Industrial Research Institute (IRI) Interview with Bob Rosenfeld – March/April 2012

Rosenfeld_R_Vol55_No2

A candid interview with Robert Rosenfeld through Industrial Research Institute’s James Euchner in Research-Technology Management Magazine • March—April 2012

CONVERSATIONS

Culture, People, and Innovation

An Interview with Robert Rosenfeld

Robert Rosenfeld with James Euchner

Innovation culture is a poorly understood aspect of innovation
management. What enables some companies to drive
breakthrough innovation consistently while others languish
despite heroic efforts? Robert Rosenfeld proposes that an innovation
program must be aligned with a company’s culture.
He further suggests that a company needs to carefully staff its
innovation initiatives so that the innovation preferences of
its people are appropriate to the specific innovation task they
are undertaking. I spoke with Bob about innovation culture
and the human side of innovation. In the interview, he
shares his insight into what corporations must to do to make
their culture visible, discussable, and actionable.

JAMES EUCHNER [JE]: Before we turn to innovation, how do
you define culture?

ROBERT ROSENFELD [RR]: That’s a very good question. Culture
is composed of peoples’ widely shared, deeply held, often unstated
and unconscious assumptions, beliefs, and internal
values. It is the leadership when there are no leaders. Culture
is almost always invisible to us. In essence, for the practitioner,
it’s “the way we do things around here.” And in terms of
innovation, culture trumps everything.

Robert Rosenfeld is the founder and CEO of Idea Connection Systems, Inc. For over 40 years, he has been a leader in the field of human dynamics that make innovation happen inside organizations. In 1978, he created at Eastman Kodak the first Office of Innovation to be successfully implemented in corporate America. He is a co-founder of the Association for Managers of Innovation (AMI) and creator of Mosaic Partnerships™ and the Innovation Strengths Preference Indicator (ISPI®), as well as the author of Making the Invisible Visible: The Human Principles for Sustaining Innovation (2006) and
coauthor of The Invisible Element: A Practical Guide for the Human Dynamics of Innovation (2011). rrosenfeld@innovating.com

James Euchner is editor-in-chief of Research-Technology Management and vice president of global innovation at Goodyear. He previously held senior management positions in the leadership of innovation at Pitney Bowes and Bell Atlantic. He holds BS and MS degrees in mechanical and aerospace engineering from Cornell and Princeton Universities, respectively, and an MBA from Southern Methodist University. euchner@iriweb.org

JE: Can you explain what you mean by that?

RR: Sure. When I try to do something innovative in a culture
that doesn’t fit, it gets rejected. If I have a culture that is very
prudent in the way it does things, for example, and I try to
put in a system that is going to be much more risk-taking in
its orientation, it’s going to be difficult for that culture to
accept the change.

JE: How do you think about innovation culture, then?

RR: I think in terms of four different cultures, which are explained
in my book: networked, communal, fragmented, and
mercenary. The four cultures come out of the research of Rob
Goffee and Gareth Jones, who speak of two critical axes that
define a culture—the axis of sociability and the axis of
solidarity.

Sociability has to do with how much people in the culture
are open with each other. Do I know you? Do I know your
family? Do I build relationships with you? A very strong sociability
rating means a highly relationship-driven, network-
driven culture. People in a low-sociability culture don’t know
anything much about you other than the fact that you’re a
physical chemist who happens to be located in the cube a few
feet away. If I need a physical chemist, I know whom to call.
That’s a culture with a low sociability rating.

The other axis is solidarity, which deals with focus on goals.
People in high-solidarity cultures focus on whatever they have
to do to drive the goal home. In their culture, they believe that
hitting the goal is what you have to do regardless of what it
takes to do it. And there are definite consequences if you
don’t. In a low-solidarity culture, people ask, “What goals?”

When you cross the axes, you get the four cultures. High
solidarity and high sociability lead to a communal culture;
networked cultures have high sociability with low solidarity.
Fragmented cultures are low on both sociability and
solidarity, and mercenary cultures have high solidarity but
low sociability.

Each of these cultures creates a different environment in
which you have to innovate. If I’m working in an organization
that has high sociability, to be effective, I need to design the
innovation process to involve other people. If I’m in a fragmented
culture, on the other hand, I can have stars. They
can drive things through a small team, but they don’t need
to interact with anyone else. Universities are like that. Each
of these cultures is viable and can work well, but if I’m
coming from one culture into another, I can get very
confused.

JE: Is there one culture that’s more consistently innovative
than the others?

RR: There are examples of highly innovative organizations in
each category, but they lead to different types of innovation.
Start-ups are often more communal in nature: they’re small,
they’ve got to know each other and have trust to make it
work. If they don’t have trust at the foundation, they can’t
make the organization work.

If I’m opening up a doctors’ office, on the other hand, I’m
likely to create a fragmented culture: each doctor basically
does his or her own thing. They may rely on each other for
certain things, but they don’t really have any common goals,
and they may not socialize outside of work.

JE: And what about a mercenary culture? What kinds of innovation
emerge from a mercenary culture?

RR: More short-term innovations. Short term because people
focus on what they’ve got to do today, so they’re looking at
the next quarter or the next half a year or a year at the most.
They’re usually focused on hitting a goal now. It’s not a long-
term type of thing. It’s harder for the revolutionary to take
hold there.

And then, finally, what makes a networked culture effective
is that the people know each other very well, so much so
that they could be in a small town. The people are all interrelated,
not just at work but outside of it, as well. So the
networking culture has the type of interrelationships I need
to build trust. In the networked culture, people are more focused
on making sure the relationships work than they are on fulfilling the goals. It’s not that they don’t want to fulfill
the goals; it’s just that the goals have to fit into the relationship
[rather than] the other way around.

JE: Where do you see more breakthrough innovation happening?
In what types of culture would that generally tend to emerge?

All of [the cultures] allow me to do breakthrough, but how I structure that breakthrough is unique [to the culture]. Robert Rosenfeld, creator of the Innovation Strengths Preference Indicator (ISPI), argues that a company’s innovation program must be aligned with its culture and innovation initiatives should be staffed with personnel who have
innovation strengths appropriate to the specific innovation task at hand.

RR: All of them allow me to do breakthrough, but how I
structure that breakthrough is unique [to the culture]. This is
key. A culture with high sociability may collaborate for innovation,
but the sociability may block you from getting to a
breakthrough because of the impact it might have internally
on the organization. A mercenary [culture], which would be
lower in sociability, might have the opportunity for breakthrough
because of its focus on goals. But if people don’t
have the sense that they need to do breakthrough innovation
to fulfill their goals, it’s not going to happen there, either.

In the end, you have to understand how to leverage different
types of people in your company context in order to be
innovative. It’s not just the culture, but how you manage
people inside the culture. In any culture, there are certain
people who do more breakthrough thinking than incremental
thinking, and those people have a preference and a sweet
spot for doing breakthrough innovation. Whatever culture
I’m in, I can leverage those people to get what I need to have
done, but I have to fit them and their work style into the
culture that’s there. We developed the Innovation Strengths
Preference Indicator, or ISPI, to help companies leverage the
natural innovation strengths of their people.

JE: Can you explain the ISPI for people who may not be
familiar with it?

RR: The ISPI is something we developed about three years
ago. It looks at a couple of things. One is an individual’s sweet
spot—where a person likes to innovate and create. The second
thing is how the person tends to play with others on
teams. Both are critical. If I put the wrong the set of people
together—in terms of either interaction style or innovation
sweet spot—it’s not going to work. Managing innovation
becomes an orchestration issue.

We talk in terms of two extreme innovation types – the
pingger and the pongger. The pingger is someone whose brain
naturally does something called bi-association. While other
people are more linear in the way they problem solve and
tend to solve within the problem definition, pinggers see the
problem definition as fuzzy; they solve within the problem
definition but then their mind bi-associates and goes beyond
it. Pinggers are the pioneers in the organization.

The counterpart to a pingger is what we call a pongger.
They’re more like builders. Builders are the bedrock of an
organization. They make things happen. They’re also very,
very good at setting up systems and processes that allow the
company to do something over and over and over again. In
any company, you’ve got both ends of the spectrum, each
having different strengths. Learning how to leverage those
strengths in my culture allows me to create the breakthrough
innovation I’m looking for.

So when you start looking at innovation, the culture is
one thing you need to understand. The culture is the world
that you’re embedding any initiative into. But you must also
understand the people. If I don’t understand the people, I
can’t use them effectively in any culture.

I want to stress a very important point to you. To me, the
spectrum from extreme builder to extreme pioneer needs to
be understood and respected in its entirety. If I’m missing
pieces of the spectrum, eventually it is going to hurt me. It is
up to the leadership to understand that spectrum and embrace
the entire thing, not just one end or the other. This can
be difficult because the preferences I’m talking about are
more or less invisible.

It’s also very important for a leader to be able to see where
he or she is on the spectrum, because where you sit determines
your biases. Let’s say, for example, that the leader is a
strong pingger, a strong pioneer. He or she may say, “I’m not
seeing enough innovative ideas come through here.” That
may be because the leader is pretty much out of the box and
the rest of the organization is generating ideas that may be
less of a stretch. So the leader has to define what type of innovation
he or she is looking for and understand who he is
and what type of innovation he is looking for in order to put
the right people in the right spaces for making it happen.

JE: How difficult is it for leaders to know themselves and to
use that information?

RR: For some leaders, it’s very difficult. If I’m on one end of
the spectrum or the other, it’s hard for me to accept the extreme
opposite and see its value. The way things have been
set up, different types actually call each other names.

JE: The complexity becomes clear the more we talk about it.
As you talk to leaders in the Fortune 1000, do you fi nd that
they tend to be on the builder side or on the pioneer side?

RR: They tend to be more mid-range. They’re in the middle.

JE: And are they are able to flex as they need to?

RR: They act as bridges in their organizations. What’s very,
very important is to know your own strengths and then, at
the same time, be able to answer the question, “If I’m doing
something that’s really outside of my preference, who do I
turn to? Who do I trust who thinks that way who can interpret
it for me?” The importance here, again, is leveraging the
differences in people.

Another thing that is important for leaders is to keep
people informed in a way that they understand, not the way
that the leader understands.

Lots of times an organization says, “We’re going to optimize. Everything’s going to be done via Six Sigma; I want everyone involved in that.” And then they shut down the more breakthrough thinking. Or
the leadership says, “You know something, our products
are not winning in the marketplace anymore. We really
need to get more breakthrough thinking.” So they start
talking about the importance of breakthrough. In both instances,
the leadership is alienating the opposite side.
They’re not balancing the dialogue.

Leaders have to recognize the entire spectrum and acknowledge
and reward the entire spectrum. At certain times,
leaders need to bring out one team versus the other, not
much unlike managers do in football. An offensive team may
be able to play defense, but they are not as good as the defensive
team at it. That’s why we have two different teams.
Leaders need to understand who is on what team and be able
to use them at the appropriate time. And by the way, on the
team, everyone knows that they need the other team.

Without this understanding and appreciation of the need
for different types of people, leaders will have a problem sustaining
innovation.

JE: When you do your own assessments of these cultures, do
you find that it’s 25 percent in each quadrant or is one of
them more dominant in today’s American business culture?

RR: Generally speaking, many companies start as communal
cultures. Then, as the organizations age and are under attack,
they usually move towards a more mercenary culture; the
goals become really critical and can overpower desires for sociability.
They may start losing the people who joined the
company for its sociability, and the culture shifts. And then
they have a problem. If they can’t succeed in being able to hit
their goal, then they can erode into what I would call a fragmented
culture, where all the organization is built up with
little pieces and there are these fiefdoms, each doing their
own thing to stay alive.

JE: Many leaders want to increase breakthrough innovation.
What kinds of cultural changes are they asking you to help
them make in order to make this possible?

RR: Leaders who want breakthrough innovation need to
know what they’re signing up for behaviorally, not just
conceptually.

One of the first things we do is to help them understand,
from an ISPI standpoint, who they are—where they are comfortable
in terms of innovation and where they are not. Wise
leaders understand their biases and how they should deal
with differences, whether in geographic cultures or innovation
preferences. They need to be really comfortable with the
full range of innovation strengths, the pioneers as well as the
people who like process and bring initiatives methodically,
step by step by step to completion. A leader who is a pioneer
must act in a way that will not mess those systems up, and a
leader who is a builder must be open to some degree of chaos
from pinggers.

Next we try to help everyone learn to speak the same language
and know when it’s appropriate to have what kinds of
conversations. We help them create rules of engagement.
Once people understand what the differences in strengths
are, the rules of engagement provide a way to discuss those
differences during a meeting. For example, we’re having a
leadership team meeting. Twenty percent of the leadership
team is pinggers and the group is going down the agenda.
Suddenly, the pinggers start to take off in a different direction.
The rest of the team could say, “Excuse me. We’re not
going to ping right now; we’re going to focus.” Everyone
laughs and says, “Yeah, you’re right, okay.”

I can’t stress enough the importance of understanding
those differences. If we do understand them and we can
leverage the strengths of different people, we can make innovation
happen all the way from breakthrough to incremental,
and celebrate the entire spectrum. It’s useful for
everyone in the organization to understand this. When I
hear people talking about the low risk tolerance in their company,
they are often the people who are pioneering or extreme
pioneering on the ISPI. They see the organization not
doing what it needs to do, and it’s holding them back.

JE: How long does that take for a company to go through that
period of understanding and sharing?

RR: Well cognitively we can get you through the understanding
pretty quickly. Living it is a different ballgame.

JE: How long before you’ve seen this understanding start to
affect the way people make decisions about what they’ll bet
on and what they won’t bet on?

RR: I would say you need between three to six months to get
more comfortable with it as a leadership team. This will allow
a team to get much more comfortable with the rules of engagement
and be able to have the discussions that they normally
couldn’t have had before.

JE: In all of this, you talk about trust as being foundational.
And you’ve talked about how all the cultures can be innovative,
so even in cultures with low sociability you still must
have some degree of trust to get sustained innovation. Can
you talk about what you mean by trust and what you mean
by trust as a foundation for innovation?

RR: Trust has two components, head and heart. “Head trust”
is trust in your competency, your expertise. “Heart trust” has
to do with whether I trust you to do what’s best for me, for
the company, and for everyone else, as opposed to acting
purely in your own self-interest.

If I have high head and high heart trust, I have people
who are really committed to each other and to getting something
done. I can have that degree of trust in any culture,
whether it’s mercenary, communal, or networked. A fragmented
culture, by its own nature, has separate groups, so
they’ll have that trust within the groups, but between the
groups there may be lower trust—and they don’t need it because
that’s not how they operate. But trust has to be present
wherever the company is innovating or creating.

You can look at it from the perspective of an individual in
the organization. I can be very, very competent, with very
high head trust. But if I have a low heart trust in the organization,
I’m not going to take a risk. Why would I take a risk?
If I step out and it doesn’t work, they can toss me out. If I
have a high heart trust, on the other hand, I know the company
will do the right thing by me and I’m willing to take a
risk because I can trust that the company will be looking out
for my interest.

JE: So what do you do when you go into an organization and
a foundation of trust is not there? How do you help those
organizations?

RR: First they have to identify that trust is not there. You can
do that very easily by asking people a series of trust questions
and plotting their answers on a graph. It becomes very simple
to make it visible.

Next the organization has to understand and accept what
types of innovation it is capable of today. If that’s different
from the innovation that [the leaders] want, they have to
start changing their behaviors in order to increase the trust
level, the heart trust level. And it has to be genuine, because
you just can’t fake this. It’s got to be real.

Most of the time, the leadership of an organization doesn’t
really recognize what it did to destroy the trust. By becoming
more aware of it, they can say, “Okay, I know what I have to
do to change this now.” It’s a learning experience, but we all
get stuck in situations where we have to do something to
increase trust. A great example of that is downsizing. If I
downsize in a way that destroys the trust, I have a problem
because the people who are left can take a while to decide to
trust me again.

Once I understand the level of trust in the organization, I
can decide what kinds of innovation activities I want to undertake.
But I have to make visible that invisible component
called trust, and I have to put it on the table so we can actually
have a discussion about its impact on innovation. Just
because there’s a low heart trust doesn’t mean the leadership
wants to change that right now; they may not be able to. And
that’s a call they have to make. But they also need to know
that when they make the call to not change, they must accept
incremental innovation, which may be just fine. Maybe the business tolerates that. I’ve learned over the years not
to criticize. My job is to try to make it as clear as possible
to them what the consequences are of certain kinds of
decisions.

JE: So you’re really trying to help them do a reality check on
themselves in terms of their innovation ambitions versus
their cultural reality. Have I overstated that?

RR: No. No you have not. I also believe it’s very important to
understand there’s a difference between hope and strategy.
Hope is not a good strategy. Prayer might be, but not hope.
The point is that leadership needs to determine where they
want to go, how fast they want to get there, and what type of
innovation they are looking for to make it happen. What
does the business need right now and what is it capable of?
They need to be able to see reality, make a decision on it, and
go forward. And then plot their course from a business, human,
and technical standpoint. The business and technology
we usually have less trouble with; it’s the human [aspect] that gets us into trouble.

JE: My last question concerns the accelerating pace of change
and its implications for corporate culture. What do companies
need to do to deal with the fast pace of change in the
world today?

RR: Throughout the history of corporations, the elements of
destruction have been present at creation. What’s very important
is to understand the assumptions you made at the
founding of the business that lock you in to a certain way of
thinking and lock out changes in the environment.

Generally speaking, you start by creating a product on the
pioneering side, and then you move to the builder side to
optimize its delivery. That cycle could have been 60 years at
one time, before the company would have to shift back to the
pioneer side to get something completely new. Today, the
cycle could be as short as three weeks. If companies don’t
learn to leverage differences in the people in the organization
in order to become more agile, they can’t make the change
that’s really needed.

With rapid change comes the requirement to be able to
listen to people in the organization differently, to put them
together to help us understand what the new thing is on the
horizon while we also optimize what we have. If I don’t have
that, I can’t be in business for the long term. That makes life
much more complex and at the same time easier. Once I

If companies don’t learn to leverage differences in the people in the organization in order to become more agile, they can’t make the change that’s really needed. understand that I’ve got to leverage the differences in the people, I just have to figure out how to do that in my company.

I very much like something Peter Drucker said. He talked about how, in the twentieth century, we improved the productivity of manual labor fiftyfold. Today, we rely on knowledge workers. We have to do the same for them.

JE: At least in my experience, there really aren’t good HR practices to help companies draw on different resources at different times. There seems to be the expectation that the best leaders will just be ambidextrous in this sense. And yet, if you want to be spawning new, innovative businesses, building them up and undertaking creative destruction inside your own company, you need to get good at reassigning people and rewarding different skills in different realms. Are there companies that you think have mastered the HR practices associated with making this world work better?

RR: We are entering into a new time. Leveraging the knowledge worker is in its infancy.

I think the challenge for HR today is to leverage those differences and partner with the line organization to be able to match the people to the challenges [the organization is] facing. HR is much more aware of differences in people. Can they leverage that knowledge to help the rest of the organization do what is required? I believe they’re more than capable of doing it; the question is, will they see this as their role?

JE: I very much appreciate your time. It’s really fascinating stuff about a part of managing innovation that gets very little
attention.

RR : My pleasure.

Conversations March—April 2012

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