|
Innovation and Business Edge
|
Question: What defines innovation, and what can I do to promote a culture of innovative thinking in my business?
Answer (Part 1 of 2): The Business Week article "Hot Growth Companies" (June 7, 2004) stated that "Building a sustainable enterprise requires speed, flexibility, innovation, and at least a little luck to thrive in the face of relentless competition." The dictionary definition of innovation is the process of making changes -- a new method, custom or device. However, all innovation is not the same. Fortune magazine, in advertising the Fortune Innovation Forum in November, says that "innovation is ideas in action. It's the origin of competitive advantage, the engine of economic growth, and the indispensable strategy for increasing market share and productivity."
Donna Prestwood and Paul Schumann, in "Applications of the InnoVantage Grid" (www.glocalvantage.com) describe nine different types of innovation and display them on a grid, with the Nature (focus) of the Innovation along one axis and the Class of Innovation (how great the change is from current production) on the other axis.
The Nature of Innovation falls into one of the following three categories:
Product innovations: involve the way things interact with things -- the function provided to customers or the form that function takes. Examples include improvement in industrial machinery, consumer goods, software and component parts.
Process innovations: involve the interaction of people with things -- the way a product is developed, produced and provided. Examples include improvements in manufacturing, distribution and development systems.
Procedure innovations: involve the way people interact with people -- the way in which products and processes are integrated into the operations of the enterprise. Examples include improvements in marketing methods, administrative methods, sales terms and conditions, and requirements generation.
The Class of Innovation falls into one of these three categories:
Incremental innovations: those that reflect a relatively small improvement over present products, processes, and procedures -- advances that are a little better, a little faster or a little cheaper.
Distinctive innovations: those that provide significant advances or improvements, though not ones based on fundamentally new technologies or approaches.
Breakthrough innovations: those that are based on fundamentally different technologies and approaches, and which allow the performance of functions that were previously not possible, or the performance of presently possible functions in a manner that is strikingly superior to the old. Prestwood and Schumann go on to say that "breakthrough innovation results in the creation of a new industry or class of technologies," which "result in a significant number of distinctive innovations, and, these, in turn, result in a flood of incremental innovations."
Source: OrlandoSentinel, here. (free registration required)
|
|
Innovation and Entrepreneurship
|
If you believe the hype, start-ups are an innovative breed that go against the grain of conventional business. But are they?
A new study says the vast majority are not, leading one to wonder whether innovation is what it takes to start companies, or if they're really fueled by something else. The findings, released this week in the Global Entrepreneurship Monitor, are part of an annual assessment of entrepreneurship as it relates to economic growth in more than 40 countries. Developed by Babson College, the London Business School and the Ewing Marion Kauffman Foundation of Kansas City, the survey contains lots of interesting facts -- Who knew Uganda ranked No. 1 in entrepreneurship? -- but those on innovation stand out.
The largest number of start-ups pursued less-than-innovative ideas in highly competitive industries. In the highly competitive U.S. market, 27 percent were pursuing an idea that was "not new to any customer." Start-ups considered most innovative -- pursuing an idea "new to all" in a market with "no competitors" -- amounted to only 4 percent of the total. Bill Bygrave, co-author of the study and a professor of entrepreneurship at Babson College, Wellesley, Massachusetts, called those innovators "superstars" but added that they were the rare exception.
"The grass-roots entrepreneurs are companies that take something someone has done before and do it better, or cheaper, or offer better service," he said. "That's the core of the economy." It's also because the landscape of entrepreneurship includes everyone from a fast-food franchise owner to a high-tech innovator. The advantage of the former -- no new product, many competitors -- is that the ubiquity of the idea shows it can work. The company will not face the task of having to convince customers to buy it. The downside, of course, is that the customer may not choose to buy it from this particular company, since so many others offer a similar product or service. One solution -- innovation -- is risky and costly, but small, incremental innovations can be highly profitable.
In line with these findings, venture capital tends to be a poor marker for start-up activity, because so much of the money backing new companies goes to less than earth-shattering ideas. Venture capitalists avoid early stage companies. The total amount invested by venture capitalists to seed new companies in 2002 was $304 million, the lowest since 1980.
Given this reality, Bygrave tells students to just do it -- get started in business, rather than spend a lot of time creating the ultimate concept that will very likely fail to win the attention of venture capitalists. All of which points to the conclusion one might glean from this study: Highly innovative ideas are rare, whereas modest ideas backed by friendly capital might very well be the root of a successful business, if not the economy.
Source: Reuters, here.
|
|
Creating an Innovation Mindset
|
This Innovation Mindset Model is from the Innovation.Net Blog by Mike Docherty. I discovered the blog recently on BlogShares.
"At the beginning of any strategic innovation initiative, everyone's excited and optimistic, we've got a great idea and we're going to rule the world (Dreaming). Then $%^& happens as it always does and we face failure (Doubting). It's never as easy as we thought it would be. Failure is a natural and useful element of innovation... it's how we learn and adapt our solutions. Or determine it's time to try another challenge. As we develop innovative concepts into real-world practical solutions, we're learning more, the problem isn't as simple and we begin to truly understand the complexity of the challenge. It's this 3rd stage (Quitting or Perservering) that truly separates innovators from dreamers... those that perservere and don't quit often experience a transformational experience of having worked through the challenges and acquire a new confidence built upon deep knowledge and experience. "
|
The contemporary manager has a problem. It is no longer possible to touch or see the things that matter to business performance. A long-term shift from tangibles to intangibles is occurring in many industries. The focus is no longer mainly on cash, inventory, plant and equipment or land, which typically accounts for only about one-fifth of a firm's value.
Instead, more slippery considerations such as vision, motivation, various types of explicit and implicit knowledge, customer and employee loyalty, and brands are the key determinants of an enterprise's performance. In 1982, 60% of the value of the United States S&P 500 companies was accounted for by tangibles. By 1999, it had fallen to 16% (the figure remains below 20%). According to the consultancy firms Accenture and AssetEconomics, by mid-2003, $US7.6 trillion, or 58% of the value of the US stockmarket, was a valuation of the future potential of intangibles.
A 2003 survey by Accenture, AssetEconomics and the Economist Intelligence Unit of American companies found that half the executives listed the management of intangibles as one of their top three priorities. Yet only 5% said they had a robust system of measurement. One- third had no measurement in place, and 61% had measures that were either informal or unorganised. John Barton, principal of John Barton Associates, says companies have trouble developing the new ways of thinking required to understand and assess intangible assets. "What you see in company after company is that knowledge management is pushed back into IT."
What is required is not a modification of the methods used to value tangibles but a radical departure. Intangible assets are considered to be elements such as innovation, knowledge (explicit and tacit), governance, organisational design, reputation, customer and employee loyalty, capabilities and brand strength. The way in which these are bought, sold and created, is different from tangible assets. For one thing, intangibles have a more uncertain value than is usually the case with tangible assets. Investing in knowledge generation, for instance, can lead nowhere or it can lead to high- value returns. The result of an investment in plant and equipment, by contrast, is comparatively predictable.
Some intangibles have completely different characteristics from tangibles. Knowledge, for instance, is usually not scarce in the way tangible assets are (because it is not lost to the owner when sold). Possessing knowledge is to some extent inevitable in a business, whereas owning a tangible asset is not. It is hard to imagine a business without knowledge, at least if it is to have any hope of staying in existence. Businesses cannot "own" knowledge, except to the extent that they can legally protect its fruits through patents and brand names. The push from the accountancy community to take a pessimistic view of intangibles on the balance sheet is at least half right.
The "snapshot" approach to valuation (the balance sheet is a snapshot of a business's value at a moment in time) is not ideally suited to getting a grip on intangibles. What really matters is what income they will create, not what their resale value is (which means taking a close look at what customers will pay for in the future). For example, important staff members may create great value for an organisation, but they cannot be bought and sold in the way that, say, land can. Resale value is largely a meaningless measure for "human capital".
The greatest challenge is in human-resources management. The term itself inspires little confidence (humans are in no meaningful sense "resources"). Yet if intangibles are to be managed well, much depends on the way people are managed. All intangibles gain value only because of what people do. Peter Aughton, chief executive of the consultancy Amerin and director of the Fred Emery Institute, says human-resource managers might do well to drop the title. "Human-resource managers often come through a background of the humanities, but somehow they lose their roots and try to run things as a machine. They get lost in bureaucracies and … the reward structure." Barton says what is required is "360-degree stakeholder management" - not just training workers to be multi-skilled, but also to involve them in management. Without this, the necessary innovation and flexibility will not materialise.
One way to derive an assessment of intangibles is to use "future value analysis". According to an article by John J. Ballow, Robert J. Thomas and Goran Roos in the Journal of Applied Corporate Finance, this is the difference between a company's market capitalisation (the total value of its shares) and the "current value of daily operations". The general rule of thumb, they say, is that capitalised current operating value equals 10 times the current earnings.
Future value is only a tentative indication of a company's need to manage intangibles but, in combination with net tangible assets as a proportion of the share price, it does give an idea of a company's position. Ballow, Thomas and Roos write that no US companies include accounting for intangibles in their annual reports. Only in Europe have there been serious attempts to improve the accounting for intangibles.
Source: BRW Magazine, by David James
|
"We need to change the culture of this organisation!" Whenever I hear this war cry, I cringe. Culture cannot be imposed; it must be discovered. What is frequently overlooked is the fact that the culture of an organisation is contained in the hearts and minds of the people it employs. It is already there, waiting to be expressed. To the extent that we allow that culture to be expressed, a range of benefits will emerge. If we don't allow that culture to be expressed, an organisation will always fall far short of its potential.
I often ask employees to tell me what they expect of their employer. It is amazing how consistent the response is irrespective of the industry, from specialist medical practices to manufacturing. The first expectation is to be ethical. This is, of course, a term that has many shades, but in essence, what employees want is to be able to look customers in the eye and feel that they have done them a good service and that they give value for money. They don't want to cheat or do something that is shady or questionable. They want to be perceived as honest.
In a workshop that I conducted with a group of rookie executives at the University of California, Riverside, which consisted of people from Japan, South Korea, Denmark and Argentina, I received the same response. These people also said that what they expected in their work was:
- Open communication.
- Positive feedback.
- Management that would listen to them and respond to their input.
- Clear goals and an ability to verify them.
- To have fun.
Across Australia and worldwide, employees consistently tell me the same thing. What better culture can you have than people who want to be ethical, have input into how the business is operating, get positive feedback from management, be able to set goals and achieve them, and have fun while they are doing it? The overwhelming desire of most people in the workplace is to do good, to have fun and be proud of where they work. The challenge to management is to give free rein to these aspirations and let loose the culture that is bursting to be expressed. Unfortunately, a competing challenge is to report good quarterly figures. Letting the culture become established might not do too much in the first few quarters of the regime but the long-term sustainability of the organisation will be more secure and many more people will be happier going to work each day.
Source: BRW Magazine, by Louis Coutts
|
A recently launched site, patents | oncloud8, offers pre-stitched, batch downloaded US and international patent copies in PDF format at a very resonable $0.49 per patent. Unlike similar services, there is no software to install, no registration to fill and, best of all, no membership fee. Batch abstract lookups are available for free.
Great service - already lots of traffic - considering it's a recently launched service.
|
The innovation gap is still widening between Chinese manufacturers and their European and American peers. A most recent survey shows that 90 percent of European and American multinationals have made innovation a part of their strategy and 80 percent of them invest at least 10 percent of their profits into R&D activities. 55 percent of their innovations are the result of their cooperation with universities, research institutes and other enterprises.
But the story is different in Chinese enterprises which do not input much of their resources in R&D. Many small and medium sized ones do not even have any R&D. Statistics shows Chinese businesses hold one thirtieth of patents of that by Japanese and American companies. Many Chinese enterprises rely too much on imports of core technologies and equipment. Imported equipment costs more than 60 percent of China's input in equipment every year.
Recently, the Time Magazine in America published an article expressed concerns on the transfer of US manufacturing base to China. It also offered a solution: making US enterprises more innovative. The article recalled how innovation helped American manufacturers resist the challenge from Japanese competitors 20 years ago.
Ms. Panchak, editor-in-chief of Industry Week, pointed out that many manufacturers were worried about competition on prices because that was their weakest point. But their worries are caused by their little progress on innovation. Players with a futuristic vision can always find ways to offset price pressure with innovation.
Source: Peoples Daily Online, here.
|
- Do not let your first task of the day be to check your e-mail. Look at your calendar first to prepare for the day's events.
- Allocate specific times of the day to read e-mail, rather than doing it randomly.
- "Only handle an e-mail once," says IBM Australia's chief executive, Philip Bullock. "When you open it, decide whether you are going to deal with it, delegate it or delete it."
- Do not store outstanding e-mail in your inbox. They will build up too quickly. Deal with the e-mail straight away or put it on your "to do" list so you know what you have to follow up on and when.
- Do not just write "Re: Hello" in your e-mail heading. Be specific in the heading.
- Companies should question the use of distribution lists.
- Ask an information technology specialist to show you how to archive your e-mail.
- Be selective about who you "CC" your e-mail to. Most people do not need to see them, or even bother to read them. It is estimated that 70% of e-mails are CC'd unnecessarily.
- Set up a filter so that if your name is in the CC box, the e-mail is diverted to a subfolder that you can read at your leisure. Most CC e-mail does not require urgent attention.
- Instead of e-mailing someone, you can often save time by telephoning them. You can e-mail them afterwards to summarise your conversation.
- Take a short course in the software you are using.
- Discuss e-mail use and relevance with staff to reduce unnecessary e-mail.
- Be sparing with graphics and attachments.
- Regularly archive all your e-mail on a CD.
- Remember that e-mail does not make you a better communicator, just a faster one.
Source: CHRISTINA CAVANAGH / INDUSTRY CONSULTING SERVICES, SWINBURNE UNIVERSITY / IBM / FLIGHT CENTRE
|
Excerpted from the Harvard Business Review.
An idea is defined as radical if it meets one or more of these tests:
- It has changed customer expectations and behavior.
- It has changed the basis of competitive edge. (The proliferation of digital cameras is an example.)
- It has changed industry economics.
One way to come up with radical ideas is by deconstructing your business model and asking: "Is there no other way to organise our business?" Another is for staff to cultivate an empathy with the customer that is so strong that they can solve problems the customer can barely articulate.
Source: BRW Magazine by Amanda Gome
|
|
Art of Strategic Innovation
|
Article contributed by Paul Hobcraft.
The Art of Strategic Innovation
Excerpts from an interview with Costas Markides, Professor of Strategic and International Management, London Business School.
On defining what strategic innovation is: 
|
Strategic Innovation is the discovery of a new way of playing the game in your business, which is fundamentally different from the way most other competitors are playing the game. Strategy is finding answers to 3 interrelated questions:
i. who will I target as my customer
ii. what shall I offer to these customers
iii. how can I do this in an efficient way
Strategic innovation is the discovery of a new "who-what-how" position in the business - a position that all other competitors have missed. By discovery of this new position, we discover an untapped source of value in our industry. |
On how to recognize strategic innovation:
When a company suddenly starts to play the game in a totally different way from everyone else - they have strategically innovated.
On the radicalness of strategic innovation:
Strategic innovation is discovery of a new strategic position that allows the company to develop not only something new but also something large - something that captures a significant market segment. In any business there are niche players and they are, by definition, playing the game in a way different than the mass market. But if they remain small, no one pays much attention to them. However if a company discovers a niche, a new customer segment, a new delivery method, etc., and that niche actually grows to become 10%, 20%, 30% of the market, that is when people take
notice and say: Isn't that interesting, isn't that innovation?
The other element to the definition if strategic innovation is that it is a new positioning. Although there is no precise answer about the degree of "newness", one can generally tell when a company starts playing the game in a fundamentally different way.
On the question of "Who generally innovates?"
A list of strategic innovators mostly has new entrants or new business start-ups.
They will usually be entrepreneurial start-ups that, having identified a new positioning in the business, pursue it rigorously. It is very rare to find an established company strategiclaly innovating because they already have a positioning that enables them to make money - so why look for any other positioning? Another problme is the inertia of success. Well established, with a certain market share, profitable - why the hell should they change? Then there is also the problem of actually identifying a new positioning. A new entrant on the other hand starts with a clean slate and a fresh perspective, allowing him or her to identify a position that has not been taken yet.
On playing two totally different games:
The traditional economic argument made popular by Michael Porter is: a company should not try to play two games att he same time. Porter argues that there are too many conflicts in trying to play two games and as a result most companies that try are doomed to fail. He cites Continental Airlines as an example. Continental was playing the airline game the traditional way, based on the hub-and-spoke system. But they wanted to respond to Southwest who was playing a totally different game, the game of low cost, point to point direct flights. To play this game, Continental created a new subsidiary, called Continental Lite. Porter points out that the new subsidiary failed because there were conflicts in trying to play these two games.
What are these conflicts that Porter talks about?
• One such conflict is the risk of cannibalization. A company may lose existing
customers to the new game (which happens to be low-margin).
• Another is distribution conflict. Why doesn't IBM try to sell its computers direct? Well, how would IBM dealers feel if, all of a sudden, everyone could buy an IBM personal computer direct? Porter also argues that, in trying to play two games, a company may harm its reputation.
• And finally there is also the factor of organizational conflicts. If an organization follows a certain strategy it needs a certain culture, structure, incentives. If all of a sudden the company wants to follow a different strategy, it needs a very different culture, structure, incentives.
My own position is that Porter is wrong in advising companies not to play two different games. I agree with him that playing two games is really difficult given all these conflicts, but not impossible. Conflicts can be managed! Over the past year, I have been studying companies that seem to be able to play two games at the same time. One generalization we can make at this stage is that these organizations have found ways to overcome these conflicts. How? For example, they minimize cannibalization by
(a) creating a totally separate brand name for the new business and
(b) addressing a different customer segment.
For example, look at VW and Audi, British Airways and Go, Midland and First Direct, Swatch and Omega. All these companies are playing more than one game but they have different names for their products. Physical separation of the units also contributes to a reduction of conflicts.
On strategic and technological innovation:
Strategic innovation happens in the absence of technological innovation, it is different from technological innovation. Strategic innovators don't discover a new product or a new technology; they just find a new way of playing the game in the existing business. But we can learn much about strategic innovation by looking at the literature on technological innovation, for example, the importance of separating the old and the new. Research tells us that if a company is to succeed in promoting a new, different technology it has to set out a separate unit to promote this new technology. It cannot do it internally; it cannot do it with the existing organization. The existing status quo will suffocate the new technology and the
new unit.
On how to innovate - strategically:
There is, obviously, no correct way to go about it. There are a variety of tactics a company can use to improve the probability of coming up with new strategic ideas.
One is to fundamentally question the existing mental models and the existing unquestioned assumptions of the organization. Every organization operates under certain mental models, paradigms, assumptions: these are our customers, this is how we sell and this is how we do business. My proposition is that an organization will never discover anything new unless it first questions what it already has and says: why are we doing it like this, could there be another way? As long as they are happy and satisfied with what they have, they are not going to search for something new - and will never discover anything new as a result.
The first step in this voyage of discovery should be to question what you have.
Now, having said that let me also say that most companies, on a rational basis, say: "Yes, that sounds good, we will question", but they never do it.
On why they don't do it:
The primary reason is that we are all very busy people. As a result we set priorities in life and we say, first we do number one and then number two, then number three and we go through the list of priorities and do whatever time allows us. Now there is also the demand to innovate and we agree that it is important. But even though it is important and we want to do it, we believe that there are many more important things in an organization to be done. As a result we do these more important things and by the time we come to the just important ones, we have run out of time and we never do it. Unfortunately innovation is important but not urgent. And as a result it stays in the middle of the bottom of the list and we never find time to do it. In my experience, for an organization to encourage the honest questioning to take place, it has to create a positive crisis. It has to create some
kind of shock.
On how to achieve positive crisis:
First, you have to develop a new challenge, a new stretching goal for the people. But that is the easy part; it is only 1% of the work. The other part of creating a positive challenge, which is by far the more important, is to sell this new challenge to your people. It is not enough to create a stretching goal, it is not enough to create a mission statement that states 'I want to be number one' or 'I want to be the best'. You have to sell it to your people so that they become true believers in that new objective, that stretching goal.
If it really is a stretching goal, the first reaction of your people should
be: "my god, that's impossible, we can never do that!" But that implies that
you have to focus all your energy on the next task: to convince people that this
new stretching goal is meaningful and that it is important to them.
At the end of this selling process you should find people who are enthusiastic, and
energetic, and passionate about what the company is trying to achieve. However, it is not easy and it is very time consuming - but the selling is the most important part of the job of any top management team. If you just create a stretching goal and fail to sell it, all you will have created in your organization is de-motivation, cynicism, sarcasm.
On the four step process:
|
-- COMMUNICATION: Develop the stretching goal and communicate it to people tell them what it is. But mere knowledge does not create passion.
-- EXPLANATION: Explain why it is important. Why is it important to them, why is it important to the organization? But neither does explanation create passion. The first reaction should be "this is impossible."
-- MAKE IT BELIEVABLE: One way to make it believable is through the creation of early victories. It is success that slowly turns people around and they start saying "maybe, afterall, we can do this!"
-- EMOTIONAL COMMITMENT: Transform it from a rational to an emotional process. With the first three steps you have told them what it is and convinced them that it is important and that they can achieve it. All you have done is to win their minds. But what you want to do is win their mind and their hearts. To achieve this final step of winning their emotional commitment you can use a variety of tactics:
-- Make them feel very special
-- Reinforce the feeling of uniqueness by being very selective on who is invited into the team
-- Enforce the feeling of being part of a special team by creating symbols for the team.
-- Allow them to participate in the creation of the objective
-- Empower them to go out and do things to achieve the objective
-- Create a credible enemy for them |
On the greatest obstacle to strategic innovation:
The greatest obstacles in my mind are our own mental models, the unquestioned assumptions, the stereotypes and beliefs that we individually and as organizations, have. They don't have to be explicit, they don't have to be written down but they are there nevertheless. They are like our genes, they control our behavior and we don't even know that they do so. Every organization has a lot of sacred cows which they are unwilling to bring to the surface and question. And these sacred cows condition what an organization does, what the people in the organization do. The first thing we need to do is to question these sacred cows. These sacred cows have to be brought out, questioned and sacrificed before anybody can come up with any new ideas. |
|
Source: Business Journal, here.
Fear is the biggest obstacle to Americans embracing innovation, according to a preliminary report issued Friday by the National Innovation Initiative. Other obstacles include
-- inadequate infrastructure,
-- talent and
-- skills as well as
-- how resources are invested and used, according to the report.
Americans must resist "impulses to become centralized, inward-focused or risk-averse," the report states. "We know that we can't preserve our way of life or generate new jobs or win the war on terror or lead the world by playing defense."
|
|
Cultural Norms for Innovation
|
Bearing in mind that external context heavily impacts innovation and reciprocally, the intrinsic creativity inherent in the organization defines its ability to adapt to and even shape the environment, we can ask how culture can promote innovation. Does culture hinder or enhance the process of creativity and innovation? The answer is that it simply depends on the norms that are widely held by the organization. If the right type of norms are held and are widely shared then culture can activate creativity. If the wrong culture exists, no matter the effort and good intention of individual trying to promote innovation, few ideas are likely to be forthcoming.
Norms that promote innovation:
Challenge and belief in action
-- No obsession with precision
-- Emphasis on results
-- meet your commitments
-- Anxiety about timeliness
-- Value "getting things done"
-- Hard work is expected and appreciated
-- Eagerness to get things done
-- cut through bureaucracy | | Freedom and risk-taking
-- Freedom to experiment
-- challenge the status quo
-- Expectation that innovation is part of your job
-- Freedom to try things and fail
-- Acceptance of mistakes
-- allow discussion of "dumb" ideas | Dynamism and future orientation
-- forget the past
-- Willingness not to focus on the short term
-- drive to improve
-- Positive attitudes towards change
-- Positive attitudes towards the environment
-- empower people
-- Emphasis on quality | | Organizational structure: autonomy and flexibility
-- Decision making responsibility at lower levels
-- decentralized procedures
-- Freedom to act
-- Expectation of action
-- Belief that the individual can have an impact
-- Delegation
-- Quick, flexible decision making, minimize bureaucracy | Trust and openness
-- Open communication
-- Information sharing
-- accept criticism
-- Open access
-- encourage lateral thinking
-- Intellectual honesty | | Debates
-- expect and accept conflict
-- accept criticism
-- don't be too sensitive | Cross-functional interaction and freedom
-- move people around
-- Teamwork
-- manage interdependencies
-- Flexibility in jobs, budgets, functional areas | | Myths and stories
-- Symbolism and action
-- build and disseminate stories and myths | Leadership commitment and involvement
-- Senior management commitment
-- walk the talk
-- Declaration in mission / vision | | Award and rewards
-- Ideas are valued
-- Top management attention and support
-- Respect for budding ideas
-- Celebration of accomplishments
-- Implementation of suggestions
-- Encouragement | Innovation time and training
-- Built-in resource slack
-- Funds
-- Time
-- Opportunities
-- Promotions
-- Tools
-- Infrastructure
-- Continuous training
-- encourage lateral thinking
-- encourage skills development | | Corporate identification and unity
-- Sense of pride
-- Willingness to share credit
-- Sense of ownership
-- eliminate mixed messages
-- shared vision and common direction
-- build consensus
-- Mutual respect and trust
-- Concern for the whole organization | External orientation
-- adopt customer perspectives
-- build relationships with all external faces |
Source: "Culture and climate for innovation" by Pervaiz K. Ahmed, European Journal of Innovation Management
|
Although most research appears to agree that innovation is influenced by social processes, research in this area thus far has taken a back seat to research on individual differences and antecedents. Generally it can be said that innovation is enhanced by organic structures rather than mechanistic structures. Innovation is increased by the use of highly participative structures and cultures. For instance, an idea champion must be made to feel part of the total innovation process; at the very least, he/she must be allowed to follow the progress of the innovation. This builds involvement via ownership and enhances attachment and commitment at the organizational level. There is also a string case here to let the individual lead the project in a total sense from beginning to end.
Organic structures promote innovation :
-- Freedom from rules
-- Participative and informal
-- Many views aired and considered
-- Face-to-face communication - little red-tape
-- Inter-disciplinary teams - breaking down departmental barriers
-- Emphasis on creative interaction and aims
-- Outward looking - willingness to take on external ideas
-- Flexibility with respect to changing needs
-- Non-hierarchical
-- Information flow downwards as well as upwards | | Mechanistic structures hinder innovation
-- Rigid departmental separation and functional specialization
-- Hierarchical
-- Bureaucratic
-- Many rules and set procedures
-- Formal reporting
-- long decision chains and thus, slow decision making
-- Little individual freedom of action
-- Communication only via written word
-- Much information flow upwards and directives flow downwards |
Source: "Culture and climate for innovation" by Pervaiz K. Ahmed, European Journal of Innovation Management
|
|
Personal Motivational Factors Affecting Innovation
|
At the individual level, numerous motivation-related factors have been identified as drivers of creative production.
Key motivational factors affecting innovation :
1. Intrinsic versus extrinsic motivation
Intrinsic motivation is a key driver of innovation. Extrinsic interventions such as rewards and evaluations appear to adversely affect innovation motivation because they appear to redirect attention from "experimenting" to following rules or technicalities or performing a specific task. Furthermore, apprehension about evaluation appears to divert attention away from the innovation because individuals become reluctant to take risks since these risks maybe negatively evaluated. Contrarily, in order to be creative, individuals need freedom to take risks, play with ideas and expand the range of considerations from which solutions may emerge.
2. Challenging individuals
Open-ended, non-structured tasks engender higher creativity then narrow jobs. This occurs by virtue of the fact that people respond positively when they are challenged and provided sufficient scope to generate novel solutions. It appears that it is not the individual who lacks creative potential but it is the organizational expectations that exert a primary debilitating effect upon the individual's inclination to innovate.
3. Skills and knowledge
Creativity is affected by relevant skills such as expertise, technical skills, talent, etc. However, such domain-related skills can have both positive as well as negative consequences. Positively, knowledge enhances the possibility of creating new understanding. Negatively, high domain-relevant skills may narrow the search heuristics to learn routines and thereby constrain fundamentally new perspectives. This can lead to functional "fixedness".
Source: "Culture and climate for innovation" by Pervaiz K. Ahmed, European Journal of Innovation Management
|
|
Cognitive Factors and Innovation
|
Cognitive factors also appear to be associated with the ability to innovate. Research appears to indicate a number of cognitive factors are associated with creativity. For example, medical psychology indicates differences in cognitive processing, ascribing left cerebral cortex to rational thinking and the right brain to intuition. Cognitive parameters affecting idea production:-- Associative fluency -- Fluency of expression -- Figural fluency -- Ideational fluency -- Speech fluency -- Word fluency -- Practical ideational fluency -- Originality -- Flexibility -- Elaboration Source: "Culture and climate for innovation" by Pervaiz K. Ahmed, European Journal of Innovation Management |
This is to announce the launch of  Design.
Please visit and see if you require any of the various services offered by Design! |
|
From Preparation to Implementation
|
An artist wakes up one morning and gets an idea to create a masterpiece. A copywriter walks on the riverside and a great campaign takes shape. A musician stumbles upon a homeless man and an excellent composition comes alive.
How often we hear this and wonder why ideas come this way only to others and not to us. But if you at this closely, you'll discover that all of them had already been working on the idea. And what happened one morning, or by the riverside or on the road is actually the third step in the creative process.
To understand this, let's look at the process of creativity and the five steps it involves.
Step 1: Preparation:
This is when the problem is first seen by the creative person and he starts preparing to find a solution to it. This is when all the knowledge you've gained in your chosen creative field comes into play. Everything that you've seen, heard, smelt and felt till date starts working together to help you find a solution. No wonder that creative people are always hungry for new knowledge and more information even on unrelated subjects. Because they know that they will never know when and from where a great idea will come by.
Step 2: Incubation:
This is when creative people try to understand the real problem. They get into the nitty gritties... into the minute details of the problem. And then, once they have all the information on the problem, they combine it with all the related and unrelated knowledge they've gathered and put it on the back burner and let it stew.
Step 3: Enlightenment:
This is also called insight. It's the moment at which the unconscious and the subconscious minds, having finished working on the problem, present an "AHA!" or a "EUREKA!" This is the step where the artist, the copywriter and the musician mentioned earlier were on.
Step 4: Evaluation:
This step is where you evaluate the solution. Will it work, will it not? Is it the best? Is it worse? It's not always the right answer, even though it may be amazingly creative. This is where you find a balance between imagination and reality and evaluate if the solution is practical.
Step 5: Implementation:
And finally, it's time to implement the idea. The artist creates the masterpiece. The copywriter writes an award winning campaign and the musician creates a memorable score.
And after the idea is implemented, the five steps begin again... the preparation, the incubation, the enlightenment, the evaluation and the implementation... all working towards making the idea better than before. Again and again.
by Arun Verma on CreativeGarh YahooGroups |
|
The Individual and Innovation Culture
|
People play a role in organizational culture. Organizations need to consider the type of employees that can most effectively drive innovation. From a diverse range of research, it has been found that a core of reasonably stable personality traits characterize creative individuals.
Personality Traits for Innovation
-- High valuation of aesthetic qualities in experience
-- Broad interests
-- Attraction to complexity
-- High energy
-- Independence of judgment
-- Intuition
-- Self-confidence
-- Ability to accommodate opposites
-- Firm sense of self as creative
-- Persistence
-- Curiosity
-- Energy
-- Intellectual honesty
-- Internal locus of control (reflective / introspective)
Although there appears to be general agreement that personality is related to creativity, attempts to try and use this inventory type of approach in an organizational setting as predictor of creative accomplishments is fraught with dangers and is hardly likely to be any more useful than attempts at picking good leaders through the use of trait theory approaches. Nevertheless, it does highlight the need to focus on individual actors and to try and nurture such characteristics or at least bring them out, if necessary, in an organizational setting.
Source: "Culture and climate for innovation" by Pervaiz K. Ahmed, European Journal of Innovation Management
|
Kaizen investigative teams can be the key to future prosperity, says Anand Sharma
"Two years ago I reported on an annual conference of senior executives that my company hosts, and how all the talk that year was of outsourcing in Mexico, India and especially China. Outsourcing has become a topic of intense debate among manufacturers, lawmakers and pundits. Now it looks like the outsourcing trend may have peaked. At our conference this year, it was old news. These 60 or so top executives from very large to midsized manufacturing firms were most interested in a topic we call value innovation."
Innovation, of course, is simply the introduction of something new. When we talk of value innovation, however, we mean new product ideas that are driven by the true desires of the customer-even if those desires are unknown to the customer. Finding out how to get at those true desires and getting to market quickly appears to be the next big thing on the minds of manufacturers.
For the complete story: theManufacturer.com, here.
|
|
Maintaining The Spirit of Innovation
|
Successful lean programs depend on vigorous employee involvement. Rich Weissman discusses how to maintain a strong culture of innovation
Employees often experience something unique in the lean process that works well, and quick successes build enthusiasm. After the novelty wears thin, there can be a steady decrease in the innovative attitude that needs to be sustained for lean to be successful.
Organizations have to maintain a spirited culture of innovation where all employees, not just those on the factory floor, are engaged and dedicated to identifying lean opportunities. Chances for continued lean success includes building an environment that supports and rewards idea generation, expands the concept of lean into non-traditional areas, and provides clear and stable leadership.
Creative ideas are at the heart of innovation. "Ideas are the realm of the kingdom," says Dr. Carol Kinsey Goman, the Berkeley, CA, author who specializes in human capital issues. "Idea generation and creativity in the workplace fuel lean initiatives." Goman feels organizations need passion to generate creative ideas. This passion can be both from the top down, such as broad efforts led by the CEO, to one supervisor on the manufacturing floor who tries to build enthusiasm with small groups. She feels that employees need to have an emotional attachment to the workplace, and there needs to be a safe environment where ideas can be discussed and built upon. "Most creative thinking happens by chance, through informal interactions of employees and a sense of community," says Goman. "Employees cannot do it alone. Creative collaboration is the key."
Bill Schwartz, senior partner and managing director of the Durham, NC, lean consultancy TBM Consulting Group, notes that during the early stages of a lean initiative there is typically high enthusiasm and rapid improvement, as there may be easy opportunities identified for initial lean projects. "These projects can be executed with good results without challenging too many closely held practices or management policies," says Schwartz. "Culturally, these early adapters are willing to move forward and make improvements while the other managers may watch from the sideline to see if this is just a fad or a long term initiative."
Schwartz feels that oftentimes the second year of a lean initiative becomes a turning point, with some programs continuing aggressively and some the victim of eroding enthusiasm. "The law of diminishing returns does not apply to continuous improvement," says Schwartz. Increased productivity drives innovation to the forefront giving companies the opportunity to seize market growth. Transitioning lean thinking and business process changes into traditionally non-lean activities can be a challenge. Front-end processes like product development and product lifecycle management, often including suppliers and customers, can be beneficiaries of automated systems that simplify and streamline existing business processes.
There is a need for strong leadership to keep the focus and the momentum. "Most management discourages new ideas and block creativity due to fear of failure," says Goman. "Some in the organization penalize risk taking, or don't give credit where credit is due, shutting down the creative process and hurting the organization. Training will help, but it often falls short", according to Goman. "Brainstorming is an important part of the creative process, but many companies do it poorly. Having a breakthrough idea is a catalyst for change," says Goman.
Source: theManufacturer.com, here. |
posted by Naina @
Permalink 7/17/2004 12:10:00 AM
< | | |
