IN THIS ISSUE:

• Letter From Sarah
• Feature Article - Hiring Innovation-minded Employees
• Out of the Box
• Events and Resources
• The Edison Awards
• About Sarah Caldicott

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Dear Innovator:

While in Cincinnati speaking at a conference this month, I had the rare opportunity to spend an hour with Mr. A.G. Lafley, Chairman and former CEO of Procter & Gamble. A.G. is one of the innovation leaders I admire most. He began transforming Procter & Gamble's (P&G's) approach to innovation shortly after the turn of the new millennium, and has enjoyed resounding success. A.G. will be offering a keynote address at the 2010 Edison Awards in April, and we spoke about how his philosophies of innovation align closely with Edison's.

One of the most important points A.G. highlighted in our conversation was the importance of hiring individuals who possess the qualities of an innovator. If your goal is to build an innovation-driven organization, this is one of your first crucial steps.

I've captured many of A.G.'s pearls of wisdom in this month's feature article. The feature article also includes powerful insights from a General Manager at Toyota, as well as recently adopted hiring practices at Cisco.

Sarah with Joe Rizzo, 2009 Conference Chair for the 25th annual Association for Manufacturing Excellence conference in Covington, KY.

Edison consistently drew upon the brain's inner wiring to creatively solve problems. He hired people who were willing to look at the world differently - individuals who could not only work with patterns and analogies - but intentionally seek them. Use of patterns and analogies forces the mind to draw upon both the left and the right hemispheres of the brain, generating rapid, high-impact solutions. This month's Out of the Box segment talks about how a product development team at Procter & Gamble used observations of Nature (often called biomimicry) to rapidly and effectively solve a stain-fighting challenge.

Are you hiring employees who would be willing to work this way?

Also read in this month's Edison Awards section about how a 2009 Edison Best New Product Awards winner - Mint.com Founder and CEO Aaron Patzer - uses trends and patterns as a core means to anticipate attitudinal shifts in his customer base. Aaron just sold his company to Intuit for millions a matter of weeks ago. Read about how Aaron and his innovation-minded team use trends to reel in new Gen X and Gen Y customers.

Now's the time to nominate your favorite products and services for a 2010 Edison Best New Product Award! Start your application today...Nominations close Friday, December 11th. Click here for the official nomination form. We are accepting nominations in the following 10 categories...so pick one that connects to your favorite product or service!

My thanks to Joe Rizzo and the Association for Manufacturing Excellence (AME) for allowing me the honor of participating in AME's extraordinary conference in Covington, KY last week (right across the river from Cincinnati). The event gave me heart that innovations in manufacturing can help the U.S. revitalize its manufacturing base. Although many jobs will still go overseas, more manufacturing can now stay here through new and innovative ways of thinking and working.

To your innovation success,

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

Feature Article - Hiring Innovation-minded Employees

(click here to view past newsletter issues)

So...you want to become an innovation-driven company, eh? You want to run faster, jump higher? Leap small buildings in a single bound?

Maybe this is something your boss put you up to. Maybe "innovation" is the latest buzz word for your 2010 Plan – and right about now you have to be thinking up some good stuff to put into that Plan. But maybe...all kidding aside...becoming an innovation-driven company is something you'd truly, authentically like to accomplish.

Wherever you are in the spectrum of adopting innovation disciplines...here is an article that will help you raise the bar on the type of individuals you hire. Understanding what an "innovation-minded employee" looks like – and how this can shape your organization – is something that will lead to true innovation power in the short and long term. It can also ultimately help reshape your competitive advantage, as I described in last month's newsletter about waging disruptive innovation.

Boiling Innovation-Mindedness Down to a Few Indicators
During a 60-minute conversation I had with Procter & Gamble Chairman A.G. Lafley just a few days ago, it was clear that P&G has deeply studied the best ways to seek out and hire innovation-minded employees. The company has distilled its hiring criteria for "new innovators" to a heady mix of just a few factors which I lay out and describe in the next section. You will also read shortly about what Toyota looks for, and how Cisco is using a new program called "Cisco Choice" to create differentiation for its organization within the highly competitive talent pool for technology-focused grads and undergrads.

Like Lafley at P&G, Edison was keen to keep his hiring process for new innovators simple and within specific parameters. He focused primarily on two areas: 1) the raw wit and intelligence of the individual as evidenced through a verbal interview with the great inventor; or 2) creative problem-solving ability and open mindedness as demonstrated through conducting a real, hands-on experiment in the lab, or completing the assembly of machine parts. As I highlighted in my March 2009 Out-of-the-box newsletter segment, in the first instance, the prospect would have to complete an experiment following Edison's written instructions. In the second, the prospect would be given a pile of machine parts and be asked to assemble them - with no instructions.

Edison was not concerned about whether the prospect "correctly" assembled the parts, or "perfectly" executed the experiment. He was more interested in their explanations for what seemed to work, and what didn't. This experiential interview approach allowed Edison to bring more innovation-oriented individuals into his company - and keep at bay those prospects who required a specific "inside the box" outcome for their efforts.

Procter & Gamble's Focused Approach to Screening Innovation-Minded Employees
A.G. Lafley credits a large portion of P&G's recent success with its "Connect & Develop" approach to innovation to changes in hiring practices and mindsets. Lafley believes that without shifting its hiring practices, it would not have been able to shift its culture as effectively as it did. Below is the gist of its process, some of which is adapted from A.G. Lafley's book The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation. The process is focused on driving four specific “cultural qualities” (shown in the left column) which in turn are translated into “desired personal attributes” for the individual being interviewed (right column):

P&G has also come up with an acronym that helps the company determine whether existing employees possess the qualities of an innovator. The acronym, fittingly enough, is I.D.E.A.S. as shown below:

Think now about your own hiring practices and internal employee review process. How would your current interview process screen for the desired personal attributes in new employees shown above? Have you or your management team identified any innovation-driving cultural qualities you'd like to emphasize in your organization? If not, what would they be, and why? Are you evaluating the innovation-mindedness of existing employees using something like the I.D.E.A.S. structure above?

The Mindset for "Innovators" at Toyota
While speaking at the 25th annual conference for the Association for Manufacturing Excellence this month, I had the good fortune to meet Gary Stewart, General Manager of Aisin, Toyota's manufacturing arm in Australia. Gary emphasized that to advance within Toyota, it is crucial for individuals to demonstrate "frog thinking" versus "bike thinking."

Simply put, frog thinking is systems thinking. The frog thinker weaves connections between things, sees similarities and differences, finds patterns that are meaningful and add insight to problem-solving. Frog thinkers readily see simplicity within complexity. (Sounds very Edisonian, no?)

Bike thinking is linear thinking. It is sequential, and focuses at the component-level of a problem rather than the systems level. It is great for finding efficiencies in processes, but does not rise to a more macro level of strategic understanding.

Amazingly enough, within Toyota, the frog thinkers self-identify. These individuals receive guidance and training because they step up and ask for it. Case in point: the highly successful Toyota Prius was designed by only 6 frog thinkers within Toyota. Wow...imagine GM trying to pull that off...

New Cisco Employees Choose Their Boss: Cisco Choice
To attract the best minds and the most innovation-driven new hires, in 2006 Cisco developed a unique approach to improving retention results among new employees. Called Cisco Choice, each year the company's roughly 800 new hires – mostly engineering grads – go through a process that resembles a Fraternity rush week. Each new hire actually gets to choose their own boss. Yes...you read that correctly!

Allowing new hires to choose their own boss has dramatically lifted retention rates. (Most Gen Y employees only stay with one employer for 2 years or less.) At Cisco, most of its Gen Y employees are already staying with the company more than 3 years.

Another reason for Cisco's high retention rates is the added engagement allowed by cross-functional training...an overlap with one of Edison's own primary tenets. Each new employee knows they will have a chance to work with other departments. This boosts collaborative work styles and innovation mindsets. One employee comments, "When we collaborate, we already know what the other department does. That helps us work together better and faster."

Do you see any opportunities for your organization to shift its thinking about how new hires are brought into your company? How well would you do if you were part of a "lottery system" of managers, and someone had to actually CHOOSE to work for you?

In the next issue: Rewarding Innovation

Out of the Box

Would you rather hire an employee who is an expert in their field, or someone who is highly skilled in solving problems through unique approaches, such as using patterns and analogies?

The best answer: You want employees who can fulfill both.

Each of the following three challenges was solved through observing systems lying outside the "obvious" spheres an expert would most likely first explore. Seeing patterns and analogies within these systems led to the ultimate solution in each case. So while it's great to have experts on your team, it's even more important that your people embrace problem-solving techniques that take them into new realms of thinking.

These three challenges were cited in a recent Fast Company newsletter article (Oct 21, 2009) and I've listed their respective solution realms:

As an employer - or a team leader - would you have considered that a solution to any of these challenges could have been found where they ultimately were? Would you have even approved funds to explore these novel pathways? Or would you have felt more comfortable going "the expert" route?

Are employees in your organization open-minded enough to approach problem-solving by looking at patterns or analogies in this way? To become an innovation-driven organization, you need to be hiring individuals who operate with open minds and are driven to find insights.

BIOMIMICRY A FORM OF PATTERN-SEEKING
Let's look at one problem-solving approach that Edison often employed, and see how it relates to a technique which has recently been gaining favor - one that P&G recently used to solve a stain fighting challenge in a cold water system. The approach is called "biomimicry" - a discipline that focuses on solving problems by imitating the ingenious and sustainable answers provided by Nature.

Edison believed that Nature was a perfect system. He found atomic perfection not only in the Periodic Table of Elements (remember that from Chemistry class?) but in his daily observations of Nature.

Because of its systemic perfection, Edison always began his search for solutions by studying Nature first. He once remarked, "Until man duplicates a blade of grass, Nature can laugh at his so-called scientific knowledge."

The unique ability of the Antarctic Icefish to digest oils in extreme cold inspired P&G-er Pete Foley, Associate Director of the Cognitive Science Group, to explore how the natural processes used by this rare fish could be applied to cold-water stain-fighting. (Photo source: Fast Company Newsletter - Oct. 21, 2009)

Edison planted acres of exotic flowers, bushes, and trees at his Fort Myers, Florida vacation home not only to observe their growth patterns and innate properties, but to select perfect specimens for his experiments. Among the many inspired solutions Edison derived from Nature was his process for gathering and manufacturing natural essences from Goldenrod plants - yielding a natural rubber compound which never, ever cracks.

P&G TEAM LEADER TACKLES STAIN-FIGHTING CHALLENGE THROUGH NOVEL METHODS
Pete Foley of P&G recently took a product development team to the San Diego Zoo for inspiration in addressing a unique stain-fighting challenge requiring the use of cold water. (The San Diego Zoo is currently developing a specialty in biomimicry.)

In the process of observing and learning about armadillos, rare flowers, geckos, and other diverse natural systems, the team learned that the Antarctic Icefish can readily digest oils from other fish it ingests at 2 degrees Centigrade. (About 36 degrees Fahrenheit.) That's way colder than All Temp-a-Cheer can handle!

Although Pete and his team could have used TRIZ or other more widely accepted problem-solving methods to attack this challenge, they elected to pursue a path that had the broadest possible learning impact for the team, and the broadest possible benefit to others at P&G who could learn from their observations. Bonus: they solved the problem and contributed to the knowledge of their internal community.

Events and Resources

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

Profile: 2009 Silver Edison Award Winner, Mint.com Founder and CEO, Aaron Patzer

Our Edison Awards team each year follows past winners of the Edison Best New Product Awards with great pride, watching them advance to new heights of excellence.

Mint.com Founder and CEO Aaron Patzer relaxes next to his mint-blue car. (Photo: Fast Company Newsletter, 9/15/09)

Grabbing the brass ring just weeks ago is Mint.com's CEO Aaron Patzer (shown at right), whose company received a Silver Edison Award in the Lifestyle and Social Impact category in 2009.

Aaron's young company logged its millionth customer just days before Mint.com received its Silver Edison Award on April 1, 2009. Then in mid-September, Intuit came knocking on Mint.com's door to buy the firm for $170 million. Looks like Aaron won't have to hunt down any more new rounds of financing...!

Why would Intuit make this move?

Mint.com CEO Aaron Patzer holding his 2009 Silver Edison Best New Product Award (April 2009)

Strategically, Intuit saw Mint.com as a threat. Mint.com was poised to create big headaches for Intuit's Quicken product down the road. Plus, Aaron's team of Gen X and Gen Y turks have done an exceptional job creating a new business model for Financial Planning, tapping into the angst the financial meltdown caused to Internet-loving mavens in their 20's, 30's and beyond.

Perhaps most importantly though, Mint.com's innovative data mining capabilities have drawn new insights about patterns of "frugality" as well as spending trends by city. Mint.com's creative, innovation-minded employees have found new ways to aggregate data, and new ways to turn the insights mined from their trends into successful customer prospecting. (See link below...)

Check out the trends that Mint.com follows so that the company can more deeply understand how its customers and prospects tick. This is one of the coolest collections of trends I've ever stumbled upon, and I use these now with my own clients. Here's the raw link:http://www.mint.com/blog/category/trends/ Mint.com's success is an excellent example of how innovation-minded employees help you win in the marketplace!

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.