1. Innovation Leadership Training Day Five Building an innovation culture February 20, 2009 All materials © NetCentrics 2008 unless otherwise noted

2. Welcome In this section of the innovation training we’ll examine the steps necessary to build a culture that encourages innovation

3. What We Want to Accomplish

4. Goals for this section Our goal this section – Look at the changes necessary to change the culture to encourage or embrace innovation – Consider what we can do at the enterprise level, business level and at your level – Think about “top down” and “bottom up” changes

5. Key Points Organizational culture is one of the biggest impediments to innovation – Culture directs how people think, the work they are willing to do and the risks they’ll take Culture isn’t easy to change, but it’s not impossible to change – Think about the changes you can implement locally – Work with the innovation team to impact the culture more globally

6. Not Invented Here Corporate culture is the number one barrier for innovation in any large organization – Most are very risk averse – Focused on continuing existing projects and services – Little desire for change – People and processes aren’t structured for innovation

7. Keepers of the culture Research demonstrates that mid-managers are the ones who are most likely to maintain and defend existing culture Senior executives often seek to augment or redirect the culture Line employees feel the culture is imposed on them to a great extent

8. Result? Those of you in an innovation advocate position can reverse the cultural resistance to innovation Rather than a barrier, corporate culture can become an enabler to innovation

9. Cultural Attributes What factors in the existing culture could become barriers for innovation? – Risk aversion – Time commitments – Lack of resources – Lack of processes – Lack of clear goals – Others?

10. Cultural Comparison

11. What can you do locally? We can’t change the corporate culture overnight What can innovation advocates do in their departments? – Use innovative tools and techniques consistently – Gather and synthesize trends to forecast new opportunities – Identify “birds of a feather” and meet regularly with other innovators – Encourage others to use innovation and creativity to solve problems or create new products and services

12. Positive bias Work with others to solve problems using innovation tools and techniques Approach each idea with a “positive bias” – find out what’s good or beneficial about the idea Your approach and attitudes will set the tone for the rest of the group around you

13. What can you do corporately? What can you do to support the concept of an innovation culture globally? – Work closely with the innovation team – Participate in innovation projects and campaigns In your department Across departments or across Pacific – Report on the projects within your team to provide greater visibility to innovation

14. Compensation If you want to change priorities and focus, change compensation Jack Welch is famous for saying “Show me a salesperson’s timecard and I’ll tell you how he is compensated” Work with the HR or Talent Management teams within Pacific to restructure compensation for innovation.

15. Community Build a community of innovators across Pacific Create discussion forums and periodic meetings so the innovators can interact and share ideas Have the senior administrators participate in this community

16. Measurements What we measure says a lot about what we value If we establish specific innovation measures and metrics, and constantly assess those measures, then we demonstrate their importance Setting innovation goals and consistently measuring against those goals demonstrates the importance of innovation

17. Managing for Innovation Many times people will speak of “managing innovation” We believe it’s more important to set the expectation that we manage “for innovation” This means we provide the cultural attitudes, tools and techniques to allow innovation to happen, rather than attempting to force it to happen

18. Key Takeaways Corporate culture can either inhibit or encourage innovation What you do to change the culture top-down or bottom-up will matter Start taking the small steps that you can control now – Compensation – Community – Communication – Measures and Metrics

19. Questions?