Innovation: The Path to Greater Profits (Part 6)

By Ted Garrison

In the first five parts of this article in Southeast Construction, the author explored the first eight of 12 critical traits of a successful innovative company. Here, he points out the need to create and maintain realistic expectations, and also the importance of measuring progress against specific targets.

9) Create and maintain realistic expectations:

This is an area where every company needs to be careful. The fastest way to destroy incentive in the field is for senior management to set unrealistic expectations. The way to avoid that is to involve field people in the setting of the goals.

Unless the people that must achieve the results believe they can accomplish the results, they tend to give up. I'm not suggesting you don't push for greater results - I'm suggesting you need to let people develop their own ideas.

During my career I was assigned the task of finishing a project in two months that had four months of work remaining. When I walked into the room with all the subcontractors and the general contractor's team, the only difference between me and everyone else was I believed we could do it. No else did. And no one knew how, including me!

When people tried to tell me it couldn't be done, I just kept asking, Why? They finally gave up, somewhat in frustration, and said, "Okay, we can do it, but we don't have any idea how!"

The good news is now they were focusing on solving the problem instead of complaining about it. We brainstormed for an hour or so, with little result. Finally, one subcontractor said, "That won't work, but if we do it this way it will." The pendulum had swung. The rest of the people in that room started adding little pieces to the process. Finally, after about four hours we left that room with a plan to accomplish our goal. The very people who said it couldn't be done had created the plan.

To make a long story short - they achieved the goal. Not because someone told them how, but because they all contributed little innovations - different ways of doing things - that made it possible to complete the project on time. The key to success was the fact that the workers on this project created a solution they believed in. They turned the project's expectations into a believable reality.

10) Measure innovation's progress against specific targets:

Innovation is a process. And just like a process you must measure results to ensure target goals are being met. For example, ever wonder why 3M has such a good innovative track record? The company requires that every division's sales have at least 25 percent from products developed within the last three years. People are held accountable for this result.

In construction, instead of the contractor focusing on how cheap they can build a building, they should focus on how much extra value they can deliver as a percentage of total cost. For example, instead of focusing on only construction cost, examine all the ways the contractor can save the building owner other costs during the construction process or during the life of the building. Considering that the cost of construction represents only about 10 percent of the total lifetime cost of a building, obviously there are more opportunities to save costs during the life of the building than during its construction.

When you measure your company's innovation progress you need to assign specific accountabilities to your employees. For example, instead of just measuring a project manager's performance based upon how close he came to the schedule and budget, measure how many new services he created for the customer on each project. This is critical because innovation is not destination, but a continuous journey.

The best way to get your employees to really understand the importance of innovation and the fact that you are serious is to measure it - just like you do the schedule and budgets. When they realize their innovative performance will have an impact on their bonuses and promotions, they will focus on it. However, the key to the measurement of innovation is that those being held accountable must have a say in how it is measured and what the targets are.

In Part 7 of this article, the 12 traits will be wrapped up including a summary. The traits that will be discussed will include why innovation is the result of focused, disciplined and rigorous mental processes as well as why it's necessary to reward what you want.

Ted Garrison, president of Garrison Associates, is a consultant, author and speaker who works with businesses in the construction industry. He can be reached by email at Growing@TedGarrison.com.