How Innovation and R&D Can ‘Increase Awesome’

December 12, 2016

How do you build innovation muscle in a company already known for having serious R&D brawn?That’s the challenge at companies like Northrop Grumman, which have historically relied on research and development divisions to supply breakthroughs for customers — but which want to find ways to innovate in other parts of their business, and make the overall company culture more accepting of blue-sky thinking and experimentation.

Parsons has been at Northrop Grumman for 19 years, and he leads multiple change initiatives at the company, working closely with executive leadership to develop an environment and the capabilities to transform culture and drive breakthrough innovations. Northrop Grumman, with $23 billion in 2015 revenue, talks about its mission as “preserving freedom and advancing human discovery,” and among its products are the Global Hawk high-altitude drone, the James Webb space telescope, military radar, and cybersecurity software and services. (It’s also the company that developed the lunar module that carried Apollo astronauts to the surface of the moon.)

Parsons sometimes uses the phrase “increase awesome and decrease suck” to describe what his innovation team strives to do. “We need innovation everywhere,” Parsons told us. But “innovation isn’t limited to new technology and product innovation, although we like to focus on those. We need innovation to both get us new technology, new products, new business — that’s the increased awesome — as well as to drive affordability and efficiency and eliminate bureaucracy, and that’s the decrease suck.

Innovation at Northrop Grumman

[Innovation at Northrop Grumman] reports into our Global Operations Group, [to] a specific team in Global Ops that is focused on change initiatives of various types.

We’ve only been [reporting to] this team for one year. The innovation initiative has been going on for three years. This is the third business unit that it is in. We were originally aligned with the business development functional organization, with the intellectual property group. Then we moved into the Engineering and Global Product Development organization. Now we’re in Global Operations.

You may ask, what are the reasons for all those changes? It really comes down to aligning this initiative with the business leaders in place that were most passionate about making this happen. When you start a fledgling initiative in a large company, you want the leaders to be fully supportive and behind what it is you’re doing. We’ve aligned the passionate organization with the passionate people. That’s been a successful alignment.

The secondary benefit of that has been there are now multiple large organizations that feel a personal sense of ownership and deep insight into what we’re doing. It’s multiple people’s baby. As a result, they’re more supportive…

One thing you may have noted is that none of those three organizations was our R&D organization. That’s actually been asked internally: “Why wouldn’t innovation be in our R&D organization?”

Our R&D group is called NG Next, and that group is focused around four key areas: basic research, applied research, advanced design, and rapid prototyping. Their focus is on next-generation technologies and systems, not so much on the follow-on systems or enhancements or upgrades to our current contract.

The way I like to say this is NG Next is filled with full-time innovators. They get to do innovation all day long and are expected to. My team is more focused on innovation for everyone else, for the more than 20,000 other employees who have great ideas and want to make a difference, and for the other business units who actually need innovation to drive their business outcomes, and we become a partner for them in that process. My group helps connect innovators and the business challenges together to make magic happen, and the R&D group is focused on some very specific full-time things to drive some of those next-generation technologies.

Innovation and R&D Working Together

It’s really important that companies’ R&D groups and innovation groups work together. Let me summarize a few tips I would have along the lines of what has made us successful working together.

First of all, we don’t set ourselves up as competition for the R&D group. I think that’s really key. When it comes to discretionary funding, it can’t be a battle between the two groups for the same pot of money. By nature, you tend to be adversarial.Second is establishing clear roles and responsibilities. It’s really important to say to each team’s strengths, and don’t try to do the same things. What is the R&D organization great at? Let them do it. In our case, we’re having our innovation organization create value elsewhere, and letting R&D focus on what they do.

We’re working together on a broad strategy for how to drive innovation, invention, research and development. It’s a joint effort, which allows us to both get behind it.

Our innovation initiative, our innovation group, is about supporting the business, not setting up an empire. This is really critical, because I feel strongly that the innovation team needs to be about making the business successful. Innovation is a means to an end to achieve our overall business objectives. As such, we use innovation to enable business success, which will benefit all groups — including the R&D group.

What this looks like in our company is, the innovation team casts a wide net for ideas to seed fund and develop, but we always partner with the business units when it comes to evaluating the ideas that come in, and selecting the ideas we choose to incubate and seed funds.

Then we end up handing off the most promising ideas back to the business units for monetization. So it’s a partnership throughout the whole process where everyone wins in the end, because it’s the business units that end up moving it forward to make it happen.

Back to R&D specifically, I view the innovation team as a source of internal people and projects that can help make them successful. In the case of people, we’ve been able to discover a lot of under-utilized talent, [where] actually it would probably make more sense for them to be full-time innovators.

As such, we’ve had at least three employees who have been identified through our efforts that have already transitioned to working full time within NG Next, and so R&D is gaining direct value through the projects and the people that we’re funneling to them…

Driving Innovation in Established Cultures

Our founders in Northrop Grumman, of all the companies that Northrop Grumman is a conglomerate of — Northrop, Grumman, TRW, Ryan Aerospace, and a number of other companies as well — were all innovators and inventors. Every one of them had at least one patent.

That’s our roots. We all started that way. They were notable engineers, not big businesspeople. However, as with many businesses, the focus shifts over time to operational efficiency and innovation as a core value is minimized. In our business, the notable exception to the minimization of innovation is in new contracts and where we’re looking to meet specific customer requirements.I call this “innovation by necessity.” You have to innovate in order to win a contract. You have to innovate in order to get the cost down to execute the contract. It’s the urgent need that creates the necessity for inspiration and the spark for innovation. That’s always been a hallmark of our success.

What I consider our real challenge on the culture side — and a lot of companies have this — is to drive innovative thinking and behaviors outside these traditional silos, outside these traditional hard needs, and not just have innovation by necessity, but make it part of our thinking at all times on all fronts. This creates a very different culture, and one that we want, where innovation is truly part of our DNA, and everyone benefits from that type of thinking.

[How do you measure success?] The truth that’s in my mind as to whether the culture has shifted is whether there’s change in the trenches where the core work is getting done — in our case, on the aircraft production line, in satellite design reviews, in financial planning meetings and maintenance. This is really tough to measure. Fundamentally it comes down to whether employees feel a new sense of comfort with sharing an idea with their team. Perhaps one that they are not sure is very good, but the environment, the culture, encourages and welcomes those things, even to the point of expectation. “We expect you to be sharing ideas. We expect you to be constantly giving us thoughts about how to do things differently or better.”

Do you ever look at something and say, “There has got to be a better way?” The question is, is the culture creating the pull for you to take it the next step, and come up with a better way, and empower you to quickly try it. And it’s OK if you fail.

A second point is there’s a lot of research that indicates that a greater mixing of people outside their normal teams — and this is both internal to a company as well as external — is a real key to innovation, because it brings in diversity of thought.

We’re looking at multiple things like leader training and creating environments, including services and our workspaces, that will help drive the mixing between groups and will allow for new behaviors to change and new habits to form that will most impact the driving of the day-to-day innovation happening across our organization.

Competitions & Challenges

This has been a really exciting year because we have two really big internal innovation competitions that were really well received by employees and leaders alike.

The first one is based on the “Harry Potter” game of Quidditch. It was actually inspired by our president, who said, “I would love to make the Harry Potter game of Quidditch a reality by quadcopter” — autonomous robotic Quidditch.

We’ve created a whole internal competition that we call Quad Cup, and it’ll be a multi-year competition. This is year one, where we’re taking elements of the game and trying to autonomously— robotically, in the quadcopter— have teams work to bring that game to life. That’s been super fun. Mostly in people’s free time, on weekends and on nights. Hundreds of employees have participated in it and just geeked out over it. It’s wonderful.

The second thing, which we’re in the middle of right now, is called the Wildlife Challenge. We’ve partnered with the San Diego Zoo Global in order to develop capabilities to help them with longer observations of habitats for endangered animals. We held a competition similar to Quad Cup for our employees to develop specific capabilities for monitoring ice floes around polar bear habitats to help them with their research. As a matter of fact, the winning team recently arrived in Churchill, Manitoba, Canada to test their vehicle.

We also do smaller hackathons through our makerspaces, and there’s a YouTube video on our Northrop Grumman channel about a recent one where we helped a local artist regain his [ability to make] art through developing devices that could help him, because he has muscular dystrophy and has been deteriorating significantly.

Increasing Awesome and Decreasing Suck

This is my way of saying that we need innovation everywhere— that innovation isn’t limited to new technology and product innovation, although we like to focus on those.

We need innovation to both get us new technology, new products, new business — that’s the increased awesome — as well as to drive affordability and efficiency and eliminate bureaucracy, and that’s the decrease suck.I say that just to bring people back to the fact that innovation can affect every single thing we do, and we care about it all and we want to improve it all.

Makerspaces and Innovation Labs

We just finished year three [of our innovation initiative], and in the very first year we set up a makerspace in Redondo Beach, California, which is the headquarters of our group called the FabLab, which stands for fabrication lab.

This was really created by the people for the people, but it’s bringing huge value to our business. The rules of the game are, you get trained and you can use it anytime you want for work or personal use. We pay for the materials.The space has 3D printers and metalworking and woodworking and electronics workbenches — the machines you need…for rapid prototyping.

We have programs using it for rapid prototyping. We have internal research and development efforts, contract research and development efforts, and so it’s created this great swell of support, with our core business saying, “Oh, it’s so great having access to this for our users,” and then the people can also say, “Let’s just put together a project team to do whatever we want.”

It’s been a wonderful environment for this mixing of the people to create this culture of innovation, but then we also have seen a number of side benefits as a result of this. There’s also been tremendous increase in learning and training in these machines. Many of our engineers that do a lot of design work don’t have a lot of experience in building and making things. Basically they go in there, they learn about this for fun, but then it can influence their effectiveness in their day job, which is a very powerful lever.Then people who know how to do things … now have a forum and an outlet for teaching other people what they know, which is another great way of knowledge sharing within the company.

How to Find Your Innovation Champions

We’ve found that [innovators] largely reveal themselves. We have what’s called our innovation pipeline, which is crowdsourcing for ideas, and we find certain repeat guests over and over again that submit constantly. Therefore, we get to know them and know the quality of their innovations. As we fund projects and move those forward, we get to know people in a totally different way. This is where we discovered some of this hidden talent.

There’s a second way we’ve done this as well. It was at least in part inspired by the book “Creativity, Inc.,” where this group [of Pixar executives] called the brain trust is described. We have a brain trust as well, and it was essentially innovators nominated by other people at the company. We have almost 2,000 people on an e-mail list that have signed up to get regular updates on our innovation website. We went out to those folks and said, “Who are some great innovators you know that exist with these attributes that we can call upon periodically to come in and bring in diversity of thought into teams, [and] to help solve problems among our various business units?” We received like 500 names submitted that way.

Avoiding the “Not Invented Here” Mentality

Over the years, we’ve identified really great thinkers that are trusted people within each of our major business units that we know get the value of innovation and can speak on behalf of their organization, but be supportive of our efforts.

They’re part of the review team. All of the ideas that come in, they’re part of looking at those ideas to see if they have the potential of making us money or saving us money. Then we have that internal partner that’s part of that business unit that can be the conduit for an on-going partnership, as appropriate, depending on the type of idea it is.

Immediately, even at the early seed funding stages, we actually assign a project mentor or a project champion from the business unit — the group that we believe will be the business unit to eventually adopt and monetize that project…

That’s been a key part of our success, because they’re part of our project throughout the whole thing, helping to shape it. …Instead of it being a push, it’s a pull, from the business unit, because they’ve had a hand throughout.

That early partnership was really critical. The other half of the equation that I think is really key is talking to the business leaders in advance about what their hard problems are, or their unsolved problems are, and really focusing challenges and crowdsourcing around those that are specific to their stated needs and desires, and then driving those solutions back to the business through a partnership.

Those two elements are really critical to the success of partnering effectively and doing this hand-off effectively.