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Inspiring Minds

Inspiring Innovation Through Culture and Environment

To be successful, innovation must have a nurturing environment in which to thrive. Failing to provide employees of your company with policies and practices that encourage the creativity and risk-taking required for innovative endeavors stifles their ability to do their best work and present the best results. At this year’s Edison Awards, Software Motor Company took home Gold in the Energy and Sustainability category and the Smart Building Solutions subcategory with their revolutionary approach to electric motors, an unprecedented innovation in the field of motor technology. On the Inspiring Minds podcast, Ryan Morris, Chairman of SMC, offers his advice on creating a culture and environment which encourages innovation on a company-wide level.

Varying Perspectives

One important ingredient to stimulating innovation at your company is bringing on board people from a wide range of different knowledge bases and backgrounds. Commonly cited as one of the most important elements of a successful innovative team, cultivating diversity has many advantages when attempting to create novel solutions to problems that occur in the real world. As Ryan explains, it can often be the case that the solution to a major problem comes from an unexpected source. In the case of SMC, one major obstacle they faced in developing their switched reluctance motor system was ultimately overcome through the work of one brilliant Silicon Valley engineer with little formal training in motor technology, rather than the team of academics that had worked on the same problem for years. While the academic approach had brought them a long way, the unique perspective provided by that engineer pushed the project to the next level.

This is one concrete example of diversity being indispensable in the development world. That said, it can also be useful when marketing your innovation to its intended audience. Whatever the high-level goals of your product may be, it will always necessitate getting it into the hands of those who can use it. A team consistent of a wide range of backgrounds may include individuals with experience in your target field, providing a considerable edge when attempting to understand and market to the customer’s wants and needs. This ultimately helps your innovation achieve its intended purpose and is necessary for it to be considered a successful endeavor. As an example, Ryan recalls taking onboard the former owner of an HVAC company who was indispensable when the time came to bring their motor system to the market.

Acceptance and Empowerment

Another important ingredient to innovation identified by Ryan is creating an environment that is accepting of failure and empowers employees. Innovation, by nature, requires the taking of risks and will inevitably result in many failures before success is finally reached. In an environment unaccepting of failure or unsuccessful attempts, employees are less likely to take these vital risks, hindering progress and lowering the likelihood of true making true innovations. In Ryan’s words, “If you want to have a company that you make sure has no innovation, just make sure that somebody gets fired if their thing doesn’t work.” One of the ways that SMC creates this culture of acceptance is through extending their trust to employees by having very few fixed policies at the company, which he describes as being outside of the company’s value system. This trust is not blindly given; Ryan states that it requires a great deal of communication and the cultivation of a common language used by everyone.

Yet, this effort to empower employees has paid dividends for SMC, as evidenced by the outcome of their approach to the COVID-19 epidemic. During this tumultuous time, SMC offered its employees the opportunity to accept a reduced salary and essentially invest in the future of the company. Eighty-five percent of employees took this opportunity, with an average deduction of thirty-eight percent. Ten percent of employees are even working for zero compensation during the quarter. This would not have been possible without the cultivation of an environment nurturing to employees and their innovative endeavors, which inspires belief in the company and the project’s or projects’ goals.

First Principles Leadership

In Ryan’s mind, however, the most important ingredient to creating innovation at your company is leading the team in a direction that focuses on thinking from first principles. This is important for two reasons. First, approaching the problem you intend to solve with your innovation from a first-principles perspective allows you to test it against those principles and ensure that it is something that can in fact be done. In some cases, the technology or enabling factors components for the project simply do not exist yet. Neglecting to test your issue against first principles can lead your team down a path with no direction, ultimately wasting the valuable time and effort of the brilliant people undertaking the project. Even the most intelligent individuals cannot overcome baseline impossibilities.

Second, reasoning from first principles allows you to keep the ultimate mission of your project connected to the individual efforts made and risks taken to see it to completion. This not only serves the purpose of keeping innovative efforts moving in the intended direction but also inspires employees by providing a clear picture of that long-term direction. By doing so, employees are assured that their work will amount to something truly meaningful that has a lasting impact. Having a mission that is not only directly tied to your project but motivates your employees to work hard and take risks is crucial to achieving any sort of innovation.

SMC’s ultimate mission is to convert all motor systems in the world to the most efficient models possible to reduce waste and increase sustainability. Reasoning from first principles and keeping this mission connected to every step of the process brought them to winning Gold in a category specifically geared towards it. People are rarely motivated to action by unclear goals and will avoid experimentation if unsuccessful attempts are punished. Ryan is adamant that the company’s culture of acceptance and trust among employees was indispensable to this success, and neglecting or refusing to cultivate one within one’s own company will almost assuredly prevent any sort of innovation taking place.

Listen to Ryan Morris’s Podcast