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8 Steps to Drive Innovation in Large Companies

This blog outlines how my friend Lajos created an atmosphere of innovation at GE HealthCare (Hungary) – a lesson we'll all want to remember.

Most people want to be creative, but at big companies, they're often stymied by rules, regulations and fear of failure. Lajos Reich, chief technology officer for GE Healthcare (Hungary) ran an experiment, giving his staff a no-strings-attached "week off" with which to do as they wished... Create, or go to the beach. What he found was a team of engineers hungry to create. Employees, who when given a specific window of unencumbered time, actually spent that time coming up with new ideas for the company.

A key part of Lajos' strategy was to get his engineers, who were typically stove-piped inside their disciplines, to work together across disciplines and to exchange best practices. He did this by organizing both an annual symposium and a monthly meeting at which engineers presented their work to each other independent of their team focus. He also created a number of competitions where engineers could demonstrate to other engineers -- and to company leadership -- their innovations.

Finally, Lajos also worked to make it easier for his employees to get patents for their work. What's the use of coming up with an idea if it goes nowhere? Historically, the patenting process was very time-consuming and cumbersome. This led to situations in which engineers dismissed novel ideas out of hand because of the difficulty in protecting the intellectual property.

"It was very complicated to submit a patent," Lajos tells me. "You had to submit it online, then if the patent was selected to proceed, people had to cooperate with attorney in the U.S. or India. Theoretically that's okay, but it killed motivation. The attorneys were in different time zones. The window to cooperate was small. The language was different. The patent attorneys were changing all the time and few understood the context of the design work."

To help break through this logjam, Lajos found and selected a local patent attorney -- in the same time zone, speaking the same language -- to work with his staff. "The attorneys could personally come to engineers and discuss how this patent can be best described, for the U.S. patent office and the European patent office," Lajos says. This sped up the patent process and reduced the frustration.

In addition, Lajos set an inventor fee. Now, a company generally owns all the ideas for which an engineer is developing working plans, but Lajos awards $1,000 to each inventor once the patent has been accepted. "It isn't for the idea itself, but for the working out of the idea," he says. "This motivates the people to work together with the patent attorney," he says.

But that was just one component of a much larger cultural change that Lajos engineered. Here is the eight-step plan he outlined to unleash creativity in a large organization:

1. Before venturing into new territory, first assure that all corporate deliverables are met at best quality, highest speed and lowest cost. Accomplishing this first gives you and your team the credibility and freedom to next be creative and do something even more interesting, challenging and productive.

2. Establish a strong culture that incentivizes innovative ideas even if they are not on the official technology roadmap. The trigger needs to be something concrete and demonstrable to receive the incentive, such as a "patentable prototype," not just an idea. Also, the staff should feel free to innovate wherever inspiration strikes.

3. Continuously facilitate the sharing of knowledge and cooperation between independent engineering teams. The first step Lajos took was an annual Technology Symposium. Last year 220 engineers made 54 presentations to each other. The second step was a monthly Technology Seminar, followed by online unlimited open brainstorming. The results of this sharing of knowledge has been a very fruitful cross-pollination across a variety of specialties.

4. Organize a competition. This can be part of the weeklong "vacation" in which engineers are free to create. In Lajos' case, the weeklong semi-sabbatical led to many ideas that would have never seen the light of day because the engineers were otherwise too busy. This one week helped unleash numerous ideas. The engineers were not only productive but extremely grateful for the opportunity to shine.

5. Create an award that is emotionally attractive to the participants. "I find this much more powerful than monetary awards," Lajos says. Last year iPads were awarded for best prototypes. This or next year it might be DNA sequencing. Further along it might be something from the new exponential technologies. Ultimately, the prize is secondary to achievement.

6. Expect and require tangible results that can be touched, tried, demoed, showcased. This forces engineers to think it through to the next level and creates physical representations that further inspire other engineers.

7. Make sure that the winners are introduced to the company leadership, so that they are aware of those talents hidden in the depth of the large organization. Educate leadership to expect further surprising prototypes.

8. Let the winners proudly share their results with the entire team to set an example for others and encourage further innovations going forward. The real prize is often the pride of success.

In my next blog I'm going to introduce you to Arianna Huffington, founder of the Huffington Post and now editor-in-chief of The Huffington Post Media Group, since its acquisition by AOL. Arianna and I will discuss her passion for creating, for innovation and for how to work up to one's peak.

NOTE: As always, I would love your help in co-creating BOLD, and will happily acknowledge you as a "contributing author" for your input. Please share with me (and the community) in the comments below what you specifically found most interesting, what you disagree with and any similar stories or examples that reinforce this blog that I might use as examples in writing BOLD. Thank you!
Philip Dumas's profile photoGuy Fraker's profile photoIan Amor's profile photoEllis Traub's profile photo
9. Turn the employees who are interested in investing into shareholders of the company. This will motivate them to think of new ideas that could rise the value of the shares of the company.
Wow! What an awesome idea who's time was long overdue!
Very interesting, congratulations Mr. Lajos. Another company that has an excellent way to motivate its employees constantly to make R&D is 3 M.  
Another company I would add to the innovators watch-list is Ford.  As many of us have seen and read, Bill Ford often discusses the "New Era of Personal Mobility", which is at hand.  Not all of the puzzle pieces have fallen into place yet, but the consumer demand is ramping up enough to see the shift go into full swing.  Ford has been ahead of these trends in many ways.  In reading these past 2 posts, filled with invaluable & tactically sound information, I am struck by the question, what causes the tipping point?  Is there one attribute that pushes innovation forward into an actual sustainable practice?  This is why I bring up Ford.  A new era of mobility will bring about unprecedented disruption to revenues for whole industries.  This is real gut-check time, requiring that deep breath & dive in decision moment for numerous C-Execs and BOD's.  But then what?  What factor(s), if any, will allow that decision to take on a life of it's own and overcome organizational second-guessing?  The conclusion I have come to, based largely on the wisdom shared by Peter, is quite simple: Build in "emotionally attractive" employee incentives.  Many of the break through opportunities are often discovered as they emerge from the fog of disruption.  Incentives essentially create the internal version of crowd-sourcing armed with both subject matter expertise and courage.  
I'm all for encouraging creativity and innovation. In this kind of culture this can only help everyone go forward, the company, the individual and the effect it has on others involved in endeavors like this. However, there appears to be something inequitable. If someone or some team, in competitions like this come up with innovative and at the end of the day the company is awarded a patent, then $1000 is rather paltry in light that companies can making millions if not billions off of successful patents. In such cases, to encourage more innovation and creativity it would be well for these companies to establish a participation or a share of the profits from such patents.

Ron Greenfield
Peter, thank you for these structured steps. On my last post, I mentioned that GE has a culture of innovation. P&G also has a culture of innovation and it creates a leadership culture that supports that. I leaned that they create more CEOs outside P&G as leaders leave to take on CEO positions outside of P&G. I think the key is really about leadership that nurtures innovation and encourages people to develop and use their creative potential across the organization at all levels - top, middle, intermediate, including and especially the front line employees.
These are great tips to innovating within organization. Establishing credibility as an innovator within a company, and recieving recognition is the framework for future innovation. As employees see their coworkers recognized, they too will be inspired to break free of the norms and revise processes that may be archaic.
This is an inspiring idea which could motivate the entire organization.
One other example for a company with innovative culture would be AZ (AstraZeneca) but with a different approach.  This organization works with research partners worldwide in order to achieve innovative products. The benefit for the company is that its revenues do not depend on a single product.
That was not the case for other large pharmaceuticals. Pfizer’s revenue largely depended on Lipitor. I remember how critical the expiration date (2011) of Lipitor’s paten was. 
I agree with Ronald Greenfield that the $1,000 is rather small.  The creator deserves more incentive like a shared ownership or larger sum of money which in turn, could create more innovative ideas for the company.  Sara (Shapiro) Brody
I think all of these steps should be incorporated into public education.  I use most of them within my classroom.  Unfortunately, they are not used on me.  I innovate naturally.  My colleagues, their students, and their students' test scores might ultimately benefit from incentivizing innovation.
Definitely a great roundup of some powerful creation initiation techniques for businesses. I know that Zappos is another leader in fostering an atmosphere of corporate creativity and spontaneity. The CEO has done this with at least two companies now, and built them from the ground up. He isn't even particularly a shoe guy, but he loves a good company. 

I believe that the key to unifying groups is to:
- show them their similarities (common ground)
- actively and continually support individual efforts 
- have situations and tasks that require cross-divisional interaction and collaboration
- complete and unabashed honesty, integrity, love, and respect on the parts of the administrators (leaders in general)

The atmosphere must encourage a breakdown of personal guards so that people are just happy and willing to chat with each other. Often times, companies approach the lack-of-creativity problem logically (left-brain) when creativity is free flowing and dependent on emotion more than logic. This key element is what companies are just now beginning to understand. Apple, Google, Zappos, and Facebook are some leaders in this massively unappreciated element in corporate management. 
I worked for a construction company that required us to submit an R&D report of a new construction methods, tool, process, etc. twice a year.   The report form had to follow a specific criteria and show how much time, and money the new innovation saved.  The submissions were then judged and significant monetary prizes and or gifts (watches, golf clubs, gift certificates) were awarded to the innovations judged best.  All of the reports were then given to all team members to be added to their work libraries.  It was amazing to see the competitive nature of this process pay huge dividends for the company.
#7 - Our organization is working to instill and rejuvenate its Innovative initatives.  What it is failing at is the ability to execute #7 in the face of other priorities.  The inability to depart from the "way we've always done it" is hampering our ability to move forward and make significant progress. 
Saw your post and feel your pain... You name the experience, the emtional roller coaster, and I've been there. So my answer is an end to end innovation process that drills down on the pain points and more importantly the assumptions behind them. The net result clarity which drives pace and a renewal of mission. The last client I worked with recouped a net ROI of 20X in 9 months. This isn't a solicitation- just an offer.

Guy Fraker
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Hi Peter ..I would like to give you some of my 50 year experience teaching creativity....How do I contact you ?
Can you give me the chapter headings in your new book  ? This will help me focus on what might be of value to you  

   Ian  amor             ceo  : "  Brain project ".
I am one of six finalist (out of over a hundred contestants) in an incentive contest for employees within a large global company.

The question I answered was "what innovative idea do you have that will set the company apart?"

My idea brought together a futuristic concept founded in science and a global distribution platform.

Now the company has invested in a current concept which has the potential to go faster!

When the team wins, we will have created global exponential growth!

"let us entertain you...and a few billion more!"
+Philip Dumas Phillip- Congrats,Kudos, & Shout-outs- and thank you for sharing your story!  You provide a great example of what so many companies either overlook or actually fear- how engaging the work force in new concepts ignites such excitement and reciprocal engagement!  Good luck as a finalist, and please post the final results!  
+Ian Amor If you are interested in sharing your approach to creativity in teaching, I would like to talk with you about a video interview of 30 to 45 minutes that would be 1 of 26 segments to be released on an every-other week basis throughout 2014.  Add me back and shoot me a note if you are interested.  This will be free content, but may lead to a crowd-authored book. 
Hi Guy  ..Yes would be interested   Ian  amor
Shades of Hewlett Packard's "skunkworks." It was just that cross-pollination of disciplines and freedom to be innovative on one's own time that spawned many of HP's benchmark products.
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