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Culture, people, and innovation: an interview with Robert Rosenfeld.

Innovation culture is a poorly understood aspect of innovation management. What enables some companies to drive breakthrough innovation consistently while others languish despite heroic efforts? Robert Rosenfeld proposes that an innovation program must be aligned with a company's culture. He further suggests that a company needs to carefully staff its innovation initiatives so that the innovation preferences of its people are appropriate to the specific innovation task they are undertaking. I spoke with Bob about innovation culture and the human side of innovation. In the interview, he shares his insight into what corporations must to do to make their culture visible, discussable, and actionable.

JAMES EUCHNER [JE]: Before we turn to innovation, how do you define culture?

ROBERT ROSENFELD [RR]: That's a very good question. Culture is composed of peoples' widely shared, deeply held, often unstated and unconscious assumptions, beliefs, and internal values. It is the leadership when there are no leaders. Culture is almost always invisible to us. In essence, for the practitioner, it's "the way we do things around here." And in terms of innovation, culture trumps everything.

JE: Can you explain what you mean by that?

RR: Sure. When I try to do something innovative in a culture that doesn't fit, it gets rejected. If I have a culture that is very prudent in the way it does things, for example, and I try to put in a system that is going to be much more risk-taking in its orientation, it's going to be difficult for that culture to accept the change.

JE: How do you think about innovation culture, then?

RR: I think in terms of four different cultures, which are explained in my book: networked, communal, fragmented, and mercenary. The four cultures come out of the research of Rob Goffee and Gareth Jones, who speak of two critical axes that define a culture--the axis of sociability and the axis of solidarity.

Sociability has to do with how much people in the culture are open with each other. Do I know you? Do I know your family? Do I build relationships with you? A very strong sociability rating means a highly relationship-driven, network-driven culture. People in a low-sociability culture don't know anything much about you other than the fact that you're a physical chemist who happens to be located in the cube a few feet away. If I need a physical chemist, I know whom to call. That's a culture with a low sociability rating.

The other axis is solidarity, which deals with focus on goals. People in high-solidarity cultures focus on whatever they have to do to drive the goal home. In their culture, they believe that hitting the goal is what you have to do regardless of what it takes to do it. And there are definite consequences if you don't. In a low-solidarity culture, people ask, "What goals?"

When you cross the axes, you get the four cultures. High solidarity and high sociability lead to a communal culture; networked cultures have high sociability with low solidarity. Fragmented cultures are low on both sociability and solidarity, and mercenary cultures have high solidarity but low sociability.

Each of these cultures creates a different environment in which you have to innovate. If I'm working in an organization

that has high sociability, to be effective, I need to design the innovation process to involve other people. If I'm in a fragmented culture, on the other hand, I can have stars. They can drive things through a small team, but they don't need to interact with anyone else. Universities are like that. Each of these cultures is viable and can work well, but if I'm coming from one culture into another, I can get very confused.

JE: Is there one culture that's more consistently innovative than the others?

RR: There are examples of highly innovative organizations in each category, but they lead to different types of innovation. Start-ups are often more communal in nature: they're small, they've got to know each other and have trust to make it work. If they don't have trust at the foundation, they can't make the organization work.

If I'm opening up a doctors' office, on the other hand, I'm likely to create a fragmented culture: each doctor basically does his or her own thing. They may rely on each other for certain things, but they don't really have any common goals, and they may not socialize outside of work.

JE: And what about a mercenary culture? What kinds of innovation emerge from a mercenary culture?

RR: More short-term innovations. Short term because people focus on what they've got to do today, so they're looking at the next quarter or the next half a year or a year at the most. They're usually focused on hitting a goal now. It's not a longterm type of thing. It's harder for the revolutionary to take hold there.

And then, finally, what makes a networked culture effective is that the people know each other very well, so much so that they could be in a small town. The people are all interrelated, not just at work but outside of it, as well. So the networking culture has the type of interrelationships I need to build trust. In the networked culture, people are more focused on making sure the relationships work than they are on fulfilling the goals. It's not that they don't want to fulfill the goals; it's just that the goals have to fit into the relationship]rather than] the other way around.

JE: Where do you see more breakthrough innovation happening? In what types of culture would that generally tend to emerge?

RR: All of them allow me to do breakthrough, but how I structure that breakthrough is unique [to the culture]. This is key. A culture with high sociability may collaborate for innovation, but the sociability may block you from getting to a breakthrough because of the impact it might have internally on the organization. A mercenary [culture], which would be lower in sociability, might have the opportunity for breakthrough because of its focus on goals. But if people don't have the sense that they need to do breakthrough innovation to fulfill their goals, it's not going to happen there, either.

In the end, you have to understand how to leverage different types of people in your company context in order to be innovative. It's not just the culture, but how you manage people inside the culture. In any culture, there are certain people who do more breakthrough thinking than incremental thinking, and those people have a preference and a sweet spot for doing breakthrough innovation. Whatever culture I'm in, I can leverage those people to get what I need to have done, but I have to fit them and their work style into the culture that's there. We developed the Innovation Strengths Preference Indicator, or ISPI, to help companies leverage the natural innovation strengths of their people.

JE: Can you explain the ISPI for people who may not be familiar with it?

RR: The ISPI is something we developed about three years ago. It looks at a couple of things. One is an individual's sweet spot--where a person likes to innovate and create. The second thing is how the person tends to play with others on teams. Both are critical. If I put the wrong the set of people together--in terms of either interaction style or innovation sweet spot--it's not going to work. Managing innovation becomes an orchestration issue.

We talk in terms of two extreme innovation types--the pingger and the pongger. The pingger is someone whose brain naturally does something called bi-association. While other people are more linear in the way they problem solve and tend to solve within the problem definition, pinggers see the problem definition as fuzzy; they solve within the problem definition but then their mind bi-associates and goes beyond it. Pinggers are the pioneers in the organization.

The counterpart to a pingger is what we call a pongger. They're more like builders. Builders are the bedrock of an organization. They make things happen. They're also very, very good at setting up systems and processes that allow the company to do something over and over and over again. In any company, you've got both ends of the spectrum, each having different strengths. Learning how to leverage those strengths in my culture allows me to create the breakthrough innovation I'm looking for.

So when you start looking at innovation, the culture is one thing you need to understand. The culture is the world that you're embedding any initiative into. But you must also understand the people. If I don't understand the people, I can't use them effectively in any culture.

I want to stress a very important point to you. To me, the spectrum from extreme builder to extreme pioneer needs to be understood and respected in its entirety. If I'm missing pieces of the spectrum, eventually it is going to hurt me. It is up to the leadership to understand that spectrum and embrace the entire thing, not just one end or the other. This can be difficult because the preferences I'm talking about are more or less invisible.

It's also very important for a leader to be able to see where he or she is on the spectrum, because where you sit determines your biases. Let's say, for example, that the leader is a strong pingger, a strong pioneer. He or she may say, "I'm not seeing enough innovative ideas come through here." That may be because the leader is pretty much out of the box and the rest of the organization is generating ideas that may be less of a stretch. So the leader has to define what type of innovation he or she is looking for and understand who he is and what type of innovation he is looking for in order to put the right people in the right spaces for making it happen.

JE: How difficult is it for leaders to know themselves and to use that information?

RR: For some leaders, it's very difficult. If I'm on one end of the spectrum or the other, it's hard for me to accept the extreme opposite and see its value. The way things have been set up, different types actually call each other names.

JE: The complexity becomes clear the more we talk about it. As you talk to leaders in the Fortune 1000, do you find that they tend to be on the builder side or on the pioneer side?

RR: They tend to be more midrange. They're in the middle. JE: And are they are able to flex as they need to?

RR: They act as bridges in their organizations. What's very, very important is to know your own strengths and then, at the same time, be able to answer the question, "If I'm doing something that's really outside of my preference, who do I turn to? Who do I trust who thinks that way who can interpret it for me?" The importance here, again, is leveraging the differences in people.

Another thing that is important for leaders is to keep people informed in a way that they understand, not the way that the leader understands. Lots of times an organization says, "We're going to optimize. Everything's going to be done via Six Sigma; I want everyone involved in that." And then they shut down the more breakthrough thinking. Or the leadership says, "You know something, our products are not winning in the marketplace anymore. We really need to get more breakthrough thinking." So they start talking about the importance of breakthrough. In both instances, the leadership is alienating the opposite side. They're not balancing the dialogue.

Leaders have to recognize the entire spectrum and acknowledge and reward the entire spectrum. At certain times, leaders need to bring out one team versus the other, not much unlike managers do in football. An offensive team may be able to play defense, but they are not as good as the defensive team at it. That's why we have two different teams. Leaders need to understand who is on what team and be able to use them at the appropriate time. And by the way, on the team, everyone knows that they need the other team.

Without this understanding and appreciation of the need for different types of people, leaders will have a problem sustaining innovation.

JE: When you do your own assessments of these cultures, do you find that it's 25 percent in each quadrant or is one of them more dominant in today's American business culture?

RR: Generally speaking, many companies start as communal cultures. Then, as the organizations age and are under attack, they usually move towards a more mercenary culture; the goals become really critical and can overpower desires for sociability. They may start losing the people who joined the company for its sociability, and the culture shifts. And then they have a problem. If they can't succeed in being able to hit their goal, then they can erode into what I would call a fragmented culture, where all the organization is built up with little pieces and there are these fiefdoms, each doing their own thing to stay alive.

JE: Many leaders want to increase breakthrough innovation. What kinds of cultural changes are they asking you to help them make in order to make this possible?

RR: Leaders who want breakthrough innovation need to know what they're signing up for behaviorally, not just conceptually.

One of the first things we do is to help them understand, from an ISPI standpoint, who they are--where they are comfortable in terms of innovation and where they are not. Wise leaders understand their biases and how they should deal with differences, whether in geographic cultures or innovation preferences. They need to be really comfortable with the full range of innovation strengths, the pioneers as well as the people who like process and bring initiatives methodically, step by step by step to completion. A leader who is a pioneer must act in a way that will not mess those systems up, and a leader who is a builder must be open to some degree of chaos from pinggers.

Next we try to help everyone learn to speak the same language and know when it's appropriate to have what kinds of conversations. We help them create rules of engagement. Once people understand what the differences in strengths are, the rules of engagement provide a way to discuss those differences during a meeting. For example, we're having a leadership team meeting. Twenty percent of the leadership team is pinggers and the group is going down the agenda. Suddenly, the pinggers start to take off in a different direction. The rest of the team could say, "Excuse me. We're not going to ping right now; we're going to focus." Everyone laughs and says, "Yeah, you're right, okay."

I can't stress enough the importance of understanding those differences. If we do understand them and we can leverage the strengths of different people, we can make innovation happen all the way from breakthrough to incremental, and celebrate the entire spectrum. It's useful for everyone in the organization to understand this. When I hear people talking about the low risk tolerance in their company, they are often the people who are pioneering or extreme pioneering on the ISPI. They see the organization not doing what it needs to do, and it's holding them back.

JE: How long does that take for a company to go through that period of understanding and sharing?

RR: Well cognitively we can get you through the understanding pretty quickly. Living it is a different ballgame.

JE: How long before you've seen this understanding start to affect the way people make decisions about what they'll bet on and what they won't bet on?

RR: I would say you need between three to six months to get more comfortable with it as a leadership team. This will allow a team to get much more comfortable with the rules of engagement and be able to have the discussions that they normally couldn't have had before.

JE: In all of this, you talk about trust as being foundational. And you've talked about how all the cultures can be innovative, so even in cultures with low sociability you still must have some degree of trust to get sustained innovation. Can you talk about what you mean by trust and what you mean by trust as a foundation for innovation?

RR: Trust has two components, head and heart. "Head trust" is trust in your competency, your expertise. "Heart trust" has to do with whether I trust you to do what's best for me, for the company, and for everyone else, as opposed to acting purely in your own self-interest.

If I have high head and high heart trust, I have people who are really committed to each other and to getting something done. I can have that degree of trust in any culture, whether it's mercenary, communal, or networked. A fragmented culture, by its own nature, has separate groups, so they'll have that trust within the groups, but between the groups there may be lower trust--and they don't need it because that's not how they operate. But trust has to be present wherever the company is innovating or creating.

You can look at it from the perspective of an individual in the organization. I can be very, very competent, with very high head trust. But if I have a low heart trust in the organization, I'm not going to take a risk. Why would I take a risk? If I step out and it doesn't work, they can toss me out. If I have a high heart trust, on the other hand, I know the company will do the right thing by me and I'm willing to take a risk because I can trust that the company will be looking out for my interest.

JE: So what do you do when you go into an organization and a foundation of trust is not there? How do you help those organizations?

RR: First they have to identify that trust is not there. You can do that very easily by asking people a series of trust questions and plotting their answers on a graph. It becomes very simple to make it visible.

Next the organization has to understand and accept what types of innovation it is capable of today. If that's different from the innovation that [the leaders] want, they have to start changing their behaviors in order to increase the trust level, the heart trust level. And it has to be genuine, because you just can't fake this. It's got to be real.

Most of the time, the leadership of an organization doesn't really recognize what it did to destroy the trust. By becoming more aware of it, they can say, "Okay, I know what I have to do to change this now." It's a learning experience, but we all get stuck in situations where we have to do something to increase trust. A great example of that is downsizing. If I downsize in a way that destroys the trust, I have a problem because the people who are left can take a while to decide to trust me again.

Once I understand the level of trust in the organization, I can decide what kinds of innovation activities I want to undertake. But I have to make visible that invisible component called trust, and I have to put it on the table so we can actually have a discussion about its impact on innovation. Just because there's a low heart trust doesn't mean the leadership wants to change that right now; they may not be able to. And that's a call they have to make. But they also need to know that when they make the call to not change, they must accept incremental innovation, which may be just fine. Maybe the business tolerates that. I've learned over the years not to criticize. My job is to try to make it as clear as possible to them what the consequences are of certain kinds of decisions.

JE: So you're really trying to help them do a reality check on themselves in terms of their innovation ambitions versus their cultural reality. Have I overstated that?

RR: No. No you have not. I also believe it's very important to understand there's a difference between hope and strategy. Hope is not a good strategy. Prayer might be, but not hope. The point is that leadership needs to determine where they want to go, how fast they want to get there, and what type of innovation they are looking for to make it happen. What does the business need right now and what is it capable of? They need to be able to see reality, make a decision on it, and go forward. And then plot their course from a business, human, and technical standpoint. The business and technology we usually have less trouble with; it's the human [aspect] that gets us into trouble.

JE: My last question concerns the accelerating pace of change and its implications for corporate culture. What do companies need to do to deal with the fast pace of change in the world today?

RR. Throughout the history of corporations, the elements of destruction have been present at creation. What's very important is to understand the assumptions you made at the founding of the business that lock you in to a certain way of thinking and lock out changes in the environment.

Generally speaking, you start by creating a product on the pioneering side, and then you move to the builder side to optimize its delivery. That cycle could have been 60 years at one time, before the company would have to shift back to the pioneer side to get something completely new. Today, the cycle could be as short as three weeks. If companies don't learn to leverage differences in the people in the organization in order to become more agile, they can't make the change that's really needed.

With rapid change comes the requirement to be able to listen to people in the organization differently, to put them together to help us understand what the new thing is on the horizon while we also optimize what we have. If I don't have that, I can't be in business for the long term. That makes life much more complex and at the same time easier. Once I understand that I've got to leverage the differences in the people, I just have to figure out how to do that in my company.

I very much like something Peter Drucker said. He talked about how, in the twentieth century, we improved the productivity of manual labor fiftyfold. Today, we rely on knowledge workers. We have to do the same for them.

JE: At least in my experience, there really aren't good HR practices to help companies draw on different resources at different times. There seems to be the expectation that the best leaders will just be ambidextrous in this sense. And yet, if you want to be spawning new, innovative businesses, building them up and undertaking creative destruction inside your own company, you need to get good at reassigning people and rewarding different skills in different realms. Are there companies that you think have mastered the HR practices associated with making this world work better?

RR: We are entering into a new time. Leveraging the knowledge worker is in its infancy.

I think the challenge for HR today is to leverage those differences and partner with the line organization to be able to match the people to the challenges [the organization is] facing. HR is much more aware of differences in people. Can they leverage that knowledge to help the rest of the organization do what is required? I believe they're more than capable of doing it; the question is, will they see this as their role?

JE: I very much appreciate your time. It's really fascinating stuff about a part of managing innovation that gets very little attention.

RR. My pleasure.

Robert Rosenfeld is the founder and CEO of Idea Connection Systems, Inc. For over 40 years, he has been a leader in the field of human dynamics that make innovation happen inside organizations. In 1978, he created at Eastman Kodak the first Office of Innovation to be successfully implemented in corporate America. He is a cofounder of the Association for Managers of Innovation (AMI) and creator of Moysaic Partnerships[TM] and the Innovation Strengths Preference Indicator (ISPI[R]), as well as the author of Making the Invisible Visible: The Human Principles for Sustaining Innovation (2006) and coauthor of The Invisible Element: A Practical Guide for the Human Dynamics of Innovation (2011).

James Euchner is editor-in-chief of Research-Technology Management and vice president of global innovation at Goodyear. He previously held senior management positions in the leadership of innovation at Pitney Bowes and Bell Atlantic. He holds BS and MS degrees in mechanical and aerospace engineering from Cornell and Princeton Universities, respectively, and an MBA from Southern Methodist University.

Robert Rosenfeld, creator of the Innovation Strengths Preference Indicator (ISPI), argues that a company's innovation program must be aligned with its culture and innovation initiatives should be staffed with personnel who have innovation strengths appropriate to the specific innovation task at hand.

DOI: 10.5437/08956308X5502007
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Title Annotation:CONVERSATIONS
Comment:Culture, people, and innovation: an interview with Robert Rosenfeld.(CONVERSATIONS)
Author:Rosenfeld, Robert; Euchner, James
Publication:Research-Technology Management
Article Type:Interview
Geographic Code:1USA
Date:Mar 1, 2012
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