Nortech, an engineering services and contract manufacturing company predominantly based in the Midwest, had been around for almost three decades when Jay Miller became its CEO in 2019.
As a company, Nortech had thus far operated under a sort of command-and-control structure, which is not uncommon for corporations in its industry, Miller explains. Employees were doing a solid job of using what he refers to as their “mid-brains.” But they weren't really leveraging the brilliance of the rest of their brains. “People were being told what to do, and then they were doing it,” Miller said in a talk at Columbia Business School's inaugural Think Bigger Innovation Summit, supported by The Hub, a CBS think tank. “And they didn't think of the company or the culture as innovative, by any stretch.”
But over the past four years, with Miller at the helm, all of that has changed. He said he has made it his mission to incorporate innovation as a core tenet of company culture and to “engage people's brains, to let them try things, and also to sometimes let them fail.”
“We make some really complex products, and the way I think about it is that very few people on the planet can make these complex cable systems like we do in Bemidji, Minnesota, for example,” said Miller, who was joined by Paul Johnson, founder of Nacua Investment Advisors and a professor at CBS. “So consequently, there are also very few people on the planet who are going to figure out how to replace those technologies with something that is green, faster, lighter, and cheaper.”
To encourage innovation as a means of not only creating greener products but also more sustainable supply chains, Miller uses a hockey analogy, saying Nortech tries to not only understand where the puck is but also where it's going. That means anticipating where demand for Nortech's products and services will go as its customers innovate and how Nortech can be ready to satisfy demand for more sustainable solutions, for example, once they have been devised.
But here again, a key part of the strategy is communicating to employees that failure is absolutely integral to innovation and that, indeed, the latter can't occur without the former. Miller noted that part of this is reassuring employees that innovation is possibly everywhere and that any failure resulting from an informed decision to try something new and ambitious will never lead to someone losing their job.
To put those concepts into practice, Miller said plant managers in each of Nortech's plants frequently walk around the production lines to listen to employees and gauge any comments or questions they have—which occurs much more frequently now that a culture of innovation has started to blossom within the organization. He said plant managers will often encourage employees to write up a particular comment, criticism, or idea for review. Management then tries to quickly determine where resources should be allocated to the issue or whether it makes sense to just go ahead and make a change.
While Miller noted that many of the most significant innovations he's seen at Nortech have originated from work done by customers' engineers, he said if he has learned anything over the course of his four-year term as CEO, it's that the first spark that leads to meaningful innovation really can come from anywhere. The role of a leader is to encourage it, recognize it, and give it the time, energy, and other resources it deserves. That's how real change happens.
Takeaways from this event:
- As a leader, you can only encourage innovation if you provide reassurance that failure is part of success.
- Consider that the most brilliant ideas and innovations can come from anywhere and anyone. Always be on the lookout.