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Interview with Retired President X

Interview with Retired President XI had lunch in 2009 with the recently-retired president of a multi-billion dollar company and had a great conversation about innovation, leadership, and culture. The insights are still relevant and he enjoys his private life so I won’t be naming any names, but I will share some of the key insights and advice for innovators that came out of the conversation.

  1. Don’t be afraid to pay people well. When people aren’t busy worrying about money, they can focus on how to get more money into the business instead of trying to figure out how to get more money out of the business for themselves. Removing money from the equation also increases the chances that employees will bring their best ideas to the business instead of leaving to create a startup based on them.
  2. If you are an innovator and want to develop your idea within the company you are working for (whether it is an incremental innovation or a radical innovation), try to take it to someone who can say yes. There are far too many people in organizations that are trained to say no, and far too few who are equipped to say yes. Unfortunately, most organizations reinforce the importance of saying no, without empowering enough managers to say yes.
  3. Run as flat an organization as possible is crucial to innovation. Flatter organizations have fewer people in the middle to say no, and flatter organizations require managers to push more decisions to the edges of the organization. Pushing decisions to the edge of an organization tends to result in better decisions. The farther removed you are from all of the factors in decisions, the less successful you will be in making them correctly.
  4. Echoing former Halliburton CEO John Gibson’s thoughts – people brought in to help re-make the organization will ultimately be defeated by the processes and culture of the organization. Organizational change must occur from within and will generally occur quite slowly.
  5. Big ideas should be separated from the main organization into a new organization funded by the board of directors and reporting directly to them. They should also be staffed with employees from outside the main organization as well (except maybe Finance to enable consistent reporting). When you try and keep these potential radical innovations within the main organization, inevitably conflicts of interest will emerge between funding the idea and funding other transitory short-term leadership priorities.
  6. Upper management doesn’t generally know the best ways to effectively improve individual components of the organization. One approach to maximizing incremental innovation and improvement possibilities is to give the employees (not management) of a factory, a business unit, etc. a pile of money to use to improve the organization. You will be surprised how quickly employees can self-organize to determine the best uses for the money, how good they will be in selecting the best improvements to fund, and how fast stories about such an effort will spread to other parts of the organization.
  7. When people have an idea, they often just jump in and start developing the idea (even those ideas that others have had before), often reinventing the wheel and repeating many of the mistakes of those who have gone before them. To reduce waste and to accelerate success, consider having people submit a short research paper on the area of innovation they plan to pursue (to show that they have researched those that have gone before them). At the same time, somehow we have to find a better way of capturing the learnings from failed efforts for those undertaking new projects to learn from.

Finally, President X expressed that he would encourage anyone about to rise to the top job to take a break before assuming the top job to refresh, reflect, and to bring renewed energy and insights into the job. Whether or not you are in the top job or several levels down, I think there are some interesting insights to ponder here.

What do you think?

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