Innovation: The Path to Greater Profits - Part 7

By Ted Garrison

In the first six parts of this article, the author explained the importance of innovation and discussed the first 10 of 12 critical traits of a successful innovative company. Here, the author explores the last two traits and then provides a brief overview that allows readers to evaluate their own company's performance.

11) Innovation is the result of focused, disciplined and rigorous mental processes:

All of the previous traits have discussed creating a focused, disciplined and rigorous mental process. This is accomplished by making people think about innovation, getting them to take action, holding them accountable for their efforts and measuring the results.

However, unless the process starts at the top of the organization and the efforts in the field are supported - whether they work out or not - change will not occur. In other words, unless innovation becomes a culture within the organization, innovation will be hit or miss at best. Therefore, companies must create a senior management-sponsored process to seek out creative ideas, implement them, measure the results and reward the innovators.

12) If you want innovation, then you need to reward it - and that includes mistakes:

The final, critical ingredient is the reward. Surveys of employees indicate the number one motivator for them is recognition for a job well done. Therefore, if you want innovation to succeed then you must acknowledge and reward it.

You can get creative here. Maybe on a weekly basis list the top ten small innovative ideas. For major innovations, maybe there is a special bonus. But clearly those that innovate must be recognized at bonus time and when promotions are made. If you want innovation you must reward it.

A little secret: if you are going to provide awards or special bonuses, let the employees vote on the ideas, or at least be a major factor in determining the winners. If everyone is involved in the process, everyone's awareness of innovation is raised and its importance is reinforced.

Now that you've explored all 12 traits, I suggest you go back and review all 12 traits and rate your company's performance on each of the traits. (Note: Past articles in this series can be found at http://www.southeast.construction.com/opinions/management/archive/default.asp ) Rate your company from zero to eight on each trait with eight being "all the time" and zero being "never." A four implies that you meet the standard 50 percent of the time. Then tabulate your results. Give yourself four points just for taking the test and add up your scores from each of the 12 traits.

If your score ranged from 0 to 59 you are in serious trouble since you failed Innovation 101! You need to drastically change the way you are conducting business. If your score ranged from 60 to 69 you get a "D." You seem to understand that innovation is needed but you need to improve your performance.

If your score ranges from 70 to 79 you earn a "C." While this may seem okay, it's really not! An average contractor gets lost in the crowd. Those companies in the top 20 percent make more than double the profits of those in the lower 40 percent.

If your score ranges from 80 to 89 you get a "B." You are certainly on the right track, but don't let up because there is still room for improvement. If your score ranges from 90 to 100 you get an "A." Congratulations! Your company is a leader in the industry. However, don't get complacent because innovation is not a destination but a journey. Don't slow down and rest, because you may lose momentum and suddenly find those behind you rushing past.

Innovation is maybe one of the only two sustainable competitive advantages - the other being continuous learning - but in order to maintain that advantage a company must continue to work at it.

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.