A conversation with Brett Richards, Founder, and President of Connective Intelligence Inc.
This is part of my series on thought leaders in the innovation space. Check out the other articles here.
Brett Richards, author of the book Growth Through Disruption, is focused on demystifying innovation and providing leaders with a clear path to drive innovation within their organizations. After years of studying cognitive styles, Brett believes that organizations have mindsets or thinking styles that are distinct from individual or team mindsets.
“Understanding a mindset within an organization is really, in my view, extremely important because it strongly affects the way in which an organization goes about responding to the challenges it’s facing in its operating environment.”
Driving growth through innovation often requires some level of transformation within the organization. For Brett, that transformation must start by understanding the current mindset — something he views as distinct from explorations of organizational climate and culture — to determine where change is needed. “A mindset influences how we view things. It influences what we pay attention to and what we don’t pay attention to, how we filter, how we interpret, how we ascribe meaning to competitive threats or changes in regulations that are happening in the market.”
Assessing innovation readiness
Inherent in the concept of organizational mindset is the idea that organizations function as a system rather than a collection of individually functioning parts. With that in mind, Brett’s research on organizational development has culminated in a new, quantitative tool to assess an organization’s ability to create new value called the Organizational Growth Indicator (OGI). The OGI begins with an online assessment completed by a broad array of leaders and key contributors within the organization. “The power of the tool is that it provides an organization with a number which [describes] their current level of capability to drive and create new value and support effective transformation.” Organizations are evaluated for how they leverage four mindsets and eight orientations and receive a score from 0–100%.
“Much of what happens and influences an organization’s actual ability to innovate and grow are invisible dynamics that we can’t always see underneath the hood. What the OGI does is shine a light on these intangible yet vital factors that influence the extent to which the organization can activate its strategy and vision successfully.”
By providing leaders with quantitative metrics to back up what many good leaders intuitively know, the OGI fosters objective conversations with teams around strengths and what may be getting in their way.
Brett has heard the adage “culture eats strategy for breakfast,” and, while he believes culture is a crucial factor, it doesn’t present the full picture. Qualitative tools like culture surveys “describe what your culture is. That’s helpful, but it’s not telling the organization what their actual ability is to affect change or to shift culture. The OGI not only describes and gives a mirror to what your cultural mindset is, but it simultaneously speaks to the ability.”
The assessment can be taken by employees across an organization. Brett emphasizes 100% participation from senior executives and director teams as well as at least 80% participation from management teams. Once the assessment is completed, Brett analyzes the results and reviews them with the leadership team to identify remedies. The insights discussed can be broken down by senior executive team and leadership level or location for precise and informative feedback on where teams are strong and where there are opportunities for improvement. Brett has found the tool to work across a variety of industries, with organizations large and small, and in Europe and Asia as well.
In practice, Brett has observed how the OGI links to actual performance metrics. “Drawing on theory and then through application, I’ve created five tiers that relate an organization’s score to real revenue growth rates within organizations.” For example, a tier three organization (one with a score of 48–56%) can expect revenue growth of 1–9%. A tier four organization moves to 10–24% growth.
Innovation isn’t effective in isolation
Viewing an organization as an integrated system, Brett sees innovation viewed and conducted in isolation as a misguided approach. Counterintuitively, even companies with large research and development teams and budgets can still struggle with growth through innovation. “The great ideas that come out of R&D have to be socialized and integrated and transformed into the broader organization. If the organizational system is not supportive of that, then the organization’s ultimate ability to drive value into the market will be compromised despite having a tremendously powerful R&D wing within the organization.”
To mitigate problems where innovative efforts languish from lack of integration, Brett says the first step is acknowledging and understanding the nature of organizations as systems. “It gets to a very basic root cause of failing to [see] just how important understanding an organization as a system is to supporting organizational transformation and growth.” This is why Brett views ad-hoc programs as ineffective in driving change.
Organizations seeking change often resort to hiring outside consultants for training initiatives focused on leadership teams. “This is a classic example of an ad hoc solution, a mechanistically-minded thinking process which fails to understand that, for all intents and purposes, you’re throwing away your money.” The training often serves as a band-aid and organizations are left wondering why they don’t see improvements as a result. “A lot of organizations throw training at stuff because it’s easy to do. It can be excellent training, but if it’s not integrated within that organizational system, then we’ve got a problem.”
While organizations understand that leadership is important, the apparent working equation that leaders plus training equals improved organizational performance is lacking. Once leaders complete the training and return to the organizational system they realize that, despite their investment, they’re not seeing a big impact. “You get frustration [from] the leaders who are going through this awesome development. They go back into the organization, but it’s not supported in the broad sense. The new organizational performance equation must start with organization — it’s organization plus leaders plus training equals improved performance.”
Innovation for survival
When it comes to measuring innovation efforts specifically, Brett seeks to identify metrics that matter to the organization’s survival. One aspect of a company’s survival relies on innovation itself. “The problem is that organizations don’t understand that innovation is probably the most significant predictor of an organization’s ability to thrive successfully into the future. Organizations that don’t innovate — they’re dead.”
“Organizations don’t understand that innovation is probably the most significant predictor of an organization’s ability to thrive successfully into the future.”
In his book, he calls out thirteen inconvenient truths related to organizational innovation — namely, “an inability to break the bonds of short-term thinking at the leadership level will kill innovation.” Reluctance to set aside funds exclusively for innovation can rob organizations of their future survival.“What happens is that because of short-term thinking they build a system where they can borrow money from the pool of unsecured money for innovation so that they can satisfy some of their short-term operational requirements. It’s really just because a slush fund to move around.”
To support and increase the ability to innovate, organizations must ensure they have a clearly articulated innovation strategy that is integrated into their overall business strategy.
“Until you have your innovation strategy fully embedded and linked to your overall business strategy, you’re setting yourself up for less effective action.”
The OGI measures the extent to which an organization’s innovation strategy is articulated and understood as well as whether it is adaptive and responsive enough to meet the needs of the changes occurring in the market. For example, in the case of hospitals, innovation may look different. Innovation requires risk and a hospital’s goal is to reduce risk as much as possible to save lives. “What becomes important within a hospital system is to be extremely clear and articulate about what we mean by innovation in the hospital system. Innovation within a hospital context has to do with things like patient experience or efficiency, driving efficiencies within the organization.”
Not only does measurement through tools like the OGI serve to provide valuable data on an organization, but it also serves as a means for necessary conversations. Those conversations can help elucidate where key problems lie. For example, is the executive team in agreement on what the organization needs to do to drive innovation? What do leaders think innovation looks like at the company? “If you’re truly serious about improving your organization’s ability to grow through new value creation and adaptive transformation, you have to take a serious look at the organizational system and what are the factors that are influencing and/or constraining your organization’s ability to do that.”
In addition to establishing benchmarks and areas to focus improvements, Brett says the OGI can be used in successive iterations to evaluate those improvements. “The organization can add in ten custom questions to the OGI analysis and that enables the organization to evaluate the impact of certain training or organizational development initiatives.” OGI scores are correlated with people’s participation in the training to see if there has been any lift in the scores for those groups. By measuring mindsets and the effects of organizational development initiatives, Brett seeks to provide a tool to organizations for understanding the nature of their system and identifying actionable ways to increase their ability to innovate and thrive into the future.
If you want to read my other articles about innovation experts and practitioners, please check them all out here.