What really is innovation? And what does it take for an innovative idea to be formed? In today’s episode, Carla Johnson shares how a business can effectively innovate in two steps! Carla is a global keynote speaker, a best-selling author, and a recognized marketing and innovation strategist that has worked with Fortune 500 brands. Tune in and learn from the expert herself what it really takes to innovate today!
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Innovate Your Business In Two Steps With Carla Johnson
Innovation is a key step in being able to transform the way you attract, hire, and retain amazing people. If your company isn’t innovating in the way it’s recruiting and you’re not innovating in the way you’re engaging your people and the way you market and present yourself in the marketplace, you’re missing out. Often, companies get stuck and they got their blinders on. They are looking at the things they used to do or the things that others are doing in their industry as inspiration for innovation.
Our guest will tell you that’s not the way we should be doing it. Carla Johnson is an expert at helping organizations innovate using her five-step process. She’s going to explain the process to you. She will help you understand how you can take this and create an amazing team of people that are constantly innovating in your side of the business and out so that you can transform your business and get the results you’ve always wanted.
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Carla, welcome to the show.
Thank you for having me, Ryan.
I’m looking forward to this conversation because there is something that is intriguing to me about your expertise in innovation. I can’t wait to hear more. What is the biggest myth you ran into in the work that you do?
The biggest myth that I ran into is that innovation is something that only a specific group of people is allowed to do. We see them as the product development people. Maybe it’s process design people if you’re thinking about construction. It could be the software people. There is a certain person or type of person, role or educational background who somehow we have given the official tap on the shoulder that they are the innovators. The most successful organizations don’t buy into that.
I should have asked you to start with this, but define innovation. What is the definition that you use for that term?
I love that you asked that because if I asked 20 different people for a definition of innovation, I would probably have 35 or 40 answers. It’s not like accounting, architecture, engineering or construction. There isn’t a specific definition and necessary methodology that’s widely accepted as to what it is.
I define innovation as the ability to consistently come up with new, great, and reliable ideas. It sounds super simple, but each word has a powerful impact. A new idea is something that hasn’t been done before in your industry. I like to use McDonald’s as an example of a new idea. When they were looking at how to design or redesign their drive-through layout for the restaurants, they took inspiration from a Formula 1 pit stop. They looked at who has to have a car, come in and out very fast, be efficient, safe, and all of the same requirements as what McDonald’s used.
Was it an idea that had never been done before? No. Was it a new idea that had its first time in the fast food industry? Yes. That’s the definition of a new idea, but a new idea on its own doesn’t necessarily mean it’s successful or provocative enough to be considered innovative. The next criterion is that the idea is great. To be honest, a great idea is a lot more subjective than a new idea because a great idea is one of those things that when you hear, it raises the hair on the back of your neck or on your arm, or gives you a little bit of goosebumps. It makes you feel a little jealous that maybe you didn’t come up with that idea.
Even with that impact, when you think about a new and great idea, we see some of those, but they crash and burn or the company that has them goes out of business. That’s why the third requirement is so important also, and that’s it’s a reliable idea. A reliable idea is something that has a bottom-line financial impact.
When you put all three of these together, then innovation is when you’re able to consistently come up with new great and reliable ideas. Ideas that are new to your industry give you that sense of envy and excitement, but also have a bottom-line financial impact. When companies or people are able to consistently develop these over long periods of time, that’s truly the people in the organizations that we look to and say, “They are rockstar innovators.”
Innovation is when you're able to consistently come up with new, great, and reliable ideas. Click To TweetI love the qualification you gave for that reliably. I work with a lot of visionaries, entrepreneurs, and people that have a hundred ideas by the time they are done with breakfast. They walk into their team meeting and they tell them, “I got all these great ideas,” and the people start shooting them down. They might be new and great, but if they don’t impact that bottom line, they’re not ideas that we need to be using moving forward. I like the way you qualified that.
Along the way, it’s not necessarily always upfront, but you have to have an objective for your ideas. There are those times when you want those brilliant breakfast ideas, but at the end of the day, they have to apply and have an impact for them to truly be innovative. What people don’t always realize is that there is also a gift in the person who can come up with a lot of ideas.
One thing that I see is people will come up with 6, 8 or maybe 10 ideas and go, “That was awesome,” then they pick the best and run with it or try to run with it. Research shows you don’t truly get to really creative and innovative ideas until you’ve gone through the first 200. You think about those meetings where you get through the first 8 or 10, that’s just the low-hanging fruit.
To be honest, in most cases, you’re probably just taking something you’ve done in the past, you’re rehashing it a little bit, taking a part out, substituting something in and saying, “That’s an awesome idea.” It misses that great component. If you think about you go one step further, maybe you’ve taken something that a competitor does and put your own flavor on it, but it’s still not competitive.
To stand out, the idea-generation step has to be fueled by inspiration outside of your industry. That’s a little bit of a benchmark. Not that every team or person gets to that 200 idea mark before they choose one, but it gives us a sense of context for how quickly we default to what’s easy rather than what’s truly new, great, and reliable for an idea.
I see that happen a lot. People get excited about ideas and they run with them. Three months later, they’re like, “We’re losing money. This is dumb. Why are we doing this?” It sounded so good three months ago and it wasn’t a good idea. The myth was that there’s not a select few that can consistently do this, but then I hear the 200 ideas before you get to the point where you’re starting to be more innovative. This seems contradictory to me. You either have to be the idea-generation person or not. Help me break that down a little bit. I’m sure I misheard something so break that down for me.
I should have put your first question into answer A and answer B. The first myth is that there are people who are the special ones, as we think of it, who are the idea-people. The second myth, subset, item 1A, is that it’s this ambiguous process. Ideas just pop into your head when you’re running or showering and they magically appear.
The truth is coming up with great ideas is a structured process. I spent five years doing research, studying all sorts of innovators in all industry sizes of companies, ages, and geographic regions around the world. I looked at their individual competence, team competence, and company competence, and coming up with ideas. What I found is that they all have the same five-step process, whether they realized it or not.
The interesting thing is the most powerful part of it is that the innovators that we think have this magical ability understand that you have to fuel upfront the idea-generation process. You do that by being more observant of the world around you. That’s the first step of this process. It’s that highly innovative people are also highly observant people.
The second thing they do is look at all of these different observations they have, and they start to notice patterns. The interesting thing about steps one and two if you want to improve your skills as an innovator is that it takes very little effort to get going with this. The ability to observe the world around us and then distill those observations into patterns are things that are genetically wired into us. It’s how we survived back on the Savannah when there were tigers, lions, T-Rex and whatever else is out there.
Our ancestors were able to observe all of these different details and distill those into patterns that told us, “Is it safe to leave my grass hut this morning or do I need to go back in and pull my grass duvet over my head and call it a day?” It’s that safety and threat patterns that tell them where food is or patterns that tell them things about the weather, the climate, and things like that. These are things that are genetically wired into us.
The third thing is the most critical one that I found in my research that determines how successful a person is as an innovator, as well as their idea. That’s being able to take the patterns that they’ve distilled and truly understand how they relate to the work that they do. If you think about the idea of designing the layout for the McDonald’s drive-through using a Formula 1 pit stop as their inspiration, the designers observed things.
To start out with, they observed that people didn’t come into the restaurant because they had to pull up, get out of their car, they’d go inside and wait in line. It was cumbersome and it took a lot of time. If you’re thinking all you want is a cup of coffee on your way to work, that’s not very efficient. They also observed what happens in a Formula 1 pit stop. There’s a team of people ready and each person has their responsibility. Each person knows how to integrate with the other. If you look at the pit stop, people are in and out in minutes because that’s part of winning the game.
For McDonald’s, they look at their ability to observe and understand that part of winning the game comes down to distilling all these details into patterns of things like efficiency, empowerment in your own job role, understanding how to hire the right people so that they fit into these functions correctly, and training them so they understand how all these parts and pieces fit together. Not that they have to necessarily do everyone, but there needs to be a context for the responsibility.
Those are things they could easily relate to what their business challenge was, and then begin to generate those ideas. Something that is really important is understanding that there is a very structured yet flexible process that we can use to come up with these ideas, and then also share them in a pitch. We’ve heard people share ideas and they’re horrible at presentation. It’s that unfortunate thing that a bad pitch kills even the best of ideas.
When we look at this whole process, it’s the ability to start with inspiration and bring that into the work that we do, generate these ideas that are different and unique, yet still relatable to the specific objective or goal that you have at hand, and then being able to share them to get buy-in from the rest of your team, your organization, and your clients.
That’s a critical step right there. It takes some skill. What are the last two? You gave us three of the five steps.
The fourth step is generate, and then the fifth step is pitch. When we think about traditional brainstorming, strategy sessions or whiteboard sessions, what typically happens is that we start at step four, generate. We say, “Everybody come together Friday afternoon at 4:00 in the main conference room.”
That in and of itself doesn’t lead to a lot of inspiration for the ideas that come into the room. We go into these meetings where we’re wanting great ideas and be inspired, but we don’t know how and we haven’t fueled that process. We’re essentially sucking from a dry bone. We’re trying to come up with something new, different, and unique but we don’t know what to do.
You then go to pitch those ideas and people say, “We don’t have that budget. That’s not what we do around here. We’re not that company. Do what you did last time and change a few of the numbers.” If we’re ever going to get a different output of the ideas that we generate and pitch, then we have to start looking at the input that fuels that fourth step, and how we bring it in a cohesive, reliable, predictable, and scalable way that anybody can learn and practice.
I was thinking that anybody can learn this if you have this process. It’s so interesting, as soon as you said people start to generate, I can think of a dozen people right now, me included, that that’s where we start. I got all these ideas and it’s not because they were influenced or anything. I was having breakfast and had an idea.
It’s always important to capture those because you never know, that idea may apply somewhere down the line or it may help lead to another idea. I call this five-step process the Perpetual Innovation Process because as innovative thinkers, we should never stop. It’s something that once we go through the observe, distill, relate, generate and pitch process, there’s always going to be another situation when we need another great idea.
Innovate Your Business In Two Steps With Carla Johnson Click To TweetIt doesn’t matter if it relates to how we hire and recruit people. It doesn’t matter if it relates to how we look at the processes that we use every day on the job. It doesn’t matter if we look at how we hire and retain people. Human resources, talent recruitment and reward, and that area of business is one that needs more ideas than ever before.
Many times organizations get stuck in, “This is how that is done.” Does it have to be? If you look at a ride-share company, a Lyft or an Uber, you can apply and within hours, you can be on the job working. What if you could take inspiration from that and relate what works for them into your organization, and begin to use that as inspiration for the ideas you generate?
I’m not suggesting that every organization needs to have a hiring process where they can get people in the door in a matter of hours. That’s not right for every organization. That’s why that relate step is so important because it isn’t about copying and pasting something that some other company has done like Uber and Lyft.
It’s understanding by observing the details and finding the patterns, and then looking at the patterns and relating that to your own organization. Maybe the pattern in that situation is they have a great process that helps filter people and understand who’s the right person. They have a great process that identifies profiles or whatever it is. I don’t know the hiring process so I can’t say. I’m just making this up. What are those things for these organizations?
One of the things that we do a lot in our work is looking at the job seeker’s or the candidate’s experience. In some of my research, as we develop our processes, we look to other industries outside of construction. If there’s one industry that has gotten stagnant in the last decade, it’s construction. The economy has been good. It’s been easy to get work and they kept going, but they’ve always struggled with hiring.
The candidate wants a fast experience. They want you to make a decision quickly. They don’t want you to call them and say, “In three weeks, we got an interview, and then three weeks later, we’ll let you know if we make a decision.” It’s great to look outside the industry and even your work
I made a comment to a remodeling contractor one time and I asked him, “Who’s your biggest competition for people?” He goes, “There’s this big company down. They’re in four states.” I was like, “Really? How much are you paying?” He’s like, “$19 an hour.” I go, “Amazon, Target, and all these customer services, these are the people you need to look at because they’re stealing your people.”
When you think about the impression you present as a company, especially if you’re looking to hire young talent and you have the same approach and brand presence as you’ve always had, especially as a construction company, you’re going to get your shorts eaten. I now see companies in traditionally boring industries that understand how to tap into TikTok and create short clips, whether it’s about the work that they do or the personality inside the company or whatever it is. All of this matters if you are looking to be relevant. While the industry may be very much in demand, if you can’t hire the talent to get the job done, it doesn’t matter how much work you have coming in the door if you can’t deliver.
My brain is churning right now with ideas and questions. I’m going to stick to the script because I know that our audience wants to know more too. What are some things that I can do as a business owner, I think about our audience, which could start using this five-step process when we start generating these ideas to innovate and ultimately, differentiate ourselves so that we stand out as an employer of choice in the industry?
I’m going to give you two things. One is a blatant direction toward the five-step process that I created that we talked about. It is to learn this five-step Perpetual Innovation Process. It’s something that I detailed in my book, RE:Think Innovation. I explain how to do it in minute detail and also why it matters from a culture and employee recruitment and retention standpoint. Half of it digs into the process and teaches people how to do it. The other part is, “Now what do you do with it if you’re looking to create a culture where everyone is encouraged to become an innovative thinker?”
The second thing that I suggest that people do is create a list of what I call envy brands or the brands you’re jealous of. This should not be solely companies in your industry. It can be some because maybe they’re doing some amazing things. What we don’t often recognize is that when we are competing, we think we’re competing against our peers in our industry. Truly, when your customers, employees, or prospective employees and customers interact with you, they aren’t using the filter of, “How should I think of this company?” They’re thinking, “How is my experience this morning at Starbucks? How does that compare to this experience? How is my experience with Amazon in same-day delivery?”
Sometimes I get things in two hours on my doorstep. How does that compare to the experience you’re delivering in whatever way, shape or form? How do people communicate? I always have my phone right here handy because I have apps and that’s what I use to keep track of things and communicate. Is this something that you need to think about when you look at the brand envy? Whose apps do you live and die by and what is it that you could learn from them? What that helps people do is understand how big and broad they need to start thinking when they look at other brands that can inspire them.
That’s interesting because I’ve heard that before. When we’re looking and interacting with someone new, we’re comparing them to the brands that have the most influence in our lives, whether they’re competition or not. The Starbucks, Apples, and Amazons of the world are who this construction company were comparing to. Amazon can do it in two hours. Why can’t you?
I know some construction companies don’t do big commercial construction. They’ll put up a camera and they send you a daily summary like some chat boards that you’re on. It’s like, why does that have to be so outside the norm and seem like such a huge thing when that’s what we would expect in many other situations with companies that we interact with? That’s what I think is a huge opportunity for the construction industry. It is to begin to ask yourself, “How might we begin to do some of these things just like what our customers have expectations for the rest of their lives?”
What I heard is to learn the process, and you have a book that will teach the whole process, and then look at your envy brands or the ones that you envy. It’s not even competition. Maybe, but most likely, who is it that you would strive to be like or go, “If I could create a process or system or be as profitable as them, who is that?”
That helps you start to think things like when you’re considering ideas and you feel stuck or you want to help move this forward with a team member, a leader, a customer or a client, you can start to say, “What would Lego do if they were building this? What would Lego do if they were creating an onboarding experience for a construction company?” It helps you start to think differently. That’s why that list of envy brands is important.
That’s impactful for me because I see in a lot of people that observation step that you start with. When they observe with the blinders on and only look at their industry, they’re not seeing what the rest of the world is doing. They’re just seeing what their competitors are doing. Many people get caught in that, “Down the street, they’re doing it this way, so we’re going to do it this way.”
I’ll never forget this. I met a client a few years ago and they didn’t offer any paid time off to any of their labors. These are the guys in the field. You had to be there for five years and then you got a week of paid time off. These are the guys putting their lives on the line. They didn’t get any time off.
I asked him why and we dug into it. He goes, “That’s the way my dad’s company was.” Why? That’s the way his dad’s company was. Why? That’s the way the industry has always done it. Why? They didn’t have any answer to it. I said, “You’re competing for the same people that Amazon is competing for, and they get two weeks of PTO on day one. You got to look outside of your industry. To me, that observation step is where so many people need to start. It is looking at those envy brands. I love that tip.
It is almost so simple. People easily dismiss it as not being relevant, but the power of it is in the simplicity of it when you stop, slow down, pause and observe. People have eaten a lot of humble pie once they go through and start to observe.
We observed, we learned the process, and we look at these envy brands, but then what? I think that there are so many different directions you could go, but I’m sure it’s not that complicated.
The next is I’ve created a specific formula for an objective statement because even if you follow this process, at the end of the day, the ideas have to apply to a real-world situation. The objective statement has three parts. The first part is, “We need new ideas too.” What is it that you’re looking to accomplish? This question is something that’s very common for most companies, especially construction companies. They have a situation in front of them that they know what they want to solve or that they need to solve.
The next part is, “So we can.” What is it that you’re ultimately wanting to accomplish? Is it so you can stay on schedule? Is it so you can stay on budget? What is the, “So we can?” This can oftentimes be deceivingly difficult because not everybody agrees on what that outcome is. That right there makes a big difference in the clarity and sophistication of the ideas that you come up with. It’s that everybody has to agree with what it is we’re ultimately trying to accomplish here. Unless you can do that, to be honest, it doesn’t matter how great the ideas are because they have to apply toward a specific business objective. That one takes time in conversations to agree on.
The next part is, “With these constraints.” I usually say to look for 2 to 4. The 2 most common ones are time and budget. It could be within code requirements. It could be a whole lot of things. What are the requirements that the idea ultimately has to fit into? Even if you got the agreement on the first and second parts of the statement, “We need new ideas” and “So we can,” the ideas still have to live in the reality of the world that we work in. That’s where the constraints come in.
When I have people go through this process, I have them set up the objective statement, and then set it aside until we’ve gone through the idea generation part. We then start to pull in, “Does it fit these first two parts of the objective statement?” Now, how do we start to combine some, get rid of some, revamp some, and still we’re looking at the world of possibility? We don’t bring those constraints in until the very last moment. It’s like what you said, Ryan, the typical thing is you get into a brainstorming meeting. You start at step four to generate ideas. You throw out all these ideas and people say, “That will never work,” because they start with the constraints in their mind instead of the world of possibilities.
I was thinking that’s unless you’re Elon Musk. There are no constraints for that man. We’re going to live on Mars, and it’s all crazy. It’s so refreshing to me to hear that there is a process for being able to generate innovative ideas and things that aren’t just going to iterate a process or change something. You could transform an industry with this, and know that it’s something you can learn and you don’t have to be an Elon Musk, a Steve Jobs, or an Ivy to be able to do this. This is something that your team can do without those names that I mentioned.
It works in every corner of the business. In the book, I talk about a woman who was in finance. She wasn’t an executive. She wasn’t even a director or anything, but she had a report that she had to run manually every month, and it was 40 hours a month to run it. If you think about that, that’s 25% of your time every month. It’s a week a month.
She started to observe what was going on with this process. She then started to observe other departments and other situations where she saw efficiencies, and how they solved them. She taught herself a programming language, wrote herself a program, and now instead of 40 hours every month, it’s about 12 minutes. It is incredibly powerful on a number of levels. One, she’s not doing soul-sucking work for 25% of her time every single month. Two, she feels empowered to be able to observe more about what’s going on and take that inspiration to generate ideas that have a specific bottom-line impact.
This is where we get back to, is it a new idea? No, but it was new to her team and what she did in the work. Was it a great idea? You better believe it. Was it a reliable one? Absolutely. If you think about being able to free up 39 hours and 48 minutes of one person’s time every single month across the entire organization, what an incredible bottom-line impact that has.
I love that story because not every idea has to be completely revolutionary for the business. To her, that was a revolutionary idea. The other thing I heard from it is she now has a new skillset.
It fits the criteria of the objective statement. It worked beautifully. We do have this perception that innovative ideas are big disruptive, back to our friend Elon Musk, but that’s not the truth. The really innovative organizations understand that it’s a consistent focus on looking at how we can do things better in every corner of the business.
The really innovative organizations understand that it's a consistent focus on looking at how we can do things better in every corner of the business. Click To TweetI think reading your book is probably a great first step for people.
I think so, but I will admit, I’m quite biased.
I would imagine that there are plenty of stories in there, and I love the story of the gal on finance because it wasn’t some revolutionary transformative, “We’re going to dominate the market and take out our competition.” In her world, that was so impactful. Even if it wasn’t 38 or 39 hours for every employee, but if an employee could save 5 hours a month by having these innovative ideas, what would that do to your organization in a year?
We don’t think about the culmination of all these tiny little baby steps forward. We look at things and think it has to be big and massive, but it’s all of these collective everyday innovations that have that big massive impact. It was interesting. When I was doing research on the book, I found a statistic that said that 90% of all innovation happens outside of traditional product and service line development.
The other thing was that 70% of all innovative ideas come from employees inside the organization as opposed to the executives and the leadership. Unless we equip every employee with something that is tangible that they can understand, that they can learn, that they can practice, you’ll never reach your full potential as an organization. That’s one of the things that gets me the most excited about uncovering as I was discovering this process that these innovators use. It’s that it is something anybody can do.
You’ve made that very clear on this show. Thank you for that. I do think that one of the things we see as a challenge for some people though is letting people be innovative. As a leader, you have to understand that just because someone wants to change your process doesn’t mean that it’s a bad thing.
A hallmark of a true leader is understanding that you don’t have all the answers. If you don’t have people on your team coming to you with ideas, it’s probably because they’ve learned that that’s not allowed.
You need that culture shift and that change there. Fantastic stuff. For those people that want to learn more and get to know more about you, I know you do speaking, training, and consulting work, how do they find you? You also have a giveaway for our audience.
People can find me on my website, CarlaJohnson.co. I say it’s dot-co for the great state of Colorado. You can find me because I’m in Denver, Colorado. When you go there, there are all sorts of blogs and resources to help you with different areas of this. Also, on the homepage, you’ll find a free assessment that you can take, and find out your own style as an innovator.
That’s also something that’s important as we look at the people part of innovation. We all say innovation, transformation, and all of these things are a mix of people, processes, and technology. We have more processes than we ever want to see or deal with. We’ve been processed to death. We have so much technology that 3/4 of it probably never gets used or at least used to its full potential, but the part that has been grossly neglected is the people part.
That’s why I wanted to look into the different styles of how people innovate. In an industry like construction where at the top, you have a lot of left-brain people. They’re thinking nicely and importantly about the very minute details of how things are done and are very left-brain thinkers. Not everybody is like that. If you only look for people like you to help be innovators in your organization, then you’re missing an incredible opportunity.
This assessment shows what kind of style you have as an innovator. There are six different styles. Also, when you find out your own style, there’s information that helps you understand how your archetype interacts with the other five, how it looks when you’re all in sync, and how it looks like when maybe you’re butting some heads. It’s educational and helps people understand how to be more effective with their own style, and not feel like they have to be somebody else to be effective.
Anyone that knows me knows I geek out about assessments. I love them. We use them in a lot of the work we do. People ask me all the time, “How many have you taken?” I go, “I lost count.” I will be taking this assessment before the end of the day and try to learn a little bit more about myself.
Carla, thank you so much. This has been insightful. I would imagine that for some of our audiences, it will be impactful to know that they can start making these changes. They can empower their team to be able to make these changes and start innovating inside their company. It’s not something that is left to a select few. Thank you so much for that.
It was wonderful to be here. Thanks, Ryan. This is one of my favorite audiences to talk to because I grew up in the AEC industry. I use a lot of what I learned there in my work now.
It definitely shows. Thank you so much again. Thank you for being a guest. I look forward to speaking soon.
Thanks, Ryan.
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About Carla Johnson
Carla Johnson is a global keynote speaker, a best-selling author and a recognized marketing and innovation strategist.
Having lived, worked, and studied on five continents, she’s partnered with top brands and conferences to train thousands of people how to rethink the work that they do and the impact they can have. Her visionary expertise has inspired and equipped leaders at all levels to embrace change, welcome new ideas, and transform their business.
Her work with Fortune 500 brands served as the foundation for many of her books. Her tenth, RE:Think Innovation busts the myth that innovation is something that requires a specific degree or special training. In fact, Carla explains why, to be a successful company in today’s hyper-competitive, customer-driven world, innovation must be everyone’s business. Her goal is to teach one million people how to become innovators by 2025. (Her book is available for pre-order at www.carlajohnson.co/rethinkpreorder)
Consistently named one of the top influencers in her field, Carla regularly challenges conventional thinking. Today, she teaches people around the world how to cultivate idea-driven teams that breed unstoppable creativity and game-changing innovation.
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