Kill the Company: End the Status Quo, Start an Innovation Revolution

2012

INTRODUCTION

The First Step Toward Greatness

The conference room was buzzing with energy. Typically it would be quiet, filled with people doing their best to hide their fatigue, disdain, or boredom while they surreptitiously glanced under the table at their phones to check e-mail. But today things were different. Everyone was engaged and animated.

In fact, it was downright boisterous. People were having a hard time waiting their turn to talk as the discussion flowed. Heads were vigorously nodding or shaking, and occasionally someone would jump up excitedly to make a point. The electricity in the atmosphere steadily increased as the team realized that its goal was within reach. The group’s ideas for putting CompliCo, their main competitor in the packaging industry, out of business were insightful, creative, and, in some cases, very easy to accomplish.

Determined to become the market dominator, the team tore into CompliCo ruthlessly. Armed with an arsenal of resources, the group considered nothing to be off-limits. They ripped CompliCo apart, quickly identifying and prioritizing a multitude of weak spots. People spouted off one opportunity for destruction after another at a rapid pace. It was amazing how many ways they could imagine toppling their rival.

Meredith, the head of Product Development, pointed out that while CompliCo was a leader in mainstay categories like consumer packaged goods, it had done little to expand into growth categories such as biotech and medical device packaging, where many smaller industry players were jumping to grab market share and make a name for themselves. She knew the company’s management was hesitant to move in this direction because of the capital expenditure required to generate products for heavily regulated industries like these. And yet the profits were potentially massive, making them very hard to ignore.

Jeff, well-known for his expertise in packaging design, commented that over the past several years, CompliCo’s investment in new packaging technologies was moderate at best, and its materials research had taken a hit, resulting in some of its lowest levels of patents and trademarks in recent years. CompliCo’s portfolio, while large, was beginning to look unimaginative.

The director of Finance, Gwen, voiced the fact that price pressure remained one of the biggest challenges in the industry; customers continually wanted lower-cost offerings and faster delivery. While CompliCo’s pricing was tough to beat, there were industry rumblings that its ability to deliver goods consistently and on time was becoming a problem. A competitor with superior logistics technology could cost the company some major accounts if it played its cards right. She added Identify and target frustrated CompliCo clients with faster delivery options to the list of Kill CompliCo opportunities.

The team’s flip charts were filling up with ideas ranging from basic tactics they could unleash on CompliCo tomorrow to complex plans that would take more time. After about an hour, the team paused and reviewed its game plan for taking CompliCo down. Going in for the kill had been easier than they anticipated. There was only one problem.

They were CompliCo.

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Fortunately, this meeting was only a simulation. It was part of an unconventional exercise called Kill the Company, one of my company’s most popular techniques with our clients. It’s incredibly effective because it takes the standard question, How can we beat the competition? and flips it on its head by asking instead, How can the competition beat us? The former invites canned responses like, We just need to get more creative!—which is easy to say, but tougher to execute in a meaningful way. The latter pushes people to admit hard truths like, If the competitor decentralizes its shipping centers, it can get its inventory delivered in half the time we can. Now, that’s a potential problem you can solve! And when you do, it will be the competition, not you, that needs to watch its back.

At futurethink, a global innovation and foresight firm that specializes in training, we teach exercises like Kill the Company to organizations of all kinds—from Fortune 500 companies to boutique businesses. These successful companies, many of them industry leaders, come to us for many reasons, but mostly they want to drive immediate and long-term growth, learn new skills, and better position themselves for the future. They believe the answer lies in improving their ability to think big, get inspired, or be innovative. They’re right, and we’ve developed an array of tools and techniques to help organizations achieve those goals. But a long time ago I realized that if you want to become more innovative, innovation often cannot be your starting point. Decades of experience have taught me that organizations that struggle with innovation commonly have entrenched behaviors and cultures that deflate their innovative spirit. To change the trajectory of these firms, you have to kill the company first.

It’s All About Culture

Kill the Company is much more than a single exercise. For any company committed to reaching its full potential, it’s the first step toward greatness. Only after you’ve killed your company will you be able to tap into the innovation that will transform it into a killer company.

Most companies, even successful ones, do not sustain a culture conducive to innovation. As they grow in size and complexity, it becomes hard for them to see what’s happening beyond their own walls. Their internal groups or divisions can become insular, resulting in creative and managerial silos that have no idea what anyone else is working on at any particular moment or what others’ strategic plan looks like. Companies often wind up using a microscope to scrutinize their isolated internal efforts rather than a telescope to keep a broad view toward the future. As the speed of change increases and demand for results continues to grow, critical thinking in all its forms—questioning, creating, inventing, exploring—too often takes a backseat to efficiency, output, and short-term ROI.

Corporate culture can become increasingly rigid and risk averse. In fact, companies have created so many complicated processes to quantify their actions, heighten their efficiency, reduce their risk, and measure results, that employees at all levels are simply overwhelmed. Businesspeople today spend so much time in meetings, reading/writing e-mails and reports, and addressing politics and policies that there’s little time or brain space left to deal with creating long-term value. We’ve been robbed of the ability to create a thoughtful, risk-tolerant corporate culture that supports innovation and investments for the future. For most people, innovative thinking has become a one-time PowerPoint exercise reserved for the annual strategic plan.

Therein lies the dilemma, because even as we shunt aside innovation in favor of more immediately gratifying business initiatives, most of us know that innovation—the ability to develop novel and useful ideas with a business purpose—is what will really drive growth and carry our organizations into the future.*, ¹, ² It’s therefore imperative that we better balance how much time we spend working internally on ways to make the status quo more efficient with time we spend examining what’s changing externally so we can start questioning the status quo altogether. We need to accept some risk, because innovation requires taking risks. We need to find ways to develop and support a culture that makes room for innovative insight. A company mired in complicated processes and short-term results is simply not in a position to encourage innovation, no matter how many new programs its leaders talk about or implement, or how often they demand innovation from their employees. It just won’t work. To create the company of tomorrow, you must break down the bad habits, silos, and inhibitors that exist today. That’s why you have to kill the company first. It’s probably the most innovative thing a leader can do.

You’re not going to literally kill the company, of course—not the one you dreamed up and built with your sweat, nor the one that you wanted to work for because you were a fan of its amazing products, nor the one you admired because you believed it provided an essential service. But the zombie company that it has become, the one infected by the twin viruses of negativity and complacency, the one populated by frustrated, worn-out employees, the one dragging its feet through the muck of processes, short-term metrics, and the status quo? That company needs to be destroyed.

Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture—it trumps strategy and leadership.³

—Booz & Company,

The 2011 Global Innovation 1000

Tools of Change

Everyone has the power to innovate. Most of the people I work with could set the world on fire with the brilliance of the ideas they come up with in our training sessions. The challenge for most companies isn’t how to get people to be more innovative; it’s how to stop paying lip service to innovation and create a structure and culture in which it can actually flourish and deliver results. That’s exactly what we’ll explore in this book. The good news is that there are proven frameworks and client-tested tools to guide you. The goal is to empower yourself and those around you to do some things that in today’s business world have become daring acts: to think, to question, and to take risks.

The traditional organizational structures—where process trumps culture and where output trumps input—have innovation in a choke hold. But you and your organization can break free. Our approach is designed to help release you and your colleagues from the constraints of typical corporate culture. And rather than implement one more layer of processes to rule your lives, it will actually eliminate those processes and simplify your work.

Start the Innovation Revolution

Whether your company is struggling or sailing high right now, ask yourself whether your focus is in the right place. If you allow yourself to get stuck in the status quo, you’ll sacrifice the big-picture view of what really matters. Creating a culture where innovation can thrive is a strategic goal that cannot be put off until tomorrow. It starts today.

This book is your guide. Part I will examine the obstacles to innovative thinking that are so often part and parcel of traditional corporate culture, such as negativity, fear, conformity, and complacency. It will reveal how process addiction and an obsession with output ultimately hurt business, and will explore new ways that we can uphold our high standards for productivity and efficiency without sacrificing our ability to foster creativity and innovation. You’ll also have the opportunity to take a diagnostic that will evaluate where you fall on the innovation spectrum. This will help you decide where to concentrate your efforts and ascertain which bureaucratic logjams should be cleared away. You’ll be surprised at how quickly you and your teams enjoy the results of tools like Kill a Stupid Rule, which reveals how less red tape can allow employees to accomplish much, much more, and Impossible to Possible, which shatters all the excuses people make to hold themselves—and others—back.

In part II you’ll find tools that will guide you to build up a new organization, allowing you to hone the right skills and behaviors to foster innovation at all levels. You’ll see how you and fellow employees can launch a revolution by implementing small changes from the middle out. You’ll get step-by-step guidance that will help you to Picture the Future, Make Forced Connections, and engage in Assumption Reversal, among other fun and effective exercises.

Throughout, you’ll find inspiration from companies that made the most of these tools, designed to shake them from business as usual and inspire innovative thinking.

Own the Future

Too many change initiatives simply add another layer of processes to the to-do lists of already overwhelmed and tired employees. Not this one. Innovation is supposed to make things better, not worse, easier, not more complicated. Kill the Company is your guide for simplifying and streamlining, then building and maintaining a place where everyone’s innovative spirit and energy fuel the long-term goals of your organization. A company that empowers its people to think critically, question relentlessly, and act boldly is by default an innovative company, the kind that will own the future.

Kill your company, and the future is yours.

Note from Introduction

* According to PriceWaterhouseCoopers’s 14th Annual Global CEO Survey 2011, 78% of CEOs surveyed believe innovation will generate ‘significant’ new revenue and cost reduction opportunities over the next three years, Or consider this quote, from the Ernst & Young 2010 Connecting Innovation to Profit report, We assume that 50% of our revenue in 5 years’ time must come from sources that do not exist today. That is why we innovate.

PART I

BREAKING DOWN THE STATUS QUO

1

Innovation Begins with You

A few years ago, I was facilitating a senior innovation workshop with the leadership team of a top manufacturing organization. The session’s stated purpose was to help senior leaders from different business units better collaborate so they could lead change and drive more growth. I was brought in to teach them new techniques they could use together to take their business into the future. I run these types of workshops all the time, and usually I’m fairly adept at putting everyone at ease and getting executives to talk, share, and laugh, even if they’re hesitant at first.

But this group was unlike any I’d had before. They simply would not talk. And it wasn’t as if they were uncomfortable with the silence. In fact, they didn’t seem to care. Collaboration, sharing, discussion—none of it was happening. I realized a couple of hours into the session, after several failed attempts to get people to interact, that they weren’t holding back for fear of being judged for what they would say. Quite the opposite: they weren’t participating because they believed that no matter what they said, it wouldn’t make a difference, so why bother? Despite my best efforts, they remained disengaged.

At the end of the day, the CEO came into the room for a fireside chat with the team. The group roused immediately upon his entry, their long skeptical faces reanimating as they pretended to be fully engaged. This item on the agenda was billed as a time when we could all share, discuss big-picture issues, and create a sense of executive team building. But the CEO had come in with his typical serious expression, and after offering a rundown of the state of the company from a financial point of view and reading out a sort of executive progress report on marketing activity and sales, he said, I really want us to have more time to innovate, to come up with bigger ideas. You know, I realize that I pay you an awful lot not to have time to think. And I thought, You sure do. So what are you going to do about it?

Nothing, as it turned out. Things only got worse. He listed all the metrics and measurements of success he would expect to see in the quarters to come. He reviewed the potential M&A activity and the processes and technologies being put in place to generate more efficiency. Of course, on one level this information was great, and especially important coming from the CEO; it’s knowledge people need. But it can’t be the only thing they need to know. He ended his talk with a lukewarm salute: Our competitive advantage is our people, you here in this room. And then he left.

Seriously? Not one single, focused, inspirational message. Not one mention of opportunities for the future or his thoughts on culture, competitors, success stories, or even the behavior she’d like to encourage. Just a fireside chat that in reality was one long monologue on finance and metrics. And on top of that, his vote of confidence was about as inspiring and energizing as a root canal. If a leader’s job is to lead by example, this example basically said, "I don’t pay you enough to think, and please don’t think, because I really don’t care what you think anyway. Let’s just execute the current strategy."

I couldn’t believe the number of contradictions these poor managers were trying to absorb: Think differently! (even though I pay you to do everything but). Get creative! (yet all the benchmarks and metrics you’ll be required to meet will stay exactly the same—or will intensify). Think outside the box! (but staying true to corporate processes will be what matters most). The CEO wasn’t concerned with rallying the troops, nor did he share the opportunities he envisioned for the future. Most tellingly, he never even asked his team whether they had anything they’d like to say. There was no opportunity for dialogue, discussion, or questions. Was it any wonder the company had lost its edge? Was