Kelley is general manager of IDEO, the widely admired design and development firm that brought us the Apple mouse, Polaroid’s I-Zone instant camera, the Palm V, and hundreds of other cutting edge products and services. He’s also written two outstanding books on innovation that share the secrets of IDEO’s success: The Art of Innovation: Lessons in Creativity from IDEO, America’s Leading Design Firm and The Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Through Your Organization, both co-authored with Jonathan Littman.

Morris: IDEO has demonstrated that the workplace environment can nourish and support breakthrough creativity and innovation. How to design such an environment? What are the essentials?

Kelley: Here are three underlying design principles that come to mind:

1) Spaces that encourage serendipity: layouts and architectural elements that encourage “accidentally” bumping into people from different parts of the company and spontaneous discussions among small groups. In some companies, that means a wide staircase between floors or a casual touchdown space in the hallway that is available for an impromptu five-minute meeting.

2) Spaces that empower people to customize and adapt them. If the protocols in your office space include a lot of restrictive rules (e.g., no decorations sticking more than four inches above the cubicle, no tape on painted surfaces, no moving desks or tables without permission from the facilities department), then don’t be surprised if those rules also restrict the flow of ideas in that space. The ideal workspace is one where you feel empowered to adapt it to your team’s workstyle and the unique circumstances of the moment—a space as flexible and easily reconfigurable as a kindergarten classroom. Putting everything on wheels would be a good start.

3) Spaces that deliberately emphasize what’s important to the organization. The right space reinforces your cultural values, which helps attract and retain the right kind of innovators to suit your unique interests. At Timberland’s headquarters in New Hampshire, the first thing you see after you get past the reception desk is the running tally of how many thousands of hours Timberland employee have donated to social causes. The social conscience of the organization is not something dreamed up by the PR department, it’s baked into the culture, and it is very evident in their space. At Cirque du Soleil in Montreal, all of the administrative offices are built around the practice space where performers work on new shows, as a constant reminder of what the business is really about. At Pixar, the workplace is as colorful and animated as the characters in their successful films.

Ever notice that the most innovative companies often have the most creative work places? Does that seem like just a coincidence? Space is a strategic tool that any company can use, but most organizations insist on treating it as a utility.

Morris: Based on your extensive experience, what are the most common cultural barriers to establishing and then sustaining such an environment?

Kelley: The physical environment of course is just one element in the overall cultural environment you’re asking about now.  There are lots of pieces to get right, and some of the barriers include:

1) Fear and loathing in the workplace. Fear of losing your job.  Fear of being yelled at.  Fear of ridicule or mean-spirited teasing.  If all you want from your team is compliance—a solid eight hours of work and dutiful following of instructions—then Machiavelli might be right: it’s better to be feared than loved.  But if you want insight and innovation and sparks of energy, then there are better ways to bring out the best talents of your team.  Let any sources of fear come from outside the company: a healthy fear of worthy competitors, a fear of disappointing customers, a fear of missing important trends.  Internally generated fears are barriers to innovation and tend to drive away talent.

2) Over-confidence in the organization’s knowledge.  My first-hand experience with some of the best companies in the world is that they are always restless, always hungry for new learning.  And as soon as an organization gets complacent about their current situation or their own market wisdom, they sow the seeds of future trouble.  So virtually all organizations need anthropologists who learn from careful observation of human behavior, experimenters who learn from enlightened trial-and-error, and cross-pollinators who learn from other industries or cultures.

3) The assumption that new ideas flow from the top. In the traditional model of organizations, the executive team generates strategic initiatives and lower-level employees carry them out.  Unfortunately, that model fails to tap into the entire brain of the organization.  Much better is a culture that allows ideas to percolate up from anywhere in the organization, with the executive team acting more like venture capitalists, allocating money and resources to the best ideas, rather than having to be the original source of the ideas themselves.

Morris: In The Art of Innovation, you suggest that anyone can think more creatively and be more innovative when solving problems, taking advantage of business opportunities, etc. Do you literally mean anyone?

Kelley: Of course it’s hard to go from a dead start to best-in-the-world, but we believe anyone who is willing to listen and is open to new learning can definitely raise their game.  We’ve all learned how to use new hardware and software, we’ve learn how to shop online, we’ve learned how to do a performance appraisal, so why shouldn’t we be able to learn how to be more innovative?  There are tools and techniques out there for innovative activities like brainstorming and prototyping.  There are roles like “the anthropologist” and the “the cross-pollinator” that everyone already has inside them, which can be nurtured or brought to the forefront.  Anyone who has ever been a child (that’s everyone that I can think of) has some of that creativity still in them.  A manager’s role is to help give their teams new innovation tools, along with the permission to think—and act—differently.

Morris: In The Art of Innovation, you loosely describe IDEO’s five-step methodology. Specifically: Understand the market, the client, the technology, and the perceived constraints on the given problem; observe real people in real-life situations; literally visualize new-to-the-world concepts AND the customers who will use them; evaluate and refine the prototypes in a series of quick iterations; and finally, implement the new concept for commercialization.

Here’s my question: Is this a methodology which literally any business can use?

Kelley: IDEO has evolved that process quite a bit since The Art of Innovation, but the underlying spirit of our methodology remains the same.  It represents an approach to business problem solving we would now characterize as “design thinking,” a human-centered multidisciplinary technique that seeks out fresh learning in order to prototype new solutions. And we have applied it in situations ranging from simple children’s toys to precision medical devices for heart surgery.  Design thinking can help hospitals deliver more patient-oriented care and help food companies streamline their supply chains.  Beyond the world of commerce, we hope to use design thinking to address larger issues like improving education and increasing the environmental sustainability of enterprises.

Morris: For those who have not as yet read The Art of Innovation, please explain how IDEO conducts its brainstorming sessions.

Kelley: There’s a whole chapter on brainstorming in The Art of Innovation because we believe if you build a culture of brainstorming, you’ve got a great start towards nurturing a culture of innovation. And it’s not very difficult to get started. Just launch a series of brainstorms on a topic of interest to your business. Recruit a master of ceremonies for each session—someone brimming with self-confidence and energy.  Next, round up 5-10 interested participants, (mixing in at least a couple of new people for each session).  Look for staffers sporting an eclectic mix of backgrounds, preferably skewed initially toward more outgoing people with nimble minds. Offer pizza or sandwiches, with indulgent “reward” food like chocolate chip cookies.  Also, stock the room with plenty of colorful marker pens, Post-its, and other materials for capturing the ideas as they bubble up.

If you head the team or the organization, make it abundantly clear to everyone that the new program has your enthusiastic support.  I would encourage you to attend the first couple of minutes of some sessions during the introductory portion when the topic is discussed.  Then—and I think this is pivotal early on when brainstorming is at a fragile, embryonic state—get out of the way. Tempting as it is to stay and share your knowledge of the business, I believe in many, many cases the presence of a senior executive or CEO will be counterproductive.

Most teams are already using brainstorms, but there’s probably an opportunity to breathe new life into the process.  Here are a few things that we’ve found contribute to brainstorming success:

Sharpen your Focus. Begin with a clear statement of the problem. A question that’s open-ended, but not too broad. Focusing on a specific latent customer need or one step of the customer journey can often spark a good ideation session. For example, “How might we gain deeper insights into the experience of our first-time customers?” would be a useful brainstorming topic for many organizations.

Mind the Playground Rules. We’ve stenciled our brainstorming rules high on the walls of many of our conference rooms: Go for Quantity, Encourage Wild Ideas, Be Visual, Defer Judgment, One Conversation at a Time.  Even in a rule-averse culture, we’ve found these basic principles to be both instructive and empowering.

Number Your Ideas. Numbering the ideas motivates participants, sets a pace, and adds a little structure. A hundred ideas per hour is usually a sign of a good, fluid brainstorm, and even if the group is nearly out of steam when you hit number 94, it’s human nature to want to push on for at least half a dozen more.

Use the Space.  Leverage the physical environment to make your brainstorm more effective. Let your brainstorm literally take shape and fill the room—write and draw your concepts with markers on giant Post-its stuck to every vertical surface. Capture your ideas in visual, low-tech mediums that everyone can share. Spatial memory is a powerful force you can use to guide the participants back on track.

Morris: Let’s shift our attention to The Ten Faces of Innovation. I think you make brilliant use of the “faces” metaphor and am curious to know why you selected it.

Kelley: Whereas my first book talked about tools for innovation, The Ten Faces of Innovation gets more personal.  It is the difference between doing experiments and being the Experimenter, betweendoing innovation and being the innovator.  Part of the reason I selected the metaphor of personas or “faces” was that I received over a thousand e-mails from readers of The Art of Innovation, and my favorites were from people who said the book sparked some personal change in their work or their life.   One such message from a man in southern Brazil said “I am 39 years old and the book lit my fire again.” So I thought that making innovation roles a personal choice might help people break out of their organizational rut and enable them to have more influence on the world around them.

Morris: At one point in The Ten Faces of Innovation you observe that “Innovators don’t just have their heads in the clouds. They also have their feet on the ground.” Why is this so important?

Kelley: “Head in the clouds, feet on the ground” is an expression used within IDEO project teams as a reminder to seek out a balance between new ideas that stretch the limits of possibility and the ultimate desire to implement those ideas in the marketplace.  At the brainstorming stage, we encourage wild ideas, but in later stages of an innovation program, we are seeking out solutions that lend themselves to practical implementation and profitable growth.  So we think teams should spend some time with their heads in the clouds, dreaming up new concepts, and then seek feet-on-the-ground practical implementations that embody the best ideas.  Through most of the history of IDEO, we have retained the capability to build almost anything we conceived, and that “build capability” tends to keep even the dreamers among us grounded in reality.

Morris: All of us are aware of the achievements of celebrated innovators such as Thomas Edison. You devote much of your attention to those whom you characterize as “unsung heroes.” Those who “work on the front lines of entrepreneurship in action, the countless people and teams who make innovation happen day in and day out.” What lessons can be learned from them?

Kelley: Thomas Edison is an inspirational figure, but there are more attainable roles out there in the innovation teams working all over the world today.  The corporate anthropologist who discovers a new customer need by watching someone use the company’s offering for the first time, the cross-pollinator who transfers and translates ideas from a completely different industry, the hurdler who has a knack for getting around bureaucratic obstacles.  Each of these demonstrates a talent and a skill that has lessons for all of us.

Morris: Here’s a related question. Andy Grove, Jeff Immelt, and Steve Jobs are among the CEOs who are celebrated for the innovations they helped to achieve. What can other CEOs learn from the leadership those three exemplify?

Kelley: We have worked with all three of their companies and seen the imprimatur of those innovative leaders.  Each has his own personal style, but I’ve noticed at least two things they have in common, in the context of the innovation roles:

First, they have the spirit of the Hurdler, a sense of incredible perseverance and drive that keeps their organization moving forward.  They have a personal intensity that is hard to miss, even the first time you meet them.

Second, they all play the role of the Director in a way that—like great movie directors—brings out all the talents of those who work for them.  Steve Jobs is the epitome of this role, attracting people with great innovation aptitude and then giving them a stage on which to do their best work.  Talk to people who works for these leaders, and they will tell you it is both exhausting and exhilarating.

Morris: Here’s a question I bet you are asked all the time. Can the bottom-line impact of innovative thinking be accurately measured? If so, how?

Kelley: Managers are sometime frustrated that innovation is harder to measure at a micro level over short periods of time, but there’s plenty of evidence out there about longer term returns on innovation.  If you think of the metaphor of a new diet-and-exercise program, it’s pretty easy to measure the resulting weight loss by stepping on a scale once a week, but the effect on your sense of well-being is a little harder to measure and takes a bit longer to become clear.  That doesn’t mean it’s less important or impossible to measure with a little patience and care.  So looking at the companies we work with, there are all kinds of macro-level payoffs using a whole range of measures.

Samsung set a blistering pace of innovation over the past decade, and saw their estimated brand value eclipse Sony’s (by $4 billion!) for the first time last year.  Procter & Gamble has pursued an innovation agenda under CEO A.G. Lafley and watched their percentage of ideas brought in from outside the company inch up toward his goal of 50%.  Jeffrey Immelt has set a goal of 8% organic growth for GE’s diverse businesses, and his management team sees that as the ultimate measure of their innovation programs.  Apple is recognized by Fortune magazine as the “most admired company” on their innovation scale—based on a report card with input from 10,000 executives and industry experts—and that status attracts new talent to the company every day.  So the return on innovation is demonstrable and even measurable if you’re willing to work at it and have a little patience.

Morris: One final question. Based on your close association with IDEO’s clients over the years, what is the single most important lesson you have learned about helping a company to generate what Steve Jobs describes as “insanely great ideas”?

Kelley: I think Linus Pauling answered your question for me: “If you want a great idea, start with alot of ideas.”  One of the reasons top-ranked universities like Stanford or Harvard have such great students is that they have thousands of good candidates to choose from.  Venture capitalists have the luxury of sifting through hundreds of business plans and proposals before choosing the small handful they will fund.  In the same way, companies can up the quality of their ideas if they will increase thequantity.  Operationally, what that means is creating an idea-friendly environment in which concepts can be openly discussed—and improved upon—without risk of ridicule…a culture in which it’s OK to conduct lots of quick experiments—knowing that many will fail—in order to learn more about the path to innovation success.