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Inclusive Innovation

Why Healthcare Innovation Often Fails

By | Inclusive Innovation

Today, health systems require an increased focus on innovation to achieve their strategic goals. With major forces of change at play — including consumerism, retail healthcare, risk-shifting, new entrants, and uncertainty resulting from a new administration — hospitals and other providers have begun evaluating new business models, diversifying their business, and searching for new revenue streams to stay relevant and competitive in their markets. Igor Belokrinitsky © ASC COMMUNICATIONS 2016

However, deciding to pursue innovation is far easier than actually making it work.  We have found that connecting innovation efforts with Diversity & Inclusion initiatives is a win-win between business strategy and H.R. strategy.

There  are a few common themes that are beginning to come to light in failed innovation attempts. Fortunately, all of these can be mitigated through thoughtful and purposeful design of an innovation operating model that includes enabling diverse ideation from a diverse talent pool.

1. Treating innovation like any other project. Treating innovation like any other investment is one of the most common mistakes we see. Measuring the financial return on innovation projects alongside other projects decreases their attractiveness, as most new ventures’ payback period is protracted. This may result in organizations shelving otherwise high potential opportunities, or myopically focusing on incremental opportunities with near-term payback. Furthermore, funding innovation via traditional budgeting processes (those used for traditional business planning) does not pull capital from dedicated innovation funds, and forces ongoing innovation efforts to compete for funding against other projects, operating units, and organizational priorities. In times of austerity and budget cuts, innovation efforts can be perceived as non-essential, and are at greater risk of falling subject to the axe. Using Diversity and Inclusion engagements as a catalyst for driving diverse innovation and tapping D&I budgets through H.R. or individual business units can be the key to avoiding this problem.

2. Measuring the wrong things. Measuring progress of innovation efforts is significantly different from, and more challenging than for traditional business units. Measuring your innovation portfolio through financial reporting processes may not provide full transparency into an initiative’s performance — progress towards milestones should be defined by metrics appropriate for pre-revenue and early-stage growth companies (e.g., engaged users, downloads), not strictly by financials. Measuring innovation efforts strictly by financial projections may be misleading, as financial projections for early stage and start up businesses are subject to significant uncertainty, and are easily missed.  Qualitative metrics as well as financial metrics related to inclusion efforts pay off in unanticipated dividends.

3. Not understanding the talent market. Successful intrapreneur leaders are a special breed of talent that have both entrepreneurial tendencies and experience, but are comfortable navigating the processes and politics of larger corporations. Not only are these leaders different in profile from traditional corporate hires, the teams they require to support their innovation efforts (e.g., design, development) are different as well. These leaders are in high demand from start-up or growth stage organizations, and field offers with compensation that includes cash and significant equity — attractive components of a total package. Leveraging traditional HR functions that don’t understand the profile or motivations of the right talent can significantly impair your innovation effort, the success of which is largely determined by having the right leaders to drive it.  HR transformation that recognizes diverse talent as more than just “visual diversity,” but actually hones in on diverse thinkers can make all the difference.

4. Borrowing from the corporate playbook. Many fall into the trap of assuming that existing resources and shared services can support innovation in a “plug and play” manner. However, it is exactly this thinking that will stifle your innovation effort. Incubators and other innovation operating models that heavily rely on matrixing to parent resources (e.g., IT, marketing, legal, procurement, D&I, HR) are subject to the same prioritization processes and corporate cost reduction efforts that can hamper the speed of traditional projects. Furthermore, without embracing an entrepreneurial culture (e.g., focus on building MVPs, employing lightweight contracting), the innovation effort risks over-building and over-contracting products for enterprise clients without first having established product-market fit.

5. Failing to keep “fit.” Designing and consistently executing an innovation process that aligns to your overall strategy is hard, and requires commitment and constant vigilance. It is easy to become complacent in enforcing strategic alignment, pursuing attractive business cases despite their failure to align with your organization’s core mission. However, focus is paramount in innovation. A coherent portfolio that supports the organization’s overall strategy, from its innovation strategy to it’s D&I strategy and everything in between, not only ensures executive and board alignment, it can yield positive benefits by enabling your organization to create a compelling case to outside philanthropists, grant-providing organizations, and strategic partners.

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3 Behaviors That Accelerate Innovation

By | Diverity & Inclusion, Inclusive Innovation, Inclusive Leadership

To succeed, leaders of diverse organizations must create an inclusive environment that encourages new ideas.

Many studies show that organizations with a diverse workforce out-perform more homogenous organizations. According to McKinsey’s 2015 study “Diversity Matters,” companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns.

While greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit, the correlation does indicate that when companies commit themselves to diverse leadership, they can be more successful.

What makes diverse organizations perform well, however, is not just the number of women and minorities they employ. It’s about how included these diverse individuals are in key decision-making activities and how organizations value their contributions. It’s also to what extent they rise to senior leadership so that their voices are more likely to translate into meaningful organizational transformation and provide inspiration to others in the diversity talent pipeline.

According to a 2013 Corporate Executive Board and Center for Talent Innovation study, the “inclusion” part of the “diversity and inclusion” equation is a key enabling or limiting factor. Inclusive leadership behaviors unlock the innovative potential of a diverse workforce and increase the likelihood (by as much as 158%) of innovating effectively.

Organizational leaders must ask themselves if they provide an environment that encourages diverse people to express their ideas so that the motivation to share diverse ideation thrives. When individuals on a team feel that their opinions are valuable and sought-after by their leader, they allow themselves the luxury and the discipline of sharing ideas without creating a self-induced filter regarding ideas that aren’t in sync with prevailing thought or the historic ways of doing things.

In the absence of inclusive leadership, employees will often do the minimum necessary to achieve their own individual performance goals, rather than see themselves as instrumental to organizational performance and growth.

So how should organizational leaders practice inclusion?

The three “Rs” of inclusive leadership provide a framework to move the needle on the connection between inclusion and innovation:

1. Receptive: Seek out opinions and viewpoints on a regular basis.
Most leaders consider themselves receptive. The reality is that if we do not seek out diverse opinions on a regular basis and make that part of the structure of our meetings—as well as the way our team is evaluated—then our self-perception does not always align with the reality of our day-to-day team interaction.

Encourage sharing different opinions and viewpoints during team meetings by incorporating the concept into every team agenda. Incorporate formal KPIs or performance goals that reflect the importance, accountability, and appreciation related to new ideas about products, services, and internal process. Consider using interactive technology such as gamification to challenge the team to share ideas. In the absence of direct and discernible goals, “groupthink” and reliance on the historical way of doing things will be the norm.

If team members know that their performance evaluation will be, in part, dependent upon their contribution, even in the face of a less than popular point of view, the chance of hearing diverse ideation increases dramatically.

2. Reflective: Keep decision-making honest and transparent.
When an idea offered by a team member is not acted upon, or a decision is made that could result in the appearance that a certain team member is being favored over others, inclusive leaders explain the “why” of their decision to their team, honestly and transparently. Nature abhors a vacuum. In the absence of direct information about why a decision is made, team members are left to speculate about the “why” and will freely attribute a decision to cronyism, or to the fact that the person chosen happens to share the same viewpoint as the leader.

In the age of technology, the final decisions are often transmitted virtually and announced by email or newsletter, leaving a team without personal interaction with their leader regarding the nuances of the decision. If all factors have been included, especially those related to diverse thought that goes against the mainstream, then call that out before the decision is announced. If not, then reconsider the basis of the decision before announcing it.

3. Revitalizing: Listen for the silence.
Find ways for the quieter voices in the team to be heard. Look around the room. When is the last time you heard each team member’s voice? Are there some team members who manage to be heard, no matter what? Are there some that seem to have nothing to say?

Assuming that your organization chooses its talent carefully, the chances are pretty good that silence does not mean that there is no point of view. Rather, it may be a personality or cultural style that does not easily permit contribution without that voice actively being requested. Ask, “Is there anything you’d like to share about this subject?”

For especially shy or introverted team members, consider giving them advanced notice that you’d like to hear from them at the next team meeting. You may be amazed.

The Outcome of Inclusion
While every organization is different, small changes in inclusivity seem to have exponential results. For example, I recently challenged a client to take one singular action in each of the categories above and to survey the outcome, including asking an open-ended question relative to how team members felt about the changes that were instituted.

One of the actions they took was that a cloud-based receptacle for ideas was established. Entries were coded in such a way that ideas could remain anonymous or could be revealed by the idea donor. Team members could anonymously vote and they could also comment or clarify an idea. A gamification component was added whereby digital badges could be collected. When a certain number of badges were obtained (regardless of the identity of the donors), the team was rewarded with a team dinner, courtesy of the company.

In addition to the fact that many process optimizations took place and several new service ideas moved forward to be vetted, the overwhelming majority of the comments reflected a feeling of excitement, optimism, and engagement, including one team member who exclaimed, “Can we please shut down the portal over the weekend? My husband is getting really annoyed because I keep getting up in the middle of the day to input an idea that I dreamt about that night!” To which the team leader responded, “All our teams should all have such problems!”

Originally published in Oracle Profit Magazine.

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High Tech: Diverse Ideation is Key to Accelerated Innovation

By | High Tech, Inclusive Innovation

“Tech giants in Silicon Valley are known for pursuing big ideas, changing the world through technology and, unfortunately, a fairly extreme lack of diversity.

But at least one company is taking proactive steps in addressing the problem. In January 2015, Intel’s CEO Brian Krzanich made a bold pledge at the annual Consumer Electronics Show in Las Vegas, allocating $300 million to increase diversity within the company and the tech industry at large.

Eighteen months later, the company is making progress on many of its initiatives, while others will require more attention in order to reach the company’s goal of having a workforce that is representative of the U.S.’s working population by 2020.

In the company’s mid-year diversity report, published today, female hires are down slightly from December 2015, from 35.1% to 34.1%. However, 25.4% of Intel employees are female, representing a new record for the company. Underrepresented minority hiring also increased this year, from 11.8% in 2015 to 13.1% in 2016.”Fast Company Article.

But the window remains open for more progressive programs relative to inclusive leadership.  The competition for talent, particularly diverse talent, is fierce, but programs focused on inclusion and that are aimed at enabling diverse ideation, thereby leading to accelerated innovation, will ultimately rule the day. Explore our High Tech Inclusive Innovation Lab to learn how to spark inclusive innovation using the principles of the Stanford d.school’s innovation framework, Design Thinking.

I hire people who I know will challenge me …

By | #bettertogether, Inclusive Innovation, Inclusive Leadership

It’s scary to hire people with a voice – particularly when they are pushing up against prevailing thought, but doing so can reduce risk and propel innovation.

The intersection of inclusive behaviors and innovative behaviors is a significant part of the work that we do at Lead Inclusively. Learn more about that intersection: check out our Design Thinking-centered Inclusive Innovation Lab.