In his bestseller, The Medici Effect, Frans Johansson argues that innovation is driven by the collision of diverse cultures, ethnicities, ages, genders and even industries, fields or disciplines. Johansson calls this the intersection – a place where ideas from different industries and cultures meet, igniting an explosion of innovation.
Companies that want to spark the fires of innovation, then, should actively encourage people from different backgrounds to work together on business issues that are outside their usual realm of experience.
Johansson himself embodies an intersection of cultural forces. He was raised in Sweden by his African-American and Cherokee mother and Swedish father. Harvard MBA in hand, he founded a software firm and a medical device company. Today he is an author, speaker and entrepreneur.
Workforce Insights recently spoke with Johansson about how human resources professionals can encourage intersections in their own companies and help encourage a culture of innovation.
WI: According to your book, diversity drives innovation. What are some practical ways for HR departments to change their companies’ hiring practices to increase employee diversity in terms of culture, ethnicity, geography, age and gender?
FJ: HR has an enormous role to play here. Companies need to staff for innovation, which means bringing diverse perspectives together. There are some standard ways to do that, including tracking the company’s level of diversity in terms of race, gender or even in terms of whether employees come from the same school or the same type of company or industry. That’s one piece for HR to think about in terms of recruitment.
But there’s also the idea of leveraging diversity, which means making managers aware of its potential and also actively encouraging employees to make these types of connections. Some large companies house a diversity function under HR, so that the role of HR is to work with affinity groups to leverage their insights.
An example of this is when Frito-Lay asked its employee affinity groups to look at all the company’s snack foods and combine them with something from their own background. The Hispanic affinity group came up with the guacamole chip, which ended up bringing in $100 million in revenues a year.
WI: But just because you hire people from diverse backgrounds doesn’t guarantee that they will naturally gather together; you point out in your book the tendency for like-minded people to seek each other out. How can HR encourage people from diverse backgrounds to work together?
FJ: If HR staged an event in which it gathered employees together from diverse backgrounds but had no real agenda, people would immediately congregate into familiar groups. So there has to be an underlying purpose, a reason why people should go outside their immediate realm to connect with somebody else. The most efficient results come from asking these groups to meet some sort of challenge or pursue an opportunity or otherwise give them something to focus on. Just throwing them together in a room won’t do it.
Imagine having an exercise where you bring together people from several different disciplines or even different industries and ask them to generate new ideas on a subject like recruiting or customer service or new product development. See what you come up with.
Usually, managers who put together strategies for, say, marketing, come from that discipline and tend to overemphasize their own background. But because HR is so cross-functional, it can naturally bridge gaps. HR has a huge opportunity to bring together people from different parts of the organization, and it’s something they should do more often.
I’m not sure HR is always used to the best effect; it depends on how it’s viewed in the company. If HR is seen as managing the company’s talent pool, it would have the power to accomplish something like this.
WI: How can HR be instrumental in helping the company capture and follow up on ideas generated by intersections?
FJ: That’s tricky, because HR has to work within the culture or system that’s developed within the organization, and the execution phase of innovation can go in different directions. HR is most effective when they can bring in very diverse talent, make sure that talent is leveraged and then spread the message of successful ways in which intersections happen in the company.
Remarkably, these stories are often very well-kept secrets. For instance, at Volvo, HR facilitated an effort to create the first concept car developed entirely by women engineers. One of their innovations was to put the washer fluid in the side of the car, like the gas tank, because women don’t like to open the hood of the car. It sounds so simple, but no one before this had questioned putting it under the hood.
The thing is, no one at Volvo heard about this for a while. Now it’s told over and over, and everyone in the world knows about it. So that’s the execution piece that HR can do very well – facilitate the process but also tell the story.
WI: Is it important to compensate intersection-generated ideas differently from other accomplishments?
FJ: I think that makes sense. However, while it’s tempting to reward success and punish failure, innovation requires us to encourage people to generate ideas and execute ideas, which means they shouldn’t be worried about success or failure. In order to encourage that, you have to reward successes and failures equally. And that’s what innovative companies tend to do.
If you reward people simply for coming up with ideas and making them happen, then failures and successes are both rewarded. If you reward people only for their successes, you’ll encourage employees to try to predict successes, which means you’ll get only incremental successes, and your competitors will eat your lunch. You need to allow people to experiment.
WI: You mention that companies either purposefully or unconsciously encourage employees to continue working in a position or a specialty that they’ve mastered, since that’s where they seem to offer the highest value to the business. And you also point out that this discourages employees from having diverse experiences and thus finding “intersections.” How can HR departments help employees structure career paths that encourage more diverse experience?
FJ: One way is through job-rotation programs. The key here is that when employees make that kind of switch, there needs to be some support or they’re set up to fail. Traditional career paths aren’t the best way to foster intersection-type thinking.
Here’s an example: In my book, I wrote that a company typically wouldn’t allow someone who specializes in grain trading to work in health care management. Later, I noticed that at Cargill, the company in fact did combine grain trading with health care, so that if a farmer commits to a certain amount of commodities for trading, Cargill will set up a specific health care account for him, and add to it each season.
I tell you this because in the book, I just randomly mentioned two fields that seemed like they’d be so separate from each other, and a year after that, that connection happened. It shows that if you try to predict where the next thing will come from, you won’t find it.
WI: You say that in order to be successful at “intersections,” we must have many failures. How can HR encourage employers to accept that?
FJ: Have your leaders talk about their failures. What happens today is, someone’s boss says, ‘You know what? We’re a risk culture.’ But if this person has never mentioned an occasion where they failed, no one will try to do it. A common notion in leadership is to try to emulate your boss. So if your boss never talks about failure, you’ll never talk about it either.
Mary Brandel is a freelance writer based in Newton, Mass.