Well, he found what works for him, at least, though he’s quick to say that it’s not the only way to grow a company. Then again, his company has seen 161 percent growth in the last three years, landing at 2009 revenue of $307.6 million.
“If you want to lead the way in an industry, if you want to lead the way over your competition, then … be involved with businesses that carry innovation as a core competency,” says Faulkner, president and CEO of Pelican Products Inc.
Innovation is certainly core at Pelican, a Los Angeles-based designer and manufacturer of advanced lighting systems and virtually indestructible cases — and at other companies that Faulkner has led, including the Americas Operations Group at Microsoft and Nimbus CD International.
A commitment to perpetual ideation and improvement has secured Pelican’s place as the flashlight provider for the Los Angeles Police Department. Pelican’s customized solutions for each of its end markets also make it the go-to protector for everything from electronic devices to helicopter blades and the mission-critical military and medical equipment in between.
But it’s not just about having cool ideas for solving customer problems or being the first in your field to jump on a new technology.
“While we’re innovative and we pride ourselves on being innovative, most of our innovation turns to commercial success, as well,” Faulkner says. “We don’t just innovate for the sake of it. We do it very much with a goal of growing our business from it.”
Here’s how Faulkner brings all the pieces of innovation together to drive growth.
Create an idea culture
For innovation to be at your company’s core, it must be a constant part of your culture.
“I don’t think you can have a meeting every Monday morning and say, ‘Let’s be entrepreneurial. Here’s your hour to be innovative,’” Faulkner says. “It’s about building that into the culture. We have formal presentations, but people here are thinking of things all the time.”
The key is having an open environment where employees can share their ideas. Pelican has what they call a Blue Sky committee. Every month, representatives from each discipline in the company — from finance, R&D and sales to marketing and manufacturing — come together as a sounding board. Anyone in the company can bring ideas to them, whether as a sketch, a sample or simply a concept.
“They may be traveling with a customer. They may be looking at our products in use with an end market. They may like some other idea they’ve seen that’s an offshoot,” Faulkner says. “They’ll come back to us and say, ‘I really think we should be doing this,’ and we take it very seriously. No idea is stupid; no idea is out of bounds.”
Ideas don’t have to follow a tightly prescribed track. It’s not just products that come out of the Blue Sky. For example, someone once suggested a leasing option for cost-restricted clients who use several cases.
Because each product launch could cost Pelican millions of dollars, it has to be smart about which ideas to pursue.
Sometimes, that’s fairly simple.
“There are some easy ones where a customer comes to us and we can categorically recognize the commercial impact of a particular idea,” Faulkner says. “For those, they’re sort of no-brainers. There’s significantly less risk for us to take on. … To the extent the idea is coming from a customer or, like in the case of the police light, there’s a known large order at the end of the rainbow, then that’s a pretty straightforward call.”
Obviously, those aren’t the only calls you’ll make. Some require more background work, like conducting market research and running calculations.
Pelican’s assessment starts with a look at related technologies and products that already exist in the marketplace.
“We would do an assessment then to whether we think we could bring something better than what’s out there,” Faulkner says. “To the extent that we can build a better mousetrap for a particular market, we might talk to some customers. We might go and do some market research on who’s buying the sort of products that are out there. We would try and gauge the size of the market. Obviously, with the cost of bringing this stuff to market, you want to make sure there’s a scale of markets that you can be successful in.”
Pelican’s fastest-growing product line — remote area lighting — didn’t come from a customer with a guarantee of orders. It came from a good idea within the organization.
Of course, you won’t win every time, but that’s the reality of taking risks for the sake of innovation. The key is giving all ideas a chance, which encourages the flow to continue.
“When you’re doing lots of innovation, it comes with the territory that not everything you do will be a success every time,” Faulkner says. “And you know, that’s OK.”
Set the direction
To make initial idea-gathering easier — and more likely to reap success — your forum shouldn’t be a free-for-all. For innovation to propel your company in the right direction, that direction must be clear before ideas start flowing.
“First of all, I think it’s fair to say that everybody’s familiar with the company’s strategy,” Faulkner says. “If somebody said, ‘Let’s start making ice cream,’ it wouldn’t be approved — and, frankly, people wouldn’t come to the forum with the idea that we should start making ice cream.
“I don’t want to make it sound like there’s not any organization around this forum. … There’s a direction the ship is going, and to that end, people come to this forum with ideas on helping that ship continue down its course or go down it quicker. It is very much a controlled environment where we only want ideas that fit the guidelines of where the company is going.”
So how does Faulkner get 1,294 employees, headed the same way? He doesn’t — at least not by himself.
“You’re not going to have (1,300) people thinking the same way. You’re not going to get consensus around (1,300) people,” he says. “Certainly, my role and the (role of) people around me is to set strategy and set direction and make sure we’re following that. Thereafter, it’s communicating everybody’s role in that strategy, and I think it’s a case of turning that strategy into an execution plan. That’s where everybody really needs to buy in.”
In other words, the broad strategy you set may not be immediately relevant to each front-line employee. But it will click when employees see specific glimpses of their role in that strategy.
After the strategy leaves Faulkner’s desk, managers hone it into specific plans for their respective departments, tailoring each person’s responsibilities through a series of manager meetings, staff meetings and employee meetings.
“You can actually go to any department within Pelican today and people will tell you what the next three months are going to look like and the next nine months, what they’re expected to be working on, what they’re expected to deliver, the budget they’re expected to work within and what performance they’re expected to deliver on,” he says. “We may change that slightly against conditions, but for the most part, 90 percent of everybody’s job is well-planned.”
At the same time, the overall strategy stays forefront through posters, brochures and communication so employees can tie their zoomed-in view to the bigger picture.
“You know your role individually and collectively as a department and collectively as a team,” says Faulkner, who addresses the entire work force twice a year to reiterate the strategy and discuss future plans.
Here’s how that trickle-down process might look in action. Let’s say an employee tells the Blue Sky committee about a military tool case that’s failing in the field. Whether the idea ends up working or not, what’s important is that the employee understands the responsibility of success rests on the entire team, not one individual.
“We all buy in to a project,” Faulkner says. “So if it isn’t successful, we all are part of that decision. Therefore, nobody’s singled out as having made a mistake. It’s very much a team-recognized thing. That way, nobody’s really frightened to bring anything out there.
“If we’re successful, then everybody’s bought in to it and we all own it. And if we’re not successful, we all own it. So there’s not this culture of worrying about failure too much.”
If Pelican decides to design the military tool case, then the teams take over. The sales team puts together a plan to sell that case around the world. The manufacturing team lays out a strategy for making cases to satisfy the sales. The marketing department determines how to promote the product. Human resources designs a strategy for hiring people to match the expected growth.
“If you think about it, it fits like a jigsaw, really,” Faulkner says. “You take a picture of something and you cut it all down to where everybody’s got their part to play in the success of that product. Any one of them not doing their part would see the failure in that particular product launch.”
Fine-tune the machine
In this scenario, you’re the puzzle master, making sure all of the pieces come together at the right time.
“The challenge is you’ve got all these moving parts,” Faulkner says. “Make sure that all those moving parts are moving individually but also moving collectively. That’s my biggest challenge … we run this place like a finely tuned engine. We can’t have any cylinders not firing because that affects the performance of the whole engine.”
By monitoring progress and holding employees accountable, you can bring all the pieces together.
“As it relates to design on new products, my comment there is that we all own it so we’re accountable as a team,” Faulkner says. “When it comes down to execution of the strategy, that’s where we all own pieces. That’s where, you know, the marketing department has a number of disciplines it has to deliver on within an amount of time and within a budget and within a group of people.”
Faulkner conducts monthly reviews to make sure each department pulls its weight. He measures each department’s performance against timelines, budgets and other resources. While the focus is on current progress, it’s also a time to review the success or failure of certain activities and to check your pace toward future goals.
Keep track of progress consistently so the goal stays in front of you. Give yourself time to adjust your path instead of realizing too late that you missed a target.
“We try to be proactive, not reactive,” Faulkner says. “To the extent a department is failing in its objectives within the timeline, then, frankly, we watch … enough to where we would know that beforehand. We try not to have any retroactive action items; we try to have preventative action items.”
Multiple deadlines — like timelines, budgets and other expectations — keep the pressure on employees to perform. But you counterbalance that with some flexibility when it comes to external obstacles. If you’re willing to work with employees to make adjustments when they hit roadblocks, then they’ll be more willing to bring you problems directly and help you address them up front.
“We obviously would not want to see every project in every department all the time moved and changed and delayed,” Faulkner says. “So I wouldn’t tell you that there’s no pressure on people to deliver; there certainly is. But to the extent that there’s something beyond somebody’s control that is impacting us, then obviously we would be understanding of that and re-plan accordingly.”
For example, safety specifications for lights recently changed. Pelican couldn’t control how long it took the outside agency to inspect and certify its products. So Pelican had to push back the release date.
Then, after an idea turns into a product and launches successfully, the cycle starts over again. While Pelican does pause to celebrate success, it’s much more focused on recognizing what could be done better. Improving existing products is as much a part of innovation as developing new ones.
“It’s all about tuning that engine, and (after) you tune one area, you’ve got to go around and tune the other areas,” Faulkner says. “And then when you finish tuning them, you’re going back to the area that you started on.”
How to reach: Pelican Products Inc., (800) 473-5422 or www.pelican.com