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Modern Marketing Innovation In Depth

'The Ferrari in the garage': why a cultural divide can support in-house brand innovation


By Katie Deighton | Senior Reporter

May 4, 2018 | 7 min read

When it comes to sparking a culture of innovation in-house, brands and agency leaders advocate marking out a healthy amount of distance between a distinct innovating team and the rest of the company.

Protecting a company’s cultural divide may sound counterintuitive in an age where collaborative working, hot-desking and co-working spaces are the norm. Yet brands including Santander and Cancer Research UK believe it’s this space from the routine operations of a brand that allows an innovation department – or leader – to do their job.

“Emergency room, business as usual, quick judgement, critical thinking... they are the antithesis of innovation,” summarised Cancer Research UK’s head of innovation, Mel Nurse. “What you need is a greenhousing response."

In other words, brands need to make a safe space for process and product ideas to grow, with a barrier to protect them from the threat of speed and the business demands of now.

Catalina Cernica, the head of Leo Pharma’s Innovation Lab, has made the barrier between her unit and the wider pharmaceutical company incredibly clear. “Even though we exist only on paper (we’re not a separate legal entity), we have our own little logo, we have a separate office to headquarters, we have our own coffee machine – which is better – and we really build our identity.

“We not only embrace the cultural gap, we create the cultural gap.”

Cernica’s statement is almost a brave one to make but it’s one that Lizzie Mandeno, co-founder of consultancy Curve agrees with, at least on a daily operational level.

“It's always hard when you are tasked with producing new things,” she said. “While [innovation departments] clearly need to be routed in the organisation's needs and customer challenges, the everyday processes and hierarchy can so easily stop things before they've really even started.

“Some degree of separation gives literal space for ideas to breathe. The challenge of course is that if that separation is too great or too prolonged it's then impossible to get them back in the door.”

Redefining boundaries

Santander – a company that employs nearly 200,000 people – has found that the bigger the organisation, the bigger the issue of integrating an innovation team. The bank reworked the mechanics of its own innovation team in order to hurdle issues that arose when it began to scale – particularly when it came to getting buy-in from middle management.

“We find it quite easy at a board level... to draw emphasis on things that need to change,” said Justin Hannemann, head of new product and service design at the brand. “And when you got to the call centres or into the branches, generally change is not an issue. So a lot of our work is about how to create more emphasis on change and urgency within the rest of the business.

“We found ourselves in these bottlenecks where we couldn’t move things forward. One of the other biggest challenges was working with people who didn’t necessarily know what our job meant.”

Following the transformation of the team’s processes (developed in five days at an offsite Google Design Sprint prototyping session), Hannemann’s biggest takeaway has been to understand how the size of a company affects how it should approach innovation.

“If you’re a small team you can easily work out innovation between the two of you,” he said. “But if you’re a big organisation... really don’t underestimate the idea of designing for process.”

It's a sentiment echoed by Siemens, which is edging towards employment rates of 350,000. Stephanie Chalmers, head of content and newsroom at the tech firm, found that when recently implementing an innovative content strategy, "the biggest obstacle was the organisation and the people in it".

"We realised that all the plans we had meant nothing because the culture wasn't ready to take on change."

Cernica advocates taking the language of innovation and translating it into traditional management speak to surreptitiously push through a cultural change.

"We underestimate the power of KPIs, and the middle management layer is driven by KPIs," she said. "If you have the support from the upper level, we too often forget that we have to ask them to make space in the KPIs in the people underneath who deliver every day."

A case for collaboration

Nevertheless, keeping the innovation department firmly locked in a basement can ala The IT Crowd can lead to issues – namely ones of confusion and misunderstanding, which in turn can lead to frustration on the innovators’ part.

Nurse noted how traditional senior teams can find it difficult to work with innovation departments because their semantics do not always alight.

“There are very different management practices [between the two],” she said. “They ask: ‘When am I going to see the benefit?’ And in the earlier days I used to get people asking: ‘Can you come and innovate our team?’ and it’s like, why? And they’re just like, ‘Oh if you could come in and fix everything that would be brill.’ Whereas now that’s changing.”

Cernica has also experienced the expectation to “innovate everything” and likens it to having a “Ferrari in the garage”.

“They want to take it to run to Sainsbury’s and back,” she explained. “But that’s not why we have the Ferrari.”

Yet for Jassim Ahmad, the former global head of innovation at Thomson Reuters, communication with the rest of the organisation was key to seeking out the best opportunities. The difference was who he communicated with.

“When I first started, the first thing I was encouraged to do was make communication,” he said. “So I put out this email – a manifesto – and it was not smart at all. People read the project as being me. After that I really started trying to do things from the bottom up and it worked much better. Because hell hath no fury like a middle manager who has not been consulted.”

He continued: “When I encountered people who were on other sides of the room or in another part of the organisation, very often they felt they had not been heard. When you listen to them they’re so appreciative – so not only do you learn a lot but they become very loyal to you. Over time, I found people started coming to me. And with innovation that’s a really good place to be in an organisation.”

But for agencies, and other places where ideas are the economy, keeping a cultural gap between innovation and business may be detrimental. James Whatley, planning partner at Ogilvy UK, notes that even building an innovation ‘department’ can imply no-one else should be thinking about developing new products, processes or methods.

“The answer to 'We need innovation!' shouldn't ever be 'Sure! Here's another silo!' – ever,” he said, adding that even outside of agencies, “having any kind of department – innovation or otherwise – that seeks or even takes pride its cultural divide away from the rest of the business is folly.”

“The hardest part of innovation is the implementation of the new solution,” he said. “Successful implementations need cross-functional buy-in and support. Culture, with a capital C, should be company-wide - not departmental."

Nurse, Cernica, Mandeno, Hannemann and Ahmad were speaking at Innovations Social's Innovation Stories

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