518: The non-obvious way to gain organization support for your ideas – with Doug Hall

Why product managers need to stop the stupid

Watch on YouTube

TLDR

Innovation expert Doug Hall reveals why most organizations struggle with innovation despite recognizing its importance. Through his experience running Eureka! Ranch and Dexter Bourbon Distillery, Hall discovered that successful innovation requires a bottom-up transformation focusing first on empowering frontline employees to fix inefficiencies (“stop the stupid”), then enabling middle managers to improve systems, and finally allowing leadership to pursue bigger strategic innovations. This three-level approach has shown to increase innovation value by 28% versus the typical 50% decline seen in traditional top-down approaches.

Key Topics:

• The Innovation Paradox: While 80% of CEOs say innovation is critical, only 20% believe their organizations are good at it
• Employee Innovation Barriers: 37% don’t see innovation as their job, 29% don’t know what to do about it
• Middle Management Challenge: Managers waste 3.5 hours daily dealing with mistakes and system flaws
• System vs. People Problems: 78% of issues come from flawed company systems, only 22% from employee mistakes
• The “Stop the Stupid” Approach: Start with empowering employees to fix immediate inefficiencies before pursuing larger innovations
• Three-Step Framework: 1) Teach innovation fundamentals, 2) Build confidence through early wins, 3) Develop systems thinking
• Measurable Impact: Organizations can achieve 4 improvement actions per employee per month
• Cultural Transformation: Focus on intrinsic motivation rather than external incentives

The Innovation Paradox in Organizations: Why Companies Struggle to Innovate

Doug shared that when you look at any survey of CEOs, more than 80% will say that innovation is crucial for their organization’s future success. However, when asked about their organization’s current innovation capabilities, the numbers flip dramatically – only about 20% believe their organizations are effectively innovating.

Doug illustrated this disconnect with a story from his consulting work. His team had just presented breakthrough solutions to a problem that a CEO had previously deemed impossible. Rather than excitement, the CEO’s response was, “Huh, wow. I guess you did figure it out. Now what do I do? I guess I gotta do it.” The disappointment in the executive’s voice revealed a deeper truth about organizational resistance to innovation.

This resistance manifests in various ways:

• Departments operating in silos resist changes that affect their established processes
• Middle managers hesitate to support innovations that might impact their performance metrics
• Frontline employees don’t see innovation as part of their role
• Existing systems and procedures inadvertently suppress new ideas

Doug explained why simply having good ideas isn’t enough. Successful innovation requires addressing deeper organizational dynamics and systems that either enable or inhibit change. As we explored in our conversation, resolving this paradox requires a fundamental shift in how organizations approach innovation, starting not with grand strategies but with empowering employees to make small, meaningful improvements in their daily work.

Breaking through this paradox requires recognizing that innovation isn’t just about generating new ideas – it’s about transforming how organizations think about and implement change at every level. This understanding forms the foundation for a more effective approach to organizational innovation.

The Problem with Traditional Innovation Approaches: Why Good Ideas Often Fail

Doug shared a startling insight from three separate studies that crystallizes why traditional innovation approaches often fall short. When organizations take an innovative idea into development, its forecasted value typically declines by 50% before launch.

The Innovation Value Loss Problem

A truly disruptive idea will challenge multiple departments in an organization. A genuinely innovative product might require:

• Changes to the supply chain
• Different manufacturing equipment
• New customer service processes
• Alternative sales channels
• Modified operational procedures

When these departmental challenges arise, organizations typically respond by compromising the original idea. As Doug put it, “It’s like you’re managing the death of ideas.” Each department makes small compromises to fit within existing systems until the final product barely resembles the original innovative concept.

The Hidden Organizational Barriers

Through our discussion, Doug revealed how organizational silos create powerful resistance to innovation:

Performance Metrics Conflict

Manufacturing departments hesitate to support innovations that might lower their productivity metrics.

Departmental Isolation

In many corporations, departments operate as separate units where promotion and income depend on making their individual department heads happy, not on supporting cross-functional innovation.

System Constraints

Standard Operating Procedures (SOPs) and existing systems often can’t accommodate truly innovative ideas without significant modification.

The Traditional Approach Trap

Most organizations try to overcome these barriers through:

• Special innovation teams
• Suggestion boxes
• Innovation training programs

However, Doug found these approaches usually fail because they don’t address the underlying system issues. Traditional innovation approaches weren’t working because they ignored a fundamental truth: most employees face daily operational challenges that make innovation feel like an extra burden rather than an opportunity.

A New Framework: Starting with Employee Engagement

Understanding the Real Barriers to Innovation

The data Doug shared revealed two primary barriers preventing employee participation in innovation:

• 37% of employees don’t see innovation as part of their job
• 29% don’t know what to do even if they wanted to innovate

These statistics point to a clear problem: organizations aren’t making innovation accessible and actionable for their employees.

The “Stop the Stupid” Revolution

This insight led to a radical shift in approach. Instead of pushing employees to create breakthrough innovations, Doug’s team started by addressing the daily frustrations and inefficiencies that drain employee energy and enthusiasm.

For example, at his distillery, while Doug was excited about developing new custom bourbon experiences, his employees were more concerned about immediate challenges like:

• Back pain from lifting heavy crates
• Inefficient paperwork processes
• Workflow bottlenecks
• Equipment issues

Building Momentum Through Small Wins

The power of this approach became clear as employees started solving these immediate problems. By focusing on improvements within their sphere of influence, employees:

• Gained confidence in their problem-solving abilities
• Developed practical innovation skills
• Experienced intrinsic satisfaction from making meaningful improvements
• Built collaborative relationships across departments

From Frustration to Innovation

This employee-first approach transforms how organizations think about innovation. Rather than treating innovation as a special initiative, it becomes part of everyone’s daily work. The results speak for themselves – organizations implementing this approach see an average of four improvement actions per employee per month.

More importantly, this foundation of employee engagement creates an environment where larger innovations can thrive. When employees feel empowered to solve problems and improve systems, they become natural allies in implementing bigger strategic changes.

The Three-Level Organizational Transformation: Creating a Culture of Innovation

Through his work at Eureka! Ranch and his own experiences running a bourbon distillery, Doug has developed a practical framework for transforming how each level contributes to innovation.

Level 1: Frontline Employees

The transformation begins at the front lines, where employees are closest to daily operations. Instead of imposing top-down innovation mandates, organizations need to:

• Provide basic innovation and problem-solving tools
• Set clear boundaries for decision-making authority
• Support immediate improvements within teams
• Celebrate small wins that eliminate inefficiencies

Level 2: Middle Managers

One of the most striking statistics Doug shared was that middle managers waste an average of 3.5 hours daily dealing with problems. Breaking this down:

• 78% of issues stem from flawed company systems
• 22% come from employee mistakes
• Most time is spent on reactive problem-solving

The solution involves transforming middle managers from reactive problem-solvers into system improvers. This means:

• Teaching managers to identify system-level issues
• Empowering them to implement systemic solutions
• Shifting focus from blame to improvement
• Creating clear protocols for change implementation

Level 3: Leadership

At the leadership level, the transformation focuses on enabling rather than directing innovation. Leaders need to:

• Set appropriate vision and strategy
• Avoid compromising innovation goals to fit current capabilities
• Support system-wide impro