Good Morning Thinkers!

Harnassing Magic

Until recently, innovation was treated as though it were magic, something that either happened or didn't happen but couldn't be controlled.  We are now beginning to realize that, while we can't "control" innovation, we can create a culture and context where it is more likely to happen.  And, we can use processes that increase the innovation success rate, which, according to Larry Keeley at Doblin, can be as low as 4%.  One organization that has worked very hard for the past several years to learn how to replicate and sustain the process of innovation is Best Buy and one of the primary players in this initiative is Kal Patel, Executive Vice-President of Strategy and International.

Patel is an advocate for quickly testing new products and services, stating, "Every one of our associates is trained in a method that starts with a hypothesis, and then proceeds to stages like test and verify.  At the end of the experiment, the Associate who undertook it reports out on what he or she has learned.

"These are quick ‘popcorn-stand’ like experiments.  If we want to try something new, we might pitch a tent in the parking lot of one of our stores and test an idea out with our customers." 

In addition to leading the innovation initiative at Best Buy, Patel finds time to contribute on a broader stage.  He accompanied a Red Cross mission to tsunami-impacted Sri Lanka to distribute needed supplies.  He stated, "Although the lives of the people here may be devastated, their spirits are not broken,  What we are doing, in addition to providing relief supplies, is part of strengthening their spirits."

Patel will be a keynote speaker at "Unblocking Innovation," the 11th annual Convergence of people, ideas and great practices related to innovation to be held in Minneapolis, September 21-23.

Convergence Blog -- get the latest here.

Cargill Innovates

Five years ago when Cargill's James Bady attended InnovationUniversity, Cargill was just beginning to talk about how to create a culture of innovation.  The pace picked up about two years later when Carol Pletcher was named Director of Innovation.  Cargill has now become a hotbed of innovation and here's a short article from the Institute of Food Technologists newsletter:  (also, Cargill will be presenting at Innovation Convergence 2005):

Cargill reports 18% increase in earnings

Agriculture processor Cargill reported net earnings of $230 million for the 2005 fourth quarter which ended May 31, up 18% from $195 million in the same period a year ago.

The company earned $2.1 billion during the 2005 fiscal year, including a noncash net gain of $578 million realized in the second quarter. Excluding the one-time gain, Cargill’s 12-month net earnings were $1.53 billion, up 15 percent from $1.33 billion a year ago.

Revenues for the full year rose 13 percent to $71.1 billion. Cash flow from operations increased 7 percent to $3.2 billion.

"Backed by strong performance across our diverse business and geographic operations, Cargill delivered increased earnings in fiscal 2005," said Warren Staley, Cargill chairman and chief executive officer. "Today’s results are a tangible sign of the progress achieved in our company’s strategy to become a recognized leader in creating food and agricultural solutions that help customers succeed."

Staley traced the year’s performance to Cargill’s development in 1999 of a new business model that called on the company to add proficiencies in supply chain management, food applications, and health and nutrition while continuing to grow its traditional strengths in trading, processing and risk management.

"Through our employees’ initiative, we undertook many changes that are making Cargill today a more customer focused, innovative, collaborative and higher performing company."

Among the contributors to Cargill’s earnings for the full fiscal year were its animal nutrition, beef, egg product, pork and poultry businesses worldwide; the risk management and financial segment; the global supply chain management network, which includes grain, oilseeds and other commodities and ocean shipping services; food ingredients in Europe; the U.S.- and Latin American-based salt businesses, which manufacture products for food, road deicing and other uses; and the U.S.- and Canadian-based agriculture services units.

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Three Levels of Sustaining a Culture of Innovation

W.L.Gore is widely noted for its innovation, and its relationship oriented culture.  Bob Henn, former  head of global R&D for Gore was interviewed by Victoria Cooper and Michael Lecky for PTRM and explained three levels of culture:

"We work differently than many companies who simply tell people what to do. Within the last few years, in fact, we've established three governing bodies within the organization. One is the Operations Committee, which pays attention to the business and the metrics that go along with it. Another is our Intellectual Property Committee, which pays attention to our patent estates, our trademarks, the generation and use of our know-how. And the other one is our People Committee, which attends to our culture. It's on the same level as the other two.

"One of the things I've learned in my years at Gore is that culture is not static. The reality is that work is a social activity, and every time we bring on a new person, our culture changes. When I was recovering from an illness some time ago, I read a lot of the work of Edward Schein, who was a student of Douglas McGregor [a social psychologist who described the "Theory X"; and "Theory Y"; manager in his seminal 1957 treatise]. Douglas McGregor was a person who Bill Gore heard speak in 1954 at DuPont, and a lot of Bill's philosophy came out of the same school. In Schein's model, culture may be viewed as essentially having three levels. At the topmost are "artifacts."; One artifact of our culture is the lack of hierarchy. Everyone at Gore is referred to as an Associate. Another artifact is our lack of corner offices. These artifacts tell you something about our culture. They're the easiest things to observe, but as you dig further, you begin to gain more insight.

"At the middle level are "espoused values": the things we say about ourselves. An example of one of our espoused values is that no one here is free to impair the growth of others. Additionally, no one can make a waterline decision himself, for instance, about whether we relocate people to set up a new operation in another country. The espoused values are easy to discern because they're voiced, but they're often difficult to interpret. At Gore it can take people a couple of years to understand or interpret the espoused values and translate them into applications.

"Digging deeper, the third layer of culture is "underlying assumptions."; This is the most difficult, because it's unarticulated, although it drives everything. One example here at Gore is trusting relationships. That's really important. Another underlying assumption at Gore is the belief, fundamentally, that the individual can make a difference."

Henn will be a keynote speaker at "Unblocking Innovation," the 11th annual Convergence of people, ideas and great practices related to innovation to be held in Minneapolis, September 21-23.

The entire interview with Henn can be seen at http://www.prtm.com/insight/article.asp?insight_id=3305  (Free, but registration is required.)

Convergence Blog -- get the latest here.