93: How Is HR Driving Innovation In Your Organization?

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Innovation expert Tristan Kromer connects the dots for HR Leaders between the company innovation strategy and the role that HR can and should play. He discusses the importance of an experimentation mindset and culture, offering practical suggestions that HR can leverage. 
 
Tristan Kromer - Episode 93 - HR Studio PodcastAs a lean startup coach and founder of Kromatic, Tristan works with teams and leaders to apply lean startup principles and build innovation ecosystems. 
 
Tristan has worked with accelerators and innovation leaders in dozens of countries from Nest’UP in Belgium to Fast Forward in Palestine. He has worked with companies ranging from early-stage startups with zero revenue to established businesses with >$10M USD revenue (Kiva, Cancer Research U.K., TES) to enterprise companies with >$1B USD revenue. (Unilever, Salesforce, LinkedIn).
 
Tristan regularly speaks, appears on panels, and gives workshops internationally with organizations such as the Stanford Center for Entrepreneurial Studies & D-school, Global Product Management Talks, Lean Startup Machine, General Electric (GE), and more.
 
Listen (above) or watch the video (below) to catch Denise's interview with Tristan
 
 

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Podcast Transcript

Tristan Kromer on HR Studio Podcast Denise Yosafat:
Welcome everyone to HR Studio Podcast. I'm Denise Yosafat, your host for today's episode. And over the next 25 minutes, we're going to explore the topic of innovation transformation and how HR can play a key role in innovation. Joining us in this lively conversation is our guests for today Tristan Kromer. Welcome Tristan.

Tristan Kromer:
Thank you very much, Denise. Nice to be here.

Denise Yosafat:
Nice to have you. Let me tell the audience a little bit about you. Tristan is the founder of Kromatic, which specializes in innovation transformation. He works with innovation teams and leaders to create amazing products and build startup ecosystems. He has worked with companies from early stage startups with zero revenue to enterprise companies with over 128, what, billion dollar ... Million-

Tristan Kromer:
I don't know about 128 but certainly over a billion with some of the Fortune 100.

Denise Yosafat:
Yeah, absolutely. Including Salesforce, Walmart, Fujitsu, and LinkedIn, to just name a few.

Tristan Kromer:
Yeah.

Denise Yosafat:
So a lot of experience in this field. So let's begin. I've worked with companies in the past regarding innovation and speed to market, but that was in the past and things have changed a lot since then. So how can companies today innovate faster?

Tristan Kromer:
I mean, I think the case in point is that the environment is changing rapidly. So it's almost not so much innovating faster, it's just trying to keep up with where the market is going, particularly if you're dealing directly with consumers. The pace of change is just kind of overwhelming. Whether it's different preferences of food or hair care products or web services products, social media, everything is just such a rapid clip that companies really have to have a direct line of connection to their customers. Otherwise, they're going to quickly find that they're building, what is the phrase, building yesterday's products today.

Denise Yosafat:
Right, right. Yeah. And so what are some of the things that executives can do to be really good in dealing with innovation and disruption? And by the way, we're energy efficient here so.

Tristan Kromer:
Just wave your hands occasionally and make sure the lights are on. It helps me. I'm from New York, so I automatically gesticulate and keep all the motion sensors activated. Executives can do so many things to help encourage innovation in their environment. One of the kind of most obvious things, and I almost hesitate to say this out loud, is actually have an innovation strategy because a lot of people think that they have an innovation strategy and their strategy is simply to kind of yell at people like, "Go innovate, go do cool stuff." And that's not really an innovation strategy.

Denise Yosafat:
That doesn't work.

Tristan Kromer:
No, no. I mean sometimes it works. I guess it depends on your team members. But I mean, having an innovation strategy meeting really means having a vision of the future, understanding the trends that are coming, both societal and technological and geographic, geopolitical. Having a vision of how that impacts you and then actually allocating resources according to that strategy. And that's, again, very sadly just not something a lot of executives do. I worked with one company that was actually a pretty small one, but it was really indicative of this type of problem where their strategy was to grow. Like that was their strategy like, "We need to focus on growth. Our strategy is to grow our company." Which-

Denise Yosafat:
Well, that's very defined, isn't it?

Tristan Kromer:
Very well defined to begin with, but even if you kind of get past that and say, "Okay, fine, let's all just focus on growth", maybe that's a kind of strategy. Then if you looked at who was allocated to the growth team, and there was a growth team, out of the 100 people that they had in the company, there was a grand total of one person on that growth team. So it just kind of shows you immediately that whatever their strategy, they were not executing it very well. And that's the case with a lot of companies that you hear from almost every company out there that they're very innovative and they focus on innovation.

Tristan Kromer:
But if you look at the number of people, even in 100,000 person company, if you look at the number of people who are fully dedicated to an innovation project, like they have that project to focus on and nothing else on their plate, maybe you can count that on two hands if that. Most people are split among nine or 10 different core projects and then the innovation projects is really something that they have to be extremely passionate about and have to do on the weekend. And that's fine for some people, but if you really want to make innovation a pillar of your company, then that's not going to cut it.

Denise Yosafat:
Right. So, it seems so obvious, right? It's like you need dedicated people to really do it right. What is HR's role since our audience here are rising HR leaders? What do you see is HR's role in making sure that they're fostering that kind of innovative culture, innovative company? What can they do?

Tristan Kromer:
I mean, first of all, obviously HR is very different in a lot of different companies. So I will make some broad blanket statements that almost certainly do not apply to everybody. I think the challenge right now is that a lot of HR, particularly the way I was taught HR, was very kind of operational to begin with, it wasn't very strategic. And I think HR needs to be a lot more strategic in its thinking. HR needs to be thinking about what is that vision of the future? Aligned with the executives, what is that innovation strategy? Do we know what the innovation strategy that the executives are thinking are? And what are those core competencies that we need to build in order to make sure that we're ready for the future? That is first and foremost and that's, I guess, a little bit obvious.

HR Studio Podcast Quote - Tristan KromerTristan Kromer:
But the second thing is really kind of still obvious, to make sure that they're not the obstacle. In the teams that I typically work with, it's usually not in the HR department, which always kind of surprises me a little bit because you'd think the HR department would be involved in setting new KPIs for those innovators. Like changing the criteria by which they're evaluated for promotion. If I'm an innovator and I work on a project, and I successfully proved that this project is a terrible idea and we shouldn't do that, is that a win for me in the HR playbook? Is that going to help me get my OKRs achieved? Or is that actually ... Does that look bad on my resume as far as HR is concerned?

Tristan Kromer:
That's something HR needs to deal with. And very often, when it comes to digital transformation, HR is not involved in that. HR is in fact viewed as somebody that the transformation team wants to keep at an arm's length because there really is that perception that HR is just this operational churning through the motion and they're not really involved with the strategy. And so I think HR has to have a seat at the table, but they have to start by going ahead and listening to what people are actually trying to achieve and making sure that they are able to adjust the processes and not just enforce them.

Denise Yosafat:
So, I'm always thinking about that seat at the table and becoming a true business partner to finance, to marketing, to the innovation teams, to everyone. Having that true seat at the table versus let's just have this off-take HR operational kind of thing. So in terms of having that true seat at the table, and having the gravitas to help build the strategy, not just react to the strategy, what is your thinking in terms of, HR, this is what you should be thinking about doing if you really want to come in and help be part of that strategy, help build that strategy. What's your advice?

Tristan Kromer:
I mean, my first advice would be pretty much for everybody, including my advice to myself, is always to try and listen as much as possible and try and understand exactly what is going on. Like getting out of, it doesn't quite make sense to say getting out of the building, but getting out of the HR department and going to, whether that's the factory floor or the marketing department or to the executive session, and really asking, "What are the core capabilities that your teams are missing? What are you struggling with, with your personal career goals? What are your personal career goals?" Those are things that HR sort of does naturally, but there's this inertia with a lot of departments where it's kind of you wait for people to come into your office, and it needs to be much more proactive.

Tristan Kromer:
So it should be the case that HR is the first person to notice that the, again, not to overly generalize, but I worked with a lot of older companies, and these companies will send their executive teams to Silicon Valley for a sort of little petting zoo and it's 20 gray-haired gentlemen. And these gentlemen have never used Snapchat, it's not a very diverse crowd. It would be nice if the HR department were the first people to point this out and say, "You know what? We need to get everybody at least understanding the basic technology the consumers are doing. Perhaps we need to implement a reverse mentorship program where the younger teams are actually mentoring the older people on technology." Now, I have a problem using Snapchat. It's actually, I think, designed to prevent my generation from effectively using it.

Denise Yosafat:
I just [inaudible 00:11:16] on Instagram so ...

Tristan Kromer:
[inaudible 00:11:17] on Instagram. But we need to be on these trends. We need to understand what sort of communication channels and marketing channels are opening up that we've never been exposed to. We need to understand how people are meeting in virtual spaces with avatars and playing around and understand that these are things that might actually impact us. Otherwise, that innovation strategy that those executives come up with is not really going to be based on consumer demand and consumer behavior. So, HR just needs to be out of their offices and on the factory floor.

Denise Yosafat:
Proactively take a role.

Tristan Kromer:
Yeah.

Denise Yosafat:
Being much more proactive about it. What about innovation as a competency? A lot of people see innovation as not just something to do but a skill to have. So how do you speak to that?

Tristan Kromer:
Yeah, I think there are many different skills that are involved in innovation. Obviously, the first and foremost being just simply that basic experimentation mindset that's really come of age now with Lean startup and with agile and design thinking. It is a way of breaking down complex problems into simple questions that you can then run an experiment and try and answer. Not by writing a 60-page business plan, but by again kind of getting out of the building and seeing what the consumers actually do when presented with certain stimuli, certain product, a landing page or what have you.

Tristan Kromer:
And so, that way of thinking is very different from kind of check the box, follow the procedure, follow that standard operating procedure. And that's first and foremost what HR needs to help people acquire. And it's not a mindset that can be acquired by kind of the standard, watch this video and take this 10 survey quiz. That's sort of the compliance-based training. It is something that very much needs to be experienced, because it requires people to have an idea, be very convinced that their idea is correct. Kind of realize that they are completely and utterly wrong. And then, and only then, are they going to get the idea that experimentation and moving quickly and testing things is a good idea. So, that's the first for skills they have to master.

Denise Yosafat:
So you talk about experimentation, we often think about it in developing products.

Tristan Kromer:
Yes.

Denise Yosafat:
And HR facilitates developing people. So what can we learn from kind of product development, the cycle to learn, redo, learn, redo in the way we do innovation and in approaching innovation? How can we use that in the way we approach developing people?

Tristan Kromer:
So, I love that because I think it's very directly analogous. In fact, the way I always try and approach culture change is to approach it as a form of experimentation, even though it's a very complex problem. But even when you're just talking about the simple things like, "How do I help people build skills or how do I onboard people into my company effectively?" There's a lot you can do there to apply that experimentation mindset. And if you want an example, which I love, everybody, go to wealthfront.com. Wealthfront is a FinTech company. Like wealthfront.com/engineering. I don't know too much about the inside of Wealthfront, but if you look at that page, that is their recruiting page for engineers and it is very much evident that that is a landing page to them, or they're looking at the conversion rate to that landing page.

Tristan Kromer:
There's a clear value proposition on that page. That page says very specifically, "We don't have a deploy process, we have a deploy button." Value proposition conveys to any engineer who looks at it that this is an agile shop, that we run in very fast sprints, that there's not a lot of process, and that you can deploy stuff live to customers very, very quickly. It is not just a listing of job opportunities, it is a page where they optimize the value proposition to prospective employees and they're looking at that conversion rate. And that mentality, I think, is absolutely brilliant, and we can bring that same mentality into the onboarding processes into our company.

Denise Yosafat:
What it also says, "Listen, we don't have all the answers. We're looking for you to be innovative and finding answers and making your mark in how we proceed. So we're not giving you a set program and this is how you fit in the box, we are going to take you as you are and value those skills and what you can do for our company with them."

Tristan Kromer:
Yeah. And think about how much of a different transaction that is from, "Here's a page, here are the requirements you need to fill, apply for a job, we will pay you." That is a fundamentally different value proposition whereas the value proposition you're talking about is, "Who are you? Are you somebody who likes to move fast and create things? We're the type of company where you can flourish. We have a value proposition to offer you that goes beyond money. We're looking for certain types of people, we're looking for a certain mindset, and that's what we want to attract."

Tristan Kromer:
And so they've honed that value proposition to kind of align with the type of people they want to recruit as opposed to just saying, "Do you have an MBA, do you have a CS degree," whatever it is. And so, think about that in the onboarding process. Again, like what happens the first day you come into the company? Are you set up for success? Are you immediately paired with a mentor? Are we getting feedback on how our mentorship is doing? So, I mean I think there's so much that can be done in HR. And I'm sorry, I realize I'm rambling, but I get very excited about this particular topic.

Denise Yosafat:
No, I think it's right on point because it's how do we get the right people and attract the right people? To begin with, how do you make it compelling for them versus just filling out a job description or filling out an application for a particular role? How do you make it compelling to them? And then how do you keep them in your company as innovators? And attracting them in the first place is step one. And then when they get there, how do you onboard them and how do you give them opportunities where they can shine with their innovative thoughts?

Tristan Kromer:
Right. So, I've got two experiments that I would challenge any HR leader listening to this to do.

Denise Yosafat:
Love it.

Tristan Kromer:
So the first one is very, very simple and it has to do with the ... Everybody has some PowerPoint with like 10 values of the company or 10 cultural hallmarks of our company. And so, here's the test. You've had that presentation, all the executives have signed off on it. These are culture, they've been there for years. First test is go to any 10 random people in the company and ask them if they can name those values.

Denise Yosafat:
I thought you were going to go there [crosstalk 00:18:41]

Tristan Kromer:
That's the first one. Okay. So, firstly, they probably won't be able to name most of them. But secondly, go and ask them, even if they get them, I would show somebody just one of your company values and then just show it to them, show it on a piece of paper, whatever it is, and then take it away and ask them to explain it back to you in different words. This is something we call a comprehension test, and see if their understanding of ... When you write down the value of "innovative", that's almost inevitably one of the corporate values that somebody has. It's just like "be innovative, be more innovative." Does the person understand what that means in the same way that you understand or that you intended that to mean? Do the 10 people that you asked to explain what does "be innovative" mean, do those explanations line up? Because if everybody has a different understanding of what innovation means or courageousness, or whatever your company values are, then obviously nobody's implementing what you intended if everybody understands a different thing. And I've done that in a company, and it was very entertaining.

Denise Yosafat:
I'm sure it was very eyeopening. So, what should HR help the organization do instead of that? Instead of having the list of values and the people not necessarily understanding what those values mean. How do we go across instead what the company needs from the people?

Tristan Kromer:
Well, I'm not saying having those values is a bad thing. What I am saying is that that experimentation mindset, if HR is truly going to absorb that, then you have to have some sort of metric for what success looks like. So, if a goal of the HR department is to make sure that these company values, whatever they are, are enacted in real behaviors, then obviously a prerequisite to those becoming behaviors is that everybody has to understand them. Prerequisite to everybody understanding them is everybody has to actually know what they are. So, we can measure progress towards that goal by looking at kind of what are those first steps? Have we successfully communicated?

Tristan Kromer:
If I explained this value of courageousness to everybody, is everybody going to have the same understanding of what type of behavior that actually means, what they would actually do, in their day to day job, to demonstrate courageousness? And so, I can improve my explanation of courageousness or my presentation by instead of just broadcasting it to 100,000 people, I could just take five people and run this sort of test and really try and make sure that I'm explaining courageousness in a way that makes sense. And perhaps that just means by giving an example, "I will be courageous enough to tell my boss when I think they're wrong." Maybe it's just that, but if we can't explain and we can't measure, and we can't know if we're correct or if we're going on the wrong path, then we're not really doing experimentation. And too much of kind of HR internal communication strategy, is just to kind of tick the box of, we did the webinar, we sent out memos. And nobody's actually looking like, "Well, what percentage of people actually opened our weekly newsletter?"

Denise Yosafat:
Right. It's looking at the metrics and it's also avoiding assumptions.

Tristan Kromer:
Yes.

Denise Yosafat:
Oh, we've got it, they know what that means.

Tristan Kromer:
Yes, exactly. So, that's one experiment which I would challenge everybody to do. And I think it's very eyeopening. I have yet to get a room full of people who agree on what innovation means at the beginning of a day. By the end of the day, hopefully they all agree, but at the beginning of the day, they never do. And the second challenge-

Denise Yosafat:
And it may mean something different for different companies.

Tristan Kromer:
Yes, absolutely. Right. I'm not going to presume that innovation means the same thing at a high tech company as it does in a mining company. It's going to be very, very different. Now, perhaps innovation is just making sure that the mine stays open and is highly productive and at certain amount of throughput.

Tristan Kromer:
The second kind of experiment I would recommend that everybody do, and that I will freely admit I have not convinced anybody to actually do this, but I'm really hoping. So get that big chart of everybody's career path, the one which kind of on the X axis is usually time, like the number of years they'd been at the company or the level that they are in the company, seniority level, and then the amount of money that they make or the seniority level. So, the longer somebody is at the company, usually this line should be going kind of straight up.

Denise Yosafat:
They would hope.

Tristan Kromer:
Would hope, right? And now, try and track what happens on average when somebody is on an innovative project that fails. Does that line, does it arc up because now that person has demonstrated a lot of entrepreneurial spirit and figured out something that doesn't work and now has gained some valuable skills, or does it arc down? Do they get punished by trying to innovate? And I think that data is going to say something very profound about the culture that you're working in, and there's a wonderful metric to evaluate how innovation is perceived in your company. Because I guarantee if that line arcs down, everybody in the company knows it and they're probably scared to be assigned to one of those projects.

Denise Yosafat:
Yeah, I mean it's a good point because if people are punished for risk taking, which is really what it's all about. You're risk taking when you're trying to be innovative, you're doing experimentation. As we all know, experimentation has failures. You have to fail, fail, fail before you succeed often.

Tristan Kromer:
Yes.

Denise Yosafat:
If you're punished for that, why do it?

Tristan Kromer:
Yes, exactly. And so having that kind of hard data to back up what it was pretty clear talking to most people in most companies, there is some level of palpable fear of kind of being the one who might be the scapegoat for that project, I think it was very powerful and should be becoming more standard practice.

Denise Yosafat:
Yeah. So, on our final couple of minutes together, how can HR leaders help overcome that fear? What can they do?

Tristan Kromer:
I think ... So, if we're going to speak specifically about fear, I think the most powerful thing that anybody in the company can do to help reduce fear is to be transparent about it. And in particular, to be transparent about failure and kind of what that means because everybody in the company has some story. And I guarantee you, the last mistake from our CEO, is probably going to be a million or billion dollar mistake.

Denise Yosafat:
Yeah.

Tristan Kromer:
And if that CEO is willing to get up on stage and say, "Here's the last time I really, really screwed up." Not as, "Oh this was a step to learning," but, "Look, I've screwed up. It is a normal thing, but I learned from it." Then that is a very powerful message that we can take. So if HR can take any steps to making that normal, and I don't know what the rating of this is, but there is an event called F'Up Nights. You can put it in the forward if you want to google it. There's-

Episode 93 of HR Studio Podcast - Airing NowDenise Yosafat:
I'm glad you kept it at that.

Tristan Kromer:
So F'Upnights.com is a type of event where people get up and talk about their failures. And it's kind of a worldwide movement and is one of the first things that I think HR can look into, is to host one of those nights internally.

Denise Yosafat:
Very cool. Well, I don't want to use that word for the rest of our interview. We'll close it on a positive note, a non F up note. But Tristan this has been fascinating. I think it speaks to culture change, it speaks to innovation and truly making it happen, and I think it also gives part of a roadmap for HR leaders on what can you do, what kinds of things ... And that small thing about having that kind of night where people can talk about, it's a small but powerful step in creating a more innovative corporation or company.

Tristan Kromer:
Yeah.

Denise Yosafat:
I could talk more about this. I know we're out of time. I want to thank you for this fascinating discussion and-

Tristan Kromer:
No, thank you.

Denise Yosafat:
And I'm glad we could connect and that we got everything working right. And I want to take a moment to speak out to our HR Studio Podcast listeners. If you're not a subscriber yet to HR Studio Podcast, you can become one by going to hrstudiopodcast.com. You'll get notified of new episodes. Also, there you'll find out all about our speakers, social handles and contact information, show notes, and more about Tristan. So, please look him up. And again, once again, I just want to thank you for sharing your insights.

Tristan Kromer:
Thank you. I mean, thank you for bringing more HR people to talk about innovation. Because I really think that HR has the ability to drive innovation, and I wish HR people were more involved in digital transformation like right from the get-go. So I really thank you for bringing that message out.

Denise Yosafat:
And thank you for the opportunity. I think more HR people want to become true business partners at the table, and I think this is a key ... Them understanding digital transformation and innovation is key to them doing it. So thank you. All right, bye.

Tristan Kromer:
All right, thanks Denise. Bye.
 


 
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Date: 
Tuesday, November 26, 2019 - 8:00am
Industry: 
Consulting
Host: 
Denise Yosafat
Guest: 
Tristan Kromer
Type: 
HR Studio Podcast
Topics: