Innovate within a structure
Myers had to walk a fine line as he rekindled his company’s innovative spirit. While he didn’t want PETCO to maintain its status quo, he also didn’t want to drift so far into new territory that the company no longer focused on the products and services that had become its calling cards.
Innovating is good for a company, but innovating without a structure and set of goals can become a destructive force to your company’s vision and mission.
Myers met the challenge by communicating PETCO’s foundational principles of pet care and customer service as he was spurring an innovative mindset. In addition, he attached employee incentives to the company’s annual goals.
Myers didn’t want to hinder new ideas, but he wanted to create a culture in which employees and managers at every level of the organization are held accountable for setting personal goals that fall in line with the company’s overall goals. Within that structure, employees could innovate with the same targets in mind.
“We set specific goals for performance each year, and we have a program that acts as a repository for that,” Myers says. “It starts with me and our senior executive team. We sit down and lay out our financial plan for the upcoming year and all the various elements that will be required for us to be successful. We embed personal goals and company goals in each of our performance objectives.
“The system allows you to cascade that throughout the organization. My goals are cascaded down to the store level, so that everyone knows about them, and store-level goals are rolled up to organizational goals. By demonstrating personally that you start at the top by setting those goals and those goals are going to integrate with achieving the company goals, it sets a strong example for the rest of the organization.”
Personal goals at PETCO are linked to the company’s rewards plan, creating another connection between innovation and company goals. Half of an employee’s year-end bonus is based on the extent to which the company achieved its goals and half is based on the extent to which employees achieve their personal goals.
“In addition, halfway through the year, you have to meet with your manager as a kind of check-in,&#x
201D; Myers says. “At that meeting, you go over what progress has been made against the goals you’ve set for the year. It might also be a case where you have to adjust your goals if some external things happened that made the goals less likely. You don’t want to set goals that can’t be reached.”
Building innovation into your company’s collective mindset is a constant process of education, reaffirming, funding and gathering feedback. That’s why building a system for implementation is so critical to success.
“You can’t just say, ‘We need innovation,’ and just sort of hope that it bubbles up somehow,” Myers says. “You have to put money in your budget for trying new ideas and develop a process for submitting new ideas. You embed the process and then fund some of the ideas that match your overall goals. Then you have to share with the organization how it worked or didn’t work. After that, you have to solicit recommendations for future areas in which you can innovate.”
It also helps if you can maintain an open-minded approach when you’re soliciting and vetting ideas. You have to accept that there might be different ways to accomplish the same objective, and the way your company has always done it might not be the best way.
“As a leader, you need to have a personality that allows for innovation,” Myers says. “By that, I mean the idea that you can try different things at various levels of the organization. You need to realize that it’s OK to do things a little differently in an effort to find a better way to accomplish the same things. You’re not setting new objectives, you’re setting new approaches and new ways to better satisfy those objectives.
“With that, it’s OK to have some failures as you try new ideas, because you have to find out if they can be proven or not. You do your best to make sure each idea is properly vetted, but sometimes ideas fall short of expectations.”
