Want to Block Innovation? Ignore Culture Changes.

Editor’s note: This post was contributed by David J. Neff. David is VP of Consulting at Clearhead, where he works with Fortune 1000 brands on the customer impact of eCommerce digital strategy and building test-and-learn cultures. He is the author of “IGNITE: Setting your Organization’s Culture on Fire with Innovation.”


Do you remember Milton, the iconic character from Mike Judge’s 1999 film Office Space? Milton hated his company’s inability to deal with change. He couldn’t handle their bureaucratic processes and his micromanaging boss. After suffering countless indignities Milton’s desk was moved into the basement. It was the last straw. Those who have seen the movie will remember that Milton reacted by burning down his company’s building.

Every time we see a red Swingline stapler, we’re reminded of Milton.

Everyone loves to concentrate on Millennials in the workplace. But what about Milton? What about those Baby Boomers who are staying even longer, and not retiring as early as the previous generation. How are you getting your best ideas from them?

Many workplaces have their own (less extreme) versions of Milton. Office Space remains the perfect modern metaphor for work as a place where brilliant ideas and potentially great employees wither under bureaucracy and micromanagement.

It doesn’t have to be that way.

Take Michael Lewis as an example. Lewis is the founder and CEO of Forever Collectibles, a premier manufacturer of officially licensed sports and novelty products. A few years ago, according to Inc.com, a young employee suggested the company start selling sports-themed ugly sweaters. Lewis was skeptical, yet he was aware of the trend of “ugly sweater” holiday parties. A trend adopted by thousands, if not hundreds of thousands, of young people.

Forever Collectibles took a risk and gave the idea a shot. One year later, the company realized $10 million in ugly sweater sales.

Forever Collectibles owes the success of this product, and the impact on their bottom line, to two factors.

First, Lewis recognized a trend. Second, he listened to an employee challenging the status quo at his company.

There’s a deeper story here, though, about culture and leadership. As Inc.com asks in the article, “What was it about sweaters, in particular, that caused Lewis to second-guess the boldness with which he usually embraced new ideas?” The answer is where we discover the real lesson behind the success of those ugly sports sweaters.

While Lewis has a background in apparel, his company was setup to license and make everything but apparel. He knew the giants that lived in the apparel industry might have already had this idea. Nike, Adidas, and Reebok are experts at apparel. Lewis’s company was not. Sure, Forever Collectibles might be able to make a sweater or two. But launching an apparel vertical — creating, marketing, and keeping it going, especially against someone like Nike — would be a large investment.

At the same time, licensors like the University of Texas or the Dallas Cowboys want their products to be anything BUT ugly. As Inc.com points out, “So much of Forever Collectibles’ competitive advantage stems from its ability to make money for pro and college licensing offices. The last thing Lewis would want is for the licensors to become skeptical about his company’s ability to deliver sales on a new product. A flop had the potential to hurt Forever Collectibles’ reputation with its results-oriented partners.”

Despite both of these factors, employees persuaded Lewis to take a risk. They created a design and sent it to a manufacturer in China to create a prototype. In less than 48 hours (in the miracle of modern manufacturing), a sample sweater was in Lewis’s hands.

Holding a physical representation of the idea did the trick. Lewis’ other concerns fell away. He brought that sample to the colleges and other licensees. They liked what they saw! With this green light Lewis and his team developed marketplace research. Their findings? None of the “big boys” were doing this.

With this insight came an entrepreneurial epiphany: they didn’t need to make three million ugly sweaters. Instead, they could control the supply and only make limited-edition ugly sweaters. This “scarcity” strategy worked: rumor has it that the company’s medium sizes were in such short supply they started re-selling online for $120 to $180 (two to three times the original retail price).

When the opportunity presents itself at your organization, are you ready to let your employees change your mind? Or would you take a different path and dismiss their ideas? Are you ready to change your mind about letting them change your mind?