The Practices That Set Apart 6 Innovative Companies

There’s a lot of talk in the business world about how companies can encourage more innovation.

I’ve found that that best way to do this is by encouraging teamwork, autonomy, creativity, and risk-taking–and not penalizing failure.

And there’s no better way to illustrate this point than by showing companies that do it well.

Check out these unique practices – they can be applied to business and to life.

 

At Facebook: Collaboration is key

They make everyone feel valued

  • Facebook makes an effort to have every employee feel like they are extremely valued.
  • After a 6-week training period, employees are given a mentor and then asked which team and project they would like to join – and they really get to choose.

Equal opportunities exist for everyone

  • Ideas turn into products whether you are an intern or C-level because everyone can contribute.
  • Quote from an employee: “You can do anything here if you can prove it.”
  • There’s a flat management structure with very few vice presidents.
  • Quote from a Facebook leader: The harder we make it for people to invent together, the faster we fall behind.”

Failure? It’s okay.

  • At Facebook, they don’t fear failure: “We’re less afraid of making mistakes than we are of losing opportunities.”
  • Some of their slogans:
    • “The riskiest thing is to take no risks.”
    • “We encourage everyone to make bold decisions, even if that means being wrong some of the time.”
    • “In a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks.”
  • The result? Facebook continues to be the most popular social networking site in the world, with last year’s revenues totaling almost $18 billion.

 

Etsy: Mistake? No problem, let’s learn from it

Mistakes are not penalized

  • At Etsy, people are encouraged to document their mistakes and how the mistakes happened – in public emails!
  • The company follows a system called “blamelessness post-mortems.”
    • This means that if something goes wrong, they have a “post-mortem” (“post-death”) in which the team tries to “find out what went wrong and make it better, not to blame.”
  • This practice encourages innovation and risk-taking because people don’t feel afraid to make a mistake.
  • The result? Etsy has grown and now “moves faster” – and people are more likely to learn from their mistakes.

Empathy is a core virtue

  • Etsy runs group dynamics sessions about empathy, one of their core virtues.
  • Departing employees are given the opportunity to give a “last lecture” to the company – and are welcome to say absolutely anything at all about the company
    • In fact, this is considered as a “post mortem,” in which employees provides advice for everyone to learn from!

Southwest Airlines: Make sure everyone is appreciated

Employee happiness is #1

  • Southwest values employee happiness over customer satisfaction (and shareholders third).
  • This has a trickle down effect, as friendly employees lead to better customer experiences.
  • Employees are considered to be “internal customers.”
  • The company is “obsessed with putting people first.”

A culture of encouragement

  • A team-based approach pushes employees to take pride in their work and always do their best.
  • Everyone is encouraged to be a CEO – a Chief Encouragement Officer.
  • Their tagline for employees:
    • The “warrior spirit” (be fearless)
    • A “servant’s heart” (treat others with respect)
    • A “fun ‘luving’ attitude” (don’t take yourself too seriously)
    • LUV is the symbol on NYSE

Employees feel valued

  • The company has an elaborate recognition process for recognizing employees.
  • Anytime any employee has a major life event, their manager will pass their information to management – and the CEO will send them a handwritten card!
  • There are lots of recognition posts online and dinners to honor employees.
  • The result? It’s worked – voluntary employee turnover is just 2% and the company ranks #1 for lowest number of customer complaints for all US airlines.

 

Amazon: Yes is the default answer

Got a big idea? Let’s do it.

  • Amazon encourages innovation by making it easier for employees to make ideas come to life
  • In many large companies, if just 1 manager out of 50 resists an idea, they can kill it.
  • This, in turn, makes people risk averse.
  • To protect employees from becoming risk averse, Amazon does the opposite
  • They use something called the “the institutional yes”
  • If an employee comes to a manager at Amazon with a great idea, the default answer must be yes.

If you want to say no…be prepared to write a thesis!

  • Amazon has taken an extra step to make saying no harder.
  • If the manager wants to say no to a new idea, he or she is required to write a two-page thesis explaining why it’s a bad idea.
  • This practice has resulted in more ideas being tested (and thus implemented) throughout the company – at all levels.
  • The result? In 2015 Amazon passed Wal-Mart to become the most valuable retailer in the US, based on market value.

 

Adobe: Trust results in innovation

Trust is the magic word

  • One of Adobe’s core values is trust in employees.
  • Instead of being micromanaged, employees are given lots of freedom and responsibility for their projects – even very challenging ones. And this starts on day one!
  • Adobe believes that instilling trust in the work environment makes a huge difference to employees.
    • And research backs this idea up–a study shows that greater job autonomy leads to increased happiness and less turnover.
  • This, as a result, fosters creativity and innovation.    

Experimentation

  • Another core value is experimentation.
  • Adobe has a “KickStart Innovation Workshop.”
  • In this workshop, participating employees receive a red box containing a step-by-step startup guide and a prepaid credit card with $1,000 in seed money
  • They are given 45 days to experiment with and validate innovative ideas.
  • This approach stimulates experimentation and creates a way in which promising ideas can be identified and pursued.
  • The result? The company has received many “best places to work” accolades – and reported record revenue numbers in Q2 2016.

Google: Provide value first

Ideas > Profits

  • Google doesn’t pursue profits.
  • Instead, they pursue big ideas and believe that If it’s a lot better, the money’s going to come and find you in a fair and elegant way.”
  • The company aims to add value to people’s lives first – and is not focused on the bottom line.
    • The strategy: “Let’s make value for the users. We’ll figure out how to make money later.”
  • The result? Products that actually answer people’s problems – and that people want to buy! This has worked so well that Google is valued at $498 billion.
  • An example is Google Maps.
    • Google Maps had been free to the users but often without advertising or any form of compensation.
    • There were years when Google didn’t make any money on Maps – or even have a plan to make money on it!
    • Now, Google Maps is the world’s most popular app for smartphones.

Employees can take 20%

  • Employees are encouraged to spend 20% of their time on a project that will most benefit Google.
  • This empowers employees to test out new ideas.
  • Gmail, Google News, and AdSense all came out of 20% projects.

It’s important to seek transformative change

  • Google has a unit called “X” – which creates “moonshot” projects.
  • Moonshot projects are big projects that, in order to be considered, must to solve a huge problem in a radical, science fiction-like way.
  • Driverless cars were thought of and are being tested in this lab.

Failure is good

  • X has very innovative practices.
  • They reward the staff for failure: “If you don’t reward failure, people will hang on to a doomed idea for fear of the consequences. That wastes time and saps an organization’s spirit.”
  • They encourage taking risks in order to create breakthroughs.
  • CEO Astro Teller says that finding new transformational ideas is like sending out a team of scouts to explore uncharted terrain for new mountains to climb.
  • His words: “If you shame them when they come back, if you tell them that they’ve failed you because they didn’t find a mountain, no matter how diligently they looked for or how cleverly they looked for it, those scouts will quit your company.”
  • Not a single X project starts from the question “How can we make a ton of money?”

To sum up, here are the unique practices of these 6 innovative companies:

Facebook: Collaboration is key

Etsy: Mistake? No problem, let’s learn from it

Southwest Airlines: Make sure everyone is appreciated

Amazon: Yes is the default answer

Adobe: Trust results in innovation

Google: Provide value first

In our own lives, we all can gain from these ideas.

By focusing on values like appreciation, collaboration, and trust, I can guarantee that you will see a payoff in your own life.

-Mel

PS: Was this article helpful? Let me know what you think at [email protected]

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