innovation and talent management

Innovation and Talent Innovation and Talent ManagementManagement

Jerry ManasJerry [email protected]

InnovationInnovation

A A NewNew Idea or Idea or Design Put To Design Put To Good UseGood Use

Why Innovate?Why Innovate?

Hint:

Ask Apple, 3M, Microsoft, GE, Sony, Dell, IBM, Google, P&G, Nokia, Virgin, Samsung, Wal-Mart, Toyota, EBay, Intel, Amazon, IDEO, Starbucks, and BMW

Business Week Top 20 Innovative Companies (2005 poll of 940 senior executives by Boston Consulting Group)

InnovationInnovation

What’s the greatest What’s the greatest innovation of all innovation of all time?time?

ExampleExample

Otto Frederick Rohwedder, Iowa Otto Frederick Rohwedder, Iowa InventorInventor

1912 – Invented Bread Slicer1912 – Invented Bread Slicer Bakers said it was useless, since the Bakers said it was useless, since the

bread would go stale.bread would go stale.

For most people: End of Story

But not for RohwedderBut not for Rohwedder For 13 years, searched for ways to hold the For 13 years, searched for ways to hold the

pieces together – including hat pinspieces together – including hat pins In 1927, assisted by Frank Bench of the In 1927, assisted by Frank Bench of the

Chillicothe Baking Company, created the Chillicothe Baking Company, created the Rohwedder Bread SlicerRohwedder Bread Slicer, which sliced and , which sliced and wrapped loaves of bread (the wrapper kept the wrapped loaves of bread (the wrapper kept the bread fresh).bread fresh).

The Chillicothe Baking Company in Missouri was The Chillicothe Baking Company in Missouri was the first to sell sliced bread on July 7, 1928.the first to sell sliced bread on July 7, 1928.

In 1930, the first commercial machines were used In 1930, the first commercial machines were used in the US and UK (under the Wonderbread brand)in the US and UK (under the Wonderbread brand)

By 1933, over 80% of bread sold was pre-sliced.By 1933, over 80% of bread sold was pre-sliced.

LessonsLessons Saw a need to Saw a need to eliminateeliminate a manual a manual

task task rather than improve itrather than improve it.. Built many prototypes.Built many prototypes. Tried different ideas to address gaps.Tried different ideas to address gaps. Didn’t give up. Persevered for years.Didn’t give up. Persevered for years. Found a complimentary partner.Found a complimentary partner.

Result: Transformed an industry and the consumer lifestyle

How to InnovateHow to Innovate

Recognize the need to innovateRecognize the need to innovate Commit to a culture of Commit to a culture of

innovationinnovation Field the right teamField the right team Create an environment for Create an environment for

innovationinnovation

““If I asked my customers what If I asked my customers what they wanted, they would have they wanted, they would have said a faster horse.”said a faster horse.”

- Henry Ford- Henry Ford

Source: Tom Kelly, Source: Tom Kelly, The Ten Faces of InnovationThe Ten Faces of Innovation

Customer satisfaction surveys have their limits.

First, What Business Are You In?First, What Business Are You In?

Ray Kroc, McDonalds: Real Ray Kroc, McDonalds: Real Estate and ServiceEstate and Service

Harley Davidson: A lifestyle Harley Davidson: A lifestyle companycompany

Cold Stone Creamery: Customer Cold Stone Creamery: Customer experienceexperience

Build a Cult!

Innovate for Competitive AdvantageInnovate for Competitive Advantage

““It’s fine to do something 15% It’s fine to do something 15% better until someone else better until someone else does it 100% different”does it 100% different”

Source: Harry Beckwith, Source: Harry Beckwith, Selling the InvisibleSelling the Invisible

Build a BrandBuild a Brand

Heinz, Dominos, Morton Heinz, Dominos, Morton differentiate themselves with differentiate themselves with their brand.their brand.

What do companies like What do companies like Starbucks and Cold Stone Starbucks and Cold Stone Creamery stand for? What is Creamery stand for? What is their identity?their identity?

The Starbucks ApproachThe Starbucks Approach Lead with principles and valuesLead with principles and values Treat all employees with equal Treat all employees with equal

respect (but celebrate the individual)respect (but celebrate the individual) Equal benefits to all employeesEqual benefits to all employees Embrace trainingEmbrace training Employee satisfaction leads to Employee satisfaction leads to

greater bonding with customers, greater bonding with customers, more ideas from committed more ideas from committed employees, lower costs, greater employees, lower costs, greater productivity.productivity.

Source: Howard Schultz (CEO Starbucks), Source: Howard Schultz (CEO Starbucks), Pour Your Heart Into ItPour Your Heart Into It

The Starbucks Approach – cont’dThe Starbucks Approach – cont’d Sell a lifestyle: the customer Sell a lifestyle: the customer

experience.experience. Commitment to the communityCommitment to the community Values start from the topValues start from the top Will yourself to success – through Will yourself to success – through

determination and belief.determination and belief. Focus on employee engagement, Focus on employee engagement,

values, and long-term growth over values, and long-term growth over appeasing shareholders in the short appeasing shareholders in the short term.term.

Source: Howard Schultz (CEO Starbucks), Source: Howard Schultz (CEO Starbucks), Pour Your Heart Into ItPour Your Heart Into It

What do you stand for?

What ingredients are needed for innovation?

The Ten Faces of InnovationThe Ten Faces of Innovation

Learning PersonasLearning Personas• Anthropologist (observes human Anthropologist (observes human

behavior)behavior)• Experimenter (enlightened trial and Experimenter (enlightened trial and

error)error)• Cross-Pollinator (T-Shaped People – Cross-Pollinator (T-Shaped People –

brings together lessons from broad brings together lessons from broad interests)interests)

Source: Tom Kelley of IDEO, Source: Tom Kelley of IDEO, The Ten Faces of InnovationThe Ten Faces of Innovation

The Ten Faces of InnovationThe Ten Faces of Innovation

Organizing PersonasOrganizing Personas•Hurdler (breaks the rules)Hurdler (breaks the rules)•Collaborator (brings people Collaborator (brings people

together)together)•Director (assembles the right Director (assembles the right

people and sets the theme)people and sets the theme)


The Ten Faces of InnovationThe Ten Faces of Innovation Building PersonasBuilding Personas

• Experience Architect (designs the Experience Architect (designs the customer experience – the WOW factor)customer experience – the WOW factor)

• Set Designer (creates a fun working Set Designer (creates a fun working environment)environment)

• Caregiver (anticipates customer needs Caregiver (anticipates customer needs and builds relationships)and builds relationships)

• Storyteller (builds internal morale and Storyteller (builds internal morale and external awareness through compelling external awareness through compelling stories and legends)stories and legends)


Innovation and TechnologyInnovation and Technology

Is technology a commodity?Is technology a commodity? Ask Wal-Mart or Dell.Ask Wal-Mart or Dell. Ask Ken KizerAsk Ken Kizer..

The Veteran’s Health AdministrationThe Veteran’s Health Administration

Ken Kizer transformed the VHA Ken Kizer transformed the VHA from a collection of poorly run from a collection of poorly run hospitals mired in government hospitals mired in government bureaucracy to a model of bureaucracy to a model of effective healthcare.effective healthcare.

He did it by embracing He did it by embracing technology and by defining what technology and by defining what the VHA stood for: the VHA stood for: Healthcare, Healthcare, not hospitalsnot hospitals..

The VHA TransformationThe VHA Transformation Establish a virtual, integrated network Establish a virtual, integrated network

of hubs (VISNs or Veterans Integrated of hubs (VISNs or Veterans Integrated Service Networks)Service Networks)

Hospitals report into VISNs.Hospitals report into VISNs. Insure community focus (national Insure community focus (national

reach, local presence, standardized reach, local presence, standardized quality)quality)

VISNs handle planning, logistics and VISNs handle planning, logistics and budgeting for their area (decentralized budgeting for their area (decentralized decision-making)decision-making)

The VHA TransformationThe VHA Transformation VISNs take a “whole product” VISNs take a “whole product”

approach with partnership approach with partnership agreements, alliances, and consortiaagreements, alliances, and consortia

Create electronic patient records, Create electronic patient records, which every doctor or nurse could which every doctor or nurse could access from anywhere.access from anywhere.

Automate drug-filling via roboticsAutomate drug-filling via robotics Washington HQ now responsible for Washington HQ now responsible for

support, principles, consulting, support, principles, consulting, information services, and change information services, and change leadershipleadership

The VHA TransformationThe VHA Transformation Key themes:Key themes:

• Focus on the customer (service Focus on the customer (service standards)standards)

• Leverage economies of scale (bulk Leverage economies of scale (bulk purchases, etc.)purchases, etc.)

• Reduce forms, approvals (especially Reduce forms, approvals (especially for small purchases and minor for small purchases and minor decisions), bureaucracydecisions), bureaucracy

Innovation vs. Best PracticesInnovation vs. Best Practices

““Best practices” allow you Best practices” allow you to aspire to the level of to aspire to the level of the current leaders, but the current leaders, but no higher. Instead, no higher. Instead, reinvent.reinvent.

“When Jacques Nasser was CEO at Ford, he ‘benchmarked.’ And I applauded. Why? His ‘benchmark’ was Dell! That is, a company outside his rather screwed-up industry. Likewise, the U.S. Marine Corps is benchmarking its supply-chain activities against… Wal-Mart. Hooray!”

- Tom Peters, The Essentials Series: Talent

Talent ManagementTalent Management

The Strengths RevolutionThe Strengths Revolution


“…“…effective executives do not start out effective executives do not start out by looking at weaknesses. You by looking at weaknesses. You cannot build performance on cannot build performance on weaknesses. You can build only on weaknesses. You can build only on strengths. Make weaknesses strengths. Make weaknesses irrelevant.”irrelevant.”

- Peter Drucker - Peter Drucker


““It became clear to me that, to understand It became clear to me that, to understand Peter Drucker’s philosophy of Peter Drucker’s philosophy of management, you need to know his management, you need to know his philosophy of education… philosophy of education… Honor individual Honor individual differencesdifferences. . Take people as they areTake people as they are. Don’t . Don’t attempt to change or manipulate them to attempt to change or manipulate them to be like or to be somebody else.”be like or to be somebody else.”

- Warren Bennis- Warren Bennis


““Discover what you don’t Discover what you don’t like doing, and stop doing like doing, and stop doing it.”it.”

- - Marcus Buckingham, Marcus Buckingham, The One Thing You The One Thing You Need to KnowNeed to Know


““Once we accept our Once we accept our limits, we go beyond limits, we go beyond them.”them.”

- - Albert EinsteinAlbert Einstein

Avoid the Peter PrincipleAvoid the Peter Principle

The Peter Principle (Laurence J. The Peter Principle (Laurence J. Peter): In a hierarchy, every Peter): In a hierarchy, every employee tends to rise to his or employee tends to rise to his or her level of incompetence.her level of incompetence.

*Instead, build growth paths of *Instead, build growth paths of prestige within the same role prestige within the same role (think sports heroes)(think sports heroes)

* Adapted from Marcus Buckingham, * Adapted from Marcus Buckingham, First Break All the RulesFirst Break All the Rules

Never arbitrarily promote someone to management based on performance or seniority. It takes the right strengths.

“In an orchestra, you don’t automatically promote a great violinist to conductor. In football, most coaches were mediocre players at best. Only in business do we make the mistake of promoting the best performer to manager.”

- Tom Peters

Building a Talented TeamBuilding a Talented Team

Build your team based on Build your team based on people’s inherent people’s inherent strengths. Manage around strengths. Manage around their weaknesses.their weaknesses.

Building a Talented Team – cont’dBuilding a Talented Team – cont’d

““Never try to teach a pig Never try to teach a pig to sing; it wastes your to sing; it wastes your time and annoys the time and annoys the pig.”pig.”

- Robert Heinlein- Robert Heinlein

Building a Talented Team – cont’dBuilding a Talented Team – cont’d

You can teach skills and You can teach skills and knowledge, not strengths.knowledge, not strengths.

Hire for attitude and Hire for attitude and strengths. Train the skills.strengths. Train the skills.

Create an environment where people can exercise and build on their existing strengths.

““Nobody ever grew taller Nobody ever grew taller by being measured.”by being measured.”

- - Phillip GammagePhillip Gammage

Source: Dennis Littky, Source: Dennis Littky, The Big Picture: Education is Everyone’s BusinessThe Big Picture: Education is Everyone’s Business

Food for ThoughtFood for Thought

Should we expect one person to Should we expect one person to be an excellent strategist and be an excellent strategist and tactician? tactician?

A leader, manager, and A leader, manager, and administrator? administrator?

A generalist?A generalist?

What about when people don’t perform well?

Examine the causes… Immediately

Fixing Performance ProblemsFixing Performance Problems11 Causes of Poor Performance (11 Causes of Poor Performance (in orderin order)*)*

1.1. People don’t know People don’t know whatwhat they’re supposed to do. they’re supposed to do.2.2. They don’t know They don’t know whywhy they should do it. they should do it.3.3. They don’t know They don’t know howhow to do it to do it4.4. They think the prescribed methods won’t workThey think the prescribed methods won’t work5.5. They think other things are higher priorityThey think other things are higher priority6.6. They think they’re doing just fineThey think they’re doing just fine7.7. Non-performance is rewardedNon-performance is rewarded8.8. Good performance feels like punishmentGood performance feels like punishment9.9. There are obstacles out of their controlThere are obstacles out of their control10.10. There are no positive consequences for good There are no positive consequences for good

performanceperformance11.11. There are no negative consequences for poor There are no negative consequences for poor

performanceperformance

Adapted from Adapted from Fixing Performance ProblemsFixing Performance Problems, by Bud Bilanich (The Common , by Bud Bilanich (The Common Sense Guy – www.commonsenseguy.com)Sense Guy – www.commonsenseguy.com)

“Flex Your Knees Bill.”

- Sam Jones’s “pep talk” to Bill Russell at the free throw line during the 1968 NBA Eastern Division Championship (Celtics vs. 76ers)

Often, a gentle reminder is all Often, a gentle reminder is all that’s needed.that’s needed.

Another Reason for Poor Another Reason for Poor Performance: Performance: The person is in the wrong role.The role of a great manager is to*:

1. Select the right people (based on their true talents)

2. Set expectations/outcomes (results, principles, priorities) aligned with organizational goals

3. Motivate people (focus on strengths, praise, recognition) - one person at a time

4. Develop people (build on existing strengths, help them find the right fit)

* Adapted from Marcus Buckingham, First Break All the Rules

When All Else Fails, You Have When All Else Fails, You Have Three Choices…Three Choices…

1.1. Devise a support system, Devise a support system, process, or toolprocess, or tool

2.2. Find complimentary partnersFind complimentary partners

3.3. Find them another role or Find them another role or remove them from the teamremove them from the team

* Adapted from Marcus Buckingham, First Break All the Rules

Talent RetentionTalent Retention Lessons from Gallup studies:Lessons from Gallup studies:

• Profitability is directly linked to Profitability is directly linked to employee satisfactionemployee satisfaction

• The employee’s The employee’s direct managerdirect manager impacts satisfaction more so than impacts satisfaction more so than corporate culture or perks.corporate culture or perks.

We can conclude: Middle management We can conclude: Middle management culture impacts profitability.culture impacts profitability.

Specifically, Employees Need:Specifically, Employees Need: Clear expectationsClear expectations The right tools to do the job rightThe right tools to do the job right An opportunity to do what they do bestAn opportunity to do what they do best Praise and recognitionPraise and recognition Interest in them as a personInterest in them as a person Interest in their developmentInterest in their development Their ideas and opinions to countTheir ideas and opinions to count Belief in the missionBelief in the mission Belief in their teammatesBelief in their teammates Opportunities to learn and growOpportunities to learn and grow

Adapted from Marcus Buckingham’s First Break All the Rules

Does this impact profits?

Sure does.

Employee Satisfaction Leads to Employee Satisfaction Leads to Customer RetentionCustomer Retention

Schlesinger and Heskett (1991) – Virtuous Circle

Customer Retention Leads to ProfitsCustomer Retention Leads to Profits

A 5% improvement in A 5% improvement in customer retention can lead customer retention can lead to 25%-85% improvement to 25%-85% improvement in profits in terms of NPV. in profits in terms of NPV. ((Reichheld and Sasser – Reichheld and Sasser – 19901990))

Why?Why? Cost of acquisition occurs at the beginning Cost of acquisition occurs at the beginning

of the relationship.of the relationship. Long term customers are less inclined to Long term customers are less inclined to

switch and are less price-sensitive.switch and are less price-sensitive. They are more likely to purchase other They are more likely to purchase other

products.products. They are less expensive to service; they They are less expensive to service; they

know the ropes.know the ropes. This makes employees happier, which This makes employees happier, which

boosts customer satisfaction.boosts customer satisfaction.

Source: Buchanan and Gilles (1990)

““Everything that can be Everything that can be counted does not necessarily counted does not necessarily count; everything that counts count; everything that counts cannot necessarily be cannot necessarily be counted.”counted.”

- - Albert EinsteinAlbert Einstein

But Remember…But Remember…

Are your employees motivated? Is your team ready to go the next level of performance?

For More InformationFor More Information [email protected]@marengogroup.com www.marengogroup.comwww.marengogroup.com www.PMThink.comwww.PMThink.com www.creatingweinstitute.comwww.creatingweinstitute.com

www.pmthink.comwww.pmthink.com

innovation and talent management

Business

chillicothe

customer experience

marcus buckingham

tom peters

tom kelley

ten faces

poor performance

albert einstein