By Adam DiPaula, PhD

Innovation need not be a quest for groundbreaking ideas. Companies gain advantages when they inspire ‘everyday innovation’ among employees. What are the conditions that foster everyday innovation and how companies can measure their progress toward creating these conditions?

Meet Linda
Linda works in a government office as a service agent assisting customers with a variety of forms and applications. The office is structured similar to a bank—customers wait in line until the next agent is available. A traditional pain point for customers is the length of the wait time for service; during peak times, the line stretches back as far as the front door. Sighing, eye-rolling, and head-shaking were common customer reactions. Despite this, Linda observed that many customers came to the window still not having completed all the materials necessary to finish their transaction.

In fact, Linda noticed that much of an agent’s time was actually spent helping customers fill out the forms at the service counter. One day Linda came to the office with a set of ‘customer checklist’ cards. As customers entered the office they were handed the appropriate checklist and asked to first check they had each of the necessary materials completed before standing on line. The implementation of this simple process reduced wait times significantly, as fewer and fewer customers presented the agents with incomplete materials. Shortly thereafter, Linda’s simple checklist procedure was implemented across government offices.

You could use a variety of ways to describe Linda. She wanted customers to be satisfied, she understood what was impacting the customer experience, and she went above and beyond the normal call of duty. Innovative? Absolutely.

The Holy Grail: Innovation
It’s hard to think of a quality more sought after today by companies than innovation. In fact, many companies are structured with resources invested in driving innovation. It is not uncommon to see job titles like ‘chief innovation officer,’ or ‘VP, strategic innovation.’ In addition, many companies outwardly promote their status as industry innovators. Company taglines, websites and vision statements make heavy use of the term. It used to be that you could have a great reputation if you were efficient, helpful and insightful. Today your corporate image, and financials, depends a lot on your capacity and reputation for innovation.

All of this stems from the reality that innovation brings with it significant competitive advantages. Companies known for innovation can more easily engage customers with their brand and they can more easily attract the most talented employees who want to work on the leading edge.

The Power of Thinking Small
Innovation is not the exclusive realm of companies seeking the next groundbreaking idea or disruptive technology. In fact, a number of business writers and researchers have emphasized the importance of encouraging small innovations. In writing for the Harvard Business Review, John Baldoni1 noted how taking pressure off employees to find the next big idea actually encourages the creativity that gives rise to smaller, incremental innovations.

As illustrated by Linda’s scenario, innovation need not change everything, only improve the customer experience—whether it is developing or modifying, a product, service or process. This effort creates a unique and distinctive customer benefit that allies the customer to the company. Office workers, customer services representatives, frontline managers and supervisors can all be innovative and create the financial benefits that spring from it.

In their comprehensive research on innovative working, Fiona Patterson and her associates2 illustrated the importance of establishing conditions that lead to everyday innovation. How can companies inspire innovation among employees, whether they are in customer service roles, marketing or product and service development? They must foster the conditions that inspire employees to create unique customer benefits. They also must measure their progress toward creating the conditions so that they can identify ways to reach these conditions effectively.

Creating the Conditions for Everyday Innovation

1. Autonomy: Adopting an Attitude of Latitude
A recent report by Mercer Consulting3 reinforces the importance of giving employees autonomy in the workplace. The report’s findings suggest that a key component to keeping employees engaged is to give them the flexibility to provide high quality products and services and sufficient autonomy to be effective. The report also noted,that compared to past survey results, employees’ feelings that they can act autonomously are on the decline in Canada.

Autonomy is critical to innovation. Why? When employees are given the freedom to act autonomously they take ownership of the work they do and take responsibility for finding ways to make things better for customers. If workplace actions are tightly controlled, employees don’t own their efforts. With no pride of ownership there is no motivation to create unique customer benefits.

A workplace culture that promotes autonomy also has a particularly powerful impact on customers. Research conducted by Sentis shows that autonomy gives rise to employee actions that signal to customers that the company has a genuine interest in creating a unique customer experience. These encounters create unique, indelible imprints that glue customer to company.
We found that when employees were given latitude in handling customer problems, they were more likely to continue to work on the customer’s behalf until a solution was found—as opposed to passing the customer off to another department. Moreover, customers could recall these service encounters with extraordinary detail even though many of these occurred years before.

2. Fostering a “Try It” Culture
“Make sure you generate a reasonable number of mistakes.”
– Fletcher Byrom’s Ninth Commandment

Mistakes are essential to growth in business and life. Some of the most influential management books ever written emphasize the central role that mistake-making has at companies that endure. Mistake-making is a sign that a company, and its people, are striving to push beyond their current boundaries.

In fact, how else can growth occur—both professionally or personally—if we do not stretch and try doing something differently?  In their landmark book, In Search of Excellence4, Tom Peters and Robert Waterman demonstrated how a ‘bias for action’ and risk-taking were key differentiators of excellent companies versus also-rans. In describing this distinctive orientation among excellent companies, Peters and Waterman noted, “They don’t try to hold everyone on so short a rein that they can’t be creative. They encourage practical risk taking and support good tries”.

Despite this advice from business leaders and successful entrepreneurs—and the fact that many of us would agree with it—our daily work lives tend to be focused on striving to avoid making mistakes. This is due in part to what psychologists have labeled loss aversion. Initially identified by Tvesky and Kahneman5, loss aversion is the tendency for people to strongly prefer avoiding losses to acquiring gains. We feel much more strongly about the prospect of losing $100 than do about the prospect of gaining $100 that we do not yet have.  This biases decision-making in a manner that, first and foremost, avoids losses; it also prevents “try-it” cultures from yielding their innovative potential.

3. Bringing the Customer Closer to the Employee
A number of recent studies have demonstrated the motivational benefits of bringing the customer experience directly to the employee—rather than have internal managers report on how customers use the company’s products or services.

Adam Grant has referred to this practice as ‘outsourcing inspiration’ and his recent Harvard Business article6 illustrates how and why it works.  Companies can inspire employees to create unique customer benefits by showing them how customers use and have been impacted by the company’s products. This can be done in a variety of ways including having customers come to the company’s offices to talk about their experiences. It can also be done by showing videos of customers describing their experiences or through written customer narrative.

The key is for the employee to experience the customer’s perspective in the customer’s own words, unfiltered by internal managers. Employees will often hold a degree of skepticism towards management’s perspective on the customer. Bringing the unfiltered experience of the customer up close is the employee’s most credible source of information. In this light, it can also become the source of an employee’s desire to innovate.

4. Measuring, Diagnosing, Improving
If you type ‘employee survey’ into your search engine you have quick access to hundreds of links to employee survey questionnaires. Many of these surveys attempt to measure the extent to which employees feel their organization supports innovation.

However, these surveys tend to use measures framed at a very broad level. For example, one survey seeks a scale measure of the following: “I am encouraged to be innovative or to take initiative in my work.” Another example: “I feel challenged in my current position”. The latter question suffers not only from being too broad but by being open to multiple interpretations.  Finding a framework that speaks to your organization’s innovative potential requires greater specificity.

Sentis’ approach is to develop customized measures that allow an organization to evaluate how it fares on those attributes of the workplace that promote an employee’s motivation to innovate. Our measures tap the employee’s perception of the organization’s support for autonomy, its encouragement of risk-taking, and the extent to which it connects the experience of the customer directly with the employee. This more targeted approach gives managers the tools to implement specific policies and practices that will sustain employees’ motivation to continually seek ways to create unique customer benefits.

The Everyday Opportunity
We are now (hopefully) emerging from difficult economic conditions in which the message from management has been: “We have to do more with less.” One of the consequences of such conditions is that employees are thrust into circumstances in which they have to find creative, innovative solutions to make customers happy at a time when there are fewer employees to serve them. This presents a timely opportunity for organizations to harness the initiative of employees that has carried them through tough times and to implement management practices that the motivation to innovate.

As the saying goes, “out of crisis, there is opportunity.”

Adam DiPaula, PhD (ad@sentisresearch.com) is one of Canada’s leading research professionals and serves as Managing Director at Sentis Market Research Inc. 

1.Baldoni, J. (2010). How to encourage small innovations. Harvard Business Review blog post. January, 29.
2.Patterson, F., Kerrin, M., Gatto-Roissard, G., Coan, P. (2009). Everyday innovation: How to enhance innovative working in employees and organizations. NESTA Research Report, December.
3.Mercer Consulting (2011). Inside employees’ minds: Navigating the new rules of engagement. Canada survey summary.
4.Peters, T., & Waterman, R. (1982). In search of excellence. Harper Collins: New York: NY.
5. Kahneman, D. & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica 47, 263-291
6.Grant, A. (2011). How customers can rally your troops. Harvard Business Review, June.

(PeopleTalk Spring 2013)