We recently hosted leaders from Colorado’s tech community for our Digital Leaders Luncheon. The luncheon featured a panel on “creating a culture of innovation.”
Moderated by ’ Nick Cayou, the panel — Doug Daniels, Head of Google’s Cloud Platform in the Rocky Mountain and Central Regions, Matt Anderson, Chief Digital Officer for Arrow Electronics and Mike Syverson, Senior Vice President, Development and Programs for Gogo Business Aviation — covered how customers play into market validation, how talent affects culture and the role of risk in innovation.
It was that angle of risk which we found most compelling, so we followed up with our panel to ask them a few more questions. Here’s what they had to say:
Matt Anderson,
What role does risk play in creating a culture of innovation?
Innovation carries inherent risks, but that’s part of what makes it so rewarding.
How can leaders both encourage and manage risk?
At Arrow, we’re incredibly fortunate to have an executive leadership team that encourages us to take risks, fail fast and then get back up and keep on pushing the boundaries of what’s possible.
Arrow started off as a small radio repair shop with one location 80 years ago, and we’ve grown into a $23 billion global Fortune 500 company — that can only happen in a corporate culture that encourages its employees to try new ways of doing things and that has an appetite for some level of risk and failure.
How does total risk avoidance affect a company’s ability to create an innovative culture?
Most innovative ideas aren’t coming out of big companies these days — instead, big companies are buying the innovative ideas from startups and makers. It’s just too difficult to innovate and ideate in a culture where strict boundaries and conformity are encouraged, which is how most large corporations — given their sheer size and scale — generally have to operate.
Arrow is a unique large company in that innovation is part of our DNA — our field engineers, system integrators and technical experts are constantly working hand-in-hand with customers on exciting new products. And, the digital department I oversee has an even stronger drive to think outside the box; we’re creating one of the most comprehensive sources of “how to” electronics content on the web to help startups and makers build almost any device.
Many of us come from the startup world or are makers ourselves, which helps us stay connected to the very people we are trying to support and fosters a culture where innovative thinking is not only valued, but expected and encouraged.
Mike Syverson,
What role does risk play in creating a culture of innovation?
Risk is an inevitable attribute of operating in an innovative environment. I think of risk as the lanes of the highway that help to outline the guidelines for your innovation roadmap. For example, while deciding whether to take on a new product development initiative, the conversation around risk helps to answer the following types of questions:
How aggressive you can be in your development efforts
How you are going to make decisions, should certain conditions arise during the product development lifecycle
What the impact to the business is if you do not act on the innovation strategy
How can leaders both encourage and manage risk?
To borrow from an investment community term, I believe one of the main functions of leadership in the innovation cycle is risk arbitrage. Through engaging traditional program management activities, leaders often manage risk through the more common triple constraint (scope, resources, and time) paradigm.
It is essential that this type of risk management activity be present so that a cycle of innovation does not have the potential outcome of cratering your business objectives.
Unmanaged risk often leads to overaggressive position-taking in an organization and can lead to outcomes that achieve much less than the desired results at usually much greater costs and schedules.
Encouraging risk-taking behaviors is also an essential leadership behavior because innovation requires the organization to think outside of its normal operating window.
By encouraging activities such as what-if development exercises, hackathons, and elimination of over-burdening processes, a leader can foster an environment where taking a chance is rewarded. Leaders who balance these two activities are usually the most successful in operating successful organizations.
How does total risk avoidance affect a company's ability to create an innovative culture?
If you are so risk averse, the DNA of your organization does not allow for the free-thinking and chance-taking necessary to continue to develop beyond its core capabilities. I would argue that any company that adopts a position of total risk avoidance has peaked.
Answers have been edited for clarity and length. Luncheon was hosted at Coohill’s restaurant in Downtown Denver and was sponsored by XO Communications.
Photos via — view more here.
Have a tip or know of a company that deserves coverage? Email us.
