Innovation is in the "DNA of manufacturers," Mike Walton told attendees in his keynote address at the IndustryWeek Manufacturing & Technology Conference & Expo, and it is vital that they establish a "culture of innovation" in order to sustain it over time.
“If there is any industry where innovation is the mother of necessity, it is this industry,” said Walton, the global head of Manufacturing Industry for Google at Work and a veteran manufacturing and IT consultant.
Walton contrasted companies with innovation cultures with those who believe they are innovative but really have just “cycles of innovation that are one-offs” or have top-down innovation rather than encouraging innovation throughout the organization.
“Ask yourself, are you enabling not just your lieutenants but the lowest-level personnel with the tools, techniques and trust to think big,” Walton asked attendees, “to make incremental improvements and leapfrog improvements?”
He cited research by PwC that innovation is an important driver of growth. That research found that the “most innovative companies in our study delivered growth at a rate of 16% above that of the least innovative and they are more bullish about their growth prospects.”
Walton recommended that manufacturers follow a Google practice of allocating time on a 70/20/10 basis in order to support innovation:
- 70% of time should be devoted to "small steps" – daily lean improvements, improving yields, cutting 2% of operational costs.
- 20% of your time should address “jump steps” - more sizable changes in your department or company to develop new products or improve employee retention. “How can we really grow our department, grow our business,” he said.
- 10% of your work hours should be focused on "moonshot" ideas - fundamental changes to the company, its products or operations and personnel. “How can we truly change the industry?” he said.
Walton this approach “really works” and he points to Google Glass as an example. Google Glass was born out of an employee asking, “Why do I have to hold a phone? Why can’t I just wear a phone?” Employees working on the idea, Walton recalled, “walked around the campus wearing cardboard on their face." He said Google Glass had inspired the boom in wearables. And as for the product, Walton promised, "We're not done yet. We're not even close to done."
9 Ways to Sustain Innovation
Walton offered 9 tenets for supporting a culture of innovation:
10x - Walton said Google believes it is easier to make a huge or 10X change than a 10% improvement. Companies should spend time on “moonshot” innovation - “thinking much differently about how you are doing business today, about the products you have and what they serve, customer needs and how you solve them.
Launch and keep listening. Walton said companies should keep iterating, getting feedback and improving on their products.
Share all you can/collaboration. Walton said sending out an email or text message is not enough. Instead, personally reach out and get as many ideas and viewpoints as possible.
Hire the right people. Walton related how early in his career he had hired a person who turned out to be both the "most horrible" person he ever hired and the "most qualified" person. “I went through more pain with that one person than I ever did with anyone else,” he said. Walton stressed it is better to wait and hire the right person than make a hasty hire in order to fill a position, and then have to deal with the ensuing disruption in the team.
Use the 70/20/10 rule. Walton challenged executives to take just one week and devote 10% - 4 hours of a 40-hour week – to thinking big. “Challenge yourself to think differently about the way your organization is doing business and what it can do,” Walton said.
Employee empowerment - look for ideas everywhere. “Companies are started all the time by people frustrated in the companies they work for,” said Walton. “They get frustrated because they can’t get their voice heard. They can’t get the ideas up the chain.”
Use data, not opinions. “Use data to make decisions, rather than always shooting from the hip,” said Walton.
Focus on the user, not competition. Companies would be better off taking the energy they put into being “fast followers” and spending it on innovation, Walton said.
Cherish victories and failures (do not condemn them). Walton advised companies to adopt a policy of "fail fast, fail early and celebrate your failures." He said it was important to learn from a mistake and "move forward."
If you are an innovation proponent in your company, there is one person you may want to keep an especially close eye on. Walton noted that research by CA Associates that Google and other companies had supported found that the biggest innovation blockers in companies are chief information officers – “the very person that we have sent off to a college education, invested years in transformation and change management – they are the people that want to change the least because they have technology they think is working on behalf of their companies and doing a great job. If they disrupt that, they are disrupting themselves. If they disrupt themselves, there is high risk. You can’t fail because the company expects nothing but the best.”
“How many CIOs give you the opportunity to fail?” Walton asked attendees. “I don’t know. I know a lot of CIOs that failed and expected to be forgiven. Maybe it’s okay that we then forgive those down below.”