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Give Birth to New Products by Killing your Cubicles

May 23, 2012

“In the end, you can only do great things with great people” – Hass Plattner, co-founder of SAP recently commenting to several SAP guru’s.

A byproduct of the mass layoffs during the Great Recession, for many companies, is a Cubicle Mentality – employees hide behind their partitions, keeping out of sight, doing their job but remembering what happens to complainers and renegades. One proof positive your company has that mentality – employees often wear that most bland and uncreative of colors unconsciously showing they fit into your cubicle mentality and are benign – the color khaki. Even that color’s origins imply blending in and not being seen – khaki is an Anglicized version of the Urdu word meaning ‘dust-colored’, and was originally used as an early form of camo. Khaki came about at a time when armies fought in strictly controlled formations without very much flexibility or disruptive thinking.

Most companies, particularly past market leaders, are afflicted with the cubicle mentality. Go to most offices and you see floors of cubicles. Each cube has a few personal items tacked to the cloth or white painted plywood walls, but it’s pretty much the same from I-55 to M-21. Many companies love to have quiet premises, only the sound of keystrokes interrupting floor sized tranquility. Is this how people best collaborate or is this how most people document activities and fill their day?

This weekend, the NY Times, had a piece on how many innovative companies are doing away with cubicles, favoring collaborative, and open, work environments. OK, this is not today’s new miracle cure for complacent companies, and the people sitting at these open spaces often wear headphones to give them some feeling of privacy. Innovation driven companies operate under the assumption and encouragement of collaboration and free thinking, which is facilitated and culturally reinforced by their physical surroundings. These post-cubicle mentality companies are the market disruptors, who put Kodak out of business, as they did Polaroid before, and a host of others. They understand a company can either be a case study or write it.

Competing in an economy where new products can turn their world upside down with a single YouTube submission or good social media strategy, slower moving companies must adopt the Silicon Valley ethos of innovation by creating the market only they can fulfill in the customer’s mind. Here’s the East Coast vs. West coast thing. A recent blog posting, from a Harvard Business School professor, talks about using his equivalent term for Voice of the Customer to tweak a product to meet customer needs, that is, how they will use the product. Innovative thought leadership? Well, Voice of the Customer has been around since the 1990’s. His suggested method of research is generally called Shopalongs, and this Ethnography technique has been part of the marketing research since the early 1980’s. The West Coast example is from the billionaire co-founder of PayPal and a recent home run hitter in a recently overpriced IPO social media site. His contention is rather than focusing on your competitors in pitched battles on their turf, you should redefine the market (or even create it) and become a creative monopoly. People come to you because you own their mindspace definition for that function (to be fulfilled solely by your product/service/hybrid), at least for a while. It’s hard to be that creative when you’re sitting behind a 5 foot cloth wall trying to look small.

Michael Hawley, the MIT professor who sits on Kodak’s BoD, replied with only one word when asked why Kodak didn’t innovate by developing Instagram. “Culture”, Hawley was quoted in a NY Times article on the need for product innovation and why conservative companies stink at it. He went on saying Kodak’s problem was the same as why McDonald’s didn’t start Whole Foods, or why Hasbro didn’t do Farmville – “cultural patterns are pretty hard to escape once you get sucked into them”. Now for a funny irony – the HBS professor mentioned above, with the seemingly dated market research advice, is the author of the seminal 1997 book, “The Innovator’s Dilemma”. It seems he got caught in his own cultural pattern, at least for that blog post.

In innovation and turnaround circles, we say “fake it until you make it”, i.e. precisely engineered actions result in culture change. Do you want your staff thinking in terms of protecting your product fortress or is it better for them to break their self-imposed conceptual-shackles, disrupting and redefining entire categories? The key question is to ask yourself if your market has stayed essentially the same in the last 20 years. If so, a 1990’s product innovation process and timeline will still suffice. Increasingly, these days, when I ask executives what keeps them up in the middle of the night, most often the answer is “some product coming out of the dark we  didn’t know of or even think about”. How then do we turn a previously successful company into an innovation powerhouse? Start at the fundamentals.

Rethink and Re-Pace the Innovation Cycle
The standard task oriented project management application (any of which could have been used to build the pyramids given their tops-down orientation) needs to be replaced. There are now a series of newer social media oriented group planning and task assignment tools, all emphasizing ongoing collaboration and real-time communications over entering ‘completed’ into a beefed up version of Excel. Require increased speed in the end-to-end cycle and don’t accept yesteryear’s timing for passing through each gate in the process. As one senior executive remarked when taking over a stalled company, “products aren’t released, they escape”. Focus milestones, gates and measurements on specific accomplishments, not specific tasks, within set escalation timeframes, forcing decisions (the antithesis of CYA cubical mentality). Over time, the cultural value of being decisive and innovative will become the norm. Besides producing new products, this new innovation process is also symbolic of a new era and culture, making hiring Millennials easier.

Redefine Progress as Actions, not meetings held, by collocating
Leave behind forming a committee in favor of a task force. Committees and project teams are not axiomatically time focused, they tend to focus on being in-process as a near-term goal and being perpetually in-process is the enemy of innovation. Good for explaining failure, but lousy on disrupting a market. Rather than product development initiatives functioning via periodic meetings, collocate all required stakeholders, from Brand Management, ERM/GRC, Marketing, R&D, Production, Finance, Sales, etc. into a Launch Team housed in a common area. Look at product development from a strategic staffing perspective – if pulling key personnel out of their daily activities to rapidly innovate is not worth the organizational ‘hit’, perhaps you should reconsider why you’re thinking of a new product initiative. Your short term internal tumult from innovation pays off in multiples when each competitor then adapts, giving you time to further capture mindshare.

Insights not confirmation
Innovation requires insights, and most companies are flooded with data. The usual report generators are not optimized for insight generation, and here the newer Data Visualization (what used to be called ‘Mashups’) and Big Data analytics find patterns invisible under the typical row/column presentation format. Market Research can then help refine insights.  Conservative companies focus on the incremental, on confirming small steps, while innovators focus on insight driven big ideas.

What about my current culture?
What about the current workforce, acculturated, after these 20 years, to the cubical mentality? How can we get these employees to create market disruptive new products? Should we require they wear bright colors? It may well require a new HR model.

A recent TV profile on Volkswagen’s US factory shows why.  One segment showed Volkswagen’s lead US trainer testing some potential new hires on their seeming aptitude for rapidly assembling toy trucks on a mini-assembly line. The host screwed up as you would expect (cue required cute shot of his face), but the key takeaway was provided by watching someone attach a wheel to the axel. Time was up; the trainer came clean – it was not about repetitively pressing a plastic wheel onto a metal rod. He wanted to see if potential employees would do tasks by rote or, on their own initiative, suggest a better way- to innovate. How important is innovation in assembling a car? Rephrase the question in this way: how would a cubicle mentality employee innovate and why is that important in improving a product with 20,000 discrete parts in a highly competitive and price conscious market? At Volkswagen, assembly line employees are more robot technicians than traditional assembly line human robots; a completely different HR model. Bottom, line – you may have to rethink the career paths of many of your most tenured employees. No one ever said innovation was painless.

To create disruptive products, to become competitive monopolies, companies need to look for internal and external employee  innovators who are uncomfortable working in a cubicle. We need to have our great people freed, physically and culturally, to do great things.

Richard Eichen is the Founder and Managing Principal of Return on Efficiency, LLC, http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program Rescue and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT/Systems Integration and key initiatives. Return on Efficiency , LCC specializes in those companies and initiatives where technology is the primary means of service delivery and revenue creation.  He can be reached at richard.eichen@growroe.com

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