511: Product insights from employee #1 after a $2.3 billion exit – with Chris Elmore

Product Mastery Now for Product Managers, Leaders, and Innovators

How product managers can foster a culture of innovation

Watch on YouTube

https://youtu.be/14cLrVAu7BA

TLDR

In this episode of Product Mastery Now, I’m interviewing Chris Elmore, a tech entrepreneur and college professor who helped found Avid Exchange, a unicorn startup that went public in 2021. Chris brings years of experience in product innovation and management, and he’s here to share his thoughts on driving innovation and keeping businesses growing for the long haul. Here are the key points from our conversation:

• A simple definition of innovation: “It’s better than what it was”
• Rethinking organizational structure can improve the flow of innovative ideas
• Hiring should focus on cultural fit and alignment around organization mission and purpose
• Everyone in an organization can be an innovator

The Importance of Innovation in Today’s Business World

As we start our chat, Chris highlights why innovation matters so much in today’s fast-moving business world. Products and services don’t stay relevant as long as they used to. Because of this, companies can’t just rely on what worked in the past. Innovation is key to keeping a business growing and thriving.

Building a Culture That Supports Innovation

One of the main topics we explore in this episode is how a company’s culture can help or hinder innovation. Culture is the unwritten rules of an organization – what people are allowed and expected to do. Chris shares his experience of keeping a strong culture, and even improving it, as his company grew. This challenges the common idea that company culture always gets worse as a business gets bigger.

Chris says that the quickest way to destroy culture is to put someone in charge of it. When someone is in charge of culture, the culture becomes that person’s version of culture.

Instead of taking charge of culture, leaders can use stories to reinforce a culture of innovation. For example, Chris tells his teams a story of how he tells his kids that he doesn’t care about their grades as long as they’re putting in full effort, but usually full effort leads to good grades. This communicates to his team that effort will eventually lead to the desired outcome.

Rethinking How Companies Are Structured to Support Innovation

We also discuss Chris’s thoughts on how company structure can affect innovation. He critiques traditional hierarchies, suggesting they can make it hard for innovative ideas to flow, especially ideas from employees who work closely with customers.

Chris observes that most good ideas come from the middle third of an organizational chart. Often, people in the middle or bottom third of an organization try to communicate their ideas to leadership who don’t understand the idea or are scared of innovation, so many great ideas fail.

Instead of a traditional org chart, Chris proposes thinking of the organization as a curve that represents everyone’s understanding of where the organization is going. The beginning of the curve represents where the organization is today, and the end represents where the organization needs to go. The goal of a leader is to get the organization over the valleys to go further down the curve. This approach focuses on aligning everyone in the organization towards common goals and outcomes, rather than rigid reporting structures.

Producing Alignment

To explain what the organization is working toward and get a team aligned around common goals, Chris concentrates on three things: mission, purpose, and outcome. The mission and purpose should be aligned with the organization’s outcomes. If not, we have work to do. If someone can’t get behind the mission and purpose, they can’t be in the organization anymore.

Building Innovative Teams: A Fresh Approach to Hiring

Chris takes an unusual approach to hiring. He focuses on the person rather than their resume. In fact, he says he’s never read a resume in his life. This approach allows him to assess candidates based on their potential and how well they fit with the company culture, rather than just their past experiences and qualifications.

A Simple but Powerful Definition of Innovation

Chris offers a simple definition of innovation: “It’s better than what it was.” This straightforward idea makes innovation something everyone in the company can understand and participate in, not just the people in research and development or product design.

A Customer-Focused Approach to Innovation

Chris advocates for a broad definition of “customer” that goes beyond just the end-users of a product or service. He explains that customers include internal and external stakeholders and even employees’ families. Product managers should think about serving all of those customers.

This wider view encourages product managers and leaders to consider the needs and perspectives of various stakeholders when driving innovation. By considering a wider range of “customers,” organizations can ensure their innovations create value not just for end-users, but for employees, investors, partners, and even the families of team members.

Everyone can be an Innovator

Chris wants everyone in his organization to be aware that they can be an innovator. In his company, every time someone was hired, Chris gave them his definition of innovation and told them it’s their job to be an innovator.

The Power of Small, Continuous Improvements

While big, disruptive innovations often get the most attention, Chris emphasizes the importance of small, ongoing improvements. He explains that small innovations over a long period of time is a huge thing.

This view encourages product managers and leaders to focus not just on big breakthroughs, but also on the cumulative impact of smaller, incremental improvements over time.

Conclusion

Driving innovation in product management is about more than just developing new features or technologies. It’s about creating an environment where innovation can thrive at every level of the organization. A culture of innovation leads to better products and more resilient organizations. Innovation is simply about making things “better than they were.” As product managers and leaders, our challenge is to embody this principle in our daily work and inspire our teams to do the same so that we can ensure our organizations not only keep pace with change but lead the way in creating value for our customers and stakeholders.

Innovation Quote

“Luck is when opportunity meets preparedness.” – Earl Nightingale

Application Questions

1. How can you simplify your definition of innovation to make it more accessible to everyone in your organization?
2. Have you ever acted as an innovator while working in a role that is not traditionally innovative? Or have you seen another employee do this?
3. What small, incremental innovations could you implement in your products or processes that might lead to significant improvements over time?
4. How can you expand our definition of “customer” to include a wider range of stakeholders? How might this change your approach to innovation?
5. What aspects of your organizational structure or culture might be hindering innovation? How can you address these barriers?

Bio

Chris Elmore is a seasoned tech entrepreneur and a respected college professor. Chris played pivotal roles in the founding of fintech AvidXchange, a unicorn startup that went public in 2021 with a $2.3B valuation. At AvidXchange his roles spanned numerous functions, including development, product, marketing, and mergers and acquisitions. Chris is also a passionate musician, performing solo and in bands as a singer with his guitar and ukulele.

Thanks!

Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.