43. Celebrate! Innovative organizations are places where people enjoy their peers' work, good tries, good screw-ups, milestones reached, etc. Celebrating these events, large and small and very small, is a fullscale part of the "innovation culture."
44. Celebrate failures. This peculiar form of celebration deserves particular mention. "Fast failure" is innovation's bedrock. Hence the encouragement thereof, rather than the stigmatization, is of paramount importance. Hence, the hearty celebration of the quick try run amok is of strategic importance.
R&D, Ubiquity of.
"Staff Department" R&D Paramount.
45. R&D spending/Overall. This is a "boring" staple of innovation, but obviously of great importance. Aggressiveness is called for. In addition to the firm itself, having, say, a set of vendors, most or all of whom are top-quartile in R&D spending in their industry, is also of great importance.
46. R&D/Big Co, Small Co. Aggressive R&D is not just the provenance of the big company. In fact, it is more important to the 2-person Professional Services Firm than the lumbering giant—talk about "Innovate or die"!
47. R&D spending/Small projects. Make sure the R&D portfolio includes many one-off, short-term projects. (Quite often, these little fellas grow to become the biggest of the big.)
48. R&D/100% Staff Departments. Aggressive R&D is as important in Finance and Purchasing as in IT or New Product Development!!!
49. R&D/Systems! Innovative systems are as important as innovative products (witness Dell's 2-decade systems-driven run, which changed the world). Manage the hell out of this!
50. R&D/Practice "Nudgery." Small system nudges can cause grand behavior changes. Become a "nudge aficionado." Teach Nudgery.
51. "R&D" Play Money/Ubiquitous. The ability for virtually anyone to get their hands on a few bucks (and a mentor) to play around (right term) with a new idea is essential.
52. Venture Funds/All levels. This can run to billions of $$ at Intel to much smaller sums, but the idea is casting a wide, speculative net.
53. University support. Research universities are among America's most vital competitive advantages, and are likely to be so for decades. Associations, large and small, with universities are an important part of the innovative enterprise.
54. "Sell-by" date, consideration of. Peddling old stalwart parts of enterprises when they become commoditized may help free the spirit of the enterprise to move toward a new playing field. (On the other hand, oldie goldies can surprisingly often become hotbeds of new innovation under inspired leadership.)
55. R&D/good times and bad times. R&D may have to take its lumps in tough times like the present. But beware of cutting too much muscle. Moreover, bad times can be the perfect time to get the jump on competitors with innovations if at all possible. Tough times are also ideal for little R&D projects that might just grow legs.
The Essential Role of Lead Customers.
Loving Angry Customers.
56. Lead customer portfolio. Innovation is not natural in the best of circumstances. Stasis is comfortable. Hence, we must force ourselves into uncomfortable circumstances. (I accept speeches to groups where I have no expertise.) Customers who are far from our norm are frontline change agents. We must formally create a portfolio of lead customers—and then commit to joint product development and connection in general. Again, this must be managed and not left to chance.
57. Customers on all teams. Customers must pervade our electronic and physical halls. They must especially be part of all innovation teams.
58. New network forms. Constantly experiment with new forms of networking with customers of all sizes and shapes.
59. Pissed-off Customers Association. No group is more valuable than pissed off customers!! (Even, or especially, irrationally pissed off customers.) Make them part of the family. Shower them with love. Reward them for their contributions. Bring then into electronic and physical networks.
60. XF Obsession. Implemented innovations generally (100% of the time?) include and are significantly shaped by contributions from all departments. Lousy cross-functional (XF) communication-cooperation-synergy-esprit is often Problem #1 in enterprises of all sizes. Thus a culture of innovation is dependent on constant-strategic-executive attention to XF effectiveness.
61. XF Innovators. The heart of an innovation that goes in a wonderfully unpredicted direction is very likely to have come from a contribution by a "secondary"-to-the-project functional expert.
62. XF Programs. Formalize numerous programs and nudges, small more important than large, to specifically and measurably attack-enhance-vivify XF effectiveness.
63. XF Friendships (measurement thereof). It is this simple: Friendships across boundaries are the best lubricant there is. Foster them! Formally!
64. XF-centrism in evaluations. Repeated XF obfuscation is a firing offense. XFX (cross-functional excellence) is cause for early promotion, hefty bonuses, etc. This part of the evaluation must have sharp teeth.
65. XF/All teams. Foster cooperative XF involvement in activities of all sizes and shapes by all sorts of folks, even, or especially, when the need is not obvious.
66. XF assignment as requisite career step. Promotion to relatively senior positions or above is dependent on at least one full XF assignment—e.g., a year or so tour of duty.
67. XF/Finance. Get as many managers as possible to spend non-trivial time in finance, to develop a "business" perspective on their work—this is especially important regarding innovation activities.
Project Team Primacy.
Project Managers Rule.
68. Project team as basic organizational unit. The largely independent project team, the coherent entity of 2, 21, or 212, is the basic building block of the innovating enterprise. This comes as no surprise, but must be underscored anyway. Innovation work is rarely accomplished via a routine grouping that follows the conventional org chart and involves members from various functions who remain under the jurisdiction of their traditional bosses. Obvious or not, innovating organizations are collections of energized project teams—with functional affiliations secondary.
69. The excellent project manager is the Superstar of the innovation-centric enterprise. These are the small numbers of superstars who must be retained at almost any cost. And they do stand out as superstars.
70. The development and care and feeding of your cadre of project managers is human resources Job #1. Effective project management is a peculiar discipline requiring a raft of skills, from the very hard to the very soft. Understanding the discipline and carefully developing project management skills is paramount to creating and maintaining a culture of innovation.
71. Project manager cadre diversity is imperative. Period.
72. Entire talent pool available to project managers. Creating a process, preferably Web-driven, for project managers to cobble teams together for the long haul or for a 48-hour project is essential. But remember to take into account the "soft stuff," and not over-mechanize the process.