I was once on a flight from Manila to San Paulo, Brazil. Now Manaus is a stunningly beautiful mystical place. It's where the Black River or the Rio Negro and the White River, the sole Boyce meet, to form the lower Amazon river. From the air, it's breathtaking to see these two sources that are visually separate and opposites if you will, running side by side. Now the Black River gets its color from plant and leaf matter that is decayed into the water. The lighter river gets its color from sentiment from the Andes Mountains.

This visual separation of dark and light is due to these different sources but also different densities and different water temperatures. on clear days, the separation can be seen from the air. And as our plane headed southeast to San Paulo, I could see these two rivers flowing side by side for a long way for maybe six kilometers. And then they ultimately merge as a result of some fast rapids to become the lower Amazon river. It's a stunning, stunning sight. But you know, the same is true for embedment and innovation in your company.

There are things that exist in your company entities that have made it successful, and they have a different source and density and temperature than that of innovation. But they ultimately what exists and the new innovation coming in have to merge to be Come a greater entity. In the embed platform, we're going to focus on the rapids. The things that causes them to merge together, this old and new or the existing and innovation. And so to put you in a place where you can merge these entities and combine them to make innovation, part of the water that is your company. We have three learning objectives in the embed module.

First, we want to understand embed and its role in innovation within companies. And secondly, we want to identify embed related actions that your company can take to enable innovation for the long term because embed is about making innovation work for the long term. And lastly, we just want to understand embed as an evolution not a revolution. So it's a slower movement than let's say generate. Okay, let's look at the innovation wayfinder. We've completed the introduction frame and generate frame is the strategic mandate the linkage generate is the customer driven problem solving the actual innovations and now we're ready to do it.

Bed and in bed is about innovation, organization renovation, it's changing your organization to make innovation work. We have four elements in embed and embed is the really interesting planet that is hard to see. In the innovation universe. A lot of these things are implicit, not discussed and invisible. So in this module, we're going to make them visible, at least parts of them. So you begin to understand what is the what are these underlying forces, this thing that lives in the basement that's controlling the way the company works and how can you renovate it, to make sure that innovation works with it.

So the four elements are change models, culture evolution, organization principles, and endo or management systems. One of the important things to realize about innovation or any big change initiative in organization, it's usually two steps forward and one step back. So you start out, get a step, maybe even take a second step, you're reaching out in the initiative itself and something pulls you back. So you start over again. And something's happening maybe in another part of the organization, maybe out in the business environment with competitors. And it pulls the Innovation Initiative back.

And so you start again, this is this continuous improvement idea I've been talking about, but if you're the innovator or you're the lead of innovation, it can be very disheartening. I wrote about this on my blog, and I called it switchbacks. Once you understand that, this is how the organization works. You can deal with it. There are lots of coping strategies, but if you don't understand it, it can be very discouraging. Let's look at the first element and that is change models.

Just to recall, embed is one of the four platforms. And I said earlier, most of these elements and embed are invisible. And you really have to train your eye to see them. And that's what we're going to do starting with change models. So the most important ingredient in the embed sic section is that changes the descriptor of embed and that we're going to look at it in terms of a renovation, and I want to look at three levels of change. And then add a fourth one that cuts across all of them.

The first level I'm going to look look at is just a thought on enterprise wide change and how it really works. Secondly, I want to look at the change and progression that happens in the Innovation Initiative itself. So if you're the one leading it, I want to show you what to expect as far as steps that you're going to go through Next, I want to look at individual or team but mostly individual change models. And I want to begin to renovate those a little bit. So they work in the innovation era. And lastly, I want to look at stakeholder alignment as a change methodology.

And it can be used across all three of these areas. Now, let's look at the next level of change. And this is on the initiative itself, the Innovation Initiative. And the way we're going to talk about this is using a model that I call the S change embedment curve. So as an innovator, or the one leading the effort, it's important that you understand the steps that a strategic initiative has to go through. Now in the model you're going to see as a generalized model, your initiative may be going through different steps, but I think it's pretty good model and generalized across the globe if you will, from How innovation gets embedded as a strategic initiative.

So it's it I wrote about it in my book, unleashing innovation, I also wrote about it on the blog so you can see it other places. But I do believe there's a global truth to it. So let's look at it. Think about starting at a launch phase for the initiative. Let's just assume in this example, you don't have innovation in your company, you're starting at the very beginning. And so this is where that blueprint that we created in frame will come into play.

This is kind of the approach you're going to take the types and how you're going to do it. And this is also getting the alignment that you need to at least get to the next step, which we'll see in a second is proof of concept. Now this phase can take weeks or months depending on your organization and how much alignment you need. And how many other things are going on and, and if you're going to go out and benchmark and gather information, so it just depends on what you're doing. So the next step is the proof of concept that's taking these ideas in this blueprint and proving them out and doing it on a smaller scale so that you can de risk it and make the adjustments that you need to allow it to work within your company. So again, how you get started in this depends on your approach.

For example, at Whirlpool, the proof of concept when we started was to take 75 people off their job 25 in North America, 25 in Latin America, and 25 in Europe and Asia and train them to become innovators. So for about six months, they worked on an actual innovation project, but we're also learning the tools in the process. And then when they finish they weren't too wonderful. three places, they went back to their job much more educated and knowledge about not just about innovation, but about the business in general, because of the work they had done. A few innovations came out of that. So some of them were tapped to work on these new startup teams that launched these businesses.

And about a third of them became mentors. And those are people as you know, that help others and facilitate innovation. So once we prove that the tools we had could work at every level, and every function could really work for everyone and that this concept of ion mentors was viable, we started moving to the next stage. Now, you know, your approach may be to start with an Open Innovation Model and collaboration and you want to do the proof of concept to make sure it will work within your company and make the changes that you need to make it thrive. So it just again, depends on what's in your blue prep. Now once you get through those phases, you're going to go through scaling.

And this is where it really gets difficult. Because scaling is where you're moving the Innovation Initiative from just a few people to everyone. This is the phase that's going to put it into the DNA of the company, if you will. And so what one of the things you'll employ here are scaling mechanisms. Now, we've already talked about some of these not all of them but for example, having a common definition for innovation as a scaling mechanism. So it allows for a distributed execution of innovation across your company around the world, and allows it to spread over time and space so that different people can begin to innovate.

It makes clear what the requirements are I mentors are another scaling mechanism. a unified common process is another scaling mechanism and common method tricks that are communicated to everyone and that everyone understands is another example of a scaling mechanism. Now, scaling is the failure mode for most companies in innovation embedment. They either don't take the time, because it does take a lot of effort. And as you can hear by the discussion, lots of things have to happen in this space. Or they don't understand that they need to do it.

But for whatever reason, there's a lot of companies that fail here because they don't quite get up this steep part of the curve. On the other thing they do is they go to the usual suspects that get all kinds of projects and they get them started innovation, and then they can't figure out how to get it out to the masses. But scaling is important because that's what makes innovation work for the long term. And so working on it is a critical embedment feature. Now, to the left of this chart, sideways, you can see All these activities up to date, we're still just putting more resources into innovation than we're getting out. So it takes a while for innovations to hit the marketplace.

And at this point, you probably have some nervous financial types looking at your numbers, but you will eventually hit breakthrough you'll take, make whatever adjustments you need to make, and you'll eventually move beyond breakeven. Now just a note on the steep hill, scaling through breakthrough, and that is, if you don't have this chart in front of you or understand these concepts, it's easily easy to get very discouraged here at this steep hill in scaling. In fact, when I teach it, I liken this space to the black dog that used to visit Winston Churchill and is more trying moments. I mean, this can be really trying for you as a professional as someone trying to get innovation to the next level. And so you have to work hard to get through this and just be wary of Your Black Dog and and, and have hope that you're putting the right things in place and you will get to break even.

Now you eventually get up to the top of this where you're sustaining and going through continuous improvement on the initiative. And that's the point where you're making adjustments. Or you might be ready to add maybe new approaches here. Maybe you started with core innovation and you want to add new to the world, or maybe you started inside your company, and you want to add open and so you'll go through some version of this S curve again, of course, with the learning and the experience, you'll go through it much, much more quickly. But you still need to go through these steps. Now the S curve can take six months or five years.

It all depends on the nature of your company and what you're trying to do, how much alignment you have, what other things are going on in the company. But it's really important that you understand these steps and understand that change happens at the initiative level. as well. I want to now look at another perspective on change. And that is individual change models. Now, there's a lot to address in the individual change model area.

But given the ground we've covered and what we're focused on, I just want to start with one simple concept that I think is very relevant. It comes from psychology, and it's called locus of control. In its simplest form, it's just looking at who's controlling the change and there are two primary perspectives to consider. One is intrinsic which is your controlling your own change and the other one is extrinsic. Others are controlling you And suffice to say that individual change models that organizations have used in the past have been predicated on this extrinsic change model. And historically, this has been true for several reasons.

Some of them include who has information and data for the company. You know, in the past, it was usually only a handful of people that had the detailed information about how the company was doing and where it's going and what threats it was facing. So these few people had knowledge about competitors and macroeconomics and all the things that are required to make good decisions in businesses. Now, an extrinsic control model is change that happens to you. It's not something that you bring on yourself, and it's in a world where you can't control your future. And if you look at change models, and they're really not coming keeping pace with what's happening in innovation.

I mean, many of them describe the change process this way. They look at a future state that only a few people know and decide how they want to communicate that. And then they identify what they call targets of change groups of people that need to go through a change from A to Z, let's say, and have those targets, which is a very strange word, they identify the benefits, and what people will lose as a result of the change. And they put a change plan together, that includes acknowledgment of those benefits or losses, and then rewards and punishments based on kind of that movement and a way to track it at the end. It's a very paternalistic view of the world. Now, if you're a change management professional, professional, I know that you're pulling your hair out right now.

Please don't I'm just over exhausted. Graduating the point here to really show that the locus of control and companies, it's been almost since the Industrial Revolution external. And now let's look at the other side of the model, this intrinsic side. And this is where each of us have data, where we make the changes necessary, that are required for the business. And in the world of innovation. This old notion of a handful of people that know everything about the business is no longer a viable model.

There are innovators out there in the marketplace, who know as much or more about their business as anyone in the company may take entrepreneurs for an example. There are really good example people who thrive on internal locus of control now, it doesn't mean they control everything and neither model is there a simplistic view of the world that you can control everything. I'm not saying that just this locus of control for entrepreneurs is internal. They know when To make changes, they know when to sacrifice, they know when to change things, at least the good ones do. Now, of course, they have investors. So it's not like they're making every decision on their own.

So the world isn't as black and white as maybe I'm describing it. But I believe in the innovation economy, that we're beginning to tip the scale to requiring more internal locus of control. Because of technology because of access to information for a lot of reasons, societal changes, generational changes in what we require and expect at work. And, of course, it doesn't mean in an accompany that anyone is ever going to be able to make all their own decisions, but it means the environment has to change. And we're going to talk about this a lot in the lead module, these new leadership skills that require this kind of an open environment and this kind of shift of locus of control From totally external to more internal. Let me give you an example.

When I started leading innovation at Whirlpool, the CEO said to me, I want innovation from everywhere and everyone and if we're successful, every job at Whirlpool will change. Now, wasn't very smart back then. I'm not sure much smarter now. But I walked away thinking, Oh my gosh, how am I going to change every job? You know, this x, extrinsic view of the world, like I was accountable to change every job like I would go and pull every job description and rewrite it and put innovation in it. I mean, that's crazy.

And then it occurred to me like, I'm not then years later, it took a long time to understand that concept. And the concept was allowing people to have control, but giving them data and information that they were not privy to before and giving them new skills and concepts about The business in innovation and allowing them to make many choices for themselves and to control many aspects of their job. So, if you think about innovation in a company and think about it at the individual level, it begins to change a lot of things. And when it changes is our notion of how change happens. And who's in control of change. It doesn't shift it all the way from the left to all the way to the right.

But it moves it quite a bit. It says if you give people the right information, if you set the right environment, the right expectations, people will do the right thing. And so that's the third notion and perspective on change that I wanted to talk about, which is a new way to think about individual change. Okay, the last area I want to look at is stakeholder analysis. And I did a little research because I didn't know where the term stakeholder is. came from the image in my mind was of me holding a stake and you pounding it, and that I had a lot lot to lose if you made a mistake, but in fact, that's not where it came from.

And you probably know that It first appeared in the 1700s in the literature and it really is the meaning is the holder of a wager and a stake is that which is placed at hazard. Now, stakeholder analysis for any kind of changes are really important exercise and some people go through it naturally. But many of us need to be trained and need to think through a stakeholder analysis. So, in front of you, I have a picture of really simple graphic of four kinds of stakeholders that you should consider, you can see the one axis is influence and the other one is interest. So if you look at someone with low influence and low interest, the best way to engage them in a change whether it's something you're doing in innovation, whether it's an innovation itself, whether it's an enterprise change is to inform them and keep them updated.

If there's someone who has high influence, but low interest, then the best way to work with that person is to update them and address any concerns. They send your way. It could be somebody who is very influential in what you're getting ready to do, but has so many things on their plate that they can't deal with it. And so they want you to keep them updated, and they may send you notes, occasionally about things I'd like you to do differently. The low, I'm sorry, high interest and low influence. That's someone who are a group and entity that you need to involve as needed.

And the one and by the way, the entity could be a person, it could be a function, it could be a council But the one that's really important in this stakeholder analysis is the high high one, which is high influence high interest in though that's the group that you want to collaborate with to make the change. And so if you just think about this model as a very simple way to think about if I'm getting ready to start an innovation, or change something or in the organization, if I quickly go through a stakeholder analysis and get really clear of kind of the landscape of entities, people or councils or functions that I need to deal with and how I need to deal with them and work with them to make the change, that's going to make the change a lot easier and help innovation in the long run.

Okay, want to look at the MVA for change. So the minimal viable approach and just an easy One here, which is the stakeholder analysis, what I'd like you to do is take the four quadrants, and you'll see them here I've numbered the quadrant, and then use this form and take a change that you're working on today that has to do with innovation and just describe it at the top of the form. And then list the people, the stakeholders that you feel like you need to collaborate or work with in a different way. So start with their name and role and again, it could be an individual or council or function. List, the quadrant here, whether it's 123 or four. Talk about why they're important to the change you're trying to make and what is their current knowledge or attitude about the change.

Do a little thinking about what you need from each other to make the change happen, what key messages might you give them and then think about how you might do whatever As you need to do in the change how you might work together more how you might get information, how you might merge whatever it is you're trying to do, and then list out when you want to do this and who would be accountable. Now, you don't need to go through this detail every time you do it change, it'll become second nature. But for now, I'd like you to just try it. Just pick a change you're working on. Turn off the module. And then when you come back well, we're going to talk about culture.

The next element is culture and culture evolution. You know how when you walk into the lobby of a company that you're visiting, you can feel what that company's like you'd begin to feel what it's like you get a sense of the company just by walking through the lobby or maybe observing a group of people as they walk by to go out for lunch. There are 1000 explicit and implicit signals that tell you what kind of company culture might exist there. And oftentimes outsiders can describe it. aspects of the culture better than insiders, maybe because they're more objective. And they see it maybe in a different light.

I have to admit a couple times when I visited companies who were having trouble with their Innovation Initiative just by walking through the lobby, kind of sense of some things that maybe were antithetical to innovation. I couldn't really articulate it. It was just a sense. So I worked hard to withhold my judgment. But often these cues represent bigger issues that we find that are impeding innovation. Maybe after all these years and all these companies I've worked with, maybe my senses have turned into an innovation divining rod.

One of the things I do when I work with companies that are trying to become more innovative, I try to hold off the discussion of culture. Mostly be People have a tendency to paint everything as a culture problem. You know that there are many barriers that impede innovation. But you also know a lot of those come from other places. And we're going to see some more of them in this section. They're not all culture related.

Some of them are. So it's back to this double sided coin. And culture is a very important piece of this coin. We're going to see a little bit later, that so our management systems, and they're the harder edge side. The problem with culture, though, is it's so big and unwieldy, that it's just hard to get your hands around. And so let alone begin to change it.

And I often worry that companies start with culture before they start innovating and think that they're going to change the culture to get it right. And I think that's not the proper order. Thank you. have to change culture as you go along. Let me just define company culture. company culture is a system of shared assumptions, values, beliefs, which govern how people behave in organizations.

And again, back to this invisibility cloak that embed has as a planet. They're usually not visible and we usually don't talk about them, but we know they're there. In fact, for many companies, generations of employees pass down this culture to the next generation and behaviors and traits and, and helping people understand how to work at the company. So these shared values have a very strong influence on people in the organization, including things like how you dress, how you act, how you perform your jobs, etc. And again, I want to think about this as an evolution because this is about slow changes. This is bad being very careful about what you want to change and then working in a system to begin to change it.

And you know, in your lifetime, it may be doubtful that the company culture will be transformed, but it certainly will be changed. Now, it may be transformed as a result of negative forces, but most culture evolves over time. It's not something that just transforms and changes immediately. So let's look at what it looks like when culture is supporting innovation. So here are some ideas. First of all, this culture needs to foster individuals who are internally driven and they are either they might be motivated by money or power or fame or curiosity or learning it doesn't matter.

They have a need for a personal achievement in the cultures willing to accept that they are able to master the cultures able to master the inherent complexity and pursue innovation in a systematic way. If your culture is of is of worth seat of a pants kind of company, and we just do things as it feels right, it's going to be really hard to think about embedding innovation so that you can get innovation from everywhere and everyone. And then thirdly, actively search for change. Now, change is the root of all innovation. And we always say about our companies, all of us do our companies culture is risk averse, but you know, that sits on a continuum. And if you're really, really risk averse, you're going to have a really hard time with innovation.

You can see the citation here that I adapted this information. But let me just describe an ideal innovation culture some things you might see. First and foremost is it's very customer oriented. And I don't mean platitudes or signs on the wall. I mean, it's really customer oriented. Secondly, leadership innovation starts at the top.

And what I mean by that is, I don't mean that necessarily people at the top are the innovators. I mean, they're doing more than just giving it lip service or just talking about it in an annual report. They're really really driving it from the top down. And as we know, in management systems being able to change some of those are things that have to happen at pretty high up in the organization, for example, to change a budgeting system. Employees are recognized and valued as individuals. Now we're going to talk about teams in a second we want them to work in teams.

But there is this realization that each of us requires some individual recognition for what we contribute in an innovation. The culture should support small cross functional and very diverse teams because those are going to give you the best results and innovation. There is an open communication a transparency and a need to collaborate. So there isn't a not invented here and big silos with big walls. It's about, hey, let's figure out how might we do this together? There's trust and autonomy.

There's tolerance for risk taking and failure and the learning that goes associated with that. And the culture is patient. And farsighted. It understands. And it's forgiving, if you will, because the end game is really about getting culture embedded everywhere. So let's think about how you might begin to change your company culture.

The first advice I give people is sounds flip. And I don't mean to be flipped, but it's to have a successful innovation. It's to when you have your first teams working, don't necessarily pick the hardest one. Don't pick the easiest one either, but pick something that's substantial. And as employees and leaders and stakeholders are seeing that innovation come to life, it begins to change culture in ways that you can't imagine. You know, you Look into the Generate platform.

And when you launch an innovation, you can begin to see how it could shirt short circuit culture renovation by just landing a successful innovation. Not only does it get people's attention and gets them fired up and excited about it, but that first team or that first time you're really observing a team will shed light on the areas of culture that need to be addressed. Now, I don't recommend that you start with culture before you start with innovation, before you start generating innovation, but some companies do that they have this belief, let's fix the culture. And then we'll get to innovation. I wouldn't recommend that it's just too hard to figure out what are the changes that need to happen? The MVA that I'm going to give you the minimal viable approach the tool in a few minutes is the competing values model and I'll talk about it more.

But it's a diagnostic model to talk about how your company exists. And what traits and beliefs and attitudes are there about the business. And it's an excellent tool. Once you identify the areas, here's some steps to help you start making the changes. So after you go through something like the competing values model, and the assessment that I'm going to recommend that's associated with it, and you identify some areas, here's some ideas about how to start changing them. Again, start with an action, start with an innovation team and look for trends and begin to understand and get data, Hard and Soft data about what needs to change first.

So then reach a consensus on the current and future state and this tool that I'm going to show you does both of those it talks about where are you today and where would you like to be? now determine what these changes are going to mean and what they won't mean. And illus be able to illustrate these changes to stories and picture you know, one of the things Bob Quinn, who I'm going to talk about in a second said to me is a culture change happens person to person. It doesn't happen as a result of meetings and PowerPoint slides. So getting that dialogue and being able to illuminate that change in a picture or a story is really helpful. Figure out the plan that you want to use.

And that plan should include things like focusing on one step at a time, communicating objectives, clearly training employees on the changes required and being able to measure the changes. Now, one of the first jobs are not first jobs at Whirlpool, but the job I had right before innovation was around helping the company change its culture is moving from a US based only to a global entity, and and worldwide purchase lots of smaller companies. And so each one came with its own set of values and cultures. And so the executive committee asked me to lead a project. I'm trying to figure out what is the culture that we want to be. And we did that partially through a series of values, and a series of interactions of workshops, allowing people to talk about what the values mean and what they don't mean.

So thinking about culture more than just PowerPoint or a set of statements, but really putting it into action so that people can interact with it and can react to it and talk about it is really important. What's the MBA for culture evolution, it's going to be the competing values model. Many years ago, I was fortunate enough to work with Dr. Robert Quinn from the University of Michigan, one of the foremost experts in the world on culture in organizations. He's an amazing academic, but he's also amazing, very special human beings. So it was really a privilege to work with him. At the time I was working with him he had just finished this model called the competing values model.

And he worked with many colleagues at the University of Michigan. It's one of the best diagnostic tools for culture that I've seen. And it stood the test of time. And I went back and looked at it in using an innovation lens and it works really well for thinking about culture in an innovation economy. So it's created the University of Michigan by Cameron Quinn and other researchers in 1999. It has four quadrants that you can see here, they go from flexible to focused from internal to external.

Now this is really used as a way to organize an approach to identify what things need to be changed in the organization. And the instrument I'm going to show you in a second and use for the mbh gives you a from two. Here's where our culture is today. And here's where we'd like it. To move to I have some citations on the screen, please go to Amazon or wherever you buy your books to get the book by Quinn and his co authors, and any other citations or models that you can find on the internet about the competing values model and I have a couple here I'd like to zone in on is the organization culture assessment instrument, the OCA I and you see a citation on the screen. I'd like you to go to that website.

And I'd like you to take this instrument now. It takes the competing values model and looks at culture in terms of dominant cares characteristics of the organization, organization leadership, management of employees. Origin organization, glue, strategic emphasis and criteria for success. So there's the reference, I'd like you to again, as we've done before, turn off the module, go over to that website, take a few minutes and go through the assessment. This is really a great assessment to take as a group or a team or as a company. So you might have other people take it as well and then go through the the change steps that I just referenced to talk about how you might change parts of your culture to make it more innovative.