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Posted by on Mar 8, 2014

Everyday Innovation: A Case Example

Everyday Innovation: A Case Example

 

The Story of AJAX Healthcare Group

The following is a case example of a fictional healthcare provider facing some tough organizational challenges. The example reflects the current realities that many organizations are facing today or will in the near future. In the example, AJAX begins to turn things around by adopting an Everyday Innovation business strategy and by implementing the BASIS Method—a systematic approach for generating and sustaining Everyday Innovation in an organization.

For the past several years, AJAX had been steadily losing market share while revenue and profits were shrinking. Employee engagement was at an all-time low while fear and uncertainty were at all-time highs. AJAX’s once strong culture of growth and innovation could now be characterized as a culture of protection, fire-fighting, and self-preservation. AJAX was also having difficulty attracting a diversity of new employees to the organization. In particular, they were having trouble attracting younger professionals known as “Millennials” (those born 1983 and after). AJAX had successfully instituted multiple initiatives to lower costs and reduce expenses but had finally reached a saturation point—a level of diminishing returns on cost-cutting measures. Simply stated, there was very little left to cut. Competition had become increasingly fierce and the business environment around them was changing rapidly. AJAX was having a hard time keeping up.  It had been many years since AJAX launched a successful new product or service and organic growth had stagnated. 

The company knew it needed to do something fundamentally different.  But what?  Throughout its history AJAX had always been a market leader and always had a great reputation in the industry with a strong tradition of success.  It also had always attracted and retained top talent and strong leadership.  But recent conditions, the changing economy, and the fallout from the “Great Recession” had changed all of that.  

A report from Deloitte (2014) regarding the needs and preferences of Millennials, caught the eye of AJAX’s CEO. One of the items in this report stated:

“Millennials want to work for organizations that support innovation. In fact, 78 percent of Millennials were influenced by how innovative a company was when deciding if they wanted to work there, but most say their current employer does not do enough to encourage them to think creatively. They believe the biggest barriers to innovation are management attitude (63 percent), operational structures and procedures (61 percent), and employee skills, attitudes, and lack of diversity (39 percent).”

The leaders of AJAX also found inspiration from the words of management guru, Peter Drucker (1985) who wrote:

“The best way to predict your future is to create it.”

Rather than waiting and hoping for things to get better, the leaders at AJAX decided to take action. These leaders quickly came to an important set of conclusions.  They realized that they had to pivot from their fear-driven, defensive position to a purposeful, opportunity-seeking position.  They determined that, in order to survive and prosper, AJAX had to commit to innovation as a key strategy for success and encourage, expect and support everyone to be active contributors toward innovation and growth.  They realized that the world now demanded a new perspective – a new brand – of innovation, one that is broader and more inclusive. They believed that the world now demanded Everyday Innovation.  Here is how AJAX defined Everyday Innovation:

At AJAX, Everyday Innovation occurs when everyone in an organization is actively and continuously supported, encouraged, and contributing toward the generation and implementation of new ideas and innovations of all types, from small to transformational, to improve our organizations and our world.

However, AJAX knew that change in the organization must be deliberate and purposeful.  Change was not going to happen by itself, nor by simply giving motivational “pep talks,” nor by running people through some kind of “creativity” training.  No, AJAX knew that the process of creating an Everyday Innovation organization would involve building new capabilities—of both people and the organization. The last point was important because AJAX knew that all too often, a lot of the talk about innovation fails to sufficiently address the organizational capabilities necessary to encourage, expect, reward, and drive innovation. Like many organizations, AJAX was simply not designed to innovate, and it shouldn’t have expected the organization to do what it wasn’t designed to do.  Like many organizations, AJAX had been designed and hierarchically managed on legacy principles that not only didn’t foster or fuel innovation—they stifled it. 

So AJAX leveraged the BASIS Method to drive Everyday Innovation.  The BASIS Method, is a scalable, systematic approach for generating and sustaining Everyday Innovation in an organization. It brings meaning and purpose to innovation by specifically defining Everyday Innovation based on an organization’s unique characteristics and then makes innovation actionable by providing customizable plans to build the People and Organizational Capabilities needed to generate new ideas and innovations.

There are five phases of the BASIS Method: Brand, Assess, Spark, Implement, and Sustain.

 

Here is the high-level process AJAX followed using the BASIS Method:

Brand 

AJAX began by creating a unique and custom “Brand” of Everyday Innovation. The Brand served as their guiding beacon – their ultimate destination. It defined what AJAX would look like when it fully became an Everyday Innovation organization.

The Brand provided context, guidance, and focus as people at AJAX engaged in innovation activities.  Here were the steps they followed:

  • AJAX began by gathering background information on their ultimate organizational purpose, strategic goals, traditions, and know-how. This required “dusting off” some old documents, some interviews with long-term employees, and conducting facilitated sessions with people, at all levels, across the organization.  Like individual people, every organization is different, and AJAX wanted to make sure their Brand of Everyday Innovation reflected and leveraged those unique differences.

  • AJAX then created a custom Definition comprised of statements that define Everyday Innovation keeping in mind the background information and the three meanings of “Every” (see Figure 1). These were statements that indicated what a person would “see” in the future when they were fully functioning as an Everyday Innovation.

  • They then identified the specific capabilities needed by people at AJAX to achieve their Everyday Innovation Definition. These were summarized in a People Profile and included “core” innovation skills such as experimenting, collaborating, and associational thinking. One of the key skills identified was the ability to continuously view the world and work through an “innovator’s lens.” They leveraged the ARC Model which represents this lens, ARC is focused on the skill and mindset of creating and stands for Acknowledge-Reframe-Connect.

  • Finally, AJAX identified the capabilities needed by the organization to achieve the Everyday Innovation Definition. These were summarized in an Organizational Profile and included support processes such as performance management, rewards and recognition, ideas management, collaboration, and leadership.

 Figure 1

The Three Meanings of "Every" Why?
Everyone is contributing to innovation

A wide-diversity of perspectives will create better   ideas. We can’t depend on a select few departments for innovation to be successful. The next great idea might come from a small regional office in a distant location.

Every type of innovation is valued

Innovation is scalable; the same principles apply to smaller innovations as well as breakthrough innovations. Smaller innovations may create a ripple effect that result in larger breakthroughs.

Every moment is an opportunity for innovation

You can’t schedule or merely “carve out” time for innovation. We need to continuously view our world and work through a lens of innovation.

 

Assess

The purpose of the Assess phase was to determine the extent to which AJAX was currently aligned to the Brand and thus where to focus their capability-development efforts and resources.

Essentially, the Assess phase was about understanding where AJAX currently was against where it wanted to be. The Assess phase also included harvesting “quick hit” ideas that could be implemented for immediate positive impact. Implementing quick hits helped to build excitement, confidence, and momentum early in the Everyday Innovation process. Key steps included:

  •  AJAX developed and executed a data-gathering strategy to determine how well the organization currently stood against its Brand including the Everyday Innovation Definition, People Profile, and Organizational Profile. Data gathering included surveys, interviews, and facilitated sessions across the organization.

  • The results were then summarized indicating the specific People and Organizational capabilities in need of development.

  • They also gathered some potential quick hit ideas that were then implemented immediately to begin to build excitement, confidence, and momentum around Everyday Innovation. Some of these ideas were already implemented on a local level, but not yet leveraged to others at AJAX who could benefit from them.

Spark

The purpose of the Spark phase was to foster (or Spark) new ideas around targeted, high-value opportunity areas or “domains.” A domain is an area of knowledge where an organization needs a continuous stream of new ideas and innovations.

AJAX identified some potential domains. Targeting these specific domains brought strategic focus to idea-generation and innovation efforts in a way that led to a greater return from organizational effort, resources, and investment. As people began to build capabilities and as they were effectively supported by the organization, they began to generate new ideas within the domain. Key steps included:

  • AJAX selected the domain: “Patient caregiving practices, processes, and tools for their hospitals that integrated the needs of patients and their families, doctors, nurses, and hospital staff.” AJAX strongly felt that new ideas and innovations in this domain would result in great positive impact and competitive advantage for the organization.

  • AJAX then developed and implemented programs and solutions to build the People Capabilities as summarized in the People Profile and around the targeted knowledge domain. This included delivering an “Everyday Innovation Workshop” (centered on the ARC Model) and other core innovation skills.  In addition, books, articles, and documents related to the “caregiving practices” domain were compiled and delivered.  People were also given access to a list of internal experts and coaches they could contact about the targeted domain. Deeper knowledge was then developed through “immersion” experiences that included participating in domain-related activities. For example, structured assignments were given to people that involved observing current hospital patient-support practices as well as interviewing current hospital patients and their caregivers. Some people were even given short-term assignments in actual caregiver roles.

  • AJAX also designed and implemented solutions to build Organizational Capabilities identified during the Assess phase. Solutions included leveraging the current performance management system to develop new innovation-related performance goals for idea-generators and their leaders. In addition, the current rewards and compensation program was modified so that formal and informal recognition and rewards could be easily given to people engaged in innovation activities. In addition, AJAX’s current intranet was adapted so people could easily engage in “virtual discussions” with peers, patients, experts, families, and caregivers. An “expert locator” tool was identified and implemented so that people could easily find and access experts in the caregiving field (both internal and external).  This allowed people to easily engage in brainstorming, feedback, and idea-sharing activities with experts in the domain. Leadership programs were also redesigned to include new skills for leaders around how to support, encourage, role-model and reinforce innovation activities. An “Everyday Innovation Leadership Workshop” was incorporated into AJAX’s existing Leadership curriculum. New performance goals around innovation support were also assigned to leaders to further reinforce these new skills. AJAX also designed a simple ideas-management process to capture, assess, and prioritize new ideas that people generated. For example, a “Caregiving Practices Innovation Summit” was delivered which resulted in a list of great new ideas around the domain. The organization even held a “Caregiving Practices Collaboration Conference” where over 200 people came together to exchange and generate ideas.

Implement

The Spark phase resulted in many new ideas around the targeted domain. During the Implement phase, several new ideas were selected to become innovation projects.

Because one of the realities of innovation is that, in many cases, initial assumptions about the innovation will be incorrect, prototypes of the innovation were first implemented to a representative subgroup from the target audience to test assumptions. Modifications were then made before reintroducing the innovation to another segment of the target audience. Key steps included:

  •  The AJAX Innovation Advisory Council (established early on to provide direction and decision-making) selected and approved several new ideas generated during the Spark phase including one idea submitted by a radiology technician from one of the regional field offices. Her idea was to create a Family-Relations Center of Excellence (FRCOE).  The FRCOE would utilize cloud-based apps and tools to be a one-stop shop for families that brings together the often confusing myriad of entities and experts that need to be consulted when a loved-one is in the hospital, especially with a serious illness (e.g., insurance companies, social security, Medicare, medical specialists, primary doctors, social workers, mental health professionals, rehabilitation centers, nursing homes, hospice, etc.).

  • An innovation project and project team was formed to test and ultimately bring to life the FRCOE innovation.

  • This team created and implemented a learning-based Innovation Plan to develop, test, and implement the FRCOE.

  • Once fully tested and revised, the FRCOE was implemented in full and has been an enormous success and competitive differentiator for AJAX.

Sustain

The Sustain phase at AJAX began by internally monitoring, measuring, and communicating the status of Everyday Innovation efforts including on-going FRCOE project status.

The goal of Everyday Innovation is to have everyone participating and actively contributing toward innovation, so it was essential that everyone was kept aware of the progress, successes, and impact of Everyday Innovation efforts and encouraged and inspired to contribute. AJAX decided to create a virtual “bulletin board” to continuously report on Everyday Innovation activities and many formal and informal celebrations occurred for Everyday Innovation successes, including those involved in FRCOE where people were recognized for their hard work. Others were simply recognized for current progress accomplished. AJAX determined that people wanted to know that the organization valued the Everyday Innovation effort. Their view was that sharing, collaborating, and learning were essential to sustaining Everyday Innovation. Key steps included:

  •  The AJAX Advisory Council continuously monitored, measured, and reported on progress of innovation projects.

  • AJAX also continuously communicated internally and externally on overall Everyday Innovation efforts.

  • There were many celebrations of progress, milestones, and successes of innovation efforts early and often.

  • Communication and collaboration processes were put in place so that people could share with and learn from others inside and outside of the organization around their innovation activities.

Conclusion

Adopting Everyday Innovation as a business strategy and applying the BASIS Method led AJAX to several positive tangible results.  For example, new products and services started making a positive impact on revenue, profit, and market share.  Employee engagement has improved dramatically as employees are now fully participating in decision-making around innovation-related projects and activities where their ideas are valued and implemented.  Several employees, who were once ready to leave the organization, have remained to participate in new Everyday Innovation activities. Furthermore, AJAX’s innovation-minded reputation is spreading across the “Young Professionals” social networks and an abundance of talented “Millennials” are flocking to AJAX to become a part of the new culture. AJAX is quickly becoming one of the “Best Places to Work.”

Many organizations today are experiencing similar challenges to AJAX (i.e., increasingly competitive markets, diverse and demanding consumers, profitability and growth challenges, diversity, engagement, etc.).  In many cases, cost-cutting has been cut to the bone and efficiencies squeezed beyond the point of diminishing returns. Business leaders are recognizing the need for new ways and new approaches to solving the most challenging and costly business problems. The need for continuous and sustained innovation has never been greater for businesses and organizations, regardless of size, industry or market, for profit or non-profit. Increasingly, business leaders are recognizing that innovative thinking is needed, not only to solve their greatest business problems and to accomplish their top business goals, but as an integral part of their overall business strategy.

EiQ will work with you to solve your most challenging and costly problems, design an innovation strategy unique to your needs and goals, and position your organization for sustainable success, competitive advantage, profitability, and growth. 

2 Comments

  1. Great case study. I help lead an initiative in Cleveland, OH called Engage! Cleveland, which is focused on helping to attract, engage, and retain Millenials in our city. We have found that they want to make a difference in their community and their place of work. Three out of four will pick a place to live first, and then find a place to work. There is a win/win here. If organizations find ways to create meaning by enabling everyone in the organization to innovate, then they will attract the talent needed to build our organizations and communities. Great example here of what can happen when an employer understands this and thrives by unleashing the power of innovation. Great read.

    • Evan, great point about the connection between creating a purposeful, inclusive, innovation-based environment and attracting, retaining and engaging Millennials, or anyone, be it an organization or a community. Greatly appreciate your sharing, your kind words and the great work you and your colleagues are leading in Cleveland!

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