Sunday, November 1, 2015

Creative Cultures of Innovation

Introduction
One of the biggest buzzwords in today’s business world is innovation. We hear how different companies claim to be centers of innovation and are pushing the limits of creativity. From a marketing perspective, it is a great way to sell your company as having a culture that inspires and accepts new ways of thinking. Ed Catmull, CEO of Pixar, is quoted in saying, “Managers scour books and magazines looking for greater understanding but settle instead for adopting a new terminology, thinking that using fresh words will bring them closer to their goals… To ensure quality, excellence must be an earned word, attributed by others to us, not proclaimed by us about ourselves.” Pixar is a recognized leader in creating widely admired stories with both inventive plotlines and emotional authenticity. IDEO is another award-winning firm that focuses on human-centered design to help organizations innovate and grow. In a case study comparing these companies, we will discuss leadership approaches that support a creative culture, benefits of project limits, appropriate team dynamics, value of experimentation, and a strong mission focus.

Historical Theories

Over the last few years the debate on whether or not lone inventors are the source of breakthroughs has continued to evolve. The idea generation process goes through three basic phases: variation, selection, and retention. Data suggests that although individuals can’t typically recognize the difference between good and bad ideas as well as groups, a group that generates ideas together won’t produce as much variety. Hybrid teams that start as individuals and then come together for the last two phases have better average quality of ideas, quantity of ideas, and variance of ideas.

Team dynamics also play a factor with the greater the diversity in a team, the more creative the results. Varied backgrounds of individuals will increase the collective knowledge of the group and allow for connections to be made across divisions of individual expertise. One theory is that ideas and knowledge exist because of the individuals whom make the necessary mental connections. Resulting from this hypothesis, the importance of individual talent is key to an organization’s success. One study suggested that approximately 5% of all the employees in an organization create more than 50% of all the new ideas for a firm. In fact, who is leaving or joining the firm determines the culture which attracts, selects, and causes other people to remain in the firm. The key takeaway is that talent is the most important asset or resource a firm can acquire and cultivate.

Leadership and Culture
One traditional framework for leadership in a business is where the company hierarchy establishes a vision for the future plans and growth of the organization and then works to inspire others to execute that plan. Creative leadership is fundamentally different. Following Disney Animation’s purchase of Pixar, one of the managers came to Ed Catmull with a two-year plan that laid out exactly how she was going to manage her department moving forward. He responded by telling her she had narrowed her thinking and that chances were that they would end up somewhere other than where she had planned (see below).


“Instead of setting forth a ‘perfect’ route to achieving future goals (and sticking to it unwaveringly), I wanted [managers] to be open to readjusting along the way, to remaining flexible, to accepting that we would be making it up as we go.” Leaders have to create space or an environment for innovation, a place where people want to belong and interact. This environment is both a spatial and social atmosphere where experimentation is common. Leaders need to be aggregators of conflicting viewpoints who empower the voices of all their employees. It is better to be fuzzy and vague at the top than giving answers and solutions. You want to be able to encourage ideas from those within your organization that interact with the customer and have an environment where those ideas are tested with candid feedback from your entire team. In my conversation with Ed Catmull, he said, “Hierarchy is there but communication is separate.” Teams are created for problem-solving. The feedback they receive is to communicate ideas and identify problems but decisions come from within the team. Management’s role is to help build teams, find talent, help teams fulfill their role and help others see conflict as healthy.

Benefits of Project Limits


There are many ways that conflict is healthy for a creative culture. Unless a company is willing to attempt to do something that might fail, they aren’t pushing themselves enough. Fail early and fail often. By encouraging risk and pushing the limits, people are forced to improvise and create unexpected solutions for unexpected problems. IDEO and Pixar both empower their employees to act and solve their own problems as they find them. When Pixar and Disney combined, Ed Catmull and John Lasseter decided that Disney needed to create its own culture and they would not share resources between the two studios. Limits forced groups to find creative solutions when time was short or they were having issues rendering a particular effect for a film. Limits imply that you can’t do everything you want so you must think of smarter ways to work and think. Balance is inherently required when working within constraints.


IDEO specifically begins their design process by evaluating ideas with three overlapping constraints in mind: feasibility (what is functionally possible within the foreseeable future); viability (what is likely to become part of a sustainable business model); and desirability (what makes sense to people and for people)Design thinkers will work to bring these constraints into balance; however, not all constraints are created equal. Some projects are driven by technology, budget, or a mix of different human factors. An organization may focus on one factor or another. There isn’t a linear approach to balancing constraints but all of them should be considered during the life of a project.

“Most companies will start with the constraint of what will fit within the framework of the existing business model. Because business systems are designed for efficiency, new ideas will tend to be incremental, predictable, and all too easy for the competition to emulate…. A second approach is the one commonly taken by engineering-driven companies looking for a technological breakthrough. In this scenario teams of researchers will discover a new way of doing something and only afterward will they think about how the technology might fit into an existing business system and create value…. Relatively few technical innovations bring an immediate economic benefit that will justify the investments of time and resources they require.
IDEO has found that innovation comes from balancing these constraints through human-centered design. Focusing on one element of the triad may undermine the sustainability of the overall program.

Team Dynamics

A common best practice is to hire smarter talented people to be the source of creativity. Pixar expands this belief by saying “Give a good idea to a mediocre team and they will screw it up. Give a mediocre idea to a great team and they’ll either fix it or come up with something even better.” The secret, mentioned before when discussing leadership, is to focus on having the right chemistry with the right team than having the right idea. Teams focus on collective genius and not individual breakthroughs in an additive, evolving, and collaborative process. IDEO describes their smart teams as a team of teams. Each team member has strengths in two dimensions – a tangible and valuable expertise that is hard to acquire and the disposition for collaboration across disciplines. A smart team is an interdisciplinary team where “there is a collective ownership of ideas and everybody takes responsibility for them.” Pixar also subscribes to the value of cross-functional learning and collaboration. At Pixar, employees have classroom experiences and interactions where everyone can learn more about other roles in the company. These new situations taught them to be more comfortable making mistakes and to see new ways in which they could improve and change their processes they were teaching to each other.

The greatest learning opportunities at Pixar happen at Braintrust meetings. The sole purpose of Braintrust meetings is to focus on problem-solving with the film currently in development and not some personal agenda. Arguments, even heated ones, are always about the project. The film is under the microscope and not the director and his team. Everyone involved is seen as a peer and are encouraged to voice their opinions candidly. They talk about what is working and what isn’t. They make suggestions, provide feedback, and continue to rework and rework a character until the iterative process finally helps it find its soul. The one thing that the Braintrust does not have is the authority to make final decisions on the story. The director of the film always determines the path moving forward and does not have to follow any suggestions that are given in the meeting, regardless of who made them. Although the Braintrust is made up of individuals who are expert storytellers and have been through the process themselves, Pixar believes that any solution presented won’t be as good as the one the director and his or her creative team can come up with. It is this environment of candor and trust and a focus on ensuring that all voices are given equal weight that make Braintrust meetings what they are.

IDEO uses Post-it notes to measure the weight and value of an idea with what they call the “butterfly test.” After lots of research and observation and numerous brainstorming and prototyping sessions, a whole wall is covered with promising ideas. Then each participant is given a small stack of Post-it “ballots” to attach to ideas that they think should move forward. Not long after everyone has gone fluttering around the room, it is clear which ideas have attracted the most “butterflies.” Then begins a debate and a consensus is eventually reached. “The process is not about

democracy, it is about maximizing the capacities of teams to converge on the best solutions.” Certain approaches are important for making choices, but good brainstorming sessions create choices and is the route to innovation.

“At IDEO we have dedicated rooms for our brainstorming sessions, and the rules are literally written on the walls: Defer judgment. Encourage wild ideas. Stay focused on the topic. The most important of them, I would argue is ‘Build on the ideas of others.’… It ensures that every participant is invested in the last idea put forward and has the chance to move it along.” Design-thinking is a balance between the divergent and convergent process as well as the analytical and synthetic processes.

Converging is to drive toward a solution, while diverging is to multiply options to create choices. When we analyze complex problems, we break them apart to understand them better. The creative process of synthesis extracts and identifies meaningful patterns from the data. It helps create the narrative or the story which drives the project. “People have to believe that it is within their power (or at least the power of their team) to create new ideas, that will serve unmet needs, and that will have a positive impact.” This confidence is built on trust and trust flows both ways. IDEO builds trust between their designers and their clients by sharing the creative experience. Their team of experts sometimes consists of a small “unfocus” group of eight-to-ten-year-olds, depending on who the end customers are. The purpose is always human-centered design.

Experimentation

Designing for innovation moves through stages of inspiration, ideation, and implementation. With IDEO’s strong belief of thinking with their hands, design thinkers can test and refine a portfolio of ideas through series of experiments, not pilots. Testing how something looks through visualizing it in a picture, role-playing a scenario, or a prototype forces a designer to make immediate decisions on how a customer will interact with a service or use a product. The different stages of innovation can be observed as these experiments become more polished and refined. During the early stages, prototypes are quick, dirty, and cheap, with many being made in parallel with one another. The greater the investment in an idea, the more committed one becomes to it. As the process progresses, each iteration decreases in quantity and increases in quality.  IDEO designs for the entire customer experience, which they call the 4th dimension. By mapping out the sequence of the overall customer journey, they identify key emotional touchpoints, turn them into opportunities and build upon them, in sequential order, across time. They can then test if the central narrative of their designed experience is meeting the needs of the customer in a powerful way.

One of the key things they do during ideation is observation. They literally put themselves in the place of the end user. When designing for emergency rooms, they literally feign an injury, call an ambulance, and go through all the steps a patient will, so that they can notice all the details and feelings a patient would. Then they observe analogous situations like a driver going to a pit crew or weary traveler checking into a hotel. They want the higher level of acuity when nothing is familiar because nothing is routine. They want to know what to do and what not to do. They want to understand what to say and what not to say. They are going on what Pixar calls “research trips.” They are looking for authenticity in their storytelling.

The first guiding principles of Pixar was “Story is King.” This meant that nothing gets in the way of the story and how it makes people feel. Whether it was a Braintrust meeting or a Daily, the Pixar differentiator is that this mantra isn’t just said but it is believed and acted on as the main focus of every storyboarding process. Dailies make directors present incomplete work to their colleagues to get constructive midstream feedback. It is in essence the Pixar prototype. Another experimental arena to test a team’s ability is through shorts. They consider shorts – three- to six-minute films that begin a feature film – to be a justified expense as R&D where they improve technically, like rendering clothes on human characters. Pixar and IDEO excel because they experiment and with each iteration, improve with each success and each mistake.

Strong Mission Focus

Pixar and IDEO both focus on really the same thing – quality of the human experience. Pixar is the master of storytelling. The reason they are such experts is because they value learning and quality. At the end of every movie, they hold a meeting called a postmortem where they explore what didn’t work and attempt to consolidate what they learned. “Everyone was so engaged in rethinking the way we did things, so open to challenging long-held ideas and learning from the errors we made. No one was defensive.” They not only were proud of sharing what they had accomplished and teaching others who weren’t a part of the film, but they had to reflect and prepare for the discussion. They are able to prepare for future films and future problems because they are already asking the right kinds of questions.
Year of Release Year of Release

One of the key problems that Pixar was able to identify early was how success could affect their culture. This is where the concepts of “Feed the Beast” and “Ugly Babies” come from. The first concept is one where success leads to a demand for more success and a need for increased output and speed. The second idea describes how new ideas may be ungainly and poorly defined but are the opposite of established and entrenched ideas. New ideas take time to cultivate and rework until they become something truly amazing. They didn’t want schedule to drive their output, but the strength of the ideas at the front end. There is a balance to obtain that kind of quality storytelling between these two inherent forces.

IDEAO, as mentioned before, tries to understand feelings and experiences so the products and services they create meet latent needs and emotions. The mission of IDEO is to center all design on people. To measure the balance of their innovation efforts, they created the "ways to Grow" matrix.

 
Like Pixar, IDEO believes that repeating old plans will create incremental innovation through extending a successful brand or the next iteration of a current product. Evolutionary products come by "extending existing offerings to solve the unmet needs of current customers or adapting them to meet the needs of new customers or markets." These needs and markets are found in the tails of the normal bell curve of a company's market research. The outlying populations can teach us new things abut creativity from their passion, their knowledge, or simply the extremity of their circumstances. This leads to revolutionary innovation where you are creating new markets. IDEO's philosophy is that "a company's best defense is to diversify its portfolio by investing across all four quadrants of the innovation matrix."

Conclusion

Although Pixar and IDEO come from very different industries, they are examples that you can't have "too much" talent in terms of creativity and innovation if it's part of the company culture. Innovation is messy and there needs to be a space and an environment where conflicting viewpoints can be shared and ideas built. Interdisciplinary teams need candid communication and focused on problem-solving. Innovation is a process with mistakes and because it is new, but there is also trust that the teams involved will be successful in finding solutions for those problems. Innovation requires a balance of the limits and pressures from success. Lastly, any product requires a process or service for it to be used and that user experience should be designed (as the quality product or service itself) with the needs and emotions of the customer in mind. Creativity and innovation are not talents only for the select few but they are results from skills we can all develop and contribute, in the right environment and as part of the right kind of team.

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