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Taking Risks and Cultivating an Innovative Environment

PRODUCT DEVELOPMENT INSIGHT

Bill Evans

August 1, 2006

11 Min Read
Taking Risks and Cultivating an Innovative Environment

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Innovation is important to companies' competitiveness and their ability to create medical products that will improve the lives of customers. In the last 15 years, medical manufacturers have seen many trends aiming to improve their products. But total quality or six-sigma environments sometimes feel more like regimes. Design has also been touted as a savior, and OEMs are often beseeched to listen to the voice of the customer. Such trends attempt to give companies tools, processes, and management structures to improve their ability to innovate.

These trends are exactly that—trendy. Like any new method, they go out of fashion after a time. Sometimes it's for a good reason, but occasionally they are wrongfully discarded for the next new thing. Although many aspects of these trends have something to offer, the biggest improvement will come from taking a more-holistic view of innovation by focusing on three core areas of a business: culture, process, and resources. Try introducing six sigma into the wrong culture and it is bound to fail. Pour resources into a development program with a bad process and it is unlikely to create breakthrough products. This article provides insight into the aspects of company culture that make many successful innovations possible.

Culturing Innovation

Company culture is one of the main reasons well-meaning efforts to innovate have failed. In many ways, being innovative is a state of mind that must suffuse throughout an organization. Obviously, leadership that allows this state of mind to thrive starts at the top. Sometimes midlevel managers cannot affect the top as quickly as they might like—but they can nurture their development teams. The cultural factors within a company that are most likely to lead to innovation include many things that make most people uncomfortable: taking risk, the possibility of failure, bucking conventional wisdom, and the democracy of ideas. Innovation is an inherently risky process. To innovate, manufacturers need to explore ideas and potential solutions, and sometimes that exploration takes a direction that inevitably leads to failure.

But it does not matter that there are occasional failures; in fact, it is inherent in the creative process. What is important is that the members of the development teams are encouraged to put new and sometimes radical ideas out in front of the team.

The trick is to experience failures quickly. Test ideas in the first months of the development project, way before any serious engineering has been done. Use every trick in the book to visualize the product and get it in front of customers. Show sketches, prototypes, and simple foam models. Cheat prototypes into existence by cobbling together existing products or hijacking technology from other industries. Show early ideas to potential customers. Get ideas out in the open for people to criticize, but do it as soon as possible.

We have all met an R&D engineer who is a perfectionist, who labors for weeks to get an idea right before sharing it with other team members. Certainly great ideas can come from this approach. However, it is just as likely that valuable time and resources will be wasted pursuing a specific solution with an inappropriate amount of engineering sophistication. Regardless of how crude or polished a prototype is, it can easily be sunk by a faulty premise about what is right for the market.

Paradoxically, teams that learn to be good at failing quickly often learn to become better at succeeding quickly. To encourage risk, and hence innovation, all team members must become comfortable with this paradox and adjust their expectations as a project moves from concept to refinement. Taking risks early is inexpensive and potentially rewarding. Taking risks later in a project is much less desirable. Then, the die has been cast, and linear, predictable behaviors are essential. This takes almost superhuman management abilities, because unpredictable behaviors must be encouraged early on, but later, when the project progresses or employee reviews come along, the same manager must hold employees accountable to their management by objectives. Or the managers must account for the team's progress to an upper management that is more skilled at counting beans than at growing them.

Who Is to Blame for That Great Idea?

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Team members that think outside the box may initiate a team's
innovation.

Shifting a business from a blame culture to a healthy, risk-taking culture is difficult. Doing so is all about another important dimension of company culture: the people.

A project leader with great interpersonal skills as well as technical chops is key to a successful team. But people are not born this way—they are cultivated. Along with the top leader, every significant project should have submanagers who are being mentored to take the leadership position on future programs. Train for the soft people skills as well as the technical know-how to cultivate a team.

Project leaders need to be supported by upper management with realistic budget and scheduling that has contingency built in. The entire team does not need to know exactly how much contingency there is; instead, the leader listens to each subteam's needs and allots it some of the scarce resources. Other team members must quickly learn the reasons for the allotment so that it is understood that there is sound logic behind it.

But even without a contingency, the schedule needs to be plausible. There is nothing less motivating to a team than shooting at a target that is hopelessly out of range. Obviously, there is never enough time to get every detail of a project perfect.

It is inevitable that a team leader will ask for a few miracles and, as the joke goes, these will take a little longer. But when the entire team understands the bigger project goals both technically and from a business perspective, and it is plausible that with a little extra effort these goals can be grasped, people rally to meet the objective.

One thing that helps a team's motivation is to be in touch with customers. This can be achieved by talking to them, watching them work, reading their journals, going to their trade shows, and hiring some of them. The team then becomes aligned with the customers' needs much more fluidly. Don't restrict this contact to a select few; it should be spread around. Also, it's important to include the cost and time of customer contact travel into a project.

Get Critical of Criticism

At a more personal level, management and team leaders must eliminate the tendency to be critical of both themselves and other team members when ideas initially come up. This opportunity certainly arises in brainstorming sessions, where team members are exhorted to suspend criticism. In that context, discipline is easy to enforce.

But in subtle ways, such situations can come up all over an organization as a project unfolds. Sarcastic comments around the water cooler about nascent ideas or overheard phone conversations that poke fun at a part of a project that failed puts innovation in a straitjacket.

For example, imagine new, bright technical hires that join the project team and get exposed to such critical remarks. They quickly learn what it takes to fit in. They either conform and lose that desire to push for the new and risky, or eventually seek more fertile pastures elsewhere.

Thinking of those bright new hires brings up the question of who will have the best ideas and how much weight should be given to each person's opinions and ideas, considering factors such as experience, seniority, and education. The best ideas can come from anyone, and in trying to break the mold, team leaders must beware the so-called wise expert.

Experience often gets in the way of new thinking, but it is an important partner in making things actually happen. Therefore, the entire team needs to encourage a democracy of ideas, especially in the early concept stage.

Do not dismiss ideas from team members who are either inexperienced or not technicians (such as marketing people). Instead, critical thoughts should be turned into insights about how to build on the seeds of the good ideas that often come from nontechnical people. It is really the whole team that creates the product.

Japanese industry from the 1970s onward showed the power of the democracy of ideas. Driven by its relentless pursuit of quality with methods taught by W. Edwards Deming, the country demonstrated that everyone who is involved in the creation of a product has the power to influence it positively.1 The quality circles made famous by the Japanese automotive industry allowed the traditionally unheard production workers a voice in product improvements that led to globally competitive and highly reliable automobiles. Even though one rarely sees these circles written about today, there is still much that the average product development team can learn from the core idea: those closest to the problem are often the best able to suggest solutions.

Hiring Diversity

The type of people who are hired for development teams is also crucial. What is perhaps surprising is the notion that some highly innovative and focused individuals might have had checkered academic success, degrees from different areas (liberal arts and technical majors), or résumés with unfamiliar jobs or extended foreign travel experience.

For management positions, companies often hire people who have had a very linear and predictable path. Certainly such people are talented and have worked hard for their success. However, they may never have really grappled with adversity. Organizations staffed this way are often highly risk-averse and poor at innovation.

Innovation is nonlinear by nature. People who have experienced hardships and have learned how to multitask and deal with adversity are often able to think creatively. Individuals who had diverse interests at school may bring more breadth to a project team. Time spent traveling abroad in different cultures may give people a head start in understanding differing customer and cultural practices, which would be expensive and time-consuming to learn about otherwise. Famously, both Bill Gates and Michael Dell dropped out of school. In the medical arena, Thomas Fogerty, a cardiologist and prolific medical innovator whose first invention was the angioplasty balloon, worked his way through his early medical education in an auto repair shop. He made his first angioplasty balloon from the finger of a rubber glove tied to a thin tube with knots gleaned from his fly-fishing abilities.

Industrial designers make many companies nervous because their discipline requires a combination of artistic, interpersonal, and technical skills. Yet it is precisely such cross-disciplinary performers who can help bridge some of the traditional divides within development teams. Whether increasing the emotional appeal of products to a company's customers or using illustrations to communicate marketing's goals to the engineers early in the project, industrial designers provide expertise that is not easily found elsewhere.

Insiders versus Outsiders

Lastly we come to the importance of NIH. This is not the National Institutes of Health, but the much more common dampener of innovation: the not-invented-here syndrome. Increasingly, progressive companies realize that they need to seek innovation both near and far. This means consulting with outsiders to gain insights, technologies, and new processes to help reseed their idea pastures.

Medical device companies often think of themselves as being focused on their core technologies. As a result, they sometimes ignore or are reluctant to enter new markets because they lack important pieces of the jigsaw puzzle. Sometimes they know they are missing the pieces; sometimes they don't. Outsiders have different vision. If chosen carefully, they can help a development team find the necessary pieces.

Consultants from many different technical and management disciplines can help stimulate innovation either with new processes and research techniques, or with actual new product designs or specialty technical knowledge.2 But if manufacturers call in outsiders without actually changing their own company's culture, the consultants' efforts are likely to be suboptimal. Ideas are useful, but execution of those ideas often needs an innovative attitude as well.

Some medical manufacturers are now using external advisory boards to help guide product design by better connecting the technical team with trends in the marketplace and providing frequent reviews of the developments in progress. Other companies are seeking outside help to tune their innovation process.

Conclusion

Creativity is a muscle. It has to be exercised to make it more effective. Thinking outside the box requires team members to get out of the box called the office more often. Changing company culture begins with individuals, but it is greatly improved if an organization feeds its employees the proper creative juices. It's important to cast wide for inspiration and look for it in new places. Seek input from people both senior and junior to you, and pick your next team hire with slightly different criteria from the previous one, looking more closely at the extracurricular activities portion of a résumé.

People who create innovative ideas never come to work in the morning and say, “Now I'll begin the innovation process for today.” Most of them never stop thinking creatively, from their hobbies to their approach to parenting. As management guru Peter Drucker said, “The greatest praise an innovation can receive is for people to say, ‘This is obvious. Why didn't I think of it?'” In the right culture, you will think of it.

Bill Evans is founder and president of Bridge Design Inc. (San Francisco). Contact Evans via e-mail at [email protected].

Reference

1. Mary Walton, The Deming Management Method (New York City: Putnam, 1986).

2. Henry W Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology (Boston: Harvard Business School Publishing Press, 2003).

Copyright ©2006 Medical Device & Diagnostic Industry

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