Innovation is the discovery and execution of pioneering ideas

that create new value and competitive advantage.

- Brendon Burchard, Author of The Leader’s Guide to Innovation

st
January 1 , 2006

Angie Seldon
Accenture Chicago Office
Street Address
Chicago, Illinois 00000

Hi Angie,

I sent you a letter last week and feel bad I missed you on Thursday! Can we reschedule to this Thursday
at 2pm Pacific?

I know your June event is right around the corner and I’d like to help bring innovation to your company.
(Did you see what those rascals at GM are doing!).

Here’s what I could cover at your conference:

♦ Innovation Ready: How Companies Ignite Innovation

♦ What Drives Innovation? Cultural Habits of Innovative Companies
♦ What Halts Innovation? Innovation Inhibitors and Activators
♦ Innovation Leadership Principles: Making Innovation Personal
♦ The Infrastructure of Innovation: Making Corporate Innovation Possible
♦ The Ideation Process: Thinking and Working Differently
♦ The Road to Innovation: The Process Beginning-to-End

This is all based on that secret whitepaper I told you about, The Leader’s Guide to Innovation.

“The Guide outlines why innovation is key to an organization’s strategy and provides cutting-edge
research and thought leadership on what it takes to make innovation happen. Readers will learn the
cultural habits of innovative companies, what inhibits or activates innovation, which leadership principles
work best to accelerate it, how companies structure themselves to achieve it, and how individuals and
teams can think and collaborate differently to produce it in their day-to-day working approaches. The
Guide is a quick read and full of clear concepts, real-world examples, and actionable strategies aimed at
helping deliver innovation. Brendon is absolutely brilliant and this is a must read for all of our people if
we’re going to win in the innovation space!”
—Jessica Alter, Accenture Partner

Let’s see if we can connect on Thursday at 2pm Pacific. Please call me then at 415-652-1144, or drop
me an email at the address below to reschedule.

In Friendship,

Brendon Burchard
Author, The Leader’s Guide to Innovation
CEO, The Burchard Group
415-652-1144

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What Drives Innovation?

Cultural Habits of Innovative Companies
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By Brendon Burchard, Global Innovation Expert and Author of The Leader’s Guide to Innovation.
[This is a free excerpt you may share with your organization at no cost.}
Contact: [email protected]

In your quest to become innovative leaders, it is helpful to consider the “cultural habits” of successful
innovators – habits that span companies like 3M, Disney, Intel, Dell, GE, Nike, Starbucks, IDEO and
others. These cultural habits are not merely lip-service, they are tried-and-true “ways of being” or
interacting that have helped organization’s survive and thrive. Each of the cultural habits below
describes 1) examples of an innovative company, 2) the organization’s focus, and, 2) what leaders in
those organizations do to make innovation happen.

Cultural Habit #1
Ideas are not just encouraged, they’re mined for

- Disney Corp. has monthly “gong show” forums where any employee can pitch a new idea
- 3M offers employees the opportunity to compete for a $50,000 “Genesis Grant” to develop
prototype and market tests on their ideas
- Shell Oil’s GameChanger, an innovation incentive program, allocates $20 million to rule-
breaking, game-changing ideas submitted and accelerated by its employees
- Boeing hosts company-wide technology forums to discover and discuss emerging technologies

Innovative companies actively search for ways to differentiate themselves by uncovering great ideas.
They ferret out the best ideas of their people and investigate the best ideas of their competitors. Their
culture is one of deep, urgent curiosity. Creativity is built into every interaction. Special brainstorming
meetings are not held – every meeting is a brainstorm, every conversation a dialogue of discovery.

Leaders in innovative companies excavate ideas. They continually ask their people what is on their
minds and on the minds of their customers. They search for pain points. They discover what the
competition is doing and ask how they could do it better. They analyze the data and ask, “What’s the
opportunity?” They rummage through industry research and diverse readings to find the trends and see
the connections. They look to all of their people – not just the upper boxes on an organizational chart –
to find new ideas. They are explicit in their expectations with their people: “We want you to come up with
new ideas that will create new value.” They dig for ideas everyday.

Idea Generators:
- Where are you looking for ideas right now?
- Who are your “explorationists,” the creative people on your teams who can help you hit oil?
- Are all of your people sniffing out new ideas?

Cultural Habit #2
Ideas are “let go” into the collective imagination of a group

- IDEO, the famed product design company, lets people pitch their idea to the whole company,
then find people interested in working on it to help shape them
- GE conducts “Work-Outs” where cross-level, cross-functional teams meet to discuss ideas and
recommend ways to improve the business

Once an idea is formed, it is shared, debated, and built upon. Innovative companies thrive on creative
dialogue. They kick ideas around, toy with them, and explore their value. They explicitly encourage idea

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sharing, understanding that group creativity is superior to individual think-tanking. People are constantly
exploring together, engaging in conversations of dialogue and discovery. As Joe Forehand notes,
“Innovation is really a group effort. Time and again, in our own organization and in our client work, we
see the best ideas coming from teamwork.”

Leaders in innovative companies put ideas on the table and let teams shape them. They encourage idea
makers to share insights and imagination with groups of diverse people. They ask that problems are
solved with a variety of voices. They challenge their teams to make the idea better.

Idea Generator:
- How often are ideas shared within your team?
- Are you encouraging the brainstorming process in your meetings?
- Do people feel safe and encouraged to debate and build upon ideas?
- Use the questions below to unlock the group’s collective ideas

Cultural Habit #3
Experimentation and learning are made an expectation and way of life

- Bill Gross of Idealab! thought of the idea of selling cars on the internet. He quickly experimented
by building a simple prototype website to see if customer’s would bite. He hired a CEO and gave
him 90 days to sell a car. The experiments result? On the first “live” day, the test site got 1000
hits and sold four cars. CarsDirect.com was born.
- When Ford rolled out the Edsel in 1958 – at which time it was the most carefully designed car to
date – it flopped. Their lesson: cars no longer sold by income groups, people were searching for
“lifestyles.” The result? After the lesson they experimented with different lifestyle designs and
responded with the Ford Mustang, a car that defined an era.
- Apple introduced the Newton handheld in 1993 and it was met with criticisms of being “bulky,
buggy, and big-ticketed.” After many experiments explicitly conducted to improve upon the
device, Palm introduced the Pilot 1000 three years later and ate up 66% of the market share.

Ideas are shared and tested. Multiple experiments abound throughout the organization. For products,
prototypes are made, examined, and added to. For services, pilot tests are conducted in small settings.
Failures are expected and used as stepping stones to success. Failures are almost encouraged, as long
as the lessons learned are captured and widely shared. People are allowed to pursue their pet projects
and garner lessons. The culture is one of testing, learning, and refinement of ideas. In organizations
where people experiment and learn, these factors are often at work:

- People feel free to speak their minds about what they are seeing and learning. There is no fear,
threat, or repercussion for disagreeing or dissenting.
- Mistakes made by individuals or teams are turned into constructive learning experiences.
Mistakes are clearly viewed as positive growth opportunities throughout the system.
- There is a general feeling that it is always possible to find a better way to do something.
- Multiple viewpoints and open productive debates are encouraged and cultivated.
- Experimentation is endorsed and championed, and is a way of doing business.
- There is a willingness to break old patterns in order to experiment.
- There are formal and informal structures designed to encourage people to share what they learn
with their peers and the rest of the organization.

Leaders in innovative companies set the expectation early: “Don’t sit on your ideas. Share them and try
them. Experiment and fail. Learn from the lessons and do something better.” By doing so, leader’s make
it their responsibility to foster a learning environment. Leaders also celebrate small wins and share
lessons with their entire teams. They spread the general sentiment that the team is getting smarter and
closer to solving a problem.

Idea Generator:
- What are you doing to create a learning environment in your team(s)?
- How are lessons shared from “failures”?

Cultural Habit #4
The customer’s experience is researched in detail

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 - IDEO teams always view people actually using products, which is how they redesigned the
toothbrush (with a larger handle), the shopping cart (with removable baskets), and the bike
bottle (with a no-twist spout)
- Male designers at Ford Motor Company put on high heels and nails before sitting in prototypes
of vehicles to be able to connect with the needs of women (i.e., experience the feel of the
accelerator with different types of shoes on, the ease of use for dashboard and radio controls
with longer fingernails, etc.)
- BEHR watched customers buy paint and noticed their hesitation in buying colors because of
matching concerns. The result: they now offer ColorSmart, and online, interactive color
matching technology that takes the guesswork out of the buying process.

Fact-finding missions are deliberate in their cause: “What is the customer going through with our product,
in receiving our services, in how they are being supported.” From surveys to research to one-on-one
interviews, customers’ experiences are analyzed and explored. Employees in innovative companies
often go beyond surveys – they often literally watch how customers interact with their product. They take
their place and walk in their shoes. They think backwards – not from product/service design to delivery,
but first from end-user then to product/service design. The culture seeks to “wow” the customer.

Leaders in innovative organizations make their people detectives. They ask their people to question
every aspect of their product or service that impacts a customer. Questioning about the end-user is built-
in through every phase of work effort. Less time is focused on market analysis and more time is focused
on the customer’s observable experiences.

Idea Generator:
- What have you done to get to know your customer?
- How are you collecting data on your customer’s needs and sharing it?

Cultural Habit #5
Business Concepts are Stretched

- UPS grew significantly by leveraging its logistic delivery capabilities with this business concept-
stretching logic: We are a technology company with trucks versus a trucking company with
technology.
- GE Capital senior executives spend 50 percent of their time looking outside the boundaries of
their business – they are considered “business development officers” for the entire company.

Innovative companies stretch their concepts of how they do business. Services and products are made
to depart from the industry norms and rewrite the rules for competition. Traditional market strategies are
revisited to create entirely new types of value. What is “in-scope” is continually refreshed to create
competitive advantage. The culture ensures they are not defining their business too narrowly.

Leaders in innovative organizations jettison projects, products, and services that don’t prove to create
value – and search out those that do. They are sticklers for value creation. As in Jim Collin’s Good to
Great, they understand what is fueling their economic engine. More importantly, they look beyond that
and seek what will be fueling their economic engines. They view their business as flexible to the market
needs – increasing scope, inventing new business concepts, chasing different demographics.

Idea Generator:
- What have you considered “out of scope” for your client or business?
- How can you mix up your assets and capabilities to offer new services?

Cultural Habit #6
The Market and the Competition are Laser-Sighted

- The coveted “Triple Crown” award in the airline industry - Best On-time Record, Best Baggage
Handling, and Fewest Customer Complaints – were targets Rollin King and Herb Kelleher
sought when they decided to start a different kind of airline, Southwest Airline. The founders set
out to beat the competition in every category possible and do it with a unique, folksy style.
- “Is beige the only color they can think of?” was the question an Apple designer asked.
Recognizing the buying power of the young adult market, Apple unleashed the brightly colored

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 Power Mac to rave reviews for its different, innovative design. After a string of successes Apple
began its “Switch” ad campaign to lure customers from PCs.

Market movements don’t go unnoticed. Either do competitors. The culture picks its villains and seeks to
take their market share. (Think Coke vs. Pepsi; xBox vs. Nintendo). Strides are made not just to beat the
competition, but to go around them by offering completely new value. Sweeping views of what is
occurring in the market are sought out – hoping to find connections in trends, consumer needs, and
emerging companies and technologies.

Leaders in innovative organizations encourage their people to look past their departments and day-to-
day tasks. They encourage people to “look at the big picture” and discuss how their work fits in the realm
of the overall market. They ask people to understand how their competition approaches similar problems
and opportunities. The message: “Get market smart, see the connections, sink the competition.”

Idea Generator:
- How are you encouraging your people to look outside of their roles to outside forces in the
market?
- What have you done to examine the competition and share that knowledge with your team(s)?

Cultural Habit #7
Great Ideas Are Scaled . . . Fast

- In 1995 the buzz was that everyone would one day buy everything online. Jeff Bezos liked the
idea, so he started a company called Amazon. Despite a lack of strategic direction, or even the
ability to fulfill orders, Bezos scaled the idea and opened his doors to customers and vendors en
masse and became the go-to marketplace for online purchases.
- When Accenture realized the outsourcing market would boom, it quickly mobilized its global
capabilities and positioned itself in the market as the leader in outsourcing solutions.

In the early stages of innovation, resources are put to work to test ideas and their value. Once proven,
innovative organizations “throw the book” at commercializing the idea: they dedicate money, people,
processes, and structures to become a “first-mover” in the market or topple an incumbent. Global
capabilities are mobilized. The culture is fired with excitement to go-to-market.

Leaders in innovative organizations work at a break-neck speed to commercialize a great idea that has
been tested. They share the idea to wider audiences of peers and put heads together on how to execute.
They align resources – budget and personnel – to sweep the market.

Idea Generator:
- What ideas are you currently sharing with other projects?
- What ideas have been generated recently that could benefit your entire group or the company

Excerpted From The Leader’s Guide to Innovation by Brendon Burchard, Global Innovation
Expert. Brendon Burchard is a popular innovation keynote for Fortune 500 companies and major
organizations. Contact him to train your people now: [email protected]

Innovation is the discovery and execution of pioneering ideas

that create new value and competitive advantage.
- Brendon Burchard, Author of The Leader’s Guide to Innovation