneyGram CEO Pam Pat-

sley has served on TI’s board

since 2004 and says she has

BOLDMOVES


CEO is an “incredible communicator and extraordinary

mix of leadership and knowledge” that benefits not only

TI, but the entire semiconductor industry.

“He’s the real deal,” Toohey says.

§§§§ GOOD COMMUNICATION

WASN’T ALWAYS A TI TRADEMARK.

The early 1980s were a difficult time under then-

chairman Mark Shepherd Jr. and president J. Fred Bucy,

who was called abrasive and autocratic. The company

posted its first-ever revenue loss of

$145 million in 1983 because of

the recession and an unexpected

slump in demand for its home

computer, a market that TI

eventually exited.

Some analysts call those the dark

days for TI. But things brightened

up in 1985, when Jerry Junkins

was named president and CEO.

Junkins is credited with loosening

up the corporate culture and

encouraging innovation, while

helping reposition the company to

better compete in the 1990s.

“The personality of the CEO

quickly permeates the company,” says Dallas business

analyst David Johnson, who has followed TI for nearly

three decades. “Junkins did an overnight turnaround. This

is the group that Templeton came from, the new wave.

They had a laser-like focus on [digital signal processors].

That was going to be the great new thing, and they sold

all of this great technology. That’s the mold that Templeton

came from.”

Junkins died of a heart attack on a business trip in 1996,

and Tom Engibous, a 20-year TI veteran, was named

CEO. For 15 years Templeton worked with Engibous,

who helped make over the company from a broad-based

conglomerate to a semiconductor company focused on

making chips for the signal-processing markets that have

fed the wireless and Internet revolutions.

After years of grooming, Templeton stepped into the

president and CEO roles in 2004, and was named board

chairman in 2008. His egalitarian style and affinity for

change, along with sound business strategy, have made him

a leader’s leader.

He keeps his finger on the

company’s pulse by traveling across

the globe to visit with some of their

90,000 customers. He believes the

best way to know what’s going on

inside a big company is to spend

time outside of it, and he encourages

his managers to do the same. He

also schedules regular employee

roundtables to hear about the issues

on his employees’ minds.

Today Templeton says he’s

fortunate to work in an industry

that has such a great impact on

people’s lives. It’s also an industry

that’s changing rapidly, but TI’ers (as the employees are

called) are engrained in a culture that expects adaptation to

economic cycles and technology shifts.

“The idea of innovating and looking forward to new

problems to solve for our customers is at the heart of

what we do,” he says. “As a result, we’ve got as many

leaders that are more afraid of not changing than if we

are. That’s wise.” Because without change, there can be

no innovation.

“THE IDEA OF INNOVATING AND LOOKING FORWARD TO NEW PROBLEMS TO SOLVE FOR OUR CUSTOMERS IS AT THE HEART OF WHAT WE DO.”

seen Templeton lead

the company through

challenging times,

basing his decisions on

many perspectives and

a lot of data.

When TI acquired

National Semiconduc-

tor for a whopping

$6.5 billion in fall 2011,

industry pundits ques-

tioned whether it was a

good move. Templeton

called it a “bold, cor-

rect move,” given the

economy, the opportu-

nity, and his vision for

the company.

“I don’t think it’s a

risk if you look at the

industry and cycles,”

he says. “Usually most

people are cautious

at the bottom, and

that’s exactly when

you should logically be

doing the opposite. One

of the benefits (at TI)

is we have people who

have worked together

a long time. It’s a very

experienced team, and

we’ve seen the ups and

downs. This organiza-

tion is not intimidated

by ups and downs.”

32 INSIGNIAM QUARTERLY

WHERE THE RUBBER MEETS THE ROAD

83 percent of management jobs in the U.S. fall

into the middle layer of their organization.

— U.S. Bureau of Labor and Statistics

What happens when ideas leave the C-suite? Three

leaders share insights on how innovation initiatives

succeed—and fail.

Dennis Crosby, Senior Account

Director, Sabre Airline Solutions

Katherine Knowles-Marchione, Global

Vice President of Customer

Engagement and Customer Success,

Teradata Corp.

Allen Couture, General Manager of Texas

Operations, Space and Airborne Systems,

Raytheon Co.

WHERE THE RUBBER MEETS THE ROAD


Innovative ideas have little value

unless they can be executed, and

execution isn’t done by those in the

C-suite. Whether or not an innovation

initiative is successful is left to the

managers in the middle. So we took

our innovation questions to three of

them and asked what it takes to execute

on those mandates from the C-suite.

Q. WHAT ARE THE HOTSPOTS A LEADER HAS TO CONSIDER

WHEN TASKED WITH EXECUTING AN INNOVATION MANDATE?

7 Dennis Crosby: Can the

organization assimilate? Does the team

have the right set of skills to execute? Is

there sufficient support from other areas

of the organization? Can the vision be

clearly articulated and understood?

What is the current culture, and what

are the barriers to execution?

7 Allen Couture: You cannot

assume that you have buy-in across the leadership team. The

CEO may be on board, but you don’t always know which

executives are supportive or silently opposed to innovation.

They didn’t get to that level without some skills in political

astuteness. Innovation carries a stereotype of being expensive,

risky, and complicated. So be up front and honest about your

expectations and address their concerns to reduce the risk of

losing support too early in the process.

7 Katherine Knowles-Marchione: You need to make

sure whatever you’re doing from an innovation perspective

involves not only R&D, which traditionally is the tech piece,

but that you’re also focused on customers, interacting with

customers, that you’ve got the best employees on board, and

that you’re looking at how the innovation affects the brand.

You can be as innovative as you want, but until your customers

are experiencing it and using it and telling you they like it or

interacting with you and giving you ideas to make it better—

you’re not innovative until your customers agree that you are.

Q. HOW DO YOU FIGHT AGAINST CORPORATE GRAVITY—THE TENDENCY OF ENTERPRISES TO PULL BACK,

WHICH CAN KEEP INNOVATION FROM TAKING FLIGHT?7 Crosby: By gaining the support and sponsorship

of C-team members for the initiative, and by adopting and

enforcing a “no turning back” policy.

7 Couture: Be very selective of your team. Their courage

and ability to focus on the promise while avoiding the typical

corporate rackets and vicious circles will be critical for success.

Also, stay in constant contact with your key stakeholders

to maintain support and understanding of what they are

concerned with in the process. Invite them into your

meetings, reviews, and offsite activities.

7 Knowles-Marchione: We have less of a tendency

to pull back at Teradata, because we’re so singularly focused.

We also don’t take anything for granted and we’re not afraid

to reinvent ourselves. One example is how we went from

proprietary hardware and software to open source. We saw

trends in the marketplace, and we were not afraid to take

advantage of those trends. It all came back to the question:

Will this allow us to perform better for our customers? Will it

improve their cost and performance? If the answer is yes, then

we’re going to do it.

Another way we fight against corporate gravity is by being

a pretty flat organization. There aren’t a lot of layers.

Q. HOW DO YOU GET YOUR TEAM TO EMBRACE THE INNOVATION MANDATE, SO THEY CARRY FORTH THE

VISION AS THEIR OWN?7 Crosby: By empowering the team. Encourage them

to make their ideas known—and then validate their ideas.

BE VERY SELECTIVE OF YOUR TEAM. THEIR COURAGE AND ABILITY TO FOCUS ON THE PROMISE WHILE AVOIDING THE TYPICAL CORPORATE RACKETS AND VICIOUS CIRCLES WILL BE CRITICAL FOR SUCCESS.


Celebrate the successes, and learn from mistakes.

7 Couture: Define a noble cause; provide the picture of

“what a win looks like.” If you have the right players, you

will not need to motivate their ownership all the time. It is

important as a leader to provide the inspiration for their work

and honest coaching during the process.

I have been most successful at implementing complicated

innovative ideas by facilitating the conversation and exchange

of views, supporting their ideas, and not mandating the steps

to get there. Never assume the outcome; it’s a shortsighted

trait for a leader.

7 Knowles-Marchione: You have to communicate:

This is where we are today, this is where we want to

take the brand, and these are the technological changes

and innovation that’s needed to become better and more

enlightened with our brand. You have to be able to show

employees a vision; no one can work toward a goal

without it. The second thing is, you have to pick the right

employees. Always pick those who are passionate and who

want to really make a difference.

Q. IN THE CONTEXT OF INNOVATION, HOW DO YOU MANAGE UP?

7 Crosby: By providing clear and concise messaging to

executives on strategy, next steps, and key milestones, as well as

progress achieved thus far. Also, by soliciting their feedback.

7 Couture: I try to establish and communicate

expectations and results regularly, then follow up with

an opportunity for them to be enrolled in the process. If

executives are directly involved with an action, it will help

the momentum and morale of your whole team. It sends

the message of corporate importance and credibility to

your project.

Utilize the network of your C-suite for support, but be

prepared to perform on the promise. Strong results will lend

to an easier task of managing up; everyone wants to be on a

winning team.

7 Knowles-Marchione: If you communicate the

vision for the company and the brand initiative and how

you’re going to change it—that, along with a singular

focus, makes managing up a lot easier. It’s also important

that innovation expands beyond the traditional R&D and

goes throughout the organization. You have to be able to

innovate with marketing and sales groups, too. The more

entrenched the vision becomes, the more you communicate

about how you’re trying to evolve a transitioning brand,

the better employees understand all of that, the easier it is

to manage up.

Q. HOW DO YOU SUSTAIN A CULTURE OF INNOVATION? WHAT WORKS?

7 Crosby: For me it is about gaining consensus through

collaboration and getting the team to buy in to the vision. Also,

establishing key milestones are important; when milestones are

met, the team is invigorated by the progress it has achieved.

Always continue to solicit ideas, validate, and then incorporate

when possible. Implore a “take it to the next level” mindset.

7 Couture: Keep your core goals simple, innovation

does not have to equal science project and difficult to

maintain. And share the vision across all functions, not

just your technical teams. At the end of the day, it will be

people outside engineering development who deliver on a

repeatable product that adds value to your customers and

keeps your economic engine running.

7 Knowles-Marchione: You have to make sure you are

following trends in the marketplace, you have to be focused,

and you must be communicating with your customers.

At Teradata, we have customer committees, made up of

traditional business folks, and advisory committees, made up

primarily of people from the IT world.

Q. WHAT ARE SOME OF THE MOST SURPRISING OUTCOMES YOU’VE EXPERIENCED AS A RESULT OF

INNOVATION EXECUTION?7 Crosby: Seeing “naysayers” becoming supporters.

Seeing the project or initiative “grow legs” and take on a life

of its own (in a good way). Experiencing genuine excitement

and participation from C-team members.

7 Couture: I have been involved in breakthrough projects

that have been able to exceed on their very complex and

difficult promises. We have shattered what was expected—by

simply taking a stand for what we can be counted on for, and

working together toward a common goal. We didn’t realize

our ideas were not supposed to work and defied what was

normal; we were too focused on what was possible to notice.

7 Knowles-Marchione: We have some of the most

innovative customers in the world. They are constantly

pushing us. We’re helping them with their competitive

advantage, so that just makes sense. They’re dealing with

consumers who are becoming increasingly demanding—and

smart. Consumers are now interacting with brands through

social media, web channels, call centers, and branches or stores,

and they’re expecting that no matter the channel, they want

their interaction to be consistent. They want you to recognize

them immediately, and respond to their concerns. Companies

want to manage these close relationships as quickly and

effectively as possible.

The 2013 Insigniam Executive Sentiment Survey

Is short-term thinking trading off tomorrow’s results?QUESTION

We expected uncertainity. The U.S. debt ceiling crisis was in full debate. Abroad,

the economic outlook was much bleaker as Greece, Portugal, and the European

Union struggled to shore up banks, stave off unemployment, and rebound. As

Insigniam prepared to launch its second annual international executive sentiment

survey, we knew leaders would struggle to prioritize innovation. However, we

didn’t think 85% would be unprepared for what’s next. CONTINUED ON BACK ->

ADDITIONAL COMMENTS

REPORTING AND ANALYSIS BY

Shideh Sedgh Bina, Gregory Trueblood, and Erica M. Wood

YES MAYBE UNDECIDED READ TO FIND OUT NO

say its critically important

87% are satisfied with previous results

33%15%say they’re prepared

to execute.

THE INNOVATION DISPARITY x


What we found during the 2013 executive sentiment

survey was less uncertainty about revenue and job security

and more of an acute disparity around innovation. Even more

startling, executives expect to increase revenue, in spite of their

spotty track record on delivering successful innovation.

This is very bad news for most companies; they know

innovation is critical for success, and they are accountable

to increase revenue each quarter, but if they haven’t been

able to deliver upon this imperative in the past, they

certainly cannot deliver it now. Overall, this tepid response

leads us to the heart of the innovation disparity. It begs the

question — how do you truly drive sustained innovation

in an enterprise if you are only partially prepared?

One executive summed up the innovation disparity this

way: “We invite people to share innovative ideas and tips,

but we do not provide them with funding and resources to

get those ideas to market.”

These sentiments take on deeper significance considering

the need for organizations to expand innovation efforts

beyond product development and technology and into

the entire spectrum of the business, including strategy

development, operations, the supply chain, go-to-market

processes, and customer service.

Says one executive: “If we do not innovate in areas of

operations, we will be consistently bringing up the rear

and not leading in our industry.”

PEOPLE AND PERFORMANCE

Innovation was just one aspect of the annual survey.

Insigniam polled 214 global leaders on their forward-facing

sentiments for business in 2013. The sampling included

C-level executives, vice presidents, and directors of Global

1000 companies in multiple industries, most from the United

States and Europe. Annual revenue at the surveyed companies

ranged from $2 billion or less to more than $50 billion.

We wanted to know — how are leaders prioritizing

their responsibilities? Respondents say the “most critical”

element in their accountability over the next 18 months

87% BELIEVE INNOVATION IS

IMPORTANT TO SUCCESS

32% FEEL VERY SECURE ABOUT THEIR JOB OVER THE NEXT 18 MONTHS

27% FEEL PEOPLE ARE THE MOST IMPORTANT ELEMENT IN THEIR ACCOUNTABILITY

IF INSANITYis doing the same thing over and over and expecting a different result,

executives are facing an innovation predicament. Nearly 87% say

innovation is very important to their company’s ability to succeed or

strengthen their competitive advantage over the next three years. The

bad news — only 15% are prepared to execute it.


is operational excellence in specific areas (29%); people

development, performance, and retention (27%); and

meeting business targets and growth (26%).

This could be a sign that leaders are looking at the

future more strategically. Critical accountability factors in

the 2012 survey ranked operational excellence in specific

areas at 57%; people performance and retention 30%; and

business targets 13%.

During this year’s survey, 16% of the respondents say

innovation was most critical. Interestingly, business leaders in

Europe, whose economies are in recession, rated innovation

as more critical for success in their own accountability (23%)

than did the respondents in general.

C-suite executives in Europe and the United States,

where the rebound from economic recession has been

disappointingly slow, also ranked “meeting business targets

and growth” as more important than the total population

of respondents did (43% and 50% respectively, versus 26%).

THE INNOVATION TRADEOFF

This focus on day-to-day accountabilities and meeting

business targets creates a tension between delivering

immediate profitability and structuring the type of

transformative innovation that may take five, 10, and even

15 to 20 years to fully realize true growth.

One respondent discloses why the most profitable

innovation — the type that is transformative — is

shortchanged. “In the end, the need to generate

profitability with new products and services in year

one kills many real innovations in an early stage. We are

constrained by the amount of non-schedule-driven time

available to innovate.”

Or, as one leader elaborates, transformative innovation is

at the mercy of corporate culture. “A bureaucracy is like a

huge aircraft carrier. You can make fine adjustments now

that will slowly turn the shift in the direction you want,

but you eat up miles of ocean before you turn. The culture

inhibits radical change. We are all not pulling — or pushing

— in the same direction.”

IS CULTURE THE

CULPRIT?

Executives also

expressed concern in

the Insigniam survey

about people and

their performance at

their companies, and

frustration over the

amount of time and

resources available to

them.

Plainly put, “we

need to change the

way we do business,”

one confided.

Especially challenging,

respondents say,

are keeping people

motivated and

productive, especially

after layoffs have reduced team sizes.

Interestingly, however, the C-suite may not share that

sentiment. The No. 1 worry by far of the survey’s C-suite

occupants were financials (60% of the Europeans) and the

economy (37% in the U.S.). European leaders in general

37% OF THE C-SUITE BELIEVE FINANCIALS TO BE

THEIR BIGGEST WORRY

16% ARE FRUSTRATEDBY PROCESS

73% RATED A MANAGEMENT MANDATE TO INNOVATE STRONG OR

SOMEWHAT STRONG

YOU CAN MAKE FINE ADJUSTMENTS NOW THAT WILL SLOWLY TURN THE SHIFT IN THE DIRECTION YOU WANT, BUT YOU EAT UP MILES OF OCEAN BEFORE YOU TURN.


also rated people as much less of a worry, with more than

30% of them putting the economy at the top of their lists.

When it comes to elevating the performance of the

individuals and groups they lead, executives pointed

to “resource and time issues” as their biggest source

of frustration (nearly 20%). They also named their

organization and its processes (16%), alignment and focus

(11%), and accountability and reliability (11%). The top

impediment for European C-suite occupants, however,

was the way their organizations were aligned and focused;

“people engagement” ranked a close second.

Last year when we asked a similar question,

frustrations and concerns about people ranked at 38%;

operations 29%; strategy 18%; external concerns 15%.

‘ALTERNATIVE INNOVATION’ TO THE RESCUE

With such challenges ahead, it’s not surprising that

more than 33% of the survey respondents circle back

to innovation as the most important factor in their

organization’s ability to succeed—and strengthen their

competitive advantage—over the next year to 36 months.

But wait; the innovation disparity continues to deepen:

A whopping 55% say innovation will be very important,

while nearly 12% say it will be somewhat important.

Many respondents noted the importance of “alternative

innovation,” the type of enterprise-wide innovation such

as improved processes and marketing and sales solutions

referenced earlier in this article.

In recent years innovation—the ability to continuously

revolutionize, reinvent themselves, or make positive

changes—has become more and more important to

companies as competitive pressures have increased.

Many more C-suite executives in the United States

(60%) seemed to recognize this, rating the ability

to innovate as most important for their companies’

future success, compared to just 25% of their C-suite

counterparts in Europe.

INCONSISTENT TRACK RECORD

These trends were also reflected when the executives were

asked to rate the effectiveness and value of their companies’

innovation efforts over the last three years. While most

(57%) say such efforts were only somewhat effective, 40% of

C-suite leaders in the U.S. said their companies’ efforts had

been “very effective.” Only 25% of the Europeans occupying

the C-suite gave the same answer. A number of respondents

cited inconsistent levels of success with innovation across

companies, even though there may be small pockets of

successful innovation in

specific departments.

Drilling down deeper

into their preparedness

levels, the executives

said their main strengths

in innovating were

in mandates from

their top leaders to

encourage and act

on innovation—73%

rated that “pillar of

innovation” very strong

or somewhat strong—

and in their culture

enabling innovative

thinking and action

(56%). Forty-nine

percent cited their

dedicated infrastructure

and resources needed

for innovation, while

35% named a creative

process at their

companies dedicated

solely to nurturing

innovation. These results show that while innovation

is acknowledged by senior leadership, managing such

innovation often remains problematic given time and

profitability pressures.

CREATING A MANDATE

What does all of this mean for business prospects

in three to five years? Without direct and intentional

intervention and funding, it is predictable that many

organizations may end up with a shortfall of new

opportunities, leading to continued “borrowing” from

the funds for the future in order to deliver on the short

term. Eventually, this innovation “Ponzi” scheme can

have significant ramifications for the overall health of

our enterprises. Leaders need to create a mandate, fund

innovation infrastructure, create a process for creativity,

and build a supportive culture. As one survey participant

expounded: “Good leadership can make the difference

to ensure people and teams focus on the same priorities

and in the same direction. Unfortunately, we have (like

many organizations) more career managers than leaders

and entrepreneurs.”

IT’S NOT SURPRISING THAT MORE THAN 33 PERCENT OF THE SURVEY RESPONDENTS CIRCLE BACK TO INNOVATION AS THE MOST IMPORTANT FACTOR IN THEIR ORGANIZATION’S ABILITY TO SUCCEED


33%Say current innovation efforts are effective

11%Are frustrated by lack

of alignment and focus

15%Are fully prepared

to innovate

7%Directors are

frustrated at lack of change

Say innovation is ‘very

important’

87%

Are worried about time and resource issues

20%

11%Are frustrated by lack of accountability and

reliability

MORE ABOUT THE SURVEY

In terms of annual revenue, nearly 45% of the leaders responding represented companies bringing in $2 billion or less. Nineteen

percent had revenue ranging between $2 billion and $5 billion, while more than 13% had $5 billion to $10 billion in revenue. Five percent

had $10 billion to $15 billion in revenue; 7% had $15 billion to $20 billion; 5% had $20 billion to $50 billion; and nearly 6% had more than

$50 billion in annual revenue. Respondents were from the North and Latin America, Europe, Asia, Australia, and Africa.

INNOVATION AT A GLANCE


HHighly creative companies like Disney, Apple, Nike,

Chrysler and consumer-goods upstart Method all reported

increases in profitability in 2012. Their mutual strong

performance and growth were all complemented by

enigmatic leaders, the expected unexpected new ideas,

great decisions, product design—and, highly creative,

customer-tuned cultures.

Over the last decade, companies once known as highly

THE PROFITABLE SIDE OF CREATIVITYRevenue-making creativity is not confined just to new consumer brands. Get the creative culture right and it pays off, even during times of transition. Three high-performing organizations share their approach with Gordon Price Locke.

BY GORDON PRICE LOCKE

creative industry leaders

have waded into the waters

of poor performance or

irrelevance, some slipping

away entirely. Among these

are Kmart, Kodak, Digital

Equipment to name a few

and narrowly escaping,

possibly, JC Penney and HP.

So, what is the difference? Creativity as a shared attribute

across leadership teams is a critical missing ingredient. If

you don’t value or foster creativity as a C-suite executive,

the warning signs of irrelevance can develop slowly. You

risk leaving a legacy of unintentional outcomes — a stalled

balance sheet, battered egos, disenchanted customers, late-

to-market products and eroding brand equity.


LEVI STRAUSS & CO.Inspired culture, Innovative solutions

Too often creativity is branded as the sole domain of the

marketing department. So to test that theory, we asked an

executive with one of the world’s more recognizable brands,

Levi Strauss.

Robert Wiley, Senior Vice President, Sourcing, in the

global sourcing division of Levi Strauss, knows a few things

about using creativity in unconventional places – in his case,

it’s the global supply chain. Wiley flies 200,000 miles a year

and has seen it all in the last 20 years at Levi Strauss.

Wiley says this about creativity: “It is about approaching

challenges differently and leading teams in a new way.”

Eschewing anything contrived or forced like “we are all

going to wear purple hats today to be creative,” his instinct

about creative leadership is that it cuts through the noise,

attracting the notice of your team.

CHALLENGING ‘BUSINESS AS USUAL’

While he could not comment about the company

itself, it is public knowledge that Levi Strauss is profitable,

has launched a plethora of highly creative marketing

campaigns and has remained a leader and legend in the retail

fashion industry. In fact, in 2012 it held its own against a

commoditized and saturated jeans market according to

many news reports, despite drastic increases in cotton costs.

It is safe to say that for Wiley and his peers, business as

usual won’t win. Wiley shared, “In my role, I work with

people all over the world, they bring their own culture to

the table and integrate it with the team. What inspires my

Miami team versus, say my Hong Kong team, is different

and I cannot pretend to have it all figured out.”

And, there it is – as a baseline for the creativity discussion

just like the discussion that follows in this article — not

being afraid to not know something.

Wiley further stated that in the sourcing game you have

to question conventional wisdom and get creative. “At first

it was all about China, until it was all about Vietnam, then

Burma. It might be about all, or none of the above, and your

teams have to constantly challenge conventional wisdom, or

business as usual.”

You can feel a level of excitement from Wiley when he

talks about this topic and as we close the conversation he

says, “so many executives go on autopilot as they lead, but

that is a recipe for failure. Habits are powerful, and bad habits

can stagnate innovation.”

UNDERSTANDING CREATIVE LEADERSHIP

To better understand how creativity can drive growth

and profit, it must be understood first. Creative leadership

isn’t about being soft. To the contrary, creative leaders tend

to have imagination and conviction, the ability to see

alternatives, envision something new, embrace multiple

points of view, to inspire, let go of ego and be aggressively

willing to take risks and be tolerant of mistakes.

Creativity itself could be explained how author Mihaly

Csikszentmihalyi describes it in his renowned work

Creativity - Flow and the Psychology of Discovery and Invention.

He states that creativity is any act, idea, or product that

changes an existing domain, or that transforms an existing

domain into a new one.

He goes on to state that creativity manifests in people as

expressions of unusual thoughts, people who are interesting,

positive, and stimulating – and, whose perceptions are fresh

and judgments are insightful.

Leonard Nemoy hosted a wildly popular and creative

television show In Search Of (1976-1982) that prompted

the viewers to draw their own conclusions around many

of the world’s mysteries. In search of how creativity drives

profitability, a handful of leaders at three large enterprises

explained the link between highly creative culture and the

balance sheet.


GLAZER’SExpanding EBITDA, 12% year-over-year growth

In the consumer goods distribution business, Glazer’s

Distributors, a $3.8 billion (U.S.) company, hired maverick

President and CEO Sheldon “Shelly” Stein in 2010 to

make big changes.

This former investment banker’s challenge was to tackle

opportunities from a new perspective to differentiate the

brand amongst many old-line, family-owned dominant

distributors. Glazer’s is now the fourth largest in its category.

“If I were starting from scratch,

how would I do this … what is the

best way to run this business?” was

Stein’s first application of creative

thinking. He stepped back, asked

questions and moved away from the

typical systems in this market, adding

that many executives aren’t willing

to “not know the answer,” quoting a

former mentor of his as saying that

a bad executive is one “who thinks

his or her own body odor smells like

perfume.” The point being you have

to be willing to be wrong or naïve

and entertain alternatives to your

beliefs to harness creativity.

“Creativity is thinking outside the

norm, knowing what really matters

in making your company win, and finding a better way to

do it,” Stein says.

Glazer’s growth has been astounding. The company has

seen 12 percent year-over-year growth since 2010 and,

going into 2013, expects more. This growth is underscored

by expanding EBITDA.

However, you can’t drive creative solutions by just

starting at the balance sheet. Stein attributes some of his

success to:

5 His belief in his team

5 An open-door policy

5 Staying aware that asking the most senior people their

opinions means junior employees will never give you

the real answer.

FROM ‘NO’ TO ‘YES’

You have to drop the attitude, get out there, and talk to

employees and customers in a meaningful way.

Stein was asked for an example of alternative thinking

and creative problem solving to overcome a “no” to get to

a “yes.” His answer was, “I have about 20 of them.” He went

on to describe how a leader had

said the current sales and account

management process could not be

redesigned to save money and make

customers happy at the same time (it

had been that way for 50 years).

His employees and leaders, who

are free to express their feelings

and make mistakes, quickly went

to work and designed a new

approach. Since that change,

profits have doubled.

When you hear Stein speak, you

immediately hear the spark, the

energy, and the passion. He creates

comfort without losing a very

aggressive edge. On the topic of

assertion versus aggression in pushing

creative ideas, Stein says that creativity and being aggressive

go hand in hand. Otherwise taking “no” for an answer and

dealing with basic, safe assertions will rule.

When asked if a COO and a CFO can be creative, he

says, “I wouldn’t hire one who wasn’t, so I do not see why

they can’t be.” Whether it is working on the front lines,

in the distribution center, or fostering employee opinion,

Glazer’s executives think differently about how to lead

and the results are showing.

CREATIVITY IS THINKING OUTSIDE THE NORM, KNOWING WHAT REALLY MATTERS IN MAKING YOUR COMPANY WIN, AND FINDING A BETTER WAY TO DO IT,

Glazer’s President and CEO, Shelly Stein, shares his approach to fostering creativity, which has been profitable for the consumer-goods distributor:APPROACHES TO CREATIVITY

FROM SHELLY STEIN

5 Make sure

employees enjoy

their job or they will

spend their creative

energy looking for

another job.

1


“Shelly” Stein,

president and CEO of

Glazer’s Distributors.

Don’t penalize

mistakes.

People aren’t

willing to try new

things when

they are afraid.

Truly tie

compensation to

performance and

reward creative

ideas. This is what

changes behavior.

Aggressive is not a bad

word. Embrace leaders

who are constructively

aggressive to spurn

creative outcomes.

Have a “no jerk policy.”

Everyone’s opinions have

value. Leaders should not

think they are too good to

be wrong, no one should

feel diminished or feel a

lack of respect.

2 3 4 5


RYANCreative culture, Blockbuster performance

The corporate financial consulting field is a huge

space. Companies like KPMG, Deloitte Consulting and

PricewaterhouseCoopers dominate. There is one CEO who

came from the big firm space, started small in the corporate

tax services space, and is rocketing back up the competitive

ladder with 20+ diversified corporate tax and financial

accounting practice areas – profitably. That would be Brint

Ryan, CEO of Ryan in Dallas.

Ryan has been awarded just about every award you could

imagine from best places to work to a leader in customer

services. Ryan was set to break the $300M mark in 2012; it

could reach $400M in 2013, and in the next three years is

poised to reach the $1 billion mark.

Part of what’s created that growth is creativity.

“I have never been afraid to push the envelope and reach

for the stars in services, client satisfaction, and technology, and

I ultimately realized I needed to take the same approach with

our work environment,” Brint Ryan says.

CREATIVE CULTURE

Delta Emerson, Executive Vice President and Chief of

Staff — and Ryan’s right arm — went on to say, “once we

applied the same level of creative thinking to our culture as we

did to functional areas, the results have been unbelievable – a

company’s bottom line and creativity are intertwined.”

Ryan eschewed the rigid culture typical of big financial

consulting firms for a flexible work environment.

Called MyRyan, the employee engagement program not

only supports flexible work arrangements, career growth and

opportunity, it’s a way of empowerment. Employees may

work from home, remotely or in-office, as long as they are

delivering the expected results.

Team members are empowered to do what is best to get the

job done. The same applies to how time-off is administered.

SCALING FOR GROWTH

Although a creative work environment can drive growth

and profit, it’s not a switch that can be turned on and off,

Emerson says.

The Ryan executive team has shown that organizational

learning, managerial flexibility and constantly deploying

innovative business practices go hand-in-hand with gains

against the competition.

In asking about the C-Suite at Ryan the discussion

turned to how the CIO/CTO and CMO could use

creativity. Emerson states that typically C-level executives

have been functional domain experts and “they need to be

comfortable working outside their area of expertise to get

creative.”

Ryan’s CIO, for example, has played a role in looking

at community outreach for the company and developed

Ryan-teering [volunteering] to track and recognize peer-

to-peer community outreach and giving. The CFO was

very involved in helping think about metrics for MyRyan.

“Sometimes leaders kill their own good ideas because

they go off in a dark corner or stay hidden in the C-suite

and do not involve people to explore,” Ryan says.

It is evident that creativity is critical, whether you are

on a climb to the top of your market or protecting your

position and want to ensure you have all the ingredients

for sustained and meaningful growth and profit.

As Csikszentmihalyi describes in his work, creative

leaders possess the ability to be both extremely smart and

very naïve at the same time. They naturally tend to balance

extroversion and introversion. Leaders are able to navigate

both and they know the importance of seeing and hearing

others’ ideas.

Imagine the possibilities if you and your leadership team

mastered these same characteristics. Get creative. Anything

is possible.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Consistent Growth

FORTUNE places to work SCORE

Client Satisfaction

36%38%

6%

21%

8%11% 8%

50%

92% 92% 92% 90%96% 96% 96% 97%

67%

79% 78% 71%85% 90% 90%

92%

RYAN’S PATH TO $1 BILLION NUMBERS ARE ROUNDED TO THE NEAREST TENTH

IQ BOOST

BY MICHAEL R. WALDMAN

Failure and innovation go hand in hand. A corporate culture that allows for appropriate risk and failure is a culture that allows for innovation.

When the currency of the business is promises kept rather than quality or impact of the work, then employees will be afraid to make the kind of promises that will stretch their thinking.

Can you imagine at the beginning of the AIDS/HIV crisis researchers thinking they would discover a treatment without having any failures along the way?

Rather than focusing on keeping a promise, the question should be: Is what you’re giving your word to worthwhile? Instead, strive for the tension that’s generated by standing for something that’s out of the ordinary. Stirring up those creative juices may lead to failure – or a whole new way of doing things.

AN INNOVATION COMMITMENT IS MORE IMPORTANT THAN THE PROMISE

Michael Waldman is one of the founding partners of Insigniam. Subscribe to his innovation blogs at insigniam-innovation.com.

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If you want to generate more revenue, maybe you need a new plan.

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insigniam quarterly spring 2013 - innovation

Leadership & Management

transformative innovation

innovation needle faster

tis innovation mandate

power of strategy innovation

s s u e

launch issue of insigniam

innovative growth

new value