Building a Culture of Innovation

· by Mariah Ramirez

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Continuing our series of interviews, I recently sat down with David Sewell, President and one of the founders of HTI, to discuss what innovation means to him.

Originally from La Palma, CA, David Sewell graduated from Augusta State University in Georgia where he majored in Marketing and minored in Production Operations.

On May 4, 1999, along with Herb Dew and John Knight, David founded Human Technologies, Inc. He initially managed the IT and operations of the company. As the company has grown he’s managed every division of the business, and currently is over the central functions of HTI. These include Accounting, IT, and HR.

What did you do before HTI?

Professionally, I was finishing up school when I started with another recruiting company. Recruiting during the day – mostly for engineers – and attending school at night. Before that, I had done everything from bartending to retail sales.

Herb (CEO) advised me that you’d be a good person to talk to not only about innovation but innovating when things are going WELL in your organization.

I think that people are forced to be innovative, generally out of survival. However, if you want to be successful long-term, and ahead of the curve, you have to constantly be thinking innovatively. He who innovates wins. Getting to the top is one thing, staying at the top is a whole different ball game. It’s dependent on continuing to innovate and push forward. As soon as you stop innovating you start slipping backwards. I think we were a little bit better at that when we were smaller as well. We’re starting to get back on track now but innovating through the growth has certainly been a challenge.

What do you define as innovation?

Innovation can be a different way of looking at something or addressing a problem. It’s not necessarily technology based. For example, before ACA or Obamacare was in place, there was a large need to have a more stable workforce that was benefitted, similar to how a direct hire full-time workforce operates for the customer. As a solution, we came up with the full flex package. This satisfied employee needs such as benefits and stability and in turn reduced turnover for us and our customer. I think coming up with that before the advent of ACA was very innovative. It addressed customer concerns and employee issues, and since nobody else was doing it we garnered more profit margin. Innovation is just an unconventional or non-traditional way of thinking. It’s creative solutions. I think innovation is a mindset.

What drives you to be so innovative?

I think my strengths largely contribute to the way I’m wired. My natural tendency and personality is that nothing is ever good enough and you have to always get better. My train of thought has always been if you’re not moving forward, you’re moving backward by default. Some of my experiences through the years have also contributed to that. I’ve worked in logistics in the automotive industry and other industries known for innovation, and that continuous improvement mentality is contagious. The customers and their expectations drive some of the innovation. Even if your product or service is effective, you can’t deliver the same thing year after year and expect them to be satisfied. You have to think of new ways to meet their needs or a competitor will.

Furthermore, because the customer is forced to continuously improve, it forces you to do the same thing if you want to continue doing business with them. It’s a customer driven requirement and demand. The reward for doing a good job in this industry is to cut your price by 10% for the next year. So, if you’re going to be able to do that and continue to stay viable in business, you’re going to have to innovate.

How do you train yourself to live in the state of constant innovation if you’re not naturally wired that way?

I think to some degree there are people that are more naturally adept at thinking that way, and then there are others that compliment those of us who aren’t. Their brains are more wired to think in terms of process: step A, then B, then C, then D. They’re reliable, and they look for consistency in their operations. The key is to constantly think “is there a way we could do what we’re doing better?” I firmly believe there isn’t anything we do that could not be done better in some way, shape, or form. Either faster, better, cheaper, with less errors, etc. Evaluate your job and its tasks and ask yourself “what am I doing that’s not adding value?”

Developing that mindset is certainly not something that happens overnight. You have to build that environment in which people feel comfortable and in routine of thinking that way. Building a culture of innovation where it’s okay to question a process or procedure. For example, in a warehouse you see very little of that. Everything is standardized work. The reason for that is to ensure all the different people across different shifts are putting out the same product.

In that type of environment, introduction of extra variables can cause issues. For example, missed shipments, damaged goods, and product loss. Within the right context people could generate new ideas, but it had to be well thought out. The company had to be sold on the new idea for it to be applied across shifts.

What are the downsides to building a culture of innovation and what can go wrong if you do have a “rogue” employee or project leader?

I think if you don’t create the proper structure in which to innovate it can be chaotic. If everyone’s going off doing things a different way you’re going to run into more mistakes, issues, and problems. You have to set clear expectations, structure, and the freedom to be able to innovate within those confines. For example, you don’t want me to haphazardly introduce an entirely new accounting process that’s lacking controls and creates extra work for the people in the field. It’s the notion of responsible innovation.

Where do you see the most opportunity for innovation or growth within staffing and recruiting?

It’s everything that we do. I think there’s a lot of mechanical or tactical things we do that could and should be automated. Maybe leading into our next conversation regarding AI which I think is a good tool. There’s a lot of things we do that are repetitive. Especially considering the scale in which we do it. I mean we had 11,200 W2s last year but to get to the 11,200 people we employed we probably processed four times that many individuals. And when you think about incrementally any task that takes even as little time as 60 seconds, if you multiply that by 11,000 the cost increases exponentially. If you can save that minute, that’s a lot of savings in time and resources. So, I think there’s a lot of opportunity to improve there with the way that we do things.

We’ve done a lot with automating reports, and metrics gathering to report to customers, but we haven’t done a lot with our side on operations to remove the repetitive, non-value-added pieces from the process. Furthermore, would be integrating all the different systems we utilize. We have a lot of different systems within the operational groups. None of which integrate. There’s a HUGE opportunity to improve that.

Do you think the objective of innovating and conquering that obstacle is to get one system that can accomplish all the operational needs, or to get one system that can make them all talk to each other?

I don’t think it’s a one system meets all needs solution. Because within the different functions that we have Safety, Accounting, Sales, Industrial, Professional, etc. for those businesses, none of them are alike. They have some things that compliment each other or require information from each other to perform optimally but none of them are alike. Thus, the likelihood of ever finding one system that covers everything is probably highly unlikely – like an ERP system in a manufacturing environment. It’s not currently available and it’s not likely to be. The packages that do exist don’t work for us. Plus, we don’t want to run our business based on the software package we use, we want it to be the other way around.

I think the key to accomplishing that is utilizing one platform to integrate those things. Ideally, drawing data from those sources and aggregating or consolidating it all into one and then pushing it back out as needed. Technology is available to do that. Some of our reporting does that now but pushing it back IN – that’s the key. We have tons of tools that we’re probably only using 50% of their capability in total.

Overall, an innovative spirit is what keeps HTI going strong.

It gets us through tough times, and distinguishes us in the good times. I would recommend to any business that is struggling to take a step back and look at ways they can make “out of the box” improvements. That’s where they will find true growth.