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Convert Ideas into Growthby Ram Charan, author of
Profitable Growth
I sometimes hear CEOs saying, "We don't have enough ideas inside our organization. They aren't flowing, and the ones that do surface aren't very good." Frequently, their explanation for why that is the case is that they have hired the wrong people, or that they are just not creative enough. That is possible, of course, but I find it is rarely the true explanation. The reason there may not be enough ideas could be as simple as people not believing that you, the leader, are serious about wanting growth, and so they focus their attention elsewhere. If the leader just talks a good game about growth, but doesn't take action, then people see through him immediately. Another likelihood: The ideas are there, but they are buried under layers of bureaucracy that keep them from surfacing. A third possibility: People have potentially good ideas, but they are afraid of raising them, because there is nothing in the corporate culture that will reward them for taking a risk, and many things that will impede their career if the ideas they propose do not work out. That is often a major problem. You need to make sure that employees feel safe taking risks. A fourth thing to check: How good are the informal networks in in your company -- say, between sales and R&D -- in which people from different departments are constantly talking to one another and fostering ideas? Or are those interactions too time-consuming and cumbersome and employees find themselves cut off from people outside their own department? The final question to ask is: As a leader, are you regularly in your staff meetings trying to come up with new ideas? Let's suppose you are the senior vice president of marketing. How often do you meet with your head of advertising or public relations and talk about ways you could help grow the business? Is that a dedicated agenda item? How often do you meet with your counterparts in R&D or finance and talk about growth? On a scale of one to ten, how well are the ideas flowing in your organization? How good are those ideas? Where are they coming from? What is inhibiting them? What will increase their flow? You, as the leader, are interested in both the number -- you are trying to generate as many ideas as possible -- and the quality of the new concepts being proposed. Are people trying to come up with only home runs, or are they going for singles and doubles as well? How well does the culture encourage ideas of all kinds? These ideas don't have to come out of R&D. A new idea may involve moving into a different market. Or using a different form of distribution. What matters is a steady flow of ideas, not where they come from. As for external ideas -- that is, ideas for new products or services that are generated outside the organization, from suppliers, customers, and alliance partners -- the first question you need to ask is: How strong are the links between the people with outside contacts, your sales force, and your development people? Are they talking to one another all the time, or are there layers inhibiting the flow of ideas? Jeff Immelt's idea of ACFC, "at the customer, for the customer," where you literally become part of your customer's culture, is helpful here. If you are unhappy with the ideas being generated, check to see that they are flowing in all directions: top-down, bottom-up, and side-to-side. You want to ensure that they are coming from the outside (that is, through interactions with your customers as well). And if enough ideas are not surfacing, identify the root cause and deal with it. One other thought about this. When an idea surfaces, take a minute or two to help shape it. Help the person who proposes it take it as far as he can. Make sure it is as fully formed as possible. You want it to appear in the best possible light as it is subjected to your selection process. Doing so enhances people's motivation. That is what Bob Johnson, head of Honeywell's Aerospace division, did. "As a division, and as a company in general, we were great at taking costs out and getting things done," Johnson explains. "We were an execution -- and productivity -- driven culture. But as the economy began to slow down, we knew we would have to come up with ways to grow faster than the economy as a whole, if we wanted to stay ahead of the competition." The problem was that the people who traditionally succeeded at Honeywell Aerospace did not think in terms of growth, risk-taking and new ideas. "The company was technical and analytical," Johnson explains. "People were not great risk-takers. We needed to develop creativity and entrepreneurial thinking and take some good risks. Culture changes like this, obviously, do not happen overnight. But Johnson set out to change Honeywell Aerospace. The company began to recruit and promote people who were creative, and he deliberately fostered an environment in which it was okay to propose new ideas, with no penalty if they were shot down. At Honeywell, as elsewhere, once people see that new ideas are being taken seriously -- and there are no negative consequences associated with the process of proposing them, and indeed are rewarded for doing so -- they are more likely to offer some of their own. Copyright © 2004 by Ram Charan. Published by Crown Business a division of Random House, Inc.
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Profitable Growth from Amazon.com Ram Charan is the coauthor of Execution: The Discipline of Getting Things Done, the international bestseller that has changed the way managers run their companies. He is a highly sought-after advisor to CEOs and senior executives in companies ranging from start-ups to the Fortune 500. Dr. Charan earned his doctorate at Harvard Business School and has been on the faculty of that school as well as the Kellogg School of Management at Northwestern University. His articles have been published in Fortune magazine and Harvard Business Review, and his other books include What the CEO Wants You to Know, Boards At Work, and The Leadership Pipeline. Visit www.ram-charan.com in April 2006 for more information.
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