Creating culture of IT innovation includes rewarding failure

Companies that don't innovate are doomed to be technology followers, says Kinberly-Clark exec

DALLAS -- David Richter, vice president of Kimberly-Clark's infrastructure solutions group, knows creating a culture of innovation can be messy, but it's still rewarding.

By encouraging his employees to come to him with innovative ideas, and rewarding them whether the ideas succeed or fail, he's been able to increase efficiency, reduce costs and boost morale.

For example, the computers that run the paper products company's mills could take as long as 25 hours to restore after a system failure. His team found a new way to restore them in less than 30 minutes, and it all came from one person's simple idea.

"When you think about these huge machines they run that cost tens of millions of dollars, you don't want them sitting idle," he told an audience at the SNW conference here Wednesday. (Computerworld is a sponsor of the conference.)

When Richter was hired in 2008 by the maker of Kleenex and Huggies, he was tasked with transforming the infrastructure organization. At the time, employee morale was low. There was no innovation because people were afraid if they failed, they'd lose their job.

A couple of years earlier, the company had gone through a massive outsourcing of its infrastructure organization, firing nearly everyone in the group, Richter said. About a year after that, the company restructured again, hiring back almost 200 engineers while continuing to outsource others.

"A lot of trust had been broken. We had very low morale and very low employee engagement," he said. "The infrastructure organization had become siloed. People were in a self-preservation mode."

While the pressure to reduce costs should be enough for any organization to want to be innovative, for Richter and Kimberly-Clark, innovation was the key to leading the technology lifecycle rather than t following it as the company had been doing.

"We're a growing organization. We reach into 80 countries. There is no way my leadership team and I can think of all the things we need to do to innovate around the globe. I'm just not that smart," he said. "We needed a way to have good ideas take root anywhere in the world."

In his more than 30 years in IT, Richter said he's seen three common barriers to innovation, all three of which were present at Kimberly-Clark at the time. The first was cultural resistance to change.

"I've seen many great ideas that didn't go anywhere because the company wouldn't let them do it," he said.

A second barrier is process. "I truly believe process kills innovation," he said. "I'd never come into an organization in my career outside of the government that was as process-bound as [Kimberly-Clark] was."

The third barrier is fear of failure. At Kimberly-Clark, this was the strongest roadblock. "There was a palpable fear that if you tried something and failed, it would damage your career forever. I never saw a single case where that occurred, but the perception was there."

Richter leads a group with about 250 employees who work in 29 countries. The problem with setting up a separate group just for innovation is that its members would be the only ones "tasked" with coming up with new ideas, he said.

Any company can tailor its methods to foster innovation throughout its workforce. At Google, for example, employees are allowed a set amount of time to consider new ideas each week, he said. That didn't work for Kimberly-Clark, however, because of time constraints, Richter explained.

Instead, he took a venture capitalist approach where new businesses seeking start-up capital have 30 minutes or less to pitch a new idea. "Anyone with an idea makes a VC-type pitch to me. It's as simple as that. Make me a pitch. And, if its good. Let's proceed," he said.

The company also has a one-page form that employees with new ideas fill out, but Richter doesn't read it. The form's purpose is to spur employees to give some context to the process and to provide an example of the kinds of questions Richter will ask.

The questions include:

  • What's the benefit to Kimberly-Clark?
  • How much effort and resources will the idea take?
  • What is the scope of the idea?

It's not about forcing an idea to have a business case, Richter explained. "To me the best result of innovation is watching the creative process take hold ... and the fact that they're having a lot of fun doing it.

"There is no business case for innovation in my view. It's something new. I seriously doubt that Apple did a business case when they rolled out the iPad," he continued. "Don't kill an idea by requiring a business case."

If Richter likes the idea, it receives its first round of "funding," which is more of a euphemism than it is about spending a lot of money. "If I add up all the innovative ideas that have come through in the last 10 months when we started this, it is less than $10,000. Usually, it's not a matter of money but giving the approval to go test out the idea," he said.

Any new ideas are required to have specific deliverables and due dates. He also limits the scope of the ideas, so they're not open ended and go on forever.

If the idea works, it receives a second round of funding to prove it can scale and be used on an "industrial level" to deliver.

Richter publishes all the employees' ideas, whether they succeed or fail, on the company's internal Sharepoint site, along with their results. That, he said, is as much a motivator as the possibility of funding.

"Everyone wants success, but by design the nature of innovation is that most ideas can be expected to be failures," he said. "Does that matter? Of course not. Failure is simply the opportunity to begin again, this time more intelligently. It's about what we learn from the failure. Not the failure itself. We celebrate that learning."

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Copyright © 2012 IDG Communications, Inc.

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