The Importance of Innovation & How To Build It Into Your Company Culture

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Timothy Reitsma My guest today is a fascinating person. He is an inventor of Bose noise-canceling headphones and designer of Apple's new product process. We talk about how to build a culture of innovation. And in my opinion, this is a conversation you don't want to miss. So stay tuned. 

Thanks for tuning in. I'm Timothy Reitsma, resident host of People Managing People. Welcome to the podcast where people managing people and we want to lead and manage better. We're owners, founders, entrepreneurs. We're middle managers. We're team leaders. We're managing people. And yes, we do human resources, but we're not HR, at least not in the traditional sense. We're on a mission to help people lead and manage their teams and organizations more effectively.

So if you want to lead and manage better. If you want to become a better organizational leader and a more effective people manager, then join us. Keep listening to the podcast to find the tips, tricks, and tools you need to recruit, retain, manage, and lead your people and organization more effectively. And while listening to the show, please subscribe and join our mailing list on peoplemanagingpeople.com To stay up to date with all that's going. Hey, John, welcome to the podcast. 

John Carter Well, thanks very much, Tim, I'm glad to be here. 

Timothy Reitsma Yeah, I think, you know, following your journey and your story and, you know, we've talked a couple of times offline and I think it's a story that will fascinate our listeners. So, you know, kind of keeping our listener's little bit on edge of who you are and you're the journey you've been on. But what do you tell us a little bit about yourself and a little bit about your career and you know what you're up to these days? 

John Carter Well, thanks for asking. And I'll do this, if you will, on Twitter link kind of summary. 

Timothy Reitsma Sure. 

John Carter I've been always interested in science and engineering from a very small age. I was kind of a boy scientist and had my amateur radio license in high school and did all those sorts of things. Went got an undergraduate degree in engineering and a grad degree from M.I.T. in sound senseless systems and acoustics. And I had the great opportunity to work with Dr. Amar Bose, who has the company named after him.

Amazing, person. He nurtured me and mentored me. I grew to be chief engineer at Bose, worked on the noise, canceling headphones, and a number of other of our initiatives. I was really, really inkling to do my own thing. And so I decided to start a company and helping organizations innovate faster and more effectively. And one of our clients was Apple, and we helped them create the Apple new product process. ANPP which is used in all their divisions, what I call it, it's a guideline that I use is the least process necessary, but no less so. Scevola, I love that. And it's as simple as avoiding making mistakes.

The second time, that's what I value process anyway. I did that for a good period. I loved what I did because it's basically the application of science and engineering to bigger problems. And so helping companies do that has always been a passion of mine. I've also had various opportunities in different areas, such as investment banking and interim CEO work.

So I've done a lot of different things. And now what I'm doing is really working in two areas. One is I'm on the board of Sirus Logica, a public company in the semiconductor space. They do audio chips. So it's related to my background and me. I work with really great companies to help them innovate new products faster. 

Timothy Reitsma It's so fascinating. I am actually just looking into my office. I have a little Bose sound system and. And so it's an honor to be speaking with you. There's as I know, your name is on the patent for the Bose noise-canceling headphones. And they've really helped out in a lot of organizations. You mentioned Apple reading Amazon as well and numerous other companies.

And so, you know, People Managing People's a podcast for, you know, effectively HR for non HR people. And so people might be thinking, OK, well, how does this technology work or this process working in HR? And I think it's it's. It's not about the process. And I think you talk about that, right? So it's not about a process of innovation or a process for, you know, growing an organization. It's often, you know, we put a diverse group of people together and we often hear it's like, OK, well, there's a process behind it. But is there more? Is there more than just the process? 

John Carter Yeah. And I think that is a misconception, Tim. In the work that I've done and, you know, you have to compare it to your own experience to see if it's relevant. What I found is process is one of the least important things in innovation. I think the two most important things are, believe it or not, one is funding, i.e. to really be given the resources to nurture our creative spark into a flame.

So, you know, it does not have to be a large amount of money, but it has to be some money. I don't know, maybe 10 percent of let's said all of your product teams or 10 percent of your business level. So a material, but not an overwhelming amount. And the second is great people, you know, having really great people. And if you have people and if you have the resources to stand behind them, you can really innovate at any scale.

Timothy Reitsma Yeah, I think about, you know, innovation from a product standpoint. But I also think about innovation from a business standpoint. Businesses need to evolve, need to need to effectively change with the times. We've talked about remote work.

There's a lot of innovation even in how to manage people in that space. And so, you know, I'm a guy who studied operations and it's a lot about process improvement, right. Setting process. We've got to look at the process and often we come up with a great process and it would fail. 

John Carter Yes. 

Timothy Reitsma And so what I'm hearing is, well, we need to get the people on board. We need to have people in the right place and buy-in and create a space for them. 

John Carter Yeah. And you said something really interesting, which is innovation can occur outside the product space. I want to highlight that one hundred times. In my experience in our work at Bose was very much that—we would go after simultaneous innovation in marketing and distribution at the same time we would develop products.

And a really great example of that is that when we're trying to first sell the Bose radio, we found it very difficult to actually go to market because our distributors were you know, these big-box retailers are kind of around the world and they're totally in the fast-moving consumer products where people walk up, they look at a shelf and they pick one and they buy it.

Well, what happens if you're selling a product that costs 10 times as much as the best product that they have? And you can only experience the differentiation if it's better if it's demonstrated to you. And we knew that wouldn't happen in large retail environments. And so we innovated in marketing and we had a whole bunch of failures, Tim. We first tried—believe it or not—door to door.

Timothy Reitsma Wow. Really? 

John CarterExactly. So talk about it. You know head snap difference in distribution. Well, that failed. And we'll come back to that failure because that's another secret of success. The second thing we tried was direct mail, you know, putting in inserts in The Wall Street Journal and a number of papers. And that that actually didn't work so well.

But then we tried working with Paul Harvey, who is this nationally famous announcer who had a regular weekday show on AM radio broadcast all over the country. And we worked with him. And that did it. And we therefore and this gets back to your question about, you know, how do organizations with the smaller or no dedicated HR functions deal with innovation? A couple of things. One is to make sure you nurture innovation in all parts of the company.

Innovation can occur anywhere. And the second is the lesson that we learned in that whole process is it's okay to fail. Because if you're innovating, you're going to fail. And if you don't fail, you're not innovating enough. So coming back to culture and the importance of really embracing failure as just an outcome that you can learn from. Another really important aspect, your lesson that all companies of all sizes could benefit by.

Timothy Reitsma That's fascinating. Thanks for sharing that story of, you know, the journey of Bose where it's not just the innovation of the product, but, OK, how are we going to get this, you know, seemingly a lot more expensive product into people's hands and fail along the way. And, you know, I think of failure, as you know, I don't necessarily like the word, but it's a data point. It's OK.

What did we do? What did we learn from this? And, you know, to ensure that we don't do it again, if, as you said, you know, mail, mail order, if it doesn't work, you're not going to try it on the next product. And if you do, then maybe there's something wrong in the organization. But I love what you said about, you know, nurture innovation everywhere and how it seems easy to say, but is it easy to do? 

John CarterWell, no, it's not. It's it's hard. So we talked a little bit about the culture and learning from failure and allowing failure. So that's super important. The second thing I, I think is, is a legitimate challenge that innovators in all parts of an organization have to consider is that businesses do certain things. They're there for a reason. There might be a vision or strategy that's in place, either written or implicit, implicit. And a lot of innovators kind of lose the line of sight to the strategy.

And the biggest place I've seen innovation fail is where innovators all over the company—good innovators—come up with ideas that don't relate to the business. And so if you have an idea and, as we described, you need to invest in that idea, you've got to make sure that you can have a line of sight between that innovation and the business itself. So you can make a difference for the owner or the investor customers.

And so oftentimes, I think innovation, just as is sometimes exciting ideas, but it has to be useful. It has to make a difference. And I think that's one of the challenges. The other's focus. And this was another lesson that posed when I first started there. I was working on two programs. And after a couple of months, I went back to bose and said, you know, we're making really good progress on the headphones.

And this other research program we're working on is really going slowly and is difficult. We had this conversation and we agreed: we're just going to work completely on the headphones that drop the other program immediately. And we didn't hedge our bets. We didn't correct the second program on loudspeakers. We didn't postpone it. We didn't try and do it on a drip. We just stopped it. And that, you know, we could have been wrong.

We could have been wrong. But I think, Tim, one thing that people do is they have innovation like peanut butter and it's spread over everything and they don't focus on something that will really make an impact. And so, Tim, I think it's really important to be successful, to focus your idea, really focus and hone it.

Timothy Reitsma Yeah. It's you know, I've been part of teams where somebody throws out an idea and all of sudden it seems like it's a new project within minutes. And, you know, we've got somebody who's running with the idea to go and research it. And it may not be even tied to the goals. You know, I worked at a tech company for many years. 

And often, you know, we would throw different ideas and not necessarily products. I wasn't on the product team. But, you know, different ways of doing business. And so, you know, we talk a lot about offering space and being OK to nurture that innovation. And so, you know, you've talked you mentioned it kind of before the podcast about ideas is fragile.

And I'm sure you've got experience of that with bows and maybe even cutting the apple innovation process. But what does it mean? Ideas are fragile. And how do you then take it to the next step and maybe take that an idea, an exciting idea into something? 

John CarterYeah. Great question. And this is where a little process is very useful. So this is absolutely true at Apple. And Jonathan Ivey, their head of UX and UI at the time really mentioned and emphasized the fragility of ideas. And that how close they come to the trash can almost every day and in companies. There's unfortunately, there's a tendency to push back on new ideas, say, well, that's not really, you know, what we want to do.

Or you're going to fail because this won't work or that won't work. So there's a tremendous amount of negativity that can occur. And organizations, not all, but it's a challenge. And so how do you deal with maintaining the focus on that which we talked about that idea? And so the way I like to envision it is that you have if you will, a protected space. It doesn't have to be a physical space, but it needs to be maybe a virtual space.

Examples that I've heard of is that innovators that are really focusing, trying to work on an idea, all their electronic communication changes. So they take them off the company Slack channel. They don't invite them to team meetings, all hands, and so forth. They create virtual skunkworks and protect this idea and its creator. 

And the second thing that they do is protect space is it keeps bureaucracy away from the teams. You know, like fill out this form, do this. That's not how we work here. So the protected spaces, space at which you basically suspend judgment, you suspend the rules and you trust. So this is where the trust comes back, back around to being so important here is you have to trust the passion and the drive and the creativity of an individual who really wants to run with an idea.

Now, that doesn't mean they've got a carte blanche. So in this protected space, what I recommend for the quote-unquote process is lightweight. One is that they write down their idea on a page piece of paper and demonstrate how it'll move the needle and how it's aligned with the company. And so you have a way of some person looks at these ideas. So you need a process to attract and curate ideas in a very short form.

That's one thing. The second thing you need to do is you need to have what I call graduation criteria. In other words, how do you move from this protected space of sandbox into the real world to launch this idea or change? Unleash it in the company. And the second step of the process is you need to have some degree of done this demonstrated. In other words, you've had customer contact, you've had a function that it might affect, say, yes, this is a great idea.

You've taken some of the risks out because you've done some experiments. But the ideas really only two steps you need is you need some way of filtering the ideas to ensure they're big and they're aligned with the company. And the second filter you need or process step is the basic demonstration that it's ready to go in the real world and be absorbed by the company. 

Timothy Reitsma That's fascinating. It actually brings back a memory of working in a tech company developing products. And I managed to the sales organization and we would often get, you know, effectively a new product from product management or engineering and said, Kate, go sell this. But, yeah, we really had no idea what even the product was and how it fit with the organization. And we've seen a number of product failures in that. And yes, it's cost money. If it's way out of touch with the customer. Yeah. There's a cost to it. 

John CarterYeah. And Tim, what you mentioned here is a very real problem. And I think that the reason there are these two process steps is really important. The second process step, which is kind of graduation out of the protective space and in your example, being a new product or service, it would be self sold by the sales organization. You need to figure out an entry plan for the organization. 

And often that takes place by encouraging you and your peers in a sales organization to be part of giving the inventor some feedback around their idea and also saying, you know if we're gonna ever sell this, you got to do X, Y, and Z and not learn that too late. Like the experience you had. 

Timothy Reitsma Yeah, yeah, absolutely. And you've mentioned now a couple of times through the conversation culture, you know, workplace culture. And then you mentioned and other keywords. That's really top of mind for me is trust. So, you know, often I hear organizations say that you know. We're fast. You know, we've got to have speed, speed to market, and don't derail the plan or don't derail the plan to get to market. So how do we create cultures of trust and a culture of innovation? 

John Carter It's hard. It's it's hard. I think that trust is something that is earned. It does not suddenly appear nor promised. But trust is what we need to do to be successful in our jobs and the relationship we need to have with our managers. If you look at the typical project, what can be in any domain in any sized company? But you've got a project manager and you've got a few people working on something.

Well, it's really important that the project manager is trusted by the leadership of the organization. And so you actually have this delicate balance because of the project manager or in this case, the innovator is not trusted by senior management. 

They're going to start micromanaging you and being in your face all the time, which is counterproductive. So you need project managers and innovators that actually know how to set expectations and meet them. And I think that's one of the first and most important things is the notion of setting expectations and then meeting them. And I think if you do that repetitively, you will build trust between yourself and the organization.

Culture is kind of a bigger thing. But there's one area that I think is an opportunity for all organizations to do and like trust culture is built, if you will, over time, much like dust accumulates over a shelf. It just accumulates very, very slowly. And one bad breath can blow it away. So it's fragile culture and trust is very fragile. But I have found that organizations don't use every possibility to message the culture in any action or activity.

For example, if someone leaves or someone joins, use that as an opportunity to reinforce the culture of the company and do it constantly. And much like advertising, culture has to be repeated and repeated and repeated and built over time. There's one other thing that I think is really relevant here. This kind of brings us back to our whole discussion, a broader sense about what's valued with the organization and alignment, and so forth.

And that is it's very important for the leadership to describe what their product vision is. In other words, why did they? This organization exists. What are its dimensions of competition? How will the organization be successful? So you have that that the same goal in mind. And then the organization, if they meet it over time, trust is developed. And so it's a slow process, but it can be nurtured by using any little day to day activities to reinforce and communicate the trust to your whole team. 

Timothy Reitsma That's fascinating. And I'd love to hear may be an example from you and put you on the spot a little bit about how did you see this happen within maybe one of your clients? Don't necessarily need to give a name or at Bose. 

John Carter Yeah. So I think there are many opportunities to do it. But I think the biggest ones are in org changes and hiring and firing because those all are really important. They're visceral to the team. They're dramatic and they're palpable. You can feel the heart in the kick. Sometimes you can be affected directly by them.

And I have seen at Bose is really good, good at this is that when there is a change, there's always a portion of the communication in either a town hall format or an email that talks about how this action reinforces the culture and the vision for the company so that, you know, when there's a reorg, for example, at the end of the communication, there's just an expression of how this reorg will reinforce the goals and the culture of the organization.

So the two biggest places I've seen it has been in reorg announcements, and the second is in the departure of people. And I and the hiring of people basically changes in staff. So the nice thing about it is those kinds of things occur relatively frequently, so you have an opportunity to reinforce the culture by those two actions related to people and organizations. 

Timothy Reitsma Thanks for kind of going down that little trail of thought with me. And I think it's important, you know, we can have great organizations who say they're innovative, but we need to get down to the core of an organization. Yeah, I've seen numerous organizations that have value written on their Web site of innovation.

And I'm always curious about that because I think organizations, need to be innovative in order to continue to succeed in the market. But it comes down to that communication internally. It comes down to the culture, that vision. And, you know, for me, a value written down means it gives us permission, gives organization permission, and people in the organization permission to ensure that that innovation is happening. 

John Carter Yeah. And I think in the cases maybe you've observed certainly where I've observed there's this I don't know. There are people in the organization are waiting for management to blink. You know, they're really like, what did they say again? Is it reinforced here? Because if they give lip service to, you know, innovation to the marketplace external, but don't you know, walk the talkback in the organization, the people the team members are always looking at management, testing them, saying do they really believe in innovation or is it lip service?

And so, you know that you really need to earn that trust by repeatedly delivering the promise of having innovation. And, you know, in all organizations, it's recognition. You know, the thing about the recognition, Tim, is it doesn't cost anything. But have you mentioned someone's name in the public announcement or a large town hall meeting or whatever you've got—that kind of reinforcement really, for innovators, really gives others the permission to do the same thing in the hopes that they'll be at the front of the room and talked about as well.

Timothy Reitsma I love that. I think it's something that, you know, organizations, even myself need to need to grab hold of and do more of. You know, I've. Right now, I'm working in an organization as a people and culture leader. And so, you know, I'm not looking at necessarily product innovation, but this organization that I'm part of is changing rapidly. So we need to change our process. And I think if we approach it not just as like,

OK, we're evolving, but let's innovate. Let's use this as an opportunity to drive interesting and new ideas. And so how do you then assemble a diverse team, you know, or whether it's a product? And I'm sure that I'm really curious about Apple and their design process. Is it just engineers or is it a diverse team? 

John CarterOh, and in all cases, in all organizations that are effective, it's got to be a diverse team. So, Tim, I believe in a simple concept called the team wheel or the core team model. And the idea is for a team to be truly high performance and deliver, well, you need to make sure that you have all the functions at the table in a meeting of minds on the order of a weekly cadence where you bring together different perspectives and different needs and interests.

If you don't do that, you as you said earlier, you can waste a whole bunch of money because you get to the end and then, you know, someone says, hey, did you consider this? It's like, oh, my God, if I had known about that at the beginning, I could have easily accommodated it. But now it's just too late.

And the great example I had at a tech company recently is in this whole area is they're very, very interested in measurement and as they call it, instrumentation. So they do web apps and mobile apps. And I saw one program actually fail because they didn't put or allow for instrumentation. So the company actually couldn't see how it's used in and be given feedback.

So that was the example. excuse me for this customer's success. Member of the team really wasn't fully part of the team from the beginning. In fact, Tim, I would say without exception, the execution success is indicated by having a core cross-functional team that works on a program and make sure that all the requirements have all of the different organizations are satisfied. 

Timothy Reitsma I think that's such a valuable lesson in hearing it from you who's been working in large organizations and small organizations for your career to hear that. Yes. And innovation doesn't necessarily happen in a vacuum. And we need to be assembling cross-functional teams and and and reaching out to different levels of organizations. Does it matter if you're 10 people or, you know, a thousand people? But ideas can happen anywhere. And there's also feedback and innovations can happen anywhere. 

John CarterYeah. And I want to put a fine point around this topic, Tim, because I think there's a misconception about teams in innovation. And I don't think what we're talking about is counter to that. But I would say in general, the creative spark, the fragile new idea, is generated by a very small team, meaning two people, most likely one and a half, two up to three.

So I'm a strong believer that true invention is not a team sport, but that's just the early part. After that flame, that spark turns into a small flame. Then you need a cross-functional team to make it happen to execute because innovation is a combination of three things. The first is you need that creative spark. The second is you need a vehicle to turn in creative spark into something useful. And that's where the cross-functional team comes in place.

And then the third area where we began our podcast discussion, which is it needs to be aligned with the company and really move the needle. So you need a creative spark. You need a cross-functional team to execute it. And then you need to really make sure that you deliver this to the company, to your customers that move the needle and make a difference.

Timothy Reitsma Thanks for clarifying that. I fully agree. Often. At least with me, you know, I'll sit around with a couple of friends or maybe one friend and just start talking about, you know, I wish this product did X, Y or Z or I wish this product existed in the market. And it's like almost that little spark and that happens within organizations as well.

And I think that's where, you know, we can we need to be able to allow that protected space to see if that product or that idea can actually turn into something as long as it's aligned with an organization. Right. And if it's not, then maybe it's an opportunity to go and branch out and develop your own product or service. But thanks for that clarification. 

John CarterYeah. And this is, again, where the process comes about, I think can be very useful, because if basically we talk about meeting some criteria in a one-pager that really sanctions this idea, that then triggers the cross-functional team. So it's a very easy and simple mechanism. Say, all right, you've got a good idea here for sure. Now, let's put some people around it and see if you can deliver. 

Timothy Reitsma Yeah, that's great. And I thank you for sharing your journey and a bit of your story with both and with Apple and. Yeah. In your in your career. And so, you know, I'm wondering if somebody is listening to this and has some questions, how can they reach you. 

John CarterI think the best place is just to go to Website TCGen, Inc and reach out to me there. 

Timothy Reitsma Yeah, it's been a really interesting conversation, John. I know. I said I think I see this on every podcast so we could go on for well over an hour. I'm sure on this topic. And, you know, just to kind of wrap it up. It's doesn't necessarily, you know, innovation happens within organizations and doesn't necessarily focus on the product. It could be an innovation of a process. I know it's the process isn't, you know, don't focus on the process.

But it could be it's how an organization could evolve. But really, it starts with the culture of trust and allowing that space for innovation to happen. So thanks for taking us on this journey. 

John Carter Oh, it's been a real pleasure. Tim, obviously, I love this topic. And thanks so much for inviting me. 

Timothy Reitsma Yeah. Yeah. And I'm sure we'll be talking again soon. 

John Carter Thanks. 

Timothy Reitsma Take care.