Ron Johnson

Learning from Pure Innovation

October 06, 2006

Case categories include: Human Resources   Leadership   

By Robert Sher
Ron Johnson, CEO of WAGIC stakes his entire success on the innovation of his team.  The company’s name stands for “What A Good Idea Company,” and holds as their core competency their ability to come up with great ideas for products, or to take great ideas and develop them into marketable products.

Most firms only need to add to their hard work a fraction of the innovation that WAGIC has demonstrated, but the creativity often fails to materialize.  A close look at how Ron Johnson created and maintains the culture of innovation yields useful insights for all CEOs.

In the early 80’s, at Hewlett Packard, Ron got his introduction and training in innovation.  He found the culture at HP at that time was “a phenomenal experience,” and the blend of autonomy and creativity in an engineering-driven culture was invaluable.  When he set up WAGIC, he strived to create the same culture.

Tap the creative power of your team
The products they work on at WAGIC cover a very wide spectrum, from tools to stationary products to IT items.  Mr. Johnson says, “It’s hard to innovate when you are overly focused.  Each member of our team has a mix of projects to work on, so they don’t have to try and force creativity (which doesn’t work well) on one project – they can switch to an alternative that will be more productive that day.”  Some of the company’s most successful inventions came out of the hobbies and pastimes of employees.  “A rich life,” says Mr. Johnson, “gets you ‘out of the box’, and leads to great ideas.”

One of the keys to developing more innovation within any company is to cross-train and rotate jobs.  During Mr. Johnson’s time at HP, an engineer followed the new product all the way through production, encouraging a full understanding of each department’s issues and needs.  This is valuable today as well, so invest the time and training to broaden your team’s breadth of experience within your company.

As your staff comes up with ideas, encourage even small ideas.  While everyone wants the “home run” idea that transforms the company, they come along rarely.  Instead, “base hits” can save money, boost sales or profits incrementally, or help in other ways.  Cumulatively, they make a huge difference.  One useful technique is to establish a cross-functional creative team of three to six members that rotate monthly.  Their goal is to generate ideas for the company that save money or increase sales, and to present them to management.  Over time, this gets everyone involved.

Make sure everyone gets exposed to customers.  It’s where the real traction comes from for a new idea about improving products.  The better everyone in the firm has an appreciation for the customer’s world, the more likely they will create products that have real world value.

Attitude is everything
Hire people with a can-do attitude, who have the gumption to keep struggling toward the achievement of an idea.  After all, having a new idea pop into one’s head is just the starting point.  A lot of work and development follow, and it takes an optimist and a hard worker to see it through.  If the role you are trying to fill is a primarily creative one, understand that while everyone has some ability to innovate, only a small percentage are born with a high level of such talent.  Choose carefully.

The attitude of innovation is a learned behavior.  As you hire new people, team them with seasoned creative people at the firm.  Set your expectations low for newcomers, allowing them the time to try out new ideas and to experiment.  Even the best can-do attitude needs some time to breathe.

With all the pressure to be productive, most companies need to set aside regular time for teams to meet, with creativity as the only stated purpose of the meeting.  Even an hour a week might be plenty.  It’s not enough to order creativity meetings.  The entire culture of the company has to value innovation and fresh ideas.  Do the people at the top do it?

Hard work is required to keep up in today’s environment.  But innovation is a path that can mean jumping ahead of the competition.  Make sure your company gets its share of the great ideas.

Takeaways:
• Cross-train and rotate your top team among projects to maximize their innovative strengths.
• Don’t discard small ideas. They add up.
• Hire optimists who follow through on their ideas with hard work.

Robert Sher is principal of CEO to CEO, specializing in assisting CEOs and business leaders as they navigate critical passages.  He is the author of The Feel of the Deal; How I Built a Business through Acquisitions.  He may be reached at Robert@ceotoceo.biz.

Company and Case Facts:

Company: WAGIC, Inc.
Person: Ron Johnson, Chief Wagician
Alliance Member since: 2004
Business Founded: WAGIC, Inc. was created in 1996 out of RJ Associates, which was founded by Mr. Johnson in 1985.
Annual Sales Volume: $20 million for FY ending Dec. 31, 2005
Head Count: 18
Product: Innovation and product development for others and for their own brands
Typical Customer: Home Depot, Lowes, Pep Boys, QVC
Written: October, 2006
Address: WAGIC, Inc., 16780 Lark Ave., Los Gatos, CA 95032
E-mail: ron@wagic.com
Phone: 408-399-5002