Reframing risk to support innovation culture

stock-photo-man-jump-through-the-gap-element-of-design-61395928HR Symposium 2013

SANTA CLARA CONVENTION CENTER—In a culture of innovation, employees throughout an organization see themselves as problem solvers and company executives are role models, re-imagining new ways to do business, according to a panel of HR leaders from companies throughout Silicon Valley.

“Historically innovation is thought of what comes out of the lab,” said Kaye Foster-Cheek, Senior VP of Global Human Resources at Onyx Pharmaceuticals, one of four panelists gathered recently for a broad-ranging discussion on innovation at HR Symposium 2013.

Joining Foster-Cheek in speaking to these challenges, were Mary Humiston, Senior VP of Global Human Resources at Applied Materials; Eric Severson, Senior VP of HR at Gap Inc.; and Derek Sidebottom, VP of People at Rocket Fuel. They discussed innovation methodologies used inside their companies – approaches that have been successful and those that were not, as well as ideas that HR professionals could implement to make an impact on the culture of innovation and how they were helping employees discover the next era of fashion, cancer treatment, marketing data analysis and technology.

The event, held at the Santa Clara Convention Center before an enthusiastic audience of about 450 people, was moderated by Eddie Sweeney, former Senior VP of Human Resources at National Semiconductor.

Innovation Outside the Lab

The challenge, for HR professionals in companies, large and small, mature and in the start-up stage, is how they can best support environments where new ideas are welcomed and risk is considered an expected learning opportunity rather than a stifling limit on new ideas.

“What we’ve been trying to get employees to accept is innovation isn’t an outcome but an opportunity for everyone in the business to think about what they do is different and ultimately holds value,” Foster Cheek said. “It’s been a bit of a clarion call for people across the organization to really think differently and really challenge themselves to think creatively about what they do. Having that as a mindset enables you to be more accessible across the organization.”

Risk and Innovation

Testing methodologies helps manage risk. Managing risk in the ideation process means opening the pipeline as wide as possible, Sweeney said. There is no way, however, to avoid risk and nurture innovation. Panelists said their companies worked to reframe the inherent pitfalls of trying something new as learning opportunities.

At Onyx, a cancer treatment company, there is a “cycle of continuous learning.” The reality is more drugs fail than make it through the clinical trials. If the point were for every single drug to work, there would never be an industry. Onyx employees are encouraged to test and learn.

“We don’t reward failure but we reward learning,” Foster-Cheek said. “There is a mindset shift. There is risk inherent in every step of that journey.”

At the Gap, where executives tried unsuccessfully to roll out a large-scale new store format about eight years ago, the company used the experience to exercise more caution the next time. When they tried again to introduce a new format again, they used more caution, testing and adjusting, applying lessons learned wherever possible. Although a more recent pilot roll-out did not actually get implemented storewide, top executives framed it as a successful experiment. The company delivered full value because leaders were able to leverage research that was generated and improve the layout overall. The end result was a better store design.

“The president says it was a huge success,” Severson said. “It taught us the value of rapid prototyping.”

To foster a high level of risk-taking for growth, find the employees who really want to be part of something much bigger, Humiston, said. Bring in different viewpoints and help teams be critical of customer roadmaps. “They have to show the viability of the return of what they’re proposing.

Results-Only Work Environment

In trying to better meet the needs of employees and the company, The Gap clothing designer, manufacturer and retailer landed in 2008 on the idea of results-based work rather than time-based work, known as “Results-Only Work Environment.” Originally adopted in 2005 by Best Buy, the results-only work environment was implemented cautiously at the Gap along with continuous testing and responding methodology.

“In each instance, we saw engagement rise 30 percent and turnover drop 50 percent,” Severson said.

The company piloted a revised version of the program in a production team then expanded the program, trying it in a cross functional team, eventually testing it in a division. Each time, the HR leaders measured specific results before and after, adjusting and adapting the program along the way.

Although initially frustrating to implement the program at such a slow speed, Severson said he eventually came to see the wisdom of the measured steps. It was important to create the foundation of evidence, he said, to test changes in the program as it was being introduced and to build confidence throughout the company in the radically different model. Today ROE is actually a key recruiting tool for The Gap.

Testing, Measuring, Adapting

“Flexible work doesn’t mean what most people think,” Severson said. “Most people came to the building every day.” They still have to accomplish everything on their job description. “You just have to figure out how to do that.” The company did less monitoring and goal changing than expected. In exchange for absolute freedom, managers get absolute accountability on results, Severson said.

“That was so powerful that all the other architecture wasn’t needed. We wouldn’t have known that if we hadn’t tested it on so many smaller teams. It was an invaluable lesson.”

What you wouldn’t know about a thing like ROE is it’s the opposite of a flexible work program, Severson said, noting that the majority of Gap employees don’t use the flexibility of ROE to work at home. The biggest shift has been in starting and ending times.

“People are using their ROE flexibility to shave commuting time and they are often reinvesting their hours in the work,” Severson said. “Interestingly enough, it almost counter-intuitively increased the number of hours people work and increased their retention and engagement.”

Innovation Starts With a Business Problem

How do you embed methodology and set of tools that allows that to happen? Sweeney asked. What would you have to put in place to make sure the organization truly makes innovation accessible?

Fifty percent of the Onyx workforce has less than six months of tenure at the company. It’s a mature company with a start-up culture. “There are literally 30 more people walking through the doors every cycle.” The question became, How do you help people understand the company evolution and its eras of growth? How do people have a shared context of mission and values when things are moving so quickly? For Onyx, the price of not venturing into the risky unknown translates directly to lives not saved.

“It’s one of the things that really drives us,” Foster-Cheek said. “The reality of the business we’re in is that there are patients dying every day as we continue to bring therapies to the market place. What that does is it creates a sense of urgency. That is what we are in service of everyday.”

Charting A Road Map For Innovation

Onyx developed a series of maps charting the evolution of the company and explaining the leadership expectations. The maps, intended to be experiential, are coupled with a series of questions for small groups of people to explore. “It starts to form a context for you about this organization,” Foster-Cheek said.

The company also hired an acquisitions manager from Google, someone who had experienced large, rapid growth cycles. That person introduced new decision science and the algorithms to challenge data sets. HR began to monitor new pools of information and data for recruitment. It was a way to reimagine the way we do business, Foster-Cheek said.

Another innovative recruiting tool at Onyx has been to have cancer patients thank future employees for coming to the company and finding a better solution for treatment.

“For me it’s that constant reimagining how we do things,” Foster-Cheek said.

Language of Innovation

For Rocket Fuel, a small five-year-old data-driven marketing startup that is hiring a person a day, the challenge has been to explain the bigger picture of what is highly technical service.

The story of innovation “is really one that starts at the front door, said Sidebottom. In the midst of a rapid growth period, it has been important to build aptitude for innovation by helping algorithm scientists consider the language of the customer. Not all the new employees need to understand code, but they need to articulate the magic of what the company is doing, Sidebottom said. “We continue to build strong connective bonds that hopefully will be a catalyst moving forward.”

Wellness & Performance

Wellness is another area of constant innovation. There are no soda vending machines at the cancer treatment company in South San Francisco. Onyx is a place where ergonomics are prioritized along with healthy available snacks and Wednesday walks – the kind of behaviors employees can transfer to their home life.

When an Onyx employee complained she couldn’t get a diet soda at the office to save her life, Foster-Cheek replied, “We’re trying to save your life!”

The Gap has introduced a Performance for Life initiative, piloting an employee wellness program to encourage the use of evidence-based practices involving physical, spiritual and emotional well-being. When those areas of life are well cared for, performance in the workplace improves, Severson said.

A health fair at Rocket Fuel reached people who have been afraid of going to a doctor, Sidebottom said.

Applied Materials is establishing this year a wellness center in Santa Clara with onsite medical, employee assistance programs, acupuncture and chiropractic services.

“Everyone knows how much healthcare costs are going up,” Humiston said. The company is attempting to manage that by helping not pass on costs while people improve their health. “If you think about engagement as a foundational element, health is a foundational element. The Applied Materials program goals for employees this year include:

  • Getting health assessments
  • Speaking to an advisor
  • Leveraging dossier company for portability of health information

“A very large percentage of employees had not been to doctor in a long time and some had not had blood drawn in their lives,” Humiston said. “We have hundreds of employees calling or coming by and saying, ‘Thank you for saving our lives.’”

Engagement, Executive Sponsorship, Clearing Obstacles

Removing obstacles to innovation is as important for HR professionals as ensuring methodologies are in place to foster a dynamic culture

“I think HR plays an incredibly important role in enabling the culture of an organization,” Humiston said, identifying three necessary elements: visible leadership sponsorship, removal of barriers and engagement. HR controls the levers. “There’s a lot in our environments that block us from doing our best work.”

Remember This: Parting Advice From Panelists

  • Keep learning. Keep growing. Most of you are here because you’re also learners.
  • Show; don’t tell.
  • Let us lead the way as role models.
  • Squelch bureaucracy wherever it exists. It is the No. 1 enemy of the nation.
  • There is a beauty in working in “small” for innovation, small pilots, small groups.
  • Test results beat theory.
  • Be open to learn from other industries and spaces.
  • Think of yourself as a business professional rather than as an HR professional.
  • Remain intellectually curious about the business you’re in. Follow the major shifts on your business so you are solving real business problems rather than practicing HR.
  • Challenge yourself.
  • Remember that our job is to enable performance within the organization, not focus on HR solutions.
  • Tell stories. Share your energy and passion.

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