1. Solving THE INNOVATION EQUATION
Andrew Maxwell and Helen Leighton
Innovators’ Alliance, May 4, 2016
“An established company which, in an age demanding innovation, is not able to innovate, is doomed to decline and extinction” - Peter Drucker

2. Solving the innovation equation Units of measurement?
01/08/2018
Solving the innovation equation Units of measurement?
Possible Outcome Measures:
Company’s reputation for innovation – Business Week
Percent of new products in last 5 years - Eurostat
Number of patents filed – Michael Porter
Expect to be most innovative – Forbes
Return on new product development – Balanced Scorecard
However:
Measuring outcomes doesn’t help improve innovation capacity
Rather, it requires an understanding of how you change behaviors

3. Behaviours that increase innovation capacity
01/08/2018
Behaviours that increase innovation capacity
Team and cross-functional collaboration
Sharing ideas with internal and external partners
Two way, open, knowledge exchange,
Deferred judgment and idea exploration
Speedy decision making
Experimentation and willingness to learn from failure
Incentives that reward new activities
Access to appropriate resources
Achieving the balance between loose practices & tight processes

4. Innovation happens between gaps in organizations
01/08/2018
Innovation involves:
Sharing ideas, knowledge and resources
Collaboration
Trust
Increasing your innovation capacity involves:
Changing behaviors
Working in new ways
Creating new partners
Trust is the universal lubricant that enables innovation

5. Trust is the universal lubricant that enables innovation
1. Mayer, Davis & Schoorman, 1995
“Engaging with another party and being willing to be vulnerable to their actions without direct means of controlling their actions or behaviours1”

6. Trust as a behavioural construct
Moving trust from a sentiment, to a behaviour that can be audited.
Developed Behavioural Trust Framework (BTF) to enable individuals to understand how to build, damage or violate trust.
Enables individuals to decide who to trust and build trust based relationships
Higher levels of trust reduce relationship risk and foster innovation

7. Solving the innovation equation
01/08/2018
Solving the innovation equation
Innovation Capacity = Level of Trust x Available Resources Level of Trust = ∫(Trust building - trust damaging) behaviours – ƒ(controls)
Collaboration is an essential ingredient for innovation
Trust is a necessary pre-condition for effective collaboration
In the absence of Trust, we develop proxies for Trust:
Any mechanism which seeks to control behaviour is a proxy for trust (examples: employment contracts, performance reviews, annual budgeting processes, rigid organizational structures and reporting relationships, over-applied lean methodology, outcome-based objective setting)
The higher the Trust Level, the lower the need for controls
The higher the Trust Level, the greater the level of collaboration, which results in a higher level of innovation

8. Behavioural Trust Framework
01/08/2018
Trusting:
Disclosing: Shows vulnerability by sharing confidential information
Reliance: Willingness to be vulnerable through reliance on others
Receptive: Demonstrates ‘coachability’ and willingness to change
Capability:
Competent: Displays relevant technical and/or business ability
Experienced: Demonstrates relevant work/training experience
Judgment: Shows ability to make accurate / objective decisions
Trustworthiness:
Consistent: Displays of behavior that confirm previous promises
Benevolent: Exhibits concern about well-being of others
Alignment: Actions confirm shared values and/or objectives
Speak to behaviours in each dimension – can build, damage or violate trust
Communication:
Accurate: Provides truthful and timely information
Explanation: Explains details & consequence of information provided
Openness: Open to new ideas or new ways of doing things

9. Behavioural Trust Framework: Trustworthiness/Capability
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Behavioural Trust Framework:
Trustworthiness/Capability

10. Behavioural Trust Framework: Trusting/Communication
01/08/2018
Behavioural Trust Framework:
Trusting/Communication

11. Apply the Behavioural Trust Framework (BTF)
01/08/2018
Apply the Behavioural Trust Framework (BTF)
To explore team dynamics in organizations looking to increase innovation capacity
To identify challenges to building partnerships with new innovation partners
To facilitate coaching discussions
Evidence BTF users can identify short term actions to reduce controls, to increase trust & to repair damaged trust
Now gathering data on how people use this tool to share with innovation community (especially Innovators’ Alliance)

12. Building innovation capacity, one trust behaviour at a time
01/08/2018
Building innovation capacity, one trust behaviour at a time
For a copy of this deck or the Behavioural Trust Framework:
or download from
“A culture of innovation can be a company‘s primary source of competitive advantage, and can pay off steadily over the years” - Stephen Shapiro