View from the Top: Arcus Innovation Leaders Series; How business leaders use innovative approaches to shape their strategies.
The Innovation Imperative: An interview with Ms. Catherine Cottingham, Executive Director and CEO of the Electricity Sector Council (ESC).
Read the Arcus Innovation Leaders Report.
Ms. Cottingham argues that innovation doesn’t just come from the top; it comes from the grassroots level. It comes from the people who set the expectation and agenda for continuous improvement.
The Electricity Sector Council (ESC) is the hub for research into human resources trends and sector-specific solutions to Canada’s skilled-labour shortage. ESC was founded in 2005 as a not-for-profit partnership between business, labour, education and government. Its mandate is to address the need—demonstrated in an exhaustive report commissioned in 2004 by the Canadian Electricity Association and Human Resources and Skills Development Canada (HRSDC)—for sector-wide recruitment and retention strategies. ESC is funded by the Government of Canada’s Sector Council Program and distinguished industry stakeholders. It carries out its mandate under the guidance of a Board of Directors, Catherine Cottingham, ESC’s CEO and Executive Director, and a dedicated staff team in Ottawa.
What does it take to innovate? The majority of executives say it involves achieving technological leadership, global presence and a comprehensive portfolio of patents that will enable the company to help define the major trends regarding products, systems and services, and to offer its customers important added value. They say it helps to cut costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovations really be part of a strategy plan? Arcus’ multi-industry survey of senior executives found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “climate for innovation”.
As Arcus research indicates that to do so, you need to be surrounded by highly talented people, and you need to find a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like “a culture of innovation” into their assessments of a company’s long-term value.
Arcus: What is your perspective on innovation in Canada?
Ms. Cottingham: If you talk about innovation broadly in Canada, I think that people quite often think only of research. Research is a critical type of innovation but there are other aspects of business – Human Resources or Operational Management, for example – that often are not acknowledged but that do have bottom line impact. If you undertake effective innovation in operational practice or in Human Resources, you improve your business cost and operations. That makes it possible for Canada to be more global and more competitive. So, it’s very important to have innovation in how you manage the business, in addition to innovation in the product or service offered.
“It’s about building an environment that is open to new ideas, open to different ways of thinking.”
Arcus: How has innovation been translated into tangible results?
Ms. Cottingham: I’ll give you an example of an innovation I personally saw deliver immediate, tangible results. When I worked at Dalhousie University, I had a department and I was asked to take over another department, the Student Employment department. This was 1995.
One of the things that were immediately apparent was that the department was getting an awful lot of traffic, and headcount was not sufficient to manage the customer visits. However, to demonstrate that I needed more headcounts, we had to find a way to count how many visits were coming in the door. I asked about people count systems. Registration had one, but it was very expensive. I was telling somebody this and they said, “You know, Radio Shack has a simple counter for a small retail operations that costs about $350.” I thought, “I can afford that.” We developed a methodology for doing reads on this little tool. It enabled me to get more budget for additional headcounts. It also allowed me to justify investment in a website, which in 1995 was considered very cutting edge. Some people thought I was stupid to do that, but within a month of implementation of that website, our customer visits decreased by 10%. The website was the right thing to do but at the time, management wasn’t sure that there was any value in websites. My vision was if you provided more tools, people could access the services and supports that my units had without coming into the office. It meant that I could achieve my mandate without requiring more budget and without having my staff feeling pressured to provide more customer service.
Arcus: Is the necessity for innovation different for large and small organizations?
Ms. Cottingham: I can be working with companies that have very small Human Resources profiles—a renewable firm that has around fifteen employees, no HR department and a focus primarily on the delivery of a product or service—versus a company like Ontario Power Generation, which has 5000 plus employees and a significant HR department. You’re trying to find ways that are effective and interesting for both of them and that help them do their business better. We engage in innovative practices and organizational type on a significant level, and we work to leverage a wide variety of communications pathways to share what we’ve done with people.
Arcus: How do you feel about collaboration and innovation?
Ms. Cottingham: When you put a problem out there and you get many minds working on it, quite often you get a greater opportunity for solutions. Nobody has the big picture, but lots of people have pieces of it and so when you get collective minds working on it, you get insights. It’s about building an environment that is open to new ideas, open to different ways of thinking. In that environment you then get cost efficiency through shared efficiencies. People will look at things and say, “You know, if I did things this way, it’d save money, save time.” Or they have conversations where somebody says, “You know, Joe. It’s really annoying when this or that happens. How can we make that better?” and then they have some shared dialogue on how they can make it better. That’s what you aim to do at team sessions, and you want to make it possible for people to feel comfortable sharing their problems and ideas.
“It’s about building an environment that is open to new ideas, open to different ways of thinking.”
Arcus: Can mandates limit innovation?
Ms. Cottingham: If you’re a company, your mandate is to whomever your shareholder is—a public community, like the taxpayer, or your shareholder, those who bought into your company. Those people have a vested interest in stating, “This is your mandate.” Your mandate is typically defined within a particular regional scope. For example, Manitoba Hydro is mandated in Manitoba. Looking beyond Manitoba Hydro is only within the scope of their mandate in a very narrow way. If they try to look beyond, their owner will ask, “Why are you spending money there?” In the case of the Electricity Sector Council, because we have public funding, we can look broadly and that can illuminate things on the regional level that might not be visible from someone only looking at one individual region. We can invest the time to find out who is doing what, and say, “Here are some shared practices. Why don’t you guys get together and talk about that?” Once you start that, the person who is working in an individual company with a narrower footprint, like Manitoba Hydro, can go back and make the business case to their stakeholder to investigate the new idea. For example, multiple regions may choose to work collaboratively on a shared curriculum for apprenticeship development. The Electricity Sector Council provides them with the tools to be able to go back and make that business case to their stakeholders so that they can invest time and support and reap benefits found through shared cost savings, through bottom line impact.
“CEOs also need to assess their organization’s communication practice.”
Arcus: What is the role of the CEO in innovation?
Ms. Cottingham: As leaders sometimes you have to push the envelope and you push the envelope in different ways to make your vision work to meet innovation. It is sometimes uncomfortable, but at the end of the day one of the other qualities that we have to have as a leader is to do metrics and to do evaluation to know if what we’re doing is working. In the website example I gave you, the results of the change were easily measure to show that it was working and provided immediate credibility. You can’t always do that, it’s not always possible to collect metrics in such a clear way, but some sort of metrics can usually be checked and cross referenced.
CEOs also need to assess their organization’s communication practice. For innovation, you have to have communication. For innovation, it has to be comfortable communication. Unfortunately, in most organizations, communication is kind of dysfunctional. There are often silos and they don’t have cross patterns. A lot of CEOs try to do “town hall” and sometimes those can be very effective. People have to feel free to put up new ideas. That doesn’t mean new ideas will be acted upon. Then again, that’s where leadership comes in: leadership has to have the courage to take a new action in spite of the fact that sometimes people don’t believe them.
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