Last week, I wrote about increasing innovation in your company.
This week, in Part 2, we'll talk about how to create the right environment and incentives for innovation to flourish.
Today's blog outlines a few key ideas and strategies I've found to be extremely effective.
The day before something is truly a breakthrough, it's a crazy idea.
But few companies actually try crazy ideas -- especially the most successful ones.
Fear of failure paralyzes creativity, stops risk taking, and ultimately slows innovation down to a halt.
Why do people fear failure?
Three principal reasons…
How do you minimize fear of failure?
The right environment and the right incentives.
A decade ago, Michael Schrage, a Research Fellow at MIT's Sloan School, shared an elegant idea with me for creating a conducive environment for innovation in your company. He called it the 5-5-5 Program. Below is my variation on his concept.
Here's the basic idea:
Teams of 5: Break your company (division, group, etc.) into teams of five people. Try to maximize diversity in the group (gender, age, expertise).
Why 5 people? There's no "CEO" of a team of 5 people. There's no need for an org chart or a communication plan. Information flows freely and there's reasonable idea diversity. This is similar to Jeff Bezos' 'two-pizza rule'… an ideal working team size.
$500 or $5,000: Next allocate a budget for each of the teams… Something on the order of $500 to $5,000. This is the amount of money each team will spend during this program – enough money for the team to try a few experiments, without breaking the corporate piggy bank.
5 Days or 5 Weeks: Give the teams a fixed (short) amount of time to run a number of experiments to see if their idea has merit and gets traction. The amount of time is sufficiently short such that there are no negative consequences if nothing useful materializes.
Here are your instructions and parameters to your competing teams:
Remember -- it's critical that your team collects data on their experiments. Data is everything, so make sure they've identified their targets and understand their key performance indicators (KPIs).
Now, run the experiment.
You may be shocked by the results – the creativity and originality of your own employees is astounding.
As it turns out, Darwin's theory from On The Origin of Species also holds true for the Origin (and Evolution) of Ideas (i.e. Innovation).
The same conditions that increase the rate of biological evolution also drive the greatest rate of idea generation.
When Darwin wrote the Origin of Species in 1859, he discussed three primary conditions as the drivers for "Speciation" (the formation of new species):
Metaphorically speaking, "speciation" is very similar to "ideation," or the formation of new ideas.
And interestingly, the same conditions that led to speciation also lead to ideation.
Small Gene Pool = Small Team Size: As discussed in the 5-5-5 segment above, small diverse teams ranging in size from five to eight are ideal for breeding new ideas. Having too large a group can create artificial social pressures that prevent individuals from raising their hands or taking risks. Beyond this, larger groups typically have too many naysayers that tend to squelch outlier ideas.
High evolutionary selection pressures: Historically, we've seen incredible innovation during times of war (e.g. Kelly Johnson's Skunkworks inventing the first jet aircraft in 1945). High-pressure environments incentivize people to try crazy 'Hail Mary' ideas, and while most fail, if one works, it is usually a true innovation.
Geographic Isolation: Place your "innovation team" outside the mother ship, far away from the hordes that will tell them how "crazy" their ideas are. True innovation is massively disruptive and the average employee hates disruptive change. Steve Jobs isolated his Macintosh team far away from the rest of Apple and proudly flew a pirate flag above the building.
This is the sort of conversation we explore at my 250-person executive mastermind group called Abundance 360.
The program is highly selective. If you'd like to be considered, apply here.
Share this with your friends, especially if they are interested in any of the areas outlined above.
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P.P.S. I've just released a podcast with my dear friend Dan Sullivan called Exponential Wisdom. Our conversations focus on the exponential technologies creating abundance, the human-technology collaboration, and entrepreneurship. Head here to listen and subscribe: a360.com/podcast