By Salt 106.5 Network Sunday 10 Nov 2019Finance and BusinessReading Time: 5 minutes
By: Michael McQueen
Few things are discussed with more enthusiasm in the business world of our day than innovation and creativity. However, implementing innovation within organisations is a much more challenging task.
1. Foster it
A key step is to undo this anxiety and foster a sense of safety among employees. When Jim Donald came to the helm of Extended Stay America in 2012, he recognised the need to inject a daring spirit into the organisation as the existing culture was one of anxious survival, lasting from the business’s recent bankruptcy. Employees were so focused on not losing their jobs or making mistakes that there was zero appetite for risk-taking innovation.
In order to address this fear-driven paralysis, Donald gave everyone a safety net by creating a batch of miniature ‘Get Out of Jail, Free’ cards. These cards gave employees a free pass should they make a mistake. The cards were distributed to all 9,000 employees with the accompanying instruction that all they had to do was call in the card when they took a big risk on behalf of the company — no questions asked. This simple but ingenious move instantly signaled that employees had permission to take risks.
A simple way to foster a safe environment of risk and boldness is to change the language we use. A colleague of mine, Cyriel Kortleven, encourages his clients to refer to mistakes as ‘nearlings’ rather than labelling them with the discouraging, oppressive term of ‘failure’. A ‘nearling’ describes something new that was done with the right intentions that has not yet let to the desired result. Although it may sound like little more than semantics or word play, Cyriel points to countless example of clients whose thinking shifted substantially by reframing the concept of failure as simply a part of success. It takes the anxiety out of the equation and frames risk as positive and necessary part of innovation.
2. Model it
Challenging as it may be, boldness needs to start at the top. Most mature organizations are led by administrators not revolutionaries. Cultures and structures of the past tend to reward those who have played it safe and so it is these individuals who often rise to the top.
Reflecting on the need for banks to adapt to the disruptions posed by technology, the former CEO of Barclays Bank Antony Jenkins suggested that an appetite for boldness must start at the top. “Boards will need to accept that we live in a discontinuous world. They should ask executives to take significant but calculated risks by working on projects that no one else is working on… In my experience, people become more risk averse the more senior they become…”
Gary Hamel picks up on this point in his book Leading the Revolution. “If you’re in senior leadership and have been for 2-3 decades, ask yourself honestly: Are you more willing to challenge conventions or less so? More cautious or less so? More radical or reactionary?” Hamel suggests that senior leaders have as much scope for being bold and radical as anyone else, but the problem is they have far more to unlearn.
If a business is to create a culture of boldness, its leaders must be the first to take a risk. An employee who witnesses their leaders simply sticking to the status quo is very unlikely to take a step of boldness or innovation. It becomes more of a dangerous personal risk with the fear of discipline from superiors, than a potentially beneficial risk for the company. Leaders must model the boldness they want to see in their company.
3. Incentivise it
Beyond simply fostering innovation and modelling boldness, leaders need to give employees an extra boost of encouragement for risks to be embraced.
Traditional reward and incentive programs focus on improvement, growth and linear advancement. Employees are encouraged to do what they did last quarter or last year but slightly more profitably, frequently or efficiently. Incentives are tied to the degree to which these improvements are realised. Structuring incentives this way certainly seems intuitive and sensible, but this is the problem. To stay at the cutting edge, ‘intuitive and sensible’ are not characteristics businesses need to be striving to attain. Radical innovations and dramatic creativity are what keep businesses ahead of the curve and the old incentive programs simply do not encourage this.
Picking up on this, prolific Harvard Business Review contributor Scott D. Anthony suggests that leaders would do well to move from rewarding innovation outcomes to rewarding innovation behaviours. At an informal level, this can be as simple as framing performance review discussions around experimentation. Imagine how the tone and culture of a performance review would change if employees were asked questions like ‘what daring risks have you taken over the last month’ or ‘what have you tried that has failed recently, and what did you learn?’. Imagine how the culture of a business would change if these questions were asked at the job interview stage…
While only the especially brave businesses may go on to tie bonus payments to levels of daring or risky behaviour, even affirming this behaviour in discussions can be a powerful incentive in itself.
The key message is this: people will not naturally take risks unless they see it modeled and are actively encouraged and incentivised to do so. Removing disincentives and constraints on risk taking is a good start, but actively fostering of a daring culture of boldness from the top down is key.
 Kwoh, L. 2013, ‘Memo To Staff: Take More Risks’, The Wall Street Journal
 Kortleven, C. 2016, Less is Beautiful, p. 161
 Williams-Grut, O. 2015, ‘An Uber Moment Is Heading For The Banking Industry’, Business Insider, 27 November
 Hamel, G. 2002, Leading the Revolution, Penguin, New York, p. 153
 Anthony, S. 2017, The Little Black Book of Innovation, Harvard Business School Publishing, p. 65
Article supplied with thanks to Michael McQueen.
About the Author: Michael is an award-winning speaker, social researcher and best-selling author.