12 Tips To An Innovative Culture From ARPA-Energy, Part II

How many times have you heard an executive talk about “the ways things are done here” or “it’s our policy”? But someone, or a group of people, chose that policy and established those “ways.” That means people can change them.

As the markets demand more transparency, especially as it relates to a company’s carbon footprint and sustainability initiatives, many more CEOs boast about their sustainability reports. But large companies in particular are stuck in problems of their own making, unable to do more than tweak their current systems.  

But because the planet is breaking heat records year after year, causing catastrophic natural disasters, we need to transition the economy to clean energy, yesterday. And that takes major changes, not tweaks.

Enter ARPA-E, the innovation arm of the U.S. Department of Energy, formally known as the Advanced Research Projects Agency, Energy. As Dr. Jennifer Gerbi told me on my podcast Electric Ladies recently, “We’re supposed to solve energy problems for the country and because it’s so broad that enables us to do all sorts of different things and to figure out what the right thing to do is… And to do that, you have to have a specific kind of culture.”

It’s elements of that unique culture that companies could adapt to drive innovation, and faster.

Gerbi acknowledged that large companies are hamstrung by their own business models and policies. “Large companies in the U. S., … you really have to appreciate how tightly they have to control their systems and processes to be able to do what they do… and that needs and requires…a culture that would be very different than the kind of culture at ARPA-E,” she said. But again, those can be changed.

There are 12 key ways ARPA-E is innovating that companies could learn from, based on my conversation with Gerbi. Here are seven and the other five are in Part I here:

·      Be willing to fail:  Many companies talk a good game on innovation, but their performance and compensation systems say something else; they promote and reward based on successes. Gerbi says, “I think a lot of it does come down to that culture that I’m talking about and the fact that you have to be willing to be able to fail. It’s about taking these shots on goal….You might have 12 different shots on goal….Maybe if two work that’s amazing. That’s two things that didn’t happen before, and that are good enough that they’re having a huge impact.”

·      Embrace Conflict:  There are zillions of articles, studies, blogs and trainings on resolving conflict. But innovation breeds and requires what Gerbi calls “synthesizing” it. Jerry Hirshberg, the first CEO of Nissan Design International wrote a book about designing organizations around innovation and creativity, and talked a lot about how the friction in the conflict birthed much better ideas. “There is a lot of what you might call conflict,” Gerbi explained, adding, “I would call that a little bit more ‘pressure testing’ and learning and help me understand why….We harness the power of all of the brains and it is sort of a messy process and you have to be comfortable with that.”

·      Fit the business model to the solution:  Established companies have established business models, but sometimes new solutions don’t fit neatly into them. Instead of discarding or altering the new solution to fit the established model, ARPA-E adapts the business model to the solution. “It’s not what’s good or bad. It’s what fits the business model that you need…to have an impact.”

·      Bring in people from odd places: We know we need diversity at the table to generate new ideas and solutions, and not miss critical adaptation issues. ARPA-E looks for diversity beyond demographics. As Gerbi told me, “We strive for having a very large diversity of people that are there in terms of institution, in terms of area of concentration, in terms of what they know, in terms of where their passion is. And we all learn from each other.”

·      Measure for unique impact: Each solution will have a different impact and therefore needs to be measured differently to truly reflect its value and effectiveness. “Every program is going to have different success metrics,” Gerbi explained, and therefore, “should be measured in a different way because their route to impact might be different. At the end of the day, we are an impact-driven agency. So that impact is really what we should measure, but impact is measured in many different ways.”

·      Understand the market: These energy solutions are only going to have an impact, if they are used. So, even as they are “talking about doing incredibly difficult things technically,“ Gerbi stressed that they also focus on the market viability. “Who’s going to make it? Who’s going to sell it? Who’s going to buy it? Who’s going to use it?… (because) it really does impact the way that you might decide to solve it.”

·      Anticipate 10 years out:  What might the economy or infrastructure or our lifestyles look like in 10 years or 20? As the famous hockey player Wayne Gretzky said, “A great hockey player plays where the puck is going to be.” ARPA-E works in an industry with a long development and deployment period and that’s very capital intensive, yet is solving urgent energy infrastructure challenges.

“The world could look very different and 10 years, even from a policy point of view or regulation point of view,” for example, Gerbi said. “So, we don’t tie ourselves down to any one vision of the future. Again, the key is diversity there. We consider many different futures, and what that would look like.”

None of us knew we’d have a global pandemic the past two years, but we do know the earth is warming dangerously and that we need new energy solutions, fast.  Companies might learn a few things from the way ARPA-E is doing it.

Read Part I here and listen to Joan’s full interview with Dr. Jennifer Gerbi on the Electric Ladies podcast here.