When Lori Senecal offered KBS+ employees a course in venture capital several years ago, the then-CEO wasn’t suggesting they quit to start their own companies. She wanted to ignite their entrepreneurial mojo so they could shape the ad agency’s business model.
Tapping employees to create change is a notion that has been around since managers set up suggestion boxes in break rooms. But turning employees into innovators takes a lot more than collecting a bunch of random ideas on a whiteboard or giving an inspiring speech.
Almost 20 years ago, in Leading Change, John Kotter estimated that only a third of change programs succeeded. Despite the avalanche of books, B-school courses and consultants that followed, a McKinsey & Co. survey in 2008 repeated those numbers. Companies stumble for many reasons, but a key one is that the top-down approach many favor can never motivate employees as well as they can motivate themselves.
Leaders might be better off mastering the art of strategic conversation. That means providing clear avenues for employees and management to discuss ideas and, crucially, their implementation, says Bruce A. Strong, founder of Cbridge Partners and co-author of Strategic Conversations: Creating And Directing The Entrepreneurial Workforce.
Strategic conversations are two-way exchanges that are structured by management to elicit relevant ideas. The best of them are ongoing. “These conversations ensure that changes aren’t foisted on the organization, rather they’re co-developed,” says Strong.
After studying innovation efforts at Red Hat, Rite-Solutions, KBS+, and Boston Children’s Hospital, among others, the researchers found three factors that led to success:
Provide a strong vision, but not the solutions.Management offers overall strategy guidance or poses specific problems to be addressed, but lets employees drum up ideas, both individually and in teams.
Offer structured forums for discussions. To ensure that good ideas are spotted and developed, companies create discussion frameworks, such as innovation days and challenges.
Empower employees who step up to affect change. Management takes on the role of keeping the conversation going by offering employees guidance, mentoring, and resources. They make sure employee ideas aren’t shut down by others and that employees who fail aren’t penalized.
Employees can’t very well push corporate strategy forward if they don’t know what it is. Sounds obvious, but workers are often in the dark about business models or aware of only overarching slogans. Opening up about strategy that has been the domain of top managers can be difficult for command-and-control types, but for the right kind of ideas to bubble up, leaders need to communicate clearly, and often, about goals.
An effective way to launch a discussion is around a specific issue, such as improving a process or increasing revenue in a particular market. “Conversation must be guided by leaders pointing out the areas to pay attention to,” says Strong. That keeps ideas that can shape the business model from getting lost among irrelevant ones.
The authors identified seven frameworks that can push forward innovation:
- Innovation Days––Physical or virtual events where employees come up with ideas and celebrate new initiatives.
- Contests––Individual or teams of employees pitch ideas, often after working with management coaches, to compete for prizes.
- Challenges––Similar to competitions, but more specifically focused on a problem or issue posed by management.
- Platforms––Intranets where employees and management discuss issues, post ideas, or ask for collaboration and feedback.
- Strategy reviews––A wide range of employees are brought into the process of reviewing and contributing to annual and quarterly strategic plans.
- T-shaped conversations––Senior managers meet with business unit managers to create cross-functional teams sharing ideas about broad strategic goals and implementation.
- Chaordic conversations––Employees build on ideas or suggestions from clients or external communities and then bring them through the hierarchy.
Perhaps the most powerful are innovation communities, where diverse employees come together to work on specific issues beyond their typical responsibilities, with management’s support. If a community takes on a life of its own, its strength and duration can go a long way to shifting a culture. “They allow employee ideas to get baked into the business model,” says Strong.
Communities sometimes evolve from one of the other types of conversations. That’s what happened at Rite-Solutions after CEO Jim Lavoie launched a stock-market game where employees used fun money to bet on other employee’s ideas. Over time, employees volunteered to work with other employees on their winning projects, creating an ecosystem, and one management can use to generate ideas or get feedback anytime.
Senecal, who recently became global CEO of CP&B, held a competition at KBS+ to crowdsource employee ideas to improve operations or morale. The winning idea, for an on-site art gallery where staff and local artists could showcase their work, came from two of the company’s youngest employees. Management initially saw it as a way to retain creative talent, but the gallery has evolved into a multi-use hub for things like photo shoots, events, and product demonstrations for clients.
For all the time leaders spend crafting and talking about their visions, the time they spend listening might be key to cultural change. Getting employees excited about innovation is possible––at least, it is when those changes are something they helped create.
Susan Price is a writer and editor who has covered money, work, and small business through almost 20 years of trends, bubbles and breakthroughs. She runs workshops for women interested in social impact and consults with startups building content strategies.