In this age of accelerating change, innovation is the only sure key to your company's long-term survival, and dissent is the key to innovation. Research we're doing for our upcoming book shows that companies that encourage a culture of creative and respectful dissent tend to outperform the market and lead the way not only in terms of customer satisfaction and loyalty, but also in innovation.
How important is innovation? A 2006 study by BusinessWeek quantified innovation's long-term affect on profits. Its choice of 25 leading corporate innovators achieved average profit growth of 3.4 percent a year, far above the S&P average of 0.4 percent a year. Innovation makes a big difference, and to benefit from it companies must learn how to encourage innovative ideas.
Google, Apple, and Toyota are among the companies that have figured out how to do this. Google is famous for requiring employees to spend at least 15 percent of their time on independent projects. And the company doesn't expect all these projects will succeed.
Failure is a key part of innovating. Yes, the inconvenient truth is that new ideas are never sure things. Without error there can be no trial. So along with tolerating dissent, the innovative organization must embrace the failures that are necessary steps along the way to discovery.
Creativity and innovation thrive on different points of view, so an innovative company has to not only tolerate but actually encourage dissent. Most creative people tend to be independent minded, antiauthoritarian, and usually nonconformists. Creativity involves mixing things up; and mixing things up is likely to generate disagreement and argument. So if you want your company to be truly innovative then you have to have creative people and you have to be able to handle conflict.
The Importance of Culture In our view, when your workers trust each other, your organization will be more capable of dealing with the widely different perspectives that are necessary to stimulate creative ideas. And, naturally, trust among employees is much more likely to occur if your culture is designed around cultivating the trust of customers.
Research has shown that better, more expert decisions are consistently made when a group is composed of a mixed number of experts and laymen, rather than 100 percent composed of experts. Even when solving a complicated engineering problem, a group that includes some nonengineers will generally outperform a group solely composed of engineers. Why? Because any group decision-making must balance two tasks: exploiting information already possessed by the group, and exploring for more knowledge. When a group is composed entirely of experts, they usually spend too much time exploiting their expertise and too little time asking basic questions and exploring for alternatives.
Innovations Versus Efficiency Interestingly, many leading corporate tools for cutting costs and improving operations tend to undermine a company's ability to cultivate dissent and divergent opinions. Variances from the known are threats to cost-efficiency. Consider the recent experience at 3M. Long hailed as a highly creative company, 3M invented a lot of things in many different technical areas, including masking tape and the Post-it note. But according to BusinessWeek's June 11 article on 3M's recent history, when a new CEO was brought in several years ago to buff up operations and cut costs, introducing Six Sigma to do so, short-term financial performance improved but the firm's ability to innovate seemed to have been undermined in the process. Six Sigma, after all, is based on the accuracy of information and the benefits of strict conformity, adhering to tight standards in all things. There is no room to allow for the serendipitous discovery—and all truly creative discoveries are serendipitous. There was no question that 3M needed to streamline its inefficient operations, but its current CEO is now swinging the pendulum back toward a more innovative culture, while attempting to maintain the healthy financial controls introduced using Six Sigma.
So, how can you gain the most advantage from dissent and differing points of view within your own company? Dartmouth Tuck Management School professor Chris Trimble told us "You must display a willingness to be a bit bizarre to get the juices flowing. Companies that are good at this, like Microsoft, Apple, and MLB.com (Major League Baseball's interactive group), create unusual interactions for their employees. They have offsite meetings. They mix people up."
If you want to stimulate more innovative problem-solving at your firm then we suggest, first, that your people must be capable of respectful disagreement. This means that a high level of employee-to-employee trust is necessary; and if you've followed our writings at all you know how important we think a culture of trust is for any customer-oriented company. But second, once you are certain that dissent is both respected and respectful, make sure all your major decisions are only made after considering diverse viewpoints and re-asking basic questions. Next time you form a team to tackle a vexing issue or problem of any kind, mix some newbies in with your veteran thinkers. And then throw some troublemakers into the process for good measure.
Because it's easy to forget the truth about innovation: Great minds think…differently.