61 Rules for a Culture of Innovation

September 8, 2013

Word cloud on key words from the many rules within Jonathan Rosenberg's 2010 talk on fostering a culture of innovationHow do you structure a corporation for innovation? There are many answers to this question, which vary depending on the size and purpose of the organization. However, if any company can claim to be a model for innovation in the past decade it has been Google. Not only has the company brought innovative products to market such as Gmail, Google Maps and the Android operating system, but also its open business model and culture challenge many assumptions of a more traditional, 20th century corporation.

One person responsible for much of this innovative business model and culture is Jonathan Rosenberg. Jonathan was VP of Product Development at Google, and was responsible for much of the culture that yielded these innovative products. (He still is a Google employee.)

In 2010 Jonathan presented a talk to his alma mater about the lessons he has learned as a manager. In the talk he outlined 61 rules for success. What you realize reading the list is that even though only six of the rules are explicitly focused on innovation, many of the others are important catalysts to the innovation process and helped make Google the effective company it is. The talk is useful, and has become a key reference point for founding my own corporation, Justkul Inc.

Because an online video is not the easiest format to access individual rules, I decided to make a list of the rules he outlines in that video. In keeping with Jonathan's emphasis on open innovation, I thought it would be useful to share the list here.

Keep in mind that what follows is my version of Jonathan's rules, and I make no claims that Jonathan would endorse this outline, or that I have captured every one of his rules correctly. You'll have to watch his talk to decide. The list below is also no substitute for the actual talk, which supplements the rules with very useful and entertaining commentary and stories.

I include some commentary of my own in italics in the post. If you would like to comment further, feel free to do so. I'd be particularly interested in any experiences you've had following or not following these rules, and what additional rules have been important for running your own innovative corporation.

Communication, 9 Rules

  1. Over-communicate in all ways all the time.

This is true, provided that actual communication is happening. Never take a lot of time in order to say very little.

  1. Openly share everything with your colleagues.

Some caveats are obviously necessary here. The point is to share things that are actually useful for colleagues. Sharing such information not only gives a company a competitive advantage, but can enhance the connections between team members. This last fact is important, because if it is implemented incorrectly and does not foster these team connections, it can lead to a stifling, ineffective organization.

  1. "Repetition does not spoil the prayer."
  2. Each word matters. Remember Blaise Pascal’s dictum: “If I had more time, I would have written a shorter letter.”
  3. Great leaders are great teachers, and great teachers are great storytellers. Narrative is how we learn.
  4. As leaders you learn more by listening than talking. “When you listen, you learn how things work as opposed to how you think they work.”
  5. If you must talk, ask questions. People learn more from your questions than your answers.
  6. If you actually know the answer in a business situation, stop listening and by all means talk. However, show what you mean through data.
  7. Strive to respond to emails instantly. A manager is nothing but an expensive router, be a good one. Always ask, “Who needs to know this?”

I know people who have had great success following the rule of responding to e-mails immediately, but it doesn't necessarily work for everyone, especially people engaged in work that requires concentration. Also, as Sandra Bond Chapman has discussed in her Forbes Next Avenue post, there are real risks associated with the multitasking mindset that results if one is constantly responding to e-mails. Personally, I would much rather have people take advice from Blaise Pascal's dictum above, and take a little extra time to ensure communication is shorter and more efficient. However, the question "Who needs to know this?" should always be asked. If some people may or may not need to know it, thenGrexit offers a nice app for that.

Company Culture, 16 rules

  1. Avoid hippos (“Highest paid person’s opinions”).
  2. You shouldn't be able to figure out the pecking order of org chart by looking at the product.
  3. Help organizations crush bureaucracy in all its forms. Dying organizations foment it.
  4. When you are trying to accomplish something ask for a winning strategy AND the tactics needed to win.

Our variant of this is whenever we come up with a good idea, we always try to also ask what are the first few steps to implement it. It is always useful to take an idea one step further than you need to at any given moment on the path to implementation.

  1. People are more productive when they are crowded.

This is not always true. Susan Cain’s provides a fairly good defense of the need not be be crowded in her TED talk about introverts

  1. Empower the smallest of teams.
  2. Working from home is a malignant metastasizing cancer. Ban it.

Given her recent actions at Yahoo, you can tell Marissa Meyer worked for the same company as Jonathan from this rule. Marissa qualified her response in light of the backlash it generated, but Jonathan appears to hold an even stronger version of the position. There are good reasons to have people in the office, especially given the importance of serendipitous interactions for innovation and the importance of co-location for agile workflow. However, I think that time away from the office can be equally valuable, not just for work-life balance, but also because it can promote other useful serendipities.

  1. Engineers and product managers add complexity. Marketing adds management layers. Sales adds coordinators. Manage this.
  2. "Knights are knights and knaves are knaves."
  3. Once someone reveals himself to be a liar, he is a liar.

In my experience context can force even honest people to lie. Philosophy abounds with examples of these cases. Design and manage a company in such a way that you these contexts do not happen.

  1. Trust, but verify.

My favorite version is the Persian proverb, “Trust in God, but tie your camel tight.”

  1. Focus on values rather than costs. In business more revenue solves all your problem. Use the 80/20 rule to determine what to focus on.

Good advice in general contexts, but one should add the exception famously identified by Clayton Christensen: in contexts of disruptive innovation following the 80/20 rule can sometimes lead a company astray. Fortunately, Google has a great antidote for this: the fact that employees can spend 20% of their time working on projects of their own design.

  1. Never suggest copying a competitor.
  2. Hope is not a plan.
  3. Success breeds the green-eyed monster. Take away its key weapon, surprise; fight it with its kryptonite, humility.
  4. Do all reorganization in a day.

Hiring and Development, 14 Rules

  1. Know how to interview well.
  2. Great people make a great company, which in turn attracts great people.
  3. Managers don't hire people, hiring committees should hire people.
  4. Promotions should be a peer review process.
  5. Don't hire specialists.

This resonates with me, because so many companies seem obsessed with specialists now. For a lot of companies the situation is even more extreme: it's not just that a company wants a Python programmer, but now it has to be a Python programmer with five years' worth of experience who also knows how to do statistics in R who lives in Houston, and has led a team for 3 years (not 2 or not 4), and so on. If you define the parameters stringently enough, soon there will be no one who could possibly fulfill them. Equally important, it prioritizes proxies that have little correlation with performance over actual performance. Basically, most hiring processes are broken, and the current reliance on algorithms and big data may even make it worse. See the excellent post by Nick Corcodilos

  1. You cannot teach passion.
  2. Urgency of the role isn't sufficiently important to compromise quality of hiring.
  3. Identify bad eggs.
  4. Get rid of bad eggs.
  5. Diversity is your best defense against myopia.
  6. You can't punt the management training program.
  7. Life is not fair; don't try to make it fair. Disproportionately reward risk-takers and performers.
  8. If you are going to pay Alex Rodriguez $33 million a year, feed him the ball. Build around people who have the most impact.
  9. The best way to get rid of bad eggs is penguin-pecking.

I’m not sure I agree with this point. I know this approach is common in many legal firms, but sometimes a transparent direct conversation has value too. Equally important is taking extra steps to ensure the process is as painless for everyone involved as possible. All the consulting firms know that ex-employees make for future clients, so it is worth ensuring that no bridges will be burned. I also like firms that take creative approaches to this, such as how ?WhatIf! Innovation apparently provided job placement and detailed letters of recommendations when employees were forced to leave

Decision-Making, 6 rules

  1. Decision making is about consensus, not unanimity.
  2. There is no consensus without dissent.
  3. If there is doubt about what to do, consider your customer’s perspective.
  4. Choose your goals wisely.
  5. None of us are as smart as all of us.
  6. Where there is harmony, there is no innovation. Innovation comes from disagreement, not from harmony.

Fostering Innovation, 6 rules

  1. Most companies manage creativity in order to manage risk. Don't do this.
  2. Innovation comes from creativity. Creativity cannot be managed. It can be allocated, budgeted, measured, tracked, encouraged, but it can't be dictated.
  3. Create a culture of yes, based on optimism and big thinking.
  4. Never stop someone from moving forward with a good idea because you have a better one.
  5. A leader’s job is not to prevent risk, but to build the capability to recover when failures occur. A good failure happens quickly and provides many lessons. A bad failure takes a long time and you don't learn anything.
  6. A good crisis is a terrible thing to waste.

Humility, 10 rules

  1. Learn something new so you can remember how hard it is to learn. Teach something so you can learn.
  2. Never stop learning.
  3. Humility is correlated with age. Arrogance is inversely correlated with age.
  4. You get personal leverage through empowerment, delegation and inspection.
  5. Judgment comes from experience, and experience comes from errors. Publish post-mortems when something fails.
  6. Smart people can smell hypocrisy. Culture is set from the top, and once set it cannot be changed.
  7. Don't burn bridges.
  8. Always ask yourself, would you work for yourself?
  9. Write a self-review and be critical about yourself. Do this every year.
  10. Communicate, confess, comply.

Jonathan emphasizes at the end of the talk that people should make their own lists and not simply follow his rules verbatim. However, I think Jonathan's list is a fantastic place to start. Let us know what you think.

By @jfhannon, CEO at Justkul Inc., a research firm focused on the needs of strategy and private equity.

Leave a Reply

Your email address will not be published. Required fields are marked *