"We should run some experiments around this."
"We should try this out."
Michal Nalepka, manager of innovation for Rothmans, Benson & Hedges Inc., has been hearing such phrases around the company's Toronto office, and he knows he's moving the needle.
"When we talk about how we're trying to market our new products and how to approach our new customers, we act completely differently than we did a year ago."
That's huge for the tobacco company, whose roots date back more than 100 years. Before Mr. Nalepka took on his role seven months ago, the Canadian staff of 780 followed standard business practices. The company was limited in its marketing and promotional activities by regulation, and as a result, it also had little experience in areas such as social media and online sales.
Then, parent company Philip Morris International started introducing new smoke-free products. "The moment the products became available, we realized we have some gaps between our current culture and the culture we'd like to have in order to market these products," Mr. Nalepka says.
A new philosophy called FastForward, which embraces innovation, end-user experiences and small-scale testing, came out across the parent company and its affiliates in the second quarter of 2017. In just a few months, the company went through a sea change, revolutionizing how it thought about problems and conducted business.
It's the kind of shift any number of companies need to undergo. "The organizational design that most companies have right now served them well when things were more stable. Now that the world is changing, that design no longer works," says Hans Balmaekers, director of the Intrapreneurship Conference, which takes place in Toronto from Nov. 15 to 17.
Even technology companies need to consider revamping their cultures in an age of disruption.
When Ginni Rometty was named CEO of IBM in 2012, she triggered a company-wide attitude change. "It was very much an engineering culture before," says Karel Vredenburg, director of IBM design client worldwide programs and head of IBM Studios Canada.
Products were often built on specs, with little input from designers, and released. Engineering-related skills were rewarded when it came to hiring and promotion. Under Ms. Rometty, the company embraced a new ethos that focused on design thinking — an approach that prioritizes the end user's experience — and tested ideas and used data. The moves were intended to keep IBM on the forefront of business lines such as the cloud, artificial intelligence, mobile and social.
To shift an entire organization's culture and way of doing business, you need a carefully created new ethos, one that includes detailed best practices. At Rothman's, FastForward offered a comprehensive framework to train against. Already, half of Rothman's head office staff have been trained in its basic principles.
Now the company is pinpointing select people to get advanced training. "At some point, every team will have one person that can be the subject matter expert for FastForward," Mr. Nalepka says.
Training is best, of course, if it connects back to the work itself. At IBM, training is dubbed "activation." Teams learn about IBM's version of design thinking and then, as part of the same process, put those ideas into place on a current project. More than 90,000 employees are now certified design thinkers.
Since design thinking focuses on getting constant feedback, those involved in implementing the new ideas at IBM asked teams how it was going. They reported a key hurdle: company leaders. While management helped broadcast the new philosophy, they still kept asking their teams to deliver projects the old way.
"We realized we needed to not only activate our staff, but we needed to activate our executive team," Mr. Vredenburg says.
IBM also needed to change some of its fundamental structures. While its new approach was design focused, and the company upped its design roster worldwide to 1,600 from 200— in positions such as visual designers, user-experience designers, user researchers and front-end developers — it was still a company that favoured engineers in its HR practices such as career advancement.
"Everything was geared to making our designers more like engineers, which was not suiting our needs," Mr. Vredenburg says. So the company created a career path for design, including design executive positions and an internal board made up entirely of designers to review promotions of designers.
An innovation-driven new philosophy that's ill stated, that has only partial buy-in or comes without structural changes can cause more harm than good, Mr. Vredenburg adds. He consults with other companies to help revolutionize themselves, and to share with them the best practices from IBM's design transformation experience.
Popular innovation techniques such as acquiring startups or sending internal teams off to build out ideas at incubators encourage powerful new ideas. But unless there's a larger organizational shift underway, according to Vredenburg, those new initiatives could fail without widespread support. Even if they get through, they are unlikely to influence the wider culture.
True change has to be reinforced throughout the organization on a regular basis. At Rothman's, staff can voluntarily attend weekly Lean Coffee events to tell others about new projects and talk about transformation generally. These events also serve as a continuing reminder of the new ideas at play, how the work gets done, and why.
"Every day we're doing something new," Mr. Nalepka says. He's been successful because his stakeholders understand it's not just change for change's sake.
This content was produced by The Globe and Mail's Globe Edge Content Studio. The Globe's editorial department was not involved in its creation.