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7 Steps to Unlocking Innovation in a Conservative Culture (Case Study)

23 Nov

What does it take to spark and sustain innovation at the heart of one of the world’s most conservative industries?

That’s the question I recently asked Harvey Wade, who has helped pioneer strategic innovation initiatives inside global finance giant Allianz.

During our interview he shared seven insights that have helped Allianz UK make innovation part of the day job for its 4,500 employees.   Michael Diekmann, Chairman of Allianz recently, described the company as the most innovative in the global organisation that spans over 80 countries.

But first, a 30-second rewind.  I met Harvey three years ago when Allianz was putting in place an ideas system.  The vision was simple but bold: to create a practical, team meeting format that would encourage all employees to suggest and implement ideas that would positively impact team performance.

“We wanted to demystify innovation for people,” says Wade. “We knew that our people were capable of bringing a lot of creativity to the issues facing their teams, just so long as we got the format right.”

The team-based ideas system took off and in parallel, the Allianz UK innovation team launched other initiatives designed to address some of the more strategic, company-wide challenges.

But an ideas system on its own is never enough to engage an entire workforce with innovation.  So what lies behind Allianz’s success in stimulating an appetite for ongoing innovation?

Tip #1 – Boardroom or bust

Harvey: “Innovation lives or dies in the boardroom.  If there isn’t a real belief in the strategic value of innovation at that level you will never get the support and resources that are needed to make it succeed in a sustainable way. ”

Elvin: “So how do you test whether leaders are simply paying lip service to the value of innovation?”

Harvey: “Money talks the loudest in terms of real commitment.  Our senior team showed its belief in the importance of innovation by committing to a certain level of investment that was ring-fenced, regardless of what was going on in the economy.  That’s pretty rare in my experience.”

Elvin: “What else do leaders need to do?”

Harvey: “Let go of the perception of needing to have all of the answers to all of the organisation’s questions.  At best it’s naïve and at worst it’s arrogance.  When leaders and managers start to ask their people to help solve the biggest challenges facing the company or team it really starts to drive employee engagement around innovation.

Tip #2 – Focus, focus, focus

Harvey: “When you’re starting out with innovation it’s really important to know where to focus your efforts.  For maximum return on investment, innovation needs to focus on the key sources of value that the organisation creates.  That ensures that innovation is always strategically aligned and is contributing to the bottom line.”

Elvin: “So avoid the temptation to have too broad a focus and to spread your innovation resources too thinly?”

Harvey: “That’s right – and also give yourself the best chance of generating some ‘quick wins’. Because the inherent nature of innovation is change, there will be plenty of people in the organisation who want initiatives to fail.  That makes it crucial to get some early successes to build positive momentum behind innovation initiatives.”

Tip #3 – Disruption not eruption

Elvin: “What’s your take on how to stimulate disruptive innovation?”

Harvey: “The big lesson that we’ve learned is about speed of ambition.  When you’re trying to develop a culture in which people are more comfortable with creativity, change and new ways of working you need to avoid the temptation to try too much too soon. “

Elvin: “But without squashing people’s creativity?”

Harvey: “Yes, actually it’s more around what you do with great new ideas that emerge.   Being very focused on ideas that are aligned to strategy and launching small scale pilots made sense for us – both in terms of efficiency but also as a message to the rest of the organisation:  when people became familiar with pilot projects happening all around them it helped normalize the idea that innovation is just part of everyday life around here.”

Tip #4 – Follow the energy

Elvin: “In really practical terms, how did you get people involved in innovation initiatives around Allianz?”

Harvey: “To begin with we decided to follow a path of least resistance:  we took innovation to where the people were and the places where their conversations were already happening.  We made use of team meetings, existing forums and the communications platforms that worked most effectively.  That helped remove the idea that innovation was something extra that people had to do on top of their day jobs.”

Elvin: “What about subject matter?  Did you find that everyone was equally motivated by all of the initiatives that you wanted to engage them with?”

Harvey: “We quickly learned that people responded better to initiatives that had most relevance to them personally.  In many cases that meant that tangible, local issues drove much higher levels of innovation engagement amongst employees.

Tip #5 – Metrics that matter

Elvin: “So how are you tracking innovation inside the organisation?”

Harvey: “We’re a financial services company so unsurprisingly metrics, data and figures drive most of our conversations.  From Day One we decided to measure three key metrics:

1)   Number of ideas generated

2)   Number of ideas implemented

3)   Financial value of ideas implemented

“This data was very powerful for us as it meant that at any point we could quickly and easily demonstrate to the board the current return on investment.”

Elvin: “Can you share any of those figures with us?”

Harvey: “Sure.  Since launching, over 25,000 ideas have been implemented and have delivered an annualised financial value that exceeds £12.5m ($19m).  We aim to keep increasing these figures but we’re pretty happy with the curve that we’re on, based on 4,500 employees.”

Elvin: “And are you able to track those metrics down to a team level?”

Harvey: “Yes, and that’s been helpful to engage our senior managers. We publish an innovation league table on a regular basis that shows the relative performance of each division.  No-one wants to be seen at the lower end of the scale so it tends to have a positive side-effect in terms of motivating leaders.”

Tip #6 – Fuelling the innovation tank

Elvin: “So how do you reward people for their innovation efforts?”

Harvey: “We have two main approaches.  The first is simple.  We say ‘thank you’.  We’ve found that the mere act of recognizing innovative behaviour is usually enough for people to feel that their contribution is valued and for them to continue to be engaged in future innovation initiatives.

“The second approach is to run an annual innovation awards ceremony.  It’s an ‘Oscars-style’ event during which the people behind the best ideas of the year get recognized by the senior team.   We have found this to be hugely motivating for people – not only because of the company-wide profile that individuals and teams receive but also because we treat the winners like stars for a day and it’s huge buzz for them.

Tip #7 – Engage tomorrow’s leaders

Elvin: “Most people will be familiar with the idea of having a network of ‘innovation champions’ on the ground to help give momentum to initiatives across the company – and I know that’s and approach that you use.  What other groups can help embed the culture of innovation?”

Harvey: “We’ve found that the ‘talent group’ – the potential leaders in 5 years’ time – is a very important community.  They have the energy, desire and ability to kickstart innovation amongst the people around them.”

Elvin: “Absolutely.  These are the guys who are usually motivated to shape the culture that they are going to inherit in a few years’ time so they are usually a key audience to engage in strategic innovation initiatives.”


What experience and ideas do you have of stimulating innovation in conservative organisations?

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