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Corporate Innovation Managers Exchange Best Practices
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We may be on the cusp of a whole new way of tapping the creative problem-solving potential of large companies, and finally making the phrase "idea management" a reality. This was Robert Tucker's reaction to spending a day participating at an idea exchange of what he calls here "innovation managers", although the work these people do in their respective organizations is so new that there is not yet a widely-accepted term to describe their occupation.
Brought together by Imaginatik, a Boston-based purveyor of idea management software, the dozen or so directors from WR Grace, Georgia-Pacific, Bayer, Goodyear and other companies spent the day discussing what's working and what's not in the fast-evolving craft of soliciting, selecting, recognizing and implementing ideas that ultimately drive profitable growth.
Idea management systems build on the notion that your rank and file contributor, whether in sales, R&D, purchasing or payroll, might just have an ingenious solution to a problem someone else in the company is struggling with, if only he or she is asked.
The idea of asking employees for their ideas is nothing new. Company suggestion programs have invited employees to submit ideas that save money, increase safety and improve productivity for over a hundred years. But idea management systems go much farther. By using the company's intranet portal to appeal for ideas, the suggestion box is brought to the desk of the employee. And queries for help with specific problems can target select groups of people in the company the way upscale catalogs get mailed to affluent zip codes. Employees who see a problem posted on the company's innovation portal can easily submit their ideas, whether they work in Bombay, Boston or Berlin.
And idea management technology enables managers to work with innovation directors to develop campaigns that solicit ideas from across the value chain: from customers, suppliers, advertising firms, think tanks, universities. The state-of-the-art today is the idea campaign, which commonly lasts only a few weeks, and then it's over. Such campaigns are often launched using what Imaginatik CEO Mark Turrell calls Flash Sessions, where brainstormers are brought together in real time to play off each other people's creativity, and spawn dozens of ideas that get posted for other problem-solvers to see and add to. Other campaigns might involve large-scale, company-wide events where everyone in the division is urged to submit ideas on topics like "how do we eliminate 'I can't believe we do this' situations, or "how can we improve plant safety"?
One innovation manager from a petroleum refining company shared how he and his team seed their ideation events with ideas they've thought of ahead of time. They gather 20 people in a conference room with a router to each person's laptop, and the ideas get projected up on a screen for all to see. These ideas in turn are posted on the division's customized version of Idea Central. The innovation manager at SunLife Financial told colleagues that she gets the creative juices flowing by asking an easy question like "what silly rules exist in the company that should be gotten rid of?" In one meet-up of employees from eight regional offices of the company, 800 clerical workers all went on line at the same time to brainstorm ways to improve productivity by 10 percent. One rubber company innovation manager, who participated from Europe, told the group that "our best events are where we have an implementation team in place and the worst, where we don't." "The books all say that the review team and the implementation teams should be different, but we found that it's okay to have the team do both."
Intranet-based idea management systems, when combined with full-time efforts on the part of innovation managers, are achieving impressive results for their companies. Indeed, they are empowering significant changes in how organizations ideate - and their potential is only just beginning to be exploited.
This from Tucker on Innovation from http://www.innovationresource.com by Robert Tucker.
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Avoid These Mistakes in Launching an Innovation Initiative
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Recently Innovation Resource had occasion to return to a large financial service company that operates in multiple countries and has multiple divisions. They had assisted the company in launching an innovation initiative in 2000, and their efforts to derive revenue growth via innovation continue after several years of turbulence in their market environment as well as numerous changes in leadership. During a recent assignment, they informally surveyed a group of 20 managers who were heavily involved in the implementation of that ambitious even groundbreaking innovation initiative.
Here's what they agreed were the key learnings:
You must keep metrics simple. The metrics apparently became burdensome in many cases. Additional metrics for innovation should be easy to capture, easy to track, and should not cause behavior that is engaged in only to "look good" with reported results. It's a "big mistake" to have more than 4 or 5 innovation metrics.
You need to invest in innovation. Product manufacturers often have metric of "percentage of sales spent on R&D." This service business, like so many others, has no budget or earmarked resources for innovation. How can we do innovation without budget?
You must continue to work on the culture. The innovation culture suffered greatly with staff cutbacks and general uncertainty in the air.
You must show people examples of regular contributors and managers coming up with value-adding, customer pleasing innovations. If you do, you'll get more of that behavior.
You must find and build new champions -- people who are responsible for making innovation happen, enhancing enablers of innovation and busting barriers. Senior management emphasis is critical. When it wanes, innovation emphasis dies. When it's present, you are bound to see big and little results in terms of top-line revenue growth, strategy innovations, new products, and process improvements.
(This from Tucker on Innovation from http://www.innovationresource.com)
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Is Innovation the Next, New Thing?
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This from the Newsletter "Tucker On Innovation" August 2004 - Part I. Visit the website at http://www.innovationresource.com
The predictions many of us made about innovation becoming the next big thing appear to be coming to pass - even more rapidly than expected. Think back to a year ago when the global economy was in the tank, and a hunker down mood dominated most organizations. Then consider these indicators:
- Attendance at the $2895 per person Front End of Innovation Conference in Boston in June was so over-enrolled that sponsors were forced to change hotels to accommodate the unexpectedly large crowd.
- Convergence 2004, which will be held in Minneapolis September 26-29, has already surpassed last year's numbers, and conference producer Elizabeth Kamper tells us that she expects record turnout.
- Most of the innovation consultants that have been spoken to, say that they are busier than ever.
- Germany has declared 2004 to be The Year of Innovation.
Of course these disparate indicators do not necessarily make a trend. But interest in jumpstarting top-line revenue growth via innovation initiatives does appear to be on the upswing. Leading the pack are chemical companies, refining companies, food companies and all manner of manufacturers. Beset by lower-cost competitors from China, they must innovate costs out while innovating in new value-adding services, business models and customer loyalty inducing strategies, while at the same time continuing to move first in introducing product improvements.
Robert Tucker says that he has been surprised at the number of manufacturing trade associations that have invited me to assist their members in increasing their IQ - innovation quotient by presenting sessions at their annual meetings. More recently service firms, including banks like Washington Mutual, insurance companies like SunLife and Progressive, and even retailers like Radio Shack, have begun to get serious about systematic innovation, rather than being content with piecemeal, ad hoc efforts confined in traditional functions like new product development.
So the news is good for the Innovation Movement as we approach our field's version of "old home week" Convergence 2004 in Minneapolis, September 26-29. Today there is a small but growing cadre of vanguard companies whose innovation work brings tangible results quarter in and quarter out. They now approach innovation as a discipline, while continuing to cultivate a culture that supports prudent risk-taking. They constantly involve their customers in new and exciting ways to suss out their unarticulated needs, and how they continue to tweak their front-end processes to keep ahead of ever-changing customer demands.
Because of the learning and the sharing in our field, we may be getting better at our craft. Companies just jumping in don't have to make the same damn-fool mistakes others have made. If only their leaders are willing to read and study and learn before launching blindly. And only if we keep sharing candidly what's going on behind the moats that companies build around them.
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Saturday, August 28, 2004
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Companies that rest on their laurels often wither and die but those that are always improving their products or services will thrive.
Without innovation any business is going to become stagnant. You just can't rest on your laurels and wait for something good to come along. You have to do something to make sure this happens. Innovation is an ongoing process of staying ahead. As soon as you think you have got it right, you need to tear it up and start again, because the hounds are always snapping at your heels. The minute you think you have got it right, warning bells should go off.
The secret of successful innovation was being brave enough to take the plunge - and then being committed to seeing it through.
Small businesses in particular needed to think carefully about how they were going to approach the concept of innovation because getting it wrong could be costly. The whole process of innovation is innately risky and no matter how good they are, most innovations simply will not stick. Innovation is expensive and time-consuming so you may need to consider other options - for example, can you quickly copy something you have seen which you think is a good idea? A lot of Japanese businesses used to do this very successfully.
Full story here.
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The post talks about a set of guidelines on how to see differently. - Listen to the radicals
- Embark on journeys of discovery
- Look across disciplines
- Question the routine
- Recognize the barriers
- Practice flying upside down
- Destroy the old model
- Envision multiple futures
From the Innovation Weblog - Permalink
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Innovation should be every manager's duty
Innovation is returning to center stage after being pushed to the wings over the past three years, during which time German companies focused mostly on cost-cutting. Innovation management is now considered as an important lever for more growth and is therefore high on the agenda of German managers.
Today, systematic innovation management is considered a way to guarantee business success: Companies that generate less than 10 percent of their turnover with new or newly designed products are in danger over the long term.
Companies pursue different methods to trace new trends: Innovative companies conduct systematic future research and question their sales staff more frequently than companies with low innovative drive. Products that are developed without feedback from staff often do not make it on the market. To avoid such mistakes, responsibility for innovation must be bundled, if possible under the responsibility of a managing board member, the consultants said.
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Institutional Innovation Pathway to Growth
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With "innovation" the watchword, China today is bent on pressing ahead with overall reforms. "To cross the river by feeling the stones" has proved a successful development approach which has conformed well to the country's realities these past 25 years. However, challenges are mounting as the country deepens reform efforts to address many underlying and emerging institutional problems.
The robust growth of the US high-tech industries in recent years bears full testimony to the vital importance of a broad institutional framework to encourage innovation. China must speed up all-round innovation if it wants to shift from previous extensive growth at the expense of resources and environment to more efficient sustainable development.
But before innovation can take root in this country, policy-makers should do away with institutional obstacles in various forms.
For the complete story: China Daily, here.
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I am on a "WEDDING BREAK"!
I'm getting married to my sweetheart and the Innovation Blogger is going for a much deserved break! I will be gone for a week (minimum).
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That's the simple wedding card I designed - small ceremony, few people - an "innovation" by Indian standards!
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It may look like black magic but there is a lot of discipline and thought behind innovation.
Leaving nothing to chance
Innovation is often associated with serendipity (the faculty of making happy discoveries by accident). The image of the scientist stumbling upon something at his lab, alone, is too anecdotal an approach to how innovation happens.
Shake up status quo
Innovation inherently focuses on disrupting the ecosystem. If not, it is an operational improvement. It is only when the status quo is shaken up that there are newer markets created or money to be made. The disruption could vary in its impact and in its visibility. An operational innovation is best done in an operational setting. Innovation has an element of risk to it.
Market pull vs technology push
A number of key market forces come together to cause the disruption that can enable one innovation or technology to surge forward.
For the complete article: The HinduBusiness Online, here.
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Olympic Innovation Scorecard
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This from Adam Bostock @ Acro Logic and the if++ The Innovation Forum http://www.acrologic.co.uk/if++/
Use this score card every few months, and plot the results on a graph. The Olympic Innovation Aim is to keep increasing all of the scores. The gradient of the graphs indicate how dynamic and innovative your organisation really is.
Note that each of the above items, hopefully, impacts on the next. More ideas lead to more products and, if done effectively and efficiently, this leads to increased profits. The organisation can use a proportion of these profits to improve working conditions and support the needs and desires of its staff. The resulting happy and relaxed work force will generate more high quality ideas, which gives more new products, more profits and more happiness, which . . .
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Tracing Origins of Innovation
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Everyone's had an idea just pop into their head, seemingly out of the blue. Ever wonder how that happens? Scientists are putting on their thinking caps to figure it out. Dan Steinberg, 18, is a study volunteer in a research project about insight.
"That's this flash of inspiration when we're trying to solve a problem, and you just don't know the solution, you have no idea, you feel you're stuck in a mental rut and then bang, the solution just pops into your head, seemingly from nowhere," John Kounios Ph.D. said. But original ideas come from somewhere, the brain.
Insightfulness
Insight is the term used to describe a sudden, unexpected discovery, realization or understanding of a concept or problem. The first description of the phenomenon is attributed to Archimedes who shouted, "Eureka!" when he suddenly understood how to calculate density of an object by measuring water displacement. (According to legend, Archimedes had been taking a bath when the insightful solution came into his mind. He was so excited, he jumped out of the water and ran down the streets without stopping to dress.)
Insight differs from traditional problem solving. The most striking aspect of insight is the feeling of "eureka!" or "aha!" that accompanies the answer. Traditional problem solving involves a series of definable steps to gain the answer. With insight, a person has tried to come up with a solution for some time, and the problem or concept is deemed unsolvable. The answer suddenly appears out of thin air - often when a person is not even thinking about the problem.
Studying the Nature of Insight
The process of attaining insight is unknown because a person who experiences insight can't tell how the answer was obtained (it just comes to them). Since insight can be an important way to solve a problem, it may be helpful to try to understand the brain processes associated with insight. Eventually, that information may be helpful in developing educational materials that instill insightful thinking as an additional way to learn and solve problems.
Researchers at Drexel and Northwestern Universities used brain scans to monitor how the brain works during insightful thinking. In one experiment, subjects were given a string of related words and asked to come up with a fourth related word (like pine, crab, sauce - answer: apple). During the test, functional magnetic resonance imaging (fMRI) was used to monitor brain activity. Subjects were asked to respond whether the answer came to them through insight or some type of problem solving process. In a second experiment, new participants were given the same type of problem-solving test. This time, investigators used EEG recording to monitor brain wave activity.
The researchers found insight was associated with an increase in neural activity in an area of the right temporal lobe of the brain, called the anterior superior temporal gyrus. In addition, about 0.3 seconds before the moment of insight, participants experienced a burst of high-frequency electrical activity in the right half of the brain. That activity may indicate the "appearance" of the solution in the brain.
More work needs to be done; however, researchers may one day be able to develop methods that enhance or facilitate insight and increase problem-solving abilities. It may also be useful when traditional problem solving methods don't help.
For complete article : News 14 Carolina, here.
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Arindam Banerji has been writing a Guest Column on Rediff.com on "Can India produce billion-dollar innovation?" It is a four-part series and the fourth part will come out tomorrow, that is 13th August 2004. Some interesting portions are excerpted below - this is from parts I, II and III. I have also added the links to all the four parts in the end.
India has made rapid strides in the world of research and development in the last few years, but are its innovations world-beaters? In an era that has been dominated by American innovations, can Indian scientists and technologists make a lasting impression? What will it take to institutionalize innovation in India?
Bluntly speaking, Indian research and development has made tremendous progress over the last decade or so and the proof of this increasing Indian ingenuity is literally available in every sphere that you can think of. Clearly, I cannot go into every aspect of this, but let me at least try to delve into a few representative symptoms. . .
R&D Market Size: "R&D (research and development) outsourcing market for information technology in India is estimated to grow to $9.1 billion by 2010 from $1.3 billion in 2003, according to research agency Frost & Sullivan. The R&D outsourcing market for IT in India is estimated to grow from the present size of 1.3 billion dollars in 2003 to $9.1 billion in 2010 at a compounded annual growth rate of 32.05 per cent, Frost & Sullivan, which undertook the study for the department of IT, said in its report. The R&D outsourcing market for telecom in India is slated to grow from $0.7 billion in 2003 to $4.1 billion in 2010 at a CAGR of 28.73 per cent, it said."- rediff.com
Earth-changing Innovations: "A research team at the National HIV Reference Centre in the All India Institute of Medical Sciences is developing a vaccine against HIV. The vaccine, called the HIV-1 DNA, has worked on mice and monkeys. The team led by Dr Pradeep Seth is now waiting for clearance to start clinical trials on humans." -- Hindustan Times
Disruptive Research: Outlook India has just published this excellent piece on some of the disruptive research that they found in various parts of India.
Institutionalized Innovation
Okay, so what is institutionalised innovation anyway -- encouragement for innovation when embedded deep within key institutions of society allows for a steady stream of high-impact innovations like the Polaroid, cell-phone, Xerox machine, MEMs (micro-electromechanical systems) and so on -- the hoops that innovators have to jump through to make a difference gets lowered.
You do not have to be one-in-a-billion to make a difference -- being one-in-10-million is good enough. And those numbers make all the difference. It is this improvement of odds that forms the crux of 'Institutionalisation of Innovation.'
So, ask yourself: would it take one Indian in a 100 million who could -- while working in India -- come up with something as earth-changing as the jet-engine? Or do you think it would take one Indian in a billion to achieve that feat?
Now ask yourself: what would it take to reduce the odds so that one Indian in 10 million could produce something fundamentally earth-changing like the photocopying machine?
How would we have to change as a society and as a country to reduce those odds of one in a billion Indians innovating the next radical shift in technology to, perhaps, one Indian in a 10 million achieving the same?
If you can figure out the changes, you have figured out how to institutionalise innovation. You have figured out what it takes not only to produce one good innovation every couple of decades, but to produce the kind of steady innovative disruptions that Tables 6-9 indicate.
Look closely, every few years within the US, somebody has come up with and produced an earth-shattering innovation or two. That does not happen by magic or coincidence and it isn't because the Americans are any smarter than the Indians.
It's because the US society, academia and industry have institutionalised innovation.
Rural and Indigenous Innovations
One style of innovation that really works in a country as large and diverse as ours, is grassroots innovation: this includes inventions for a milieu that is quintessentially Indian.
These inventions are probably difficult to migrate from our culture, traditions and environment to that of other countries, but they are critical to how Indian ingenuity can be directly used to transform our circumstances, in ways that elite corporate research laboratories never can.
These rural and indigenous innovations come from two sources: first, farmers, semi-literates, illiterates, slum-dwellers who have managed to change things by marrying their own innate genius to their inherent understanding of ground conditions; and, second, innovations taken from more traditional sources such as universities and independent engineers that are then adapted back to suit Indian traditions and conditions.
Academia-Industry alliances
A calculation by the Centre for Studies in Science Policy, Jawaharlal Nehru University, says 50 of India's 250-odd universities are active in academia-business liaisons. The interaction between academia and business can take many forms -- new start-up companies by academics, consultancies, joint ventures between commercial and academic organisations, and even 'blue-skies' projects that entail industry sponsorship of research in an area where the outcome is not clear.
Finishing school for Innovation: 'NirmaLabs, an incubating initiative of Nirma Education and Research Foundation has established a fund of Rs 5 crore to support the incubation programmes. With a commitment of Rs 20 lakh per project as initial seed fund, the incubation programme enables participants to develop the concept further to a funding level. The programme is initially focusing on the IT, communication and entertainment sectors, with expansion in other sectors to soon follow. However, this is where this effort starts breaking off from other incubators.'
Co-ordinated research in strategic areas: Key strategic areas, where a national presence is required cannot be done in a handful of research labs or be looked into from a few angles only. One such area is the work on smart materials.
The fourth part talks about how to bridge the gaps between where India is as far as innovation is concerned and where it ought to be.
Part I
Part II
Part III
Part IV
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Wednesday, August 11, 2004
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Evolutionary Approach To Innovation
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Reproduced from: FastCompany Innovation Station
Need to kickstart your innovation practices, processes, and production? Take a hint from the world of biology and consider how evolution -- idea Darwinism -- can help inspire change and creativity.
Can biology teach us anything about innovation? The essence of Darwinism is that progress is created by adaptation to changed conditions. What starts as a random mutation can also spread to become the norm through a process of natural selection.
The same is surely true with innovation. New ideas are mutations created when two or more old ideas combine. For instance, Virgin Atlantic Airways is what happens when you cross an entertainment company with an airline business.
Virgin itself is also a good example of mutation and adaptation. The music retail business was created when a postal strike threatened to shut down the fledgling mail order record company. Virgin Atlantic was the result of an unsolicited approach from outside the company. Virgin Blue (a low-cost airline in Australia) is a similar story.
In my experience, what makes Virgin innovative is a strong sense of self, an ability to experiment, the skill to cross-fertilize ideas, and a willingness to change. The company has largely grown, not through the unfolding of some master plan, but through an accumulation of learning and ideas caused by threats, accidents and luck.
So, if external events and adaptation are the driving forces of biological evolution, is it possible to develop an innovation process that seeks out accidents and mutations?
Click here for the complete article: FastCompany Innovation Station
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Edward De Bono - Creative Organizations
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From the e-newsletter Management Intelligence Where does your organization stand? Quiet Life
A new idea is a distraction and a disturbance. The idea may fail. So just don't have any.
Me-Too
Let someone else develop the new idea. Let someone else carry the development costs. Let someone else develop the market. When the idea is seen to be successful then you come in with a 'me-too'.
Acquisition
A particular form of me-too. Let some other organisation develop new ideas and then you take over the other organisation, so acquiring the new ideas.
Osmosis
A new idea is tried out. It is successful. People talk about it. Gradually it becomes part of the standard thinking in that field, so you adopt the idea too.
Chance
You read the literature. You go to conferences. You talk to others. Ideas do happen from time to time. You have to be patient and to wait.
Research
You rely on your R&D department to generate new ideas. That is what they are there for, isn't it?
Advertising Agencies
These are creative people. Surely they can suggest new ideas. Sometimes they do.
Centre For Creativity
A formal Centre for Creativity takes over responsibility for the 'New Ideas' function. This Centre would organise training in creative thinking. This Centre would put together the Creative Hit-List which defines creative target areas, and so on.
Process Champion
This person is given the responsibility for ideas in an organisation. It is the specific responsibility of the Creative Champion to seek ideas, to energise the creative process, to compile the target list and to collect new ideas from any source.
Creative Outsourcing
If you need additional creative thinking you could have a creative contract with a 'creative shop' or even with Edward de Bono himself.
New ideas, Edward points out, involve effort, decisions, actions and investments. 'In the end the idea may not be successful. It is hardly surprising that people prefer to talk about innovation rather than do anything specific about it'. But that's exactly what you should be doing. 'As an individual or as an organisation ask the simple question: What am I (are we) doing about new ideas? And answer this question honestly! |
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Diagnostic For Disruptive Innovation
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Complete Article: HBS Working Knowledge
You have three potential innovations, but resources to develop just one. Here are diagnostics to help you make the best decision. From Strategy & Innovation newsletter. A brief follows:
Customer diagnostic
This diagnostic assesses customers in order to identify "disruptable" market segments. Conducting this diagnostic involves looking for signs that specific customer groups either are overserved or are unsatisfied nonconsumers.
Portfolio diagnostic
The portfolio diagnostic assesses whether any current or potential innovations, such as new ideas or acquisition targets that produce appealing innovations, can be deployed in a way that successfully meets the needs of a disruptable customer group. This diagnostic involves looking at the technological characteristics of the innovation and at the potential business model by which the innovation might be brought to market.
Competitor diagnostic
The third diagnostic assesses competitors to ensure that the selected opportunity takes unique advantage of their weaknesses and blind spots. First, it helps to evaluate whether a competitor will be motivated to respond. Second, it identifies whether that competitor has the ability to do so effectively.
Putting it all together
By systematically conducting these diagnostics, any individual or team can quickly identify which opportunities within its purview are the most promising and therefore merit disproportionate attention. Sometimes, the one or two opportunities worth tackling are exceedingly clear. But other times, a number of seemingly equally promising ideas emerge. In these situations, create a weighting system where each opportunity can be rated against the factors discussed in this article.
When the highest-potential opportunity has been identified, build a preliminary business case for it. It should include a target customer, the characteristics of the selected innovation, the proposed business model to commercialize the innovation, and the predicted competitor response. In addition, the business case should highlight the key unknowns that need to be addressed while the selected opportunity is honed.
These diagnostics can also aid companies that are frustrated by their track record in making acquisitions. Many companies find that large acquisitions provide stable but lackluster returns, whereas small acquisitions typically have highly variable outcomes, occasionally producing blockbuster returns. Screening for small targets that match identified disruptive opportunities can, in essence, cut the tail off the returns distribution curve, allowing companies to capture disruptive growth before it becomes fully understood by the marketplace.
As an added bonus, this analysis will also highlight opportunities for sustaining innovations, the lifeblood of most companies as they allow existing companies to grow within markets where they have already gained a foothold. What kills companies is trying to introduce sustaining innovations into disruptive markets and vice versa.
Rigorously using these three diagnostics can help avoid this pitfall, allowing companies to systematically identify high-potential opportunities, address gaps between the planned deployment of the innovation and the factors that will determine its success, and begin to create new-growth businesses.
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The key to U.S. economic success is innovation. The reason the US has stayed ahead of the rest of the world, despite globalization and growing competition, is it tends to have the best ideas - and the United States continues to be a magnet for people from around the world with the best ideas. And the US will only be able to retain jobs and create new ones if it continues to lead the world in innovation. The secret behind U.S. innovation is the investment the private sector and the government make every year in research and development. The article goes on to talk about the House Science Committee, which oversees the government's investment in research at universities, national labs, and the private sector. Source: EnidNews, here. |
The 90-Day Plan
CIOs should monitor both their own and surrounding environments for signals of disruptions. This requires training, infrastructure changes, and some difficult analysis. Recognizing precise signals that indicate disruptive developments can help CIOs predict important market changes.
First month: Identify training requirements
Many of the concepts of disruptive innovation appear counterintuitive. Therefore, institutionalizing its use as an analytical tool involves widespread education. The first thing to do is identify employees who need to be exposed to the ideas. Start with those who interface with customers, evaluate and shape projects, or work with outside vendors. Training these employees in the basic concepts will also identify their ongoing IT requirements related to disruption.
Second month: Conduct internal overshoot analysis
One way to quickly put the concepts into action is to monitor whether your company has overshot market tiers. In addition to developing further intuition about how to use theory to analyze the findings, the analysis itself can be very important. When a company has overshot its market, it has opened the door for a disruptive incursion. It should consider "self-disruption" to block an attack from below. Furthermore, the company needs to curtail investment that promises improvements along overshot dimensions or it won't receive adequate returns on its investment in innovation. Remember to start this analysis at the bottom of the market, not the top.
Third month: Include disruptive concepts in appropriate information systems
Making the analysis systematic means ensuring that information systems are configured to collect and interpret data related to disruption. For example, sales tools should include fields that facilitate the collection of data related to overshooting. External market scans need to look at important fringe markets, and trend reports should include a segment on tracking disruptive developments.
Source: OptimizeMagazine, here.
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Firms and organisations, indeed whole nations, have to adapt fast to changing situations and demands. That means constant renewal. Everyone can succeed, some more than others, as long as they bear in mind the following key organisational principles.For a nation to be healthy requires an ability to renew itself constantly. This applies to companies, organisations, governments, indeed everyone. The need to innovate is obviously not new.
The fathers of management, be it Frederick Taylor, Henri Fayol or Joseph Schumpeter, wrote volumes on how innovation affects production and economics. And managing innovation has been central to management studies since the early work by Tom Burns and George Stalker on innovation management, the SAPPHO studies in the UK comparing successful and unsuccessful innovations, or the work carried out for the Apollo and Gemini space projects in the early 1960s. But innovation has become an even bigger imperative than it used to be in OECD countries, and this is for at least three reasons.
First, the economic landscape is changing. Globalisation, the rise of China and India as economic powers, and the geographicalrelocation not just of production, but R&D too, pose a major challenge for the "industrialized" world. There are new technology leaders, like Korea in the applications of broadband, or Singapore in biotechnology.
Second, customers for new products, systems or services, and citizens as clients of government have become far better informedand more demanding about both design and quality.
Thirdly, the possibilities offered by information and communication technologies enable a much faster diffusion of innovation worldwide, so much so that the sources of innovative ideas crop up in places where we do not necessarily expect them. Take SMS(short messaging systems), some of whose best innovations come out of Manila, or the Indian movie industry. Or consider Ireland,which has emerged as a hub of activity in IT and pharmaceuticals, much to the surprise of many economists.
The trouble with innovation is that while it is becoming ever more important for success, it is a very risky enterprise. The traditionalliterature exploring the subject all draws discouraging conclusions: the prospects of the innovator "making it" are slim. Overall itappears from most research that the probability of economic success from innovation is between 20% and 30%. The implication is simple: we need to have the guts to live with risk if we want to innovate for our health!
- LEADERSHIP
- MANAGE RISK
- CREATIVITY
- ORGANIZATIONAL INTEGRATION
- IMPLEMENTATION
- MANAGEMENT OF INFORMATION FLOWS
- PROTECT INNOVATIVE IDEAS
- MARKET CATEGORIES
Source: OECD Observer, here.
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Gary Hamel says companies should be more romantic. They need a vision of what an organisation can become - with the help of its people. Business must adopt and adapt the Silicon Valley approach to innovation. Resilient companies have workers purposefully schooled in the art of innovation.
Twenty-five years ago companies began to realise they should use their employees' problem-solving talents, rather than destroying all discretionary decision-making. So why not do the same with the imagination of employees? Why not let Hamel do for innovation what W. Edwards Deming, the American who convinced the Japanese to enlist the support of workers, did for total quality management, efficiency and process? Hamel is adamant that good ideas - innovation - flow not from the top and the hero CEO but from anywhere in the organisation. "Why did it take so long for companies to figure this out?" he asks - "this" being the awareness you can get a positive return on investment by unleashing the problem-solving ability of employees. "For a great part of the Industrial Revolution the belief we had was that the way you drove productivity and efficiency was to steadily reduce the discretionary decision-making power of first-line employees, that you gave them lock-step procedures, that it was the expert who came in and figured out new ways of doing things and you wrote out the manual and people followed it."
It was a radical departure when Deming and others came along and said management should teach firstlevel employees about statistical process control and so on. Now, Hamel says, organisations face something equally challenging: how to make business innovation "an everywhere, all-the-time capability, not something that is done in some kind of innovation ghetto".
The new rules of the game People were left less curious, less interested in new ideas. But while it is fine for companies to try to get over the "hangover" of the past decade, the world does not stand still. For incumbents, the challenge is to make sure they are the ones writing the new rules of the game. That means new management practices founded on new management principles: "There's no doubt the modern industrial organisation is the second-greatest thing that humankind has invented [the greatest being constitutional democracy], but we are also at a point of time where features of large-scale industrial organisations need to be reinvented."
Hamel says that medium- to large-scale organisations have been very good at optimising their core business model. "There is a set of principles that has been baked into every organisation of any size in the developed world:
replication;
hierarchy (as you went up the chain of command people had more discretionary authority);
specialisation (where you grouped together people who had similar skills), and so on.
This "organisational DNA" is fine, but as change accelerates some of these things can have increasingly toxic effects. The desire to get rid of variety leads to a mistrust of experimentation. Hierarchy can lead to arrogance. Specialisation can lead to a loss of new skills.
Innovation is not anarchy, Hamel says, but companies need to be bold - and romantic. They need an idea of what an organisation can be. At the core is the people thing. Over the past decade managers have systematically undermined any deep sense of employee affiliation, he argues. Companies complain that employees think of themselves as independent, yet it is management that created that distance. On one hand it says people are its most important resource, on the other its sends out the message that people are expendable. "We are never going to go back to jobs for life or an entitlement culture, but we have to pay more attention to investing in people and giving them the possibility to grow and innovate, and tie them emotionally to the organisation," Hamel says.
"I don't think you can justify a situation in which the average CEO makes 400 or 500 times [that of] a first-line employee. It reinforces the notion that change starts at the top, and of course that the CEO should be this great visionary. It is almost an insult to employees to see that kind of a gap, and it sends the wrong message." But getting employees to innovate is not solely about financial reward: "What people really care about is acknowledgement, and what really drives them is peer recognition - one of the most underrated currencies in most organisations." "I think that if we are going to create new management practices we need new management principles, and we are not going to find those by benchmarking studies of the same old, same old," he says. "Every company I know has been working to reengineer their business processes, logistical offerings, customer support. But they have given almost no attention to reinventing their management processes. Yet if you look at what gets in the way of resilience, it is the way we do capital budgets, strategic planning, product development, training and hiring." Gary Hamel says there are five key strategies:
z Increase the ratio of employees who think of themselves as innovators
z Increase the ratio of radical innovation to incremental innovation.
z Increase the ratio of externally sourced innovation to internally sourced innovation.
z Raise the ratio of learning over investment.
z Raise the ratio of long-term commitment and remain consistent in your goals. Source: AFR Boss, here. |
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Saturday, August 07, 2004
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Innovation Defined : A mindset, a pervasive attitude, or a way of thinking focused beyond the present into the future vision (Kuczmarski).
Is it just a "BUZZ"word?
Perhaps innovation has been misunderstood and therefore its full potential not realized. The vital importance of continuously fostering and maintaining an innovation culture has been underplayed. While many companies have at one point in time spoken to the importance of innovation and some have gone so far as to truly embrace innovation, few have been able to maintain a culture that supports innovation as a top strategic priority. With the myriad of benefits that accompany true innovation, there is no reason why innovation should not be at the top of senior management's "to-do" list. Innovation needs to be cultivated within organizations to ensure success and longevity. This begs the question, what is innovation really, and why are not more companies doing it?
Mindset?
Is innovation a process? Is it a strategy? Is it a benchmark, a cross-functional team, or a new-to-the-world process? Is innovation a management technique or a leadership responsibility? The answer is that when innovation is done well, it is all of the above and more. A truly innovative organization has developed a mindset that permeates every aspect of its business. Innovation is a pervasive attitude, a feeling, an emotional state, an ongoing commitment to newness. It is a set of values that represents a belief in seeing beyond the present and making that vision a reality.
Most managers are unable to recognize innovation when it is happening right in front of them. Their understanding of what it is and what it involves leaves a lot of room for misinterpretation. Some think of innovation as a broad-ranging creative process, others as simple idea-generation. Some see it as strictly the domain of the new products department, others know it has something to do with marketing, but are not quite sure what. Most just want to get it "done", but fail to devote enough attention or dedicated resources to it to make this possible.
Recipe for successful innovation
Ingredients:
- an optimistic, buoyant, and positive CEO;
- a chief innovation officer (CIO) committed to leading the innovation effort;
- a commonly agreed-upon new products strategy;
- a balanced new product and technology portfolio;
- a consumer-driven development process;
- several dedicated teams;
- a reward structure for new product participants;
- a set of innovation norms and values; and
- a measurement system for assessing innovation.
Directions:
- Start with a CEO who believes in, conveys optimism about, and consistently commits resources to innovation. Add a chief innovation officer who has as his/her number one priority spearheading, mentoring, and leading the innovation effort. Develop a new products strategy and technology portfolio. Implement a consumer-driven development process.
- Next, mix in several dedicated and upbeat cross-functional new products teams. Motivate them with a reward structure based on performance. Add a set of values and norms for the organization to believe in and act on.
- Simmer for approximately five years. Be sure to convey passion and stir regularly. Watch carefully that the innovation mix does not burn and keep the heat regulated. Assess success by using a previously developed measurement system.
- Make sure you have already started a new batch before removing the first one from the stove.
- Serves hundreds of thousands of shareholders, employees, and customers. Enjoy!
Risk?
The aspect of innovation that concerns most CEOs is that it is almost always inseparable from risk. Though many pay lip service to the power of innovation, most corporations today are averse to the type of aggressive investment it demands. Instead, they dabble in innovation. They talk about it as the lifeblood of the company and throw occasional resources and R&D dollars into new product development. It is a hot topic in strategic planning meetings. At least one manager or department is charged with "doing" it. But the commitment usually ends there. Unwilling to be measured by their failures, employees are reluctant to take risks that the successful development of new ideas demands and, as a result, even the desire to innovate diminishes. As most managers discover, it is one thing to talk about innovation, but it is quite another to stake your resources - and your career on it. Aha!
A passion for innovation must be inculcated within the hearts and minds of senior management before it can permeate an organization. Innovation cannot merely receive an occasional mention or occasional surges of additional resources. Senior management must believe in innovation and tout it as the most valuable strategic advantage that the company could ever hope to achieve. Actions must support the words. A fervor for and intensity about innovation must be conveyed. Innovation is not just one more thing to get done. Innovation is not simply a buzzword or a trend. Instead, it should be viewed as a way of life - a way of thinking, managing, and feeling. Summary of "What is Innovation? And why aren't companies doing more of it? by Thomas D. Kuczmarski in the Journal of Consumer Marketing.
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All businesses are threatened by innovation. How do we respond to it? By seeing innovation as unfair competition and wasting resources in legal battles that inevitably fail? Or by accepting that the world changes and then deciding we are best served by finding our own innovations? If someone creates a faster, cheaper, better or generally more efficient way to produce the same product as you, allowing them to sell their product at a price significantly less than yours, or securing a great market segment ... are they cheating? Before you answer the question, consider its flip side. If your company found a faster, cheaper ... you get the general idea ... are you guilty of cheating? Source: GlobeTechnology.com, here. |
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Organizational Innovation
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Question: What defines innovation and what can I do to promote innovative thinking in my business?
A collaborative survey of innovative products and services conducted over a five-year period identified key underpinnings of an innovative business culture (see www.london-innovation.org). These were:
Inspire:
- Have a clear mission that all employees understand and support.
- Constantly reinforce the importance of innovation, design and creativity.
- Ensure that a culture of trust and respect pervades the entire organization.
- Celebrate success and provide support in failure.
- Give people the freedom to perform against stretching goals.
- Develop people to meet the needs of the organization.
- Reward and recognize talent and commitment.
Create: - Have a formal or informal system for encouraging and capturing all ideas.
- Extend the company's team structure to external partners.
- Ensure senior management adopts a "hands-ready" support role.
- Manage risk effectively on a progressive basis.
- Ensure intellectual property and competitive advantage are well-managed.
- Effectively manage the financing of innovation.
Connect: - Have a well-managed process for staying close to customers and markets.
- Regularly review markets and competitors to seek competitive advantage.
- Turn regulation and legislation to business advantage.
- Fully exploit the potential of the Internet and e-business for communicating with customers.
- Always compete from a position of strength with distinctive innovation.
- Ensure the value chain is constantly under review.
The London Innovation organization also listed their top-10 tips for introducing innovation and creativity into a business. These include: - Turn dissatisfaction or frustration with an existing product or service into a new idea.
- Ask customers (existing and potential) what they want and don't want.
- Be restless, outward looking and unreasonable.
- Do not let the cynics get to you, especially those who "know" why your idea will not work.
- Capitalize on your inexperience by thinking without constraints and out of the box.
- Be passionate and have faith in your product.
- Let threats to your business drive your innovation.
- Use the knowledge in universities and research institutions to help you innovate.
- Utilize business networks to exchange ideas with other businesses and partners.
- Learn to expect failure on the way to success.
Source : OrlandoSentinel, here.
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When was the last time you really celebrated a new innovation at your company or organization? I don't mean the Christmas party. I'm talking about a rewards-and-recognition dinner for the entire team that worked on the development of a successful new product.
If you had one, that's a good sign that your organization is trying to create a risk-taking culture.
Attitude and mind-set are the be-all and end-all for creating an innovative culture. A company that creates a culture that encourages and rewards risk-taking is one that will accelerate the advancement of good ideas and eventual market successes. Crafting a culture that enables everyone within a company to feel and be innovative means providing people with a financial upside when a product or service does well and not scolding or reprimanding someone when a product fails. Failure is intrinsic to the innovation process. Accept that or don't play the game.
The primary reason to create an innovative culture is that it makes economic sense. Margins increase, earnings go up, stock prices appreciate, and ultimately employees feel that they are part of a winning team. Why then don't more organizations encourage a risk-taking environment? The unfortunate answer is fear of failure and uncertainty. People feel as if they are going to be burned in many cases if they stick their necks out to pursue something new and it doesn't make it or falls short of the goal.
And yet, as Andrew Carnegie, the famous industry leader, once said, "The first person gets the oyster, the second one gets the shell."
The same is true with innovation. The first to market with a new idea or the first to create a new category is the one who usually secures the most share and margin structure.
Source: SunTimes.com, here. Article by Thomas Kuczmarski
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Organizations must become more adaptive and creative. It's hard to argue with that statement as we look at the forces impacting organizations today. But becoming more adaptive and innovative requires fundamentally new ways of seeing and engaging the world, not merely applying the latest improvement model.
Perhaps the most critical and difficult part of any effort to improve adaptability is the need for the organization to have the simultaneous presence of balancing and growth systems, of stable and chaotic conditions all at once. It is important to keep in mind that in using the word chaos (or chaotic) we are not talking about the everyday definition, which conjures images of things falling apart and being in total disarray-usually a fairly bad thing. We are using chaos more in the scientific vein, which describes unstable conditions but with an underlying, integrating order.
A number of authors have spoken about the need to be at the "edge of chaos," where things are just about to fall apart but don't. This really is the zone of highest adaptability and creativity. But helping leaders understand what it looks like and how to bring it about is sadly neglected. Leaders are told how important it is to find this edge of chaos, but little is provided in the way of useful information about the methods or approaches. A deep inhibitor of creative and adaptive responses is a serious misunderstanding of the nature of paradox, particularly dealing with chaotic conditions.
For the complete article: Center for Simplified Strategic Planning - here.
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The Media Lab at Massachusetts Institute of Technology is a hotbed of creativity and innovation. Barry Vercoe, a founding member and speaking on National Radio this week, is convinced that what he describes as "the clash between disciplines" results in innovation. Researchers and students from many different disciplines are brought together in an atmosphere of liberation. Sponsors are free to observe work and commercialise any of the results on the basis of a royalty-free non-exclusive licence. With ready finance and interchange of ideas, researchers don't have to spend time on paperwork.
Creativity flourishes where societies have the combination of talent, technology and tolerance. Creativity is important because it is the driving force of innovation, which in turn drives economic growth. Talent defines the creative class, which encompasses scientists, engineers, artists, musicians, architects, managers, professionals and others whose jobs deal with creative or conceptual tasks. Creatives outnumber blue-collar workers in all advanced western economies.
For the complete story: National Business Review, here.
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CREATIVITY is one of our most powerful faculties. Disciplined and focused creativity is a mighty instrument that plumbs the depths of our subconscious mind, bringing forth innovations, solutions, methods of improving business and even new approaches to human relations.
Innovations or business breakthroughs that are not nurtured tend to fail. One thing is certain: the business landscape is being transformed into a competitive environment.
Change must be expected. Innovation and improvement are tied to a successful business or product. But at times change can be disruptive to an establishment, thus an innovation can pose a problem rather than be an advantage. A leading expert in systematic innovative methods for technical, business and social systems, Darrell Mann, said global innovation statistics revealed a shocking scenario, over 80% of innovations failed before they reach the market.
"And 80% of the innovations that make it to the market also fail. Also, more than 90% of the innovations are brought in after the deadline, thus making them obsolete," he said. Scratch your head no more, as there is a repeatable process for a successful innovation. With Teoriya Resheniya Izobreatatelskikh Zadatch or Theory of Inventive Problem Solving (TRIZ), situations are rectified within hours. TRIZ was developed in the former Soviet Union, and traced its roots to 1946 when an engineer, Genrich Altshuller, conducted a careful study of the process of inventions. TRIZ emphasises that every successful innovation is brought forth only when an innovator is able to create an environment where customers, shareholders and employees win.
Source: BizStar, here.
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Innovation Incubator Model - SALON
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The graphic is from the Salon Blog. The full post permalink is at http://blogs.salon.com/0002007/categories/businessInnovation/2004/07/29.html#a823.
The post is titled "Corporate Anorexia". One of the paragraphs follows:
"I believe what we're seeing in the corporate world today is corporate anorexia. I described last week the horrendous 9-step race-to-the-bottom that has driven corporations to abandon quality, sacrifice domestic workers, and gouge and sue customers in the never-ending, desperate attempt to keep in the good books of insatiably demanding shareholders. You can see the unhappiness in the faces of today's executives, and the weakness and vulnerability of the depleted corporations that they lead in their financial statements and forecasts. Meanwhile, fawning consultants, instead of warning about the shortage of innovation, investment and long-term strategy, are making excuses for it. It's insane, it's unsustainable, it's bad for consumers, workers and the economy, and it's irresponsible. You can no more cut your way to corporate greatness than you can starve yourself to health."
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Thursday, August 05, 2004
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GIST Innovation2004 Survey Results
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Recent survey results: - -- 59.4% state that innovation is very important or critical to our future.
- -- 63.6% state that they talk about innovation frequently or all the time.
- -- 38% state they have a definition of innovation.
- -- 24% state they have a well-defined process of innovation.
- -- 20% state that they monitor a set of innovation metrics.
Read the details on the Heads-Up! Blog, here.
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To stay competitive, companies are finding new ways to automate operations, reuse technology, and streamline processes. Nearly 2 million U.S. computing jobs are forecasted to shift offshore over the next 10 years.
Services companies are under intense pressure to coax more productivity out of their staffs. After growing only 3% per year for the past two years, the $520 billion worldwide industry seems poised for a rebound. Getting creative while doing a lot of work in low-wage countries is a necessity for most tech-services outfits, it's not the only way to trim labor costs.
Smart companies are coming up with creative ways of automating their operations, reusing valuable technology, and streamlining business processes. In this most labor-intensive part of the tech industry, they're reducing the number of bodies they need for everything they do -- whether it's operating data centers, consulting, writing software, or running their clients' customer-service and accounting operations. The changes not only make them more efficient, they result in more effective services.
Source: excerpted from BusinessWeek
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Wednesday, August 04, 2004
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Innovation Picture of The Week: Footprint
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The numbers "55", "18" and "60" on the ruler. What do they remind you of?
The "Spade"... and what about its "handle" - does that point to the "Goal" being clear but not the "Means" to get there?
A waterfall or a spider-web?
Or the mouth of a cave?
How is it related to your problem?
Can your "design" problem be solved by increasing the size of the opening?
Making it deeper? Painting it black?
What are the three most important factors that will affect the management's decision for the go-ahead for your innovation project?
How can you make those favorable for you and your team?
How can you make sure that this project gets the approval?
What's the foot doing in the middle of all this?
And that too pink?
What does "pink" remind you of?
Why is the foot "higher" than the others"?
What is the one thing that will either make-or-break this project?
Are you paying enough attention to that?
Can you dig with a spade holding the spade with your feet?
Or can you even balance the spade with your toes?
Can you carry your briefcase with your foot?
Can you measure the length of the room using your feet?
What happens if you soak your feet in water for 24 hours?
The last part with the "Can you...?" questions is an attempt at BodyStorming - IDEO follows this technique to get different perspectives for their problem...very interesting and effective because you physically put yourself in awkward positions and in effect "stretch" your mind by demanding "wierd" stuff from your body!
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Da Vinci believed that the first way to look at a problem was too biased to reveal something new. He thought that changing the perspective would also grow the understanding of a problem. But it should be done more than once. Did you further know that ninety-five percent of what we know about the capabilities of the human brain has been learned in the past twenty years? -- Research indicates that we are gifted with virtually unlimited potential for learning and creativity.
Curiosità: is an insatiably curious approach to life.
Dimonstratzione: A commitment to test knowledge through experience.
Sensazione: The continual refinement of the senses, especially sight, as the means to clarify experience.
Sfumato: A willingness to embrace ambiguity, paradox, and uncertainty.
Arte/Scienza: The development of the balance between science and art, logic and imagination ("whole-brain thinking").
Corporalita: The cultivation of ambidexterity, fitness, and poise.
Connessione: A recognition and appreciation for the connectedness of all things and phenomena; "systems thinking."
Source: IM-BOOT, here.
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The 10 Characteristics of a Complex Evolving System by Professor Eve Mitleton Kelly of the London School of Economics
- Connectivity and interdependence - networks of relationships have different degrees of connectivity Self-organisation is a spontaneous coming together of individuals; its often a source of innovation. It can be blocked or facilitated by culture and management style. The SOL network is an example, supported by guiding principles (and other attractors, which often include a spiritual aspect) Emergence comes out of self-organisation, but cannot be predicted in advance; much creativity is emergent
- Feedback - a process not a mechanism (unless in an engineering context) - reinforces or balances in a social system
- Co-evolution - reciprocal influences of entities in an ecosystem, resulting in change to both/all. Strategy, for example, is not just us acting on the world but there is a reaction back upon us
- Exploration of the space of possibilities - looking at constraints and inhibitors - looking at new perspectives, turning inhibitors into enablers. Not major innovation, often, but looking at the "adjacent possibles" - just one step away. A single, optimum strategy is not possible in a turbulent environment
- Far from equilibrium - Prigogine's work showed that when a system is pushed far from equilibrium, symmetry is broken but particles behave coherently, and at a macro level this coherence characterises emergent behaviour: new order is created. However, precise, actual behaviour cannot be predicted or controlled.
- Historicity and time - chance events, unfolding in time, generate complex social phenomena
- Path dependence - the form and direction of events depends on preceding events - for example, look at the historical development of the railways.
- Previous interactions bring about what we currently experience - and a technology develops from a small starting point, and then grows through a positive feedback mechanism and a momentum gradually develops
- Creation of New Order - under non-equilibrium conditions, certain systems can create new order - and if we know this, we can facilitate the emergence of this new order, rather than inhibit it
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