By Sam Herring and Vikesh Mahendroo
We're in the midst of "The Learning Decade," and private-sector executives as well as public-sector officials have embraced the notion that knowledge drives revenue-enhancing innovation at a time when the economy is uncertain and companies need turbo-chargers that can accelerate growth, spark competitiveness, and boost future prospects.
Peter Drucker, the founding father of Corporate Management, said in The Effective Executive that companies need to build brainpower because, in the end, it's more important than manufacturing facilities and financial capabilities.
Indeed, U.S. organizations spent $126 billion on employee learning and development in 2009. And 80 % of all learning executives anticipate that funding for workplace learning and performance programs will increase or remain the same over the next six months. Just as important, the most recent ASTD Learning Executives Confidence Index indicates that more organizations are placing a stronger emphasis on learning today than at any time in the last two years.
This heightened focus on learning was also reflected in President Obama's recent State of the Union Address and 2012 budget proposal, which emphasized the need for continued investment in research and education, despite urgent fiscal belt-tightening. "The first step in winning the future," Obama told Congress in late January, "is encouraging American innovation ... In America, innovation doesn't just change our lives. It's how we make a living."
President Obama articulated what every business leader knows—that our nation's competitive advantage resides in our ability to innovate new solutions to address vexing problems and realize promising opportunities. To be successful, we need more Apples, more Ford turn-arounds, better wind and solar technologies, and more! We must foster creativity and innovation in our economy. In fact, research from IBM suggests that creativity is the top characteristic required for future leaders in order to meet the complex challenges of the future. Additionally, research from the Institute for Corporate Productivity identifies innovation and creativity as the most critical issues facing organizations today, and the number one lever to boost organizational performance.
Recognizing this, there are a host of efforts to foster an environment of innovation and learning now underway in U.S. companies of all sizes. Intel Corporation, for example, will invest $200 million in U.S. firms through Startup America; and, for its part, IBM will invest $150 million to finance new entrepreneurial opportunities. In addition, HP will commit more than $4 million, also through Startup America. HP's investment is under the HP Learning Initiative for Entrepreneurs (HP LIFE), a global program launched in 2007 that uses educational and technology outreach aimed at helping entrepreneurs and small business owners create and grow commercial opportunities.
While it is clear that innovation is absolutely critical to our nation's success, the question currently being asked in board rooms and conference rooms all across the country is: "How can we really break through with fresh and lucrative ideas that will resonate in the marketplace?"
Unfortunately, there's no easy answer.
But, from our perspective, there are five key factors that must be considered in order to effectively deliver the revenue-producing innovation—and learning is a component of each:
• Understand How to Best Learn Innovation Skills: Can innovation be learned? Research suggests that it can. Studies of identical twins separated at birth tell us: that two-thirds of innovation-related skills come from learning. Being innovative is not just an inherited trait. But innovation can't easily be codified and instructed either. Rather, learning how to be innovative can be achieved by understanding the skills and behaviors associated with innovation, and consciously demonstrating, practicing and applying those in our day-to-day work and personal lives. "The Innovator's DNA," a Harvard Business Review article by Jeffrey H. Dyer, Hal B. Gregersen, and Clayton M. Christensen, suggests that there are five key innovation skills and behaviors: associating, questioning, observing, experimenting and networking. Learning programs for innovation can be developed around these or similar behaviors, with a heavy emphasis on action learning assignments applied on the job.
• Understand the Difference Between R&D and Innovation: It's important not to be lulled into complacency because you're spending a good amount on embedded R&D programs. The key questions are whether your innovative efforts are challenging the status quo, anticipating future needs, and demonstrating market agility—not merely burning through research budgets. To answer these questions within any organization, requires learning and an agility to respond to market circumstances. A 2004 National Academy of Sciences study discussed effective innovation and listed five substantive areas for breakthroughs: the introduction of new products; the development of new processes to produce or deliver products; the funding of new supply sources for raw materials; the development of new markets; and changes in the organization of firms.
• Understand That Service Companies Can Be Innovative, Too: It's important to remember that innovation isn't only about products—even though technology products tend to drive the focus on innovation. It's important not to forget that services constitutes roughly 70% of our economy, and is a huge driver of innovation. Indeed, some of the best CEO's in the service sector, like Joe Robles, the head of USAA Insurance, have helped develop state-of-the-art processes and programs. For example, in 2009, USAA developed an iPhone application that allows customers to use the camera function of the mobile device to deposit a check. A photo of the front and back of the check—no trip to the bank—is all that's needed. Simply, USAA listed to and learned from their customers as the iPhone and other mobile applications gained widespread adoption.
• Understand That the Pace of Innovation Needs to Be Calibrated: It's important to keep business realities in mind when implementing new breakthrough ideas. And not everyone has an unlimited capacity for change; adapting to the new isn't easy. That's where learning comes in. The more we learn about and reflect on why we are resistant to change or why change hasn't happened, the more easily we can advocate and embrace it. As Peter Senge writes in his book, The Dance of Change, organizational learning can help us to examine the assumptions, the habits and the mental models that often thwart innovation from taking hold or that prevent us from implementing meaningful change.
• Understand That the Bleeding Edge Isn't the Be All and End All: It's important to accept the fact that maximum innovation isn't always the best innovation; sometimes, incremental change is more commercially palatable and effective. The key is driving change in a way that makes a meaningful and workable difference. A good example here is 3M described in a 2010 Wall Street Journal story—an engineering and innovation-driven company. 3M CEO George Buckley knows that his company engineers want to be on the front end of 3M's next big innovation, yet he still reminds them not to lose sight of un-sexy, low-cost, incremental innovations like the respirator mask.
Generating much-needed growth from new products, services and processes is challenging and complex in today's highly competitive global economy, and it requires deep organizational commitment—from top to bottom. But the breakthroughs and accompanying revenues will definitely make themselves felt, especially if clearly focused learning informs both strategy and execution.
By Sam Herring, cofounder, Executive Vice President and Vikesh Mahendroo, President and Chief Executive Officer, Intrepid Learning Solutions.
Vikesh Mahendroo provides strategic leadership for Intrepid, focusing on operations; finance; and client, board, and investor relations. He joined Intrepid in 2007 after a distinguished 23-year career with Mercer Human Resources Consulting.
Mr. Herring is a frequent speaker at universities and leading industry conferences and seminars, where he speaks on topics including designing effective corporate learning strategies, trends in learning technology, and best practices in vendor selection and outsourcing.