Innovation Network

Sometimes Innovation Starts with a Relationship
by Ruth Ann Hattori, Co-founder of InnovationNetwork

Tropicana/CSX Transportation partnership site visit for IU 2000.

Looking across the country at some very innovative companies, it becomes clear that true innovation goes by many names. Often, these companies don't define what they're doing as innovative--they have merely found a formula to be the best in their class or unique in their industry. But upon scrutiny, the values and practices that drive success fall perfectly in line with the embodiment of innovation. Empowerment, shared learnings, collaboration, free-flowing information, and trusting relationships all elements that encourage innovation. At Nordstrom, innovation is called, simply, customer satisfaction.

At Cirque du Soleil--the international, acrobatic performance company-- it's "evoking emotion." At CSX Transportation and Tropicana Products, it's the type of deep, trusting relationship that becomes a true partnership. After 25+ years of an adversarial customer-supplier relationships, the CSX/Tropicana Cultural Partnership has now operated for almost two years with the goals of reducing costs for Tropicana and increasing revenue for CSX. The result: the creation of $1 million in combined savings and profits. The partnership meets once a month to present ideas that have bubbled up in each company, generate new ideas, and most importantly, to actually implement those ideas.

The CSX/Tropicana Cultural Partnership won the George Land World Class Innovator Award for 2000, presented at Innovation Network's annual conference Convergence. As it implies, this partnership is a cultural change initiative that involves both companies and the way they conduct business.

One example of the culture change is the story of the CSX rail inspector who proposed the idea of inspecting the rail cars on the Tropicana property rather than bringing them all the way back to the CSX yard many miles away. This back-and-forth transport of the cars simply for inspection was both costly and time-consuming. In the early days of implementation of this new inspection scheme, the inspector could be seen walking wearily down a long line of cars, one by one, while Tropicana workers sped by in their "golf" carts, thumbing their noses at him-or worse. As the Partnership culture took hold, those workers started offering the inspector rides in their carts, until finally, Tropicana offered him his own golf cart to make the inspection faster and less painful.

You might say inspecting cars at Tropicana is a simple, logical step to cut costs-not innovation! True enough, but the innovation is not in this simple idea, the innovation is in the relationship that allows it to happen.

As in most culture change initiatives, the forces of the previous culture-the way Tropicana and CSX historically interacted -- were the biggest obstacles to change. The culture of mistrust prevented people from offering ideas. The essence of the Partnership is to eliminate barriers and create relationships. So what's so innovative about that? Perhaps nothing, except they are succeeding at it. An example of the profound change in the way the two companies interact is that contract negotiations used to consume six lawyers for six months and end up with nobody truly happy. Going into the recent negotiations with a win-win mentality, the three-year contract was negotiated between two guys, the two who have to live with it, in two months, and both felt good about the result, which was then formalized by attorneys.

The underpinnings of their success include commitment, discipline and effective leadership. The commitment of both companies to this relationship is stunning. The financial and operational information provided by both sides forms the backdrop upon which the Partnership committee can make powerful decisions. The discipline of the monthly meetings--they happen every month, rain or shine, they honor ground rules that provide a safe place to learn, and they measure results in dollars and cents. The Partnership committee is made up of about 20 people from various levels in both organizations. They include senior managers whose passion and commitment for the Partnership are constantly scrutinized for any whiff of "flavor of the month" actions. And, all members of this highly visible partnership model behavior that, over time, has encouraged curiosity, pride and support from the rest of their organizations. These days, others are asking how they can create similar relationships with other commerce partners.

So, if the bottom line result you seek is innovation, the top line must be the investment made in upholding the values of learning, commitment and the importance of people through a culture of trust and respect, openness, flexibility, empowerment, relationships and celebration.