Corporate Innovation Online

The massive recall by Toyota of 8.4 million vehicles (8 million for unintended acceleration (which as of this date has not been adequately diagnosed) and 400,000 for brake problems is, according to the company, attributed to over expansion and insufficient attention to quality. Toyota’s organization was unable to cope with the building of upwards of 17 new production facilities since 2,000 on top of the need to supply and manage the current total of 75 production plants world-wide. The outcome is that Toyota became the largest auto maker in the world and was simultaneously hobbled with the largest recall in its history. Will the recall affect Toyota’s traditional innovative culture?

With the failure of its off-shore drilling rig and its tarnished reputation for offshore drilling, world-wide attention has been drawn to BP. This failure is not the image which BP has worked for over the past 3 years under the leadership of Tony Hayward. BP you would think, wants to be known as innovative. Its response to this latest disaster raises some questions about its preparedness; its research and its ideas.

Is BP an innovative company? Does the company have a culture which fosters innovation? What are the characteristics of the ‘new culture’ which management says it has been putting in place over the last 2 to 3 years? Is BP sufficiently able to come up with ideas and solutions to mitigate the risk associated with deep-water drilling? Using a framework developed by White & Partners Ltd., these are the questions raised in a ‘White Paper’ available, for free, on the web site: http://www.corporateinnovationonline.com

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Reckitt Benckiser (RB) was awarded The Economist’s very prestigious annual Innovation Award on October 29th, 2009, for its “innovative and entrepreneurial corporate culture”. W&P sets out to parse RB’s culture and we get about 50% done based on the information which we can access. Perhaps others can help? You can download a copy - from the web site - of the ‘Draft work in progress’ and see how far we got. Comments welcome. How would you describe their corporate culture? Is it a culture which will - on an ongoing basis - better RB over its competition?

It should come as no surprise that GE is off loading its media assets. Why? One major reason is that the culture of GE is dramatically different from the media business and, over the long term, just does not fit. GE thinks long term, its initiatives are based on an understanding of R&D spending, and the company is steeped in technology and,  even more so, in its understanding of the role of science. No surprise here. It is just too bad the acquisition happened in the first place. A lot of investment and management effort would have been spent, wisely, elsewhere.

A new Profile explores the culture for innovation which, once set in motion by Ken Iverson in the 1960s, contributed to Nucor becoming the largest steel company in the United States and all this without an R&D department per se. The Founder’s legacy carries on!

Following the lead of many CEO’s these days Jeff Immelt has, in his latest book - The New GE Way, let us in on a lot of previously closely held information about GE. By carefully examining this book, as well as other recent and older publications about GE, we have been able to construct a picture of the culture within GE from its beginnings (Reference Innovate Like Edison) to the culture under Welch and Immelt. The styles are different and are intended to achieve different results in certain aspects of GE’s business.

See what you think and provide a comment.

It is becoming increasingly clear to me, as I examine the ‘culture for innovation’ in many of the most innovative companies, that the culture of the founder(s), even from 100 years plus back, has a profound effect on the company.

By taking the time to complete the Check-Up (part of this web site) you can now compare your company’s culture for innovation with one of the most innovative companies in the world; 3M. Based on the Profile of 3M, which outlines for each of 25 Factors, the culture for innovation in 3M, you can now compare your company with 3M. Go ahead. See how your profile matches or is out of line with 3M. Go to http://corporateinnovationonline.com and download 2-page instructions that will, with 6 easy steps, provide insight into the culture for innovativeness in your company.

Viewers may be interested in this most recent profile as it provides insight into many new management practices at P&G which have been implemented to improve corporate performance through focussing on innovation. 

P&G might once have been characterized as being rather closed mouthed about how it has managed to be so successful. No more, thanks to recently published articles, a book [The Game Changer] authored by A.G. Lafley and Ram Charan, and interviews with senior executives. The changes introduced over the last 8 years represent a step-function in how to improve innovation. 

Companies and consultants can learn a lot from taking the time to understand more about the changes which have been made. Visit the web site; www.corporateinnovationonline.com, go to the QuickIndex and download the profile.

Comments on the profile are most welcome. 

What do senior executives (Chief Operating Officers and Chief Executive Officers) consider to be the most important Factors which encourage a culture for innovativeness? Our analysis of the latest survey results found some answers.

Those respondents to the survey who identified themselves as COO/CEO identified 10 Factors as most important to creating a positive culture for innova tion. Five of these Factors were seen as being most important. To find out what to do, in practical terms, visit the web site; http://www.corporateinnovationonline.com  and go to Thought Starters where you will find helpful ideas for each of the 5 Factors.

Factor #6; Emphasis on management of people and their interactions. Not surprisingly, senior executives emphasized this important aspect of their management responsibility as contributing significantly to creating a climate for innovation. 

Factor #8; Tolerance of variance from the corporate norm. At the senior executive level it is seen as very important to encourage employees to give voice to their opinions even if such statements or ideas depart in some way from the traditions of the organization. New ideas and new methods of doing things are to be encouraged.

Factor #12; Degree to which management decisions are made with input from the rest of the organization. Senior executives like to believe that their management style creates openings for employees to contribute to the decision-making process.

Factor #19; Availability of resources (budget, time, etc.,) for new ventures. Having funds available for new ventures is seen as being a very important contributor to a positive culture for innovation. Respondents, as measured by the difference between the ideal situation and the reality faced by senior executives on this issue, were clear that this was an area where they were least satisfied with the status quo. In other words, generally, there are insufficient funds (relative to desire) available for new ventures.

Factor #22; Extent to which management has an innovative tradition. Senior executives believe that having an innovative tradition is, in itself, important to creating a positive climate for innovation. Obviously the first step is to create the climate, but the second step is taking actions which sustain innovation.

What do you think of this short list of 5 Factors? Does your senior executive have the same opinion?

More on the other 5 Factors seen as important will be presented in a subsequent blog entry.

If you want to get more insight into why both 3M and John Deere are amongst the most innovative companies in the world, go to http://www.corporateinnovationonline.com and download an in-depth profile of each company. Learn more about their management practices and how they help sustain a culture for innovation.