Marty Yudkovitz is one of those rare people who has worked at industry stalwarts (Disney and NBC), as well as Silicon Valley disruptors (TiVo, a pioneer of digital video recorders, where he was President). Up through 2015, Yudkovitz was Disney’s Head of Strategic Innovation, before retiring to serve as a senior fellow and visiting scholar at Duke University and the University of Virginia.
We spoke to Yudkovitz as part of our research for our latest report, “Creating a More Innovative Culture.” He also shared several slides that encapsulate his approaches to breaking through resistance to innovation in more established companies.
In a traditional organization, you get to be very good at something. You become excellent at the process. You get it down to a science. That’s how great companies become great, but it’s also an obstacle to innovation.
Any step a company takes to foster innovation is praise-worthy. But that said, a lot of what is going on in a lot of companies is window dressing, and doesn’t sustain. It’s about being able to say you’ve got programs going to your board and shareholders.
Innovation is a Tool, Not a Goal
True innovation requires a willingness to take risk. Innovation would be easy if it didn’t come with enormous downside risk.
My view of this is a little controversial … My view is that innovation is a tool, not a goal. You shouldn’t just say, “We want innovation!” Because the question is why, and what are your corporate goals?
Five different things impact an organization’s ability to innovate:
- Are you small or large?
- Are you a startup or highly-established?
- Are you in a young industry, or a mature industry?
- Is the company tech oriented or non-tech?
- Most importantly, are you a troubled company or a successful company?
GE, NBC’s parent company, and Disney were large, established companies in mature, non-tech industries, and already highly successful. All the stuff on the right side [of those spectrums] makes for the most difficult environment to create an innovative culture. And if you’re at the other end of the spectrum, like TiVo was — a small company, a startup, a young industry that they invented, completely tech-oriented — we never talked about innovation. It was all we did all day. It was just, “This is what we do for a living.”
An Innovative Culture Requires Rewarding Risk-Takers
It’s about setting priorities and rewarding innovative thinking and behaviors, because that comes with significant risk. The failure rate is far, far higher when you’re really innovating, and everybody who has the biggest salaries [in your company] got there by doing what they’ve been doing for 50 years.
If you’re willing to reward the risk, and reward the people, you will get an innovative culture. You give them a promotion, because their thinking was good.
You have to build [support for risk] into people’s bonus structure — reward people for taking chances and going outside the lines. When you do that, you’re walking the walk and not just talking the talk.
The Three Most Important Words in Corporate Innovation
At Disney, we set up this small guerrilla group to carry the torch of innovation. You keep it small. You have no operational capability, because you don’t want to scare the business units that you’re going to take over their job. We had no turf. We didn’t pose a threat. We had 10 people. So we could operate with great speed and simplicity, and the CEO, Bob Iger, loved it. We did this accelerator with TechStars. The idea, we claimed, was to bring in and mentor 10 small companies. But really, they were teaching us and mentoring us about how media and entertainment was changing.
Most innovation programs are bottoms up, driven by people in the trenches. But it’s much harder that way.
What are the three most important words to driving corporate innovation? Chief executive officer.
Slides: Techniques to Break Through Obstacles to Innovation