Professor Hayagreeva Rao Stanford Graduate School of Business

Creating the Innovation Mindset: Knowledge Sharing in CUs

McKinsey (2007) study on innovation

What is the greatest predictor of innovation performance?

McKinsey Findings

Metrics & Measures Clear criteria

Success metrics

Go/no go decisions

Ability to discontinue

projects

Idea Generation

Multiple inputs

External sources

Deep consumer insights

Climate & People

Quick execution

Right people

Experimentation

Risk taking

Knowledge sharing

Leadership

Clear priorities

Active involvement

Communication

Protect innovation

Leadership and Innovation Focus

Channels

Superior ability to… •  Generate

•  Select

Valuable Innovations

Collaborators

Customers Competitors

TOOLS

Employees

IDEAS

WILL

•  Implement

The Emotional Sources of Will Emotions Will

Safety

Confidence

Fun

Trust

To Ask Questions

To Share

To Take Risks

To Borrow & Learn

Drives Innovation

Will, Risk and Innovation: Rewarding Failure

In the early days of MTV, Steve Ross, used to fire people…

for not failing enough.

Prototype Early: Learn from Interactions

A High Trial Rate

At Algasco, the CEO gives out visiting cards to employees

when he visits them. One side of the card has the CEO’s name

and other details. The other side says “get out of jail” and

people can turn it in after they have tried something, and it

has not worked.

A High Trial Rate

Jeff Bezos of Amazon has a monthly reward

for employees who act without getting

permission first.

The Whirlpool Pipeline

Capital

Internal Venture Capital

Risk (ß)

Valuation

Idea is Feasible

Technology Works

A Customer Buys

Seed Funding

R&D Capital

Go-to-Market Capital

Expansion Capital

Source: Lou Mazzucchelli, Ridgewood Capital

P(success) = 30% Req’d IRR = 100%

P(success) = 40% Req’d IRR = 70%

P(success) = 50% Req’d IRR = 50%

P(success) = 80% Req’d IRR = 30%

Pass Through Bubble Assignments & Sabbaticals

Kokai (cross-functional teams) to watch task force

Center for Army Lessons Learned

Chief Learning Officer (CLO) to identify best practices. CLO as 911.

CLO to make hoarding and not giving credit into integrity violations

T-Shaped Managers (10-15% of time sharing with peers & cross-pollination of ideas into proposals)

Reliance Retail and video-based sharing every week

Project Eureka at Xerox and sharing of knowledge

Will, Borrowing & Innovation: Rewarding Borrowing

Innovation is an export-import business. So borrowing and knowledge sharing critical.

The Emotional Foundations of Ideas Emotions Ideas

Safety

Confidence

Fun

Trust

Generation

Combination

Selection

Execution

Drives Innovation

  CEO and COO want to unleash collective genius. Don’t think of themselves as the smartest guys in the firm!

  Stock Market for Collective Genius: Mutual Fun

Computer Visualization Company Based in Rhode Island

Bringing Will, Ideas, and Tools Together: Rite Solutions

  Every employee given $10,000 of “opinion money” to buy savings bonds and stocks.

  Originators of ideas encouraged to develop “expect-us”, and get “prophets” to get stock listed.

  Others can buy stocks, offer suggestions, and volunteer time!

Mutual Fun

Stock Headlines

Personal Impression

Sum of Impressions

Employee Participation

Growth of Stocks

Rite-Solutions: Puzzle

Where to Start: “Bug Finding”

“The Curse Method” Where people are cursing, there is a need for something better.

“When I lie in bed, I try to think of things that suck.”

David Levy, Inventor

Closing Thoughts

Role of management is to create conditions for innovation – they have to put will, ideas and tools in place. Managers often overestimate the value of their involvement – it can cause distraction, and damage First do no harm is the first rule – get out of the way! Managers of the most innovative teams let others act without seeking their permission, and don’t’ enforce rules as consistently as others. “After you plant a seed, you don’t dig it up every week to see how it is doing”, William Coyne, 3M

Our agenda: How can we improve knowledge sharing in CU’s?

And providing a space for its evaluation: Fail earlier, learn faster.

Knowledge Sharing is activating the urge to help: Traditional approaches emphasize financial incentives, we want to prime their prosocial engagement.

While making it safe for unusual ideas to flourish: The importance of safety and innovation.

Our Knowledge Sharing Platform

Make sure management responds to the ideas: KS begins with voice; less useful if it isn’t heard.

Allow people to post anonymously: No user names aren’t present on the page.

Allow people to comment and evaluate ideas: Every idea can be commented on and prioritized.

Piloting the Platform with a Filene Affiliated CU

Key Lessons: 1. The importance of local networks and friendships.

CU Admins activated their internal networks

Piloting the Platform with a Filene Affiliated CU

Key Lessons: 1. The importance of local networks and friendships. 2. People have ideas.

Piloting the Platform with a Filene Affiliated CU

Key Lessons: 1. The importance of local networks and friendships. 2. People have ideas. 3. Management models the behavior.

Try it out yourselves!

https://filene.passagewaysonline.com