LeadingAge Magazine · March/April 2013 • Volume 03 • Number 02

Creating a Climate for Innovation

March 14, 2013 | by Gene Mitchell

A “Climate for Innovation” in an aging-services organization depends on vision at the top, a willingness to take risks and energetic employees at all levels who feel valued and engaged.

Run the phrase “climate for innovation” through a search engine and you’ll not only land thousands of hits, you’ll also realize that a whole industry of consultants, academics and others has arisen to help organizations create such environments.

Innovation is also a priority for LeadingAge, as witnessed by the presence of “Lead Innovation” among the six LeadingAge Leadership Imperatives that guide the organization’s work.

There are countless innovative organizations among the LeadingAge membership, and they are led by brilliant and charismatic people with no shortage of ideas. Even so, any organization that actively encourages and promotes innovation among staff will get the most out of its most valuable resource and increase its chances for really groundbreaking change.

Here is a look at a few providers that make a priority out of creating a culture of innovation. They all offer some combination of visionary leadership, comfort with risk, trust for employees and willingness to look outside our field for inspiration.

When an urban CCRC owned by Episcopal Retirement Homes needed to solve an aggravating shortage of parking, the organization’s headquarters declined to solve it. Instead, ERH leaders challenged the on-site staff to find their own solution, on a short deadline. Their solution was an effective valet parking program using existing staff and without adding cost.

While this parking solution is not necessarily a groundbreaking innovation, the management response to this problem—to push responsibility downward—is an intentional strategy typical for this multi-site CCRC provider in Cincinnati, OH.

“Whenever we think staff on-site has the capability to do it we will ask them. If it’s a localized opportunity to improve process and care delivery, we will always push that down to that level when we have the opportunity to do it,” says Doug Spitler, ERH’s president and CEO.

Spitler has done a lot of thinking about innovation and he insists that any thinking about the subject must go beyond new ideas, products and services, and give full consideration to ways to improve process, delivery and execution.

He argues that at the board level, members who will inspire and challenge staff to innovate are crucial. ERH’s board includes members with entrepreneurial backgrounds and experience in positions of influence. “The same thing applies for senior [management],” he adds. “You want people with a level of curiosity about the world around us, not just [from within] senior living. We need to look outside of our world for answers and applications, maybe in the corporate world or academic communities.”

Creating a culture of innovation must be a deliberate strategy, he says, and one sure innovation-killer is a controlling, top-down management style from leaders.

Another impediment to innovation, Spitler says, is that organizations have a limited degree of risk tolerance, sometimes for good reason, but that it must always be balanced by recognition that innovation can require risks. “But innovation doesn’t necessarily mean a lot of money has to be involved,” he cautions. ERH has set up what it calls a “strategic opportunities fund” to allow experimentation with new ideas. “The dollar amount varies, within the context of our financing structure, as long as we meet our covenants.” Today the fund holds about $2 million.

Another key to innovation, ERH believes, is willingness to collaborate. One example of the organization’s history of collaboration was its role in creating an alliance in the 1990s, originally as a way to prepare local providers for managed care. Its original focus (and the insurance product it created) have fallen by the wayside. Today, Link-age serves more than 450 providers in 16 states, offering group purchasing and other services, and is about to launch a new investment fund which will invest in start-up products, services and technologies focused on aging services and caregiver markets.

Apart from the obvious benefits of innovation, Spitler notes a very important downstream benefit: the attraction of outstanding talent for the future.

“Creating a culture where you’re strategically focused … produces a situation where you can attract the best and brightest,” Spitler says. “You get people who are on top of key trends, and it tends to attract really good people. It’s sort of self-feeding. A lot of it has to do with social media and other forms of communication. We’ve got a fairly high-profile presence and are well-known in the state association. We’ve got a brand; people know us as early adopters of new ideas.”

Once in the organization, employees benefit from a culture that encourages new ideas and recognizes that they don’t always work. Coupled with that is a policy of recognizing and rewarding successes and individual contributions above and beyond the ordinary through an "extraordinary bonus" program that recognizes and rewards achievements. Spitler explains, "It's a very tangible way the company can demonstrate its commitment to independent thinking and problem solving."

Applications for the 2013 LeadingAge national awards are now being accepted (click here). Winners in nine award categories will receive free registration to the LeadingAge Annual Meeting in Dallas, TX, Oct. 27-30, 2013, where they will be honored.

It’s easy to apply. Just fill out the online entry form and answer a few questions about the person or organization being nominated and why they deserve the award. Award categories include:

  • Award of Honor
  • Excellence in Not-for-Profit Leadership Award
  • Excellence in the Workplace Award
  • Innovation in Care and Services Award
  • Hobart Jackson Cultural Diversity Award
  • Dr. Herbert Shore Outstanding Mentor Award
  • Excellence in Research and Education Award
  • Public Trust Award
  • Outstanding Advocacy Award

Read the criteria for each award category.  Nominate an individual or organization that is making a difference. The deadline to enter is April 30, 2013.

If you have questions, email Deborah Cloud or call her at 202-508-9458.

At North Hill, a CCRC in Needham, MA, a culture of innovation has been both a driver of and a result of more than half a decade of major change. The organization’s “True North” repositioning campaign is centered on an ambitious five-year program of new construction plus renovation of existing infrastructure to support a next-generation concept of senior living and long-term care.

The culture of innovation dates back to the beginning of CEO Kevin Burke’s term in 2006, says Rebecca Donato, North Hill’s VP of business development. She credits him as a visionary who empowers staff. Across the organization, Donato adds, the change of culture has been in its essence a matter of putting decision-making and the process of transforming the organization into the hands of a number of team members. “It’s about moving beyond the senior leadership saying, ‘Here’s our five things for the year,’” she says, “and asking team members from across the organization, ‘What possibilities do you see for us and how do you want to make that happen?’”

The ongoing engine of change at North Hill is its Innovation Team, a cross-departmental group of staff who meet monthly to create new programs, services, and “ways of being” for the organization. It was formed in 2010 to coincide with the major on-campus construction and the launch of True North. The next year saw the launch of the North Hill Values Task Force, which grew out of extensive surveys that assessed the organization’s cultural values. The process resulted in three values established as central: excellence, customer satisfaction and respect. The workgroup is largely involved in cementing the brand and integrating the brand values into job descriptions.

Other workgroups include “Brand Champions,” “Universal Language,” and “Amenities Naming.”

While the substantial construction and repositioning is an outcome of innovative thinking, Donato says, it also becomes a driver of innovation by creating new environments where staff can be encouraged to be creative.

“You can’t have all these new hospitality and wellness venues without asking ‘how do we need to think and operate differently in order to maximize the opportunities they offer?’” Donato says. “For example, the nature of operational changes informed by the newly built small houses is forcing us to think [about] how we evolve culture within our health services teams.”

For example, in one observation exercise, the Innovation Team toured a newly constructed space and had to describe how it made them feel, in writing or by photographing it with an iPad. One unexpected outcome was that staff noticed the strong contrast between the new, vibrant resident areas and the tired staff lounge area. The contrast in the brand was marked. The upshot is that the Innovation Team and brand champions have now been tasked with redesigning the team member café and integrating the new brand into the space.

“Little successes mean a lot,” says Donato. “The team members’ imprints get placed on things we do along the way.”

North Hill’s lessons learned can be distilled into a few tips:

  • Empower those who see “in possibilities.”
  • Use cross-functional teams whenever possible, and the more diverse the team, the better.
  • Find ways to inspire team members—ask them to vision, to dream—then give them an avenue to make a small dream happen.
  • Innovation goes nowhere without the top leadership behind it, visibly.
  • Middle managers can be the most effective culture-changers. They are the bridge who can see from the perspectives of both senior management and frontline staff.
  • Have the courage to change “riders on your bus,” [in Jim Collins’ Good to Great terminology]. Managers (or those with wide influence) who stand in the way of change undermine the movement toward an innovative culture.
  • Be willing to invest in a leader who will be focused on intentionally leading the innovation charge. This person may not be in the most obvious (e.g., the HR director or the executive director) role.
  • Budget funds each year (small as they may be) for innovation projects.

 

Cedar Community, West Bend, WI, has a history of innovation, says CEO Steve Jaberg, who points to a ground-breaking, small-house-like dementia care model that dates back to the 1970s.

The provider’s newest innovation echoes the original one. Construction of “The Cottages at Cedar Run” will commence this spring, to be completed in 2014. Jaberg says, “We have a history of leading the nation in that approach to memory care. What we want [now] is to try to advance memory care to assisted living in the same degree.”

The project will involve three buildings of 20 apartments each, each room with its own look. The design will emphasize natural light, areas with “virtual walls,” and encourage an active rather than sedentary lifestyle. There will be less emphasis on grand entrances, because they call attention to people coming and going and remind residents that they cannot do the same. Corridors will be minimized if not eliminated to reduce navigation problems. Courtyards will use “restrictive landscaping” rather than fences that can make residents feel trapped. Staffing models will be similar to small house designs, but there will be more emphasis on activities; full-time activities directors will be on-site.

While Jaberg is never short of energy or ideas, Cedar Community has a culture of innovation that empowers staff, seeks all staff’s input, and recognizes the speed of change.

The board, for instance, has three familiar roles: fiduciary responsibility, evaluation of the CEO and strategic planning. The last of those responsibilities, however, has evolved over the years, and helps avoid getting locked in to inflexible plans. “When I first started,” Jaberg says, “we had no strategic plan, then we developed a 10-year formalized plan, then moved to five years, then three, and now it’s ‘rolling,’ reviewed every four months. The board has been highly flexible, and because we see change so quickly, elaborate plans can’t work anymore.”

Managers have their own strategic plan that complements the board’s, and after Jaberg benefited greatly from executive coaching, Cedar Community invested in coaching for the whole executive team.

“Now we have all gone through it,” says Jaberg. “We know our blind spots and weaknesses and have permission to call each other out. It forces us to put all our egos aside. It’s very important to have an ‘organizational ego,’ and we get excited about all of our achievements.” Jaberg’s coach taught him to think about strategies and big-picture projects while learning to delegate.

Staff is also encouraged to innovate. For instance, a group of direct care staff helped modify the original room design for the new cottages by evaluating a mock-up created in a warehouse.

“We have 850 staff, with new people every month,” says Jaberg. “The first person anyone meets is me and I do 45-60 minutes with them. My job is to serve staff, and no one is good at our job until they’ve made 100 mistakes and learned from them. What we want is excellence, not perfection.”

Eskaton, Carmichael, CA, was founded as a hospital company in the 1960s. By the 1980s its board had decided it was more interested in its aging-services components and since then has been all-seniors, all the time.

“I was first attracted to Eskaton because when I met team members they all had a great desire to impact lives,” says Sheri Peifer, senior VP, innovation & strategic development. The mission, she says, includes the phrase “to enhance the quality of life of seniors.” The word innovation is included both in the mission statement and is one of the organizations five “core values.”

Today Eskaton has 16 distinct business lines and is known not only for its services throughout the continuum, but also for an entrepreneurial culture that goes beyond the traditional service to include development of “livable design” homes, a national model for intergenerational programs, integration of interoperable electronic health records and aggressive pursuit to expand home-based services.

“How do you create a sense of innovation throughout the whole organization so [that we] draw ideas from all areas, and that people can understand that their ideas are valued?” Peifer asks.

Peifer notes that Eskaton has eight to ten pilots going on now, and that a culture of innovation must also be a culture of discipline. “We must have a process, there must be an owner, manager, monitoring, and stop and go points.” A discipline around the testing of new ideas has developed, though sometimes it is hard to measure the full impact programs may have for residents. “It doesn’t necessarily have to have a defined return on investment either,” she adds.

Another part of it is a “culture of expectation” that what they do will connect the organization to the broader community, as well as an expectation that managers will always be looking for the next way to improve care and services. Documentation and evaluation play a role as well. For every distinctive program a guidebook is created to help new ideas propagate throughout the organization. One important focus for Peifer this year is to develop better metrics to evaluate programs, as well as scorecards for reporting.

One challenge for an organization with dozens of locations is creating a cohesive culture everywhere. The organization sets up user groups of staff and “collaboratives,” along with the guidebooks, to help to make services consistent. Staff are also encouraged to visit their peers at other locations to make connections. Even so, over time some sites will certainly innovate more than others.

“You absolutely need to start with a campus team that embraces new ideas, that champions new things, that is not afraid to poke holes in things,” Peifer says. “At the corporate support center, for instance, our guidebooks came out of recommendations from the first three communities that included the QuietCare® sensor technology. They go through sample tools, what goals and roles do people have? For those who want structure, they can know their peers have integrated this system.”

In short, she says, “People respect their peers; if you have feet on the ground I want to listen to you. Such rich connections and relationships are being developed outside their campuses. For us, that’s where the fruit is being borne.”