Creating an innovation culture

Shutterstock, 25th on the most innovative companies list in 2014, is certainly not one of those companies that can be accused of becoming slower innovators after going public. The company achieved a 40% growth in revenue and has been consistently releasing new programs. In addition to integrating with Dropbox, Shutterstock's images are freely available to Facebook advertisers who formerly littered the site's ad space with cheap but poor-quality photos.

Shutterstock's founder and CEO, John Oringer, explained to Fast Company that the Facebook advertising deal is a win-win: advertisers are happy as their ads have high-quality photos for no cost; Facebook gets more advertisers and better looking ads and Shutterstock sells more images. Oringer said that Facebook pays Shutterstock a fee per image, with the photograph contributor receiving approximately 30% of that fee. That all of Shutterstock's images are ready to be used commercially also helps advertisers avoid the threat of litigation that they would be exposed to had they simply copied and pasted an image from the internet.

The company has brought in the concept of collaborative experimentation, which can help companies to not only boost their products but instil a progressive innovative mentally into the company culture. Shutterstock's Vice President of Product, Wyatt Jenkins, argues that through the continuous testing of ideas, a culture of experimentation can begin to manifest in the organisation. Jenkins says that the benefits of an experimental culture include the death of 'HiPPOs', which he describes as the 'highest paid person's opinion'. 'A/B testing is a sure way to get to the bottom of a decision without relying on anyone's gut instinct. At Shutterstock, if a senior executive has an idea in a meeting, the response is simply, "Let's test it"."

This process spills over into teams, which results in better engagement since their ideas are values and will be testes. Even if the result is failure, many positive spin-offs are achieved such as improved self-esteem and employee growth, especially the growth of critical ideas. Jenkins is an advocate of keeping the testing teams small, for example, a business analyst, an engineer and a designer/front-end developer (in the case of Shutterstock). The idea is to get a mix of different business functions but related to what is being tested. The concept of the '20% time' phenomena of the tech world is relevant here. In essence, it allows employees to use some of their work time to work on any company-related product they want. They experiment with

ideas that would not normally see the light of day. This kind of experimentation has led to Gmail, Adsense and many other Google initiatives.

Question 1

Shutterstock is empowering its employees by investing in a culture of experimentation. What are the benefits and limitation of allowing lower level employees to have a say in the strategic direction of the business?

Question 2

What risks to the organisation do you identify in the initiative Shutterstock executives have taken and what actions can they take to minimise such risks? (maximum 2 risks)