IN THIS ISSUE:

• Letter From Sarah
• Feature Article - Rewarding vs. Recognizing Innovation - Which Is Better?
• Out of the Box
• Events and Resources
• The Edison Awards
• About Sarah Caldicott

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Dear Innovator:

Identifying how to incentivize innovation across an entire organization remains one of the most perplexing challenges leadership teams face today. Figuring out what will motivate employees to engage in innovation - and then sustaining that engagement over time - is paramount to achieving innovation success in the 21st century.

A few weeks ago I had an opportunity to interview the former Chief Innovation Officer of Cargill - an international producer and marketer of agricultural and industrial products - Dr. Carol Pletcher. Four core insights emerged from my discussion with Dr. Pletcher which are revealed in this month's feature article: Rewarding vs. Recognizing Innovation - Which Is Better?

Carol points out that many companies - large and small - miss opportunities to create strategic impact with their "innovation awards" programs because they structure them incorrectly or communicate them without an eye to strategically educating employees about what innovation is.

Carol indicates Cargill reaped substantial benefits from creating a network of self-reinforcing patterns within the company that accelerated and expanded innovation at a rate no one in senior management could have projected. Learn whether your organization should "reward vs. recognize" innovation, and what steps you can take to accelerate innovation engagement among employees starting now.

For those organizations seeking to incentivize innovation from a "grass roots" level, have a look at this month's Out-of-the-Box segment. A recent study released by the University of Cambridge in England revealing how birds effectively flock to find food has parallels for how innovation momentum can begin in pockets within organizations, then spread. Read on to see how you can become an influential innovation node in your company!

Sarah with Ben Heng, a leader within Microsoft's global Senior Technical Leadership support network.

A few weeks ago I had a chance to lead an innovation workshop for Microsoft's Senior Technical Leadership Team. The workshop was part of a 4-day conference held in Bellevue, Washington - right near the company's Redmond headquarters. Attendees from all over the world were present. Ben Heng (at right), one of the lead organizers, emphasized the importance of examples showing how innovation has a cultural basis - and not just a behavioral basis.

I had an opportunity to include in the workshop key cultural aspects of Edison's Innovation Competencies. Facets of this learning I also applied in my 6-day November visit to Helsinki, Finland. (See below.)

In this month's Edison Awards section, learn how Finland has risen of to become one of the leading innovation nations in the world, despite its small size (5 million people). I had a chance to serve as the keynote speaker at an innovation conference in Helsinki with over 300 leaders from diverse industries. While I was in Finland, Newsweek released a cover story entitled, "The Decline of American Innovation." (The U.S. version of the cover story was: "Is America Losing its Mojo?") Learn how Finnish companies - like many in the US - are battling to regain traction as global innovation leaders. Plus, read how several Finnish companies embody the spirit of innovation celebrated by the Edison Awards.

One last thing...the deadline to nominate products and services for the 2010 Edison Awards is Friday Dec 11th! Go to www.edisonawards.com to submit your nomination today!

PS: Please share this newsletter with a co-worker or a friend!

Feature Article - Rewarding vs. Recognizing Innovation - Which Is Better?

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One of the most perplexing challenges leaders face today is how to incentivize the innovation process on an enterprise-wide basis. What are the best mechanisms to create momentum behind the kinds of innovations you want to see in your company? Should your focus be on monetary rewards, or peer recognition?

Dr. Carol Pletcher, former Chief Innovation Office at Cargill, offered four key insights on this question in a conversation I had with her a few weeks ago. Carol put in place an innovation recognition program at Cargill which remains to this day, and which has been a powerful driver of innovation expansion within the company. Her four key insights include:

Many organizations I've work with in the past year want to foster an innovation climate, and often do so by starting with an "idea generation" structure of various kinds. Some of these include monetary rewards, others do not.

While these "idea generation" approaches to innovation can begin to drive employee engagement, their momentum often lasts for only 2 to 3 years. Cargill's experience has been that recognizing innovation at the highest management levels, and creating a networked program that reaches deep into the grass roots of the organization delivers a high index of success over the long term.

Edison Used Both Monetary and Non-Monetary Innovation Incentives

On the non-monetary side, Edison often celebrated team victories with fishing trips for the entire staff. He also offered all employees access to his 10,000 volume library at the West Orange, New Jersey lab - one of the top 5 largest libraries in the world in the late 1880's. These approaches helped to broadly foster camaraderie as well as an innovation mindset within his organization.

Carol Pletcher would agree with Edison's approach inasmuch as he was able to signal deeply rooted leadership support for innovation and innovation-driving behaviors. Here are her recommendations for how to develop a "recognition" program that can help drive innovation in your organization.

Position Recognition of Innovation as a Key Strategic Priority for Your Leadership Team
Cargill's innovation recognition program came as a result of the company's desire to "be more innovative." Realizing that this was a pretty fuzzy message to take to employees, the leadership team began by developing a template for employees to use when submitting their team projects for consideration as "innovations." The template itself was specifically designed to get at the kinds of strategic process questions and team behaviors Cargill's leadership was seeking as drivers of innovation activity. Carol emphasized the importance of this, saying otherwise "...all your employees will get out of the innovation review process is a nice plaque."

Carol also emphasized that the design of the submissions template itself became a key strategic win for the leadership team right off the bat. She encourages any organization to spend time on this step, and to map out all the pieces that will flow from the submission process rather than "lobbing it out" to employees with minimal strategic forethought. "Most companies don't generally pay attention to how they can use the platform as an educational vehicle to broaden the impact of innovation on a corporate-wide basis....They don't generally think about the strategic benefits...They don't view innovation recognition as a strategic communication opportunity."

Important to the Cargill leadership team's template design was its intention for use by any functional or divisional group within the organization. It provided a guide, in essence, showing employees the kinds of criterion that leadership was looking for in an "innovation project." The template helped reveal to employees "what innovation looked like" at Cargill and wasn't just a boilerplate form. This included team size, strategic focus of the project, and the number of other departments involved in the innovation effort.

Here are some key Cargill program highlights from a structural perspective:

By recognizing entire innovation teams rather than select individuals, Cargill annually draws thousands of employees into its innovation process versus dozens. The recognition program has thus served as an innovation multiplier within the organization. Carol indicated part of the power of the program comes from employees seeing "people just like me" winning recognition for their innovation efforts, They then become more excited about engaging in these behaviors themselves.

A Hidden Benefit to an Innovation Recognition Program is the Ability to Educate Employees
Given the breadth and visibility of this program, Cargill's leadership learned to "walk the talk" of innovation throughout the year and not just during the innovation project review cycle. The company has also linked key internal messaging to the innovation recognition program, talking about the submission process, the judging process, the Finalists, and the Winners.

One of the program's key hidden benefits has been the mentoring and tutoring that takes place employee-to-employee as the process unfolds. This one-to-one engagement has been a crucial part of Cargill's ability to sustain the program.

Monetary Rewards Can Backfire if They Don't Encourage Collaboration
Since putting the Cargill program in place years ago, Carol has continued to conduct research on what kinds of innovation incentives prove to be the most powerful across organizations of all sizes. Her finding is that - although seductive - monetary rewards can often backfire. "The problem is there's a big distance between the launch of an idea and the launch of the product or service it spawns....You can't expect great results because the ideas won't be fully baked. (Companies which) start doing this type of thing suggests the firm doesn't have a strong compensation program. The implication is ‘We're serious because we have put all this money in this pot.'"

Carol suggests that a monetary rewards approach to incentivize innovation can be a trap for management. "I think a company loses something when they go to money to motivate, and when they go to a small number of people rather than a broader, more expansive effort....If the company is trying to make something happen, can it really do that via individuals? If one individual wins and others don't get credit, people aren't going to be too eager to assist that individual again in the future."

What You Can Do Starting Now
If you already have an innovation incentive(s) program in place, take a look at these factors:

If you are considering development of an innovation incentive program, ensure you look at these factors:

In the next issue: Finding Key Innovation Inflection Points

Out of the Box

Create Powerful "Grass Roots" Innovation Nodes in Your Organization

As I noted in the October 2009 Out of the Box segment of Edison's Notebook, the concept of biomimicry - looking for patterns in nature that yield insights on human problems - is a powerful way for us to augment our own daily innovation behaviors.

The July 13th, 2009 issue of the Fast Company newsletter revealed results of a fascinating study recently conducted by physicist Hai-Tao Zhang at the University of Cambridge in England. The study examined the social structure of birds, and how they communicate by flocking in different patterns.

It turns out that "a small band of like-minded birds can sway the entire flock" and convince the majority of birds to change their behavior. Zhang discovered this by creating a computer program to simulate the birds' behaviors based on his extended observations.

University of Cambridge physicist Hai-Tao Zhang discovered a behavioral phenomenon in the flocking patterns of birds that has implications for how to strategically create powerful innovation nodes in an organization.

When Zhang set the parameters of his computer program to require that any given individual bird followed the "average" behaviors of those around it, the direction of the flock was changed when a small group of individual birds scattered throughout the flock all worked in concert to change the direction or behavior of the other birds. This type of shift was particularly important when these scattered clusters of birds had discovered an important food source, for example.

The implication for innovation here is that, rather than having one super high-powered innovation center within an organization designed to spread innovation, it can be more effective to have clusters of innovation catalysts all working in concert throughout the organization, all moving in the same direction.

3M discovered the power of this same phenomenon several years ago via the formation of a small but powerful body of innovation catalysts it calls the Grass Roots Innovation Team - or the GRIT. The GRIT was instrumental in sustaining innovation at 3M during periods when senior leadership had dampened the innovation climate at the company, and the firm's renowned innovation culture was under threat. The GRIT stands as an excellent example of how a band of dozens can successfully influence the innovation behavior of thousands.

Events and Resources

The Edison Awards
Dedicated to America's Innovation Competitiveness in the 21st Century

Embodying the Spirit of the Edison Awards - Finland

The Edison Awards are dedicated not only to the word-changing accomplishments of Thomas Edison, but to his unflagging spirit. Edison said, "If we all did the things we are capable of doing, we would literally astound ourselves."

By embodying the spirit of innovation, we motivate others to embody it as well - igniting it everywhere around us.

I witnessed the spirit of innovation alive and well at the 2009 Innovation Management Officer (IMO) Conference in Finland last month. Several hundred senior executives and their teams attended, listening to panels and presentations on innovation from several leading companies, including Microsoft.

Top of mind for most attendees were results of a recently released innovation study commissioned by the Finnish government. In the past few years, Finland has lost ground as one of the leading innovating nations of the world. Although it still ranks in the top 5 on most global indices, setbacks for some of its largest firms - including global powerhouses Nokia and Wartsila - have caused the nation to newly examine how it can innovate effectively in the future.

Two conference sponsors - Endero and Nero - called upon the attendees to ramp up their innovation mindset. Endero, headed by CEO Anthony Gyursanszky (center photo below, sitting in chair at left), and Nero, headed by CEO James Solatie (center photo below, sitting in chair at right) currently train their managers in core innovation methods. Solatie has also authored a book on creativity, entitled (in Finnish) Ideasta Innovaatioksi - i.e. how to develop creative ideas that drive innovation.

A panel of local business leaders (photo lower left) addressed questions about innovation related to many areas, including how Finland could begin nurturing more entrepreneurs and venture capital - two dynamic forces within the American innovation system which have enabled the nation to thrive over the long term.

But clearly, America's innovation woes also weighed on the minds of attendees. During my visit, the Newsweek cover article shown at right was released, questioning the state of American innovation, and whether titans like Edison were being forgotten.

Forgotten? Never! Keeping the Edisonian spirit alive is crucial for every country - and every company! The Edison Awards are one tool to help us all do this. I welcome my Finnish colleagues to join us in April 2010 in New York City for the 15th annual Edison Awards. I also welcome you to nominate new products and services you've developed in the last 18 months at www.edisonawards.com. See you in New York! And keep innovating!

About Sarah Caldicott

Sarah Miller Caldicott is a great grandniece of Thomas Edison, a 25-year marketing veteran, and co-author of "Innovate Like Edison: The Five-Step System for Breakthrough Business Success." She has assembled teams of highly experienced consultants and trainers to assist her in bringing Edison's Five Competencies of Innovation™ to organizations of all sizes. Sarah and her teams are capable of addressing business challenges from a diverse array of industries, in either a business-to-consumer or business-to-business environment.

Sarah is a dynamic and award-winning speaker, whose engaging style combines substantive business content with humor. Her invaluable experience offers an ideal resource for organizations seeking innovation success in today's rapidly integrating global marketplace.

Born and raised in the Midwest, Sarah received a BA from Wellesley College, where she was named a Wellesley College Scholar. She also holds an MBA from the Amos Tuck School of Business at Dartmouth. Sarah resides in Oak Park, Illinois, and has two teenage boys, Nicholas and Connor. For additional information on Sarah, click here.

©2009 by Sarah Miller Caldicott. All Rights Reserved.