02/21/2013 01:47 pm ET Updated Apr 23, 2013

8 Steps to Drive Innovation in Large Companies

This blog outlines how my friend Lajos created an atmosphere of innovation at GE HealthCare (Hungary) -- a lesson we'll all want to remember.

Most people want to be creative, but at big companies, they're often stymied by rules, regulations and fear of failure. Lajos Reich, chief technology officer for GE Healthcare (Hungary) ran an experiment giving his staff a no-strings-attached "week off" with which to do as they wished... Create, or go to the beach. What he found was a team of engineers hungry to create. Employees who, when given a specific window of unencumbered time, actually spent that time coming up with new ideas for the company.

A key part of Lajos' strategy was to get his engineers, who were typically stove-piped inside their disciplines, to work together across disciplines and to exchange best practices. He did this by organizing both an annual symposium and a monthly meeting at which engineers presented their work to each other independent of their team focus. He also created a number of competitions where engineers could demonstrate to other engineers -- and to company leadership -- their innovations.

Finally, Lajos also worked to make it easier for his employees to get patents for their work. What's the use of coming up with an idea if it goes nowhere? Historically, the patenting process was very time-consuming and cumbersome. This led to situations in which engineers dismissed novel ideas out of hand because of the difficulty in protecting the intellectual property.

"It was very complicated to submit a patent," Lajos tells me. "You had to submit it online, then if the patent was selected to proceed, people had to cooperate with attorney in the U.S. or India. Theoretically that's okay, but it killed motivation. The attorneys were in different time zones. The window to cooperate was small. The language was different. The patent attorneys were changing all the time and few understood the context of the design work."

To help break through this logjam, Lajos found and selected a local patent attorney -- in the same time zone, speaking the same language -- to work with his staff. "The attorneys could personally come to engineers and discuss how this patent can be best described, for the U.S. patent office and the European patent office," Lajos says. This sped up the patent process and reduced the frustration.

In addition, Lajos set an inventor fee. Now, a company generally owns all the ideas for which an engineer is developing working plans, but Lajos awards $1,000 to each inventor once the patent has been accepted. "It isn't for the idea itself, but for the working out of the idea," he says. "This motivates the people to work together with the patent attorney," he says.

But that was just one component of a much larger cultural change that Lajos engineered. Here is the eight-step plan he outlined to unleash creativity in a large organization:
  1. Before venturing into new territory, first assure that all corporate deliverables are met at best quality, highest speed and lowest cost. Accomplishing this first gives you and your team the credibility and freedom to next be creative and do something even more interesting, challenging and productive.
  2. Establish a strong culture that incentivizes innovative ideas even if they are not on the official technology roadmap. The trigger needs to be something concrete and demonstrable to receive the incentive, such as a "patentable prototype," not just an idea. Also, the staff should feel free to innovate wherever inspiration strikes.
  3. Continuously facilitate the sharing of knowledge and cooperation between independent engineering teams. The first step Lajos took was an annual Technology Symposium. Last year 220 engineers made 54 presentations to each other. The second step was a monthly Technology Seminar, followed by online unlimited open brainstorming. The results of this sharing of knowledge has been a very fruitful cross-pollination across a variety of specialties.
  4. Organize a competition. This can be part of the weeklong "vacation" in which engineers are free to create. In Lajos' case, the weeklong semi-sabbatical led to many ideas that would have never seen the light of day because the engineers were otherwise too busy. This one week helped unleash numerous ideas. The engineers were not only productive but extremely grateful for the opportunity to shine.
  5. Create an award that is emotionally attractive to the participants. "I find this much more powerful than monetary awards," Lajos says. Last year iPads were awarded for best prototypes. This or next year it might be DNA sequencing. Further along it might be something from the new exponential technologies. Ultimately, the prize is secondary to achievement.
  6. Expect and require tangible results that can be touched, tried, demoed, showcased. This forces engineers to think it through to the next level and creates physical representations that further inspire other engineers.
  7. Make sure that the winners are introduced to the company leadership, so that they are aware of those talents hidden in the depth of the large organization. Educate leadership to expect further surprising prototypes.
  8. Let the winners proudly share their results with the entire team to set an example for others and encourage further innovations going forward. The real prize is often the pride of success.
In my next blog I'm going to introduce you to Arianna Huffington, founder of the Huffington Post and now editor-in-chief of The Huffington Post Media Group, since its acquisition by AOL. Arianna and I will discuss her passion for creating, for innovation and for how to work up to one's peak.

NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.