Internal vs. External Innovation

Turnover

Turnover by Industry

There is a lot of debate about the scope of innovation management, principally, whether it should include “external” participants or just “internal” participants.  So, are you missing something if you focus your innovation efforts inwardly?

There several good reasons for working only with internal people. First, it tends to be easier to manage innovation from internally-based sources because you know the work environment and control management, resources, rewards, and other organization-based factors.   Secondly, there is typically less junk, less quantity, more focused innovation, and better understanding of the total competitive environment.

There are also many good reasons for including external participants as well.  First, there is a significant amount of research that concludes  “outsiders” are better able to solve problems.  Second, the perception organizations become stagnant and aren’t capable of creativity unless new people/ideas are brought into the mix.  Let’s examine both of these reasons.

Outsiders Solve Problems better than Internal People

I don’t dispute that external people are better able to solve problems and inject creativity, however, even these “outsiders” have peripheral knowledge of the problems at hand.  That is, if you are trying to solve complex electrical engineering issues, then you will most likely have to include engineers.  While you have a very good chance of solving the problem by uninterested, distant people (i.e., a mechanical engineer who spent time with electrical engineers or an accountant who used to work at an engineering firm), they still have to grasp the nature of the problem.  Two pieces of research capture the essence of this thought:

  • At the Harvard Business School, Karim R. Lakhani created a process for “broadcasting” tough scientific challenges to outsiders.  They found that people with expertise on the margins of the challenge quickly offered tenable solutions; almost a third of the “unsolvable” challenges were solved.
  • It’s a time-tested phenomenon. In the book, See New Now: New Lenses for Leadership and Life, de Jaager and Ericson report, “A study of the top fifty game-changing innovations over a hundred-year period showed that nearly 80 percent of those innovations were sparked by someone whose primary expertise was outside the field in which the innovation breakthrough took place.”

Internal People are Stagnant

Another aspect of internal vs. external is the notion that long-term employees are not capable of coming up with new solutions because they are jaded on past experiences, i.e., “We already tried that”, and the problem overcoming the not-invented-here syndrome.  However, consider an organization with 10% turnover per year.  In five years, approximately 40% of the organization will be new.  There are new positions, new thoughts, information on competitors, new information on technologies, and so on.  So with this many new people, how much not-invented-here mentality will you really have?  You can have it, but management has to actively promote it.  Also, many long-term employees become disillusioned with management’s lack of follow-through, lack of resources, and low priority for innovation.  These are issues that are much easier to solve internally.

In conclusion, the difference between the results you’ll get from internally-based innovation versus externally-based innovation can be very similar.  If it’s not, then look to your management to instill a better innovative culture.

Apollo 13 Timed Challenges

Apollo 13 Command Module

Apollo 13 Command Module

One of the cornerstones of successful innovation is the use of Timed Challenges™, a concept originated by MindMatters Technologies that helps guarantee innovation results.  Timed Challenges combine the best of business processes and psychology to insure that your organization can rapidly tap the latent intellectual knowledge of your workforce.

 

The Timed Challenge uses:

  • Focused Problem Solving
  • Management Participation
  • Strategic Goals
  • Employee Engagement
  • Limited Resources, and
  • Time Constraints

to inspire creativity and innovation.  One of the most outstanding real-world examples of  Timed Challenges is the Apollo 13 event that turned a near-certain disaster into a spectacular save.  Apollo 13 had taken off from earth on its way to the moon with 3 astronauts on board.  Shortly after takeoff, there was an explosion that severely incapacitated the rocket and put the lives of the astronauts in jeopardy.  While there were many technical issues that were solved by Mission Control, one of the most critical was that the astronauts were running out of oxygen to breathe–their expired CO2 was not being removed and they were getting lethargic and hypoxic.  They was no question that they would die before they could return to earth.  To solve this issues, engineers had to use their limited resources (supplies available to the astronauts in the space capsule) to adapt equipment so that a “square filter would fit into a round filter” as quickly as possible.  Clearly it was a matter of life and death, and it required engineering experts in all fields to collaborate and engage.

Clearly it worked, and the astronauts made it safely back to earth.

There were many other innovations made during the entire flight that saved the crew.  It’s been over 45 years since this happened, but the methods and principles are just as applicable today.  Read the full story here.

 

2015 Innovation Best Practices Survey

An Innovation Best Practices survey conducted by MindMatters Technologies (republished in Forbes) reveals that a significant percentage of workers believe that their efforts are not sufficiently appreciated or managed within their organizations.

Specifically:

  • Three of four respondents (77%) said their ideas are poorly analyzed or reviewed by their companies,
  • Four of five people who took the survey (81%) said their firms do not have the resources needed to fully pursue the innovations and new ideas capable of keeping their companies ahead in the competitive global marketplace,
  • Half the respondents (55%) said their organizations treat intellectual property as a valuable resource,
  • One in seven (16%) believed their employers regarded its development as a mission-critical function,
  • Almost half (49%) believe they won’t receive any benefit or recognition for developing successful ideas.

One of the most outstanding results was the question, “Do you believe that there are adequate resources available to pursue new innovations and ideas in your organization?”, where over 80% answered negatively.  Unfortunately, this is typical in many organizations, and it is one of the leading reasons why I’ve seen innovation fail.   In the most extreme cases, it turns the entire innovation process upside down by forcing the innovators to justify (again) their ideas to someone who has to “make resources available.” It usually means that resources are taken away from another project and/or that the threshold for getting the resources is extremely high. If management is truly committed to innovation, then the innovation team is trusted with a “budget” to make resource allocations. We already know that not all innovations will be successful, and making an upfront resource commitment means that management is committed for the long term–a critical element of success.

Take a Break for Productivity

Work/break RatioA recent article in Mashable details some interesting research about productivity as it relates to the work/rest ratio.

In an effort to determine who was the most productive over the course of the day, they used a time tracking application to monitor the work habits for the most productive employees. They considered the most productive employees to be the top 10% of the total. What they discovered was that the most productive people actually only worked 52 minutes at a time, then they take a break for 17 minutes. They found that during the 52 minutes of work, these people actually accomplish all of their tasks efficiently and got significant amount of work done. They didn’t check their email, they didn’t check Facebook, and they didn’t socialize with other workers. Conversely during the 17 minutes of break, they were completely disengaged from their work. They also did not check their emails or check Facebook. It’s quite well-known that a person can’t be 100% productive all day, and this research into the most productive work break ratio is quite revealing. Perhaps you should give it a try.

Creativity and Innovation

Walk your way to Creativity

Creativity and InnovationIn a recent Journal of Experimental Psychology article, Give Your Ideas Some Legs: The Positive Effect of Walking on Creative Thinking, by Marily Oppezzo and Daniel L. Schwartz of Santa Clara University, the researchers looked at ways that walking could be used improve your creativity and thinking skills.  While there had been plenty of anecdotal evidence for such a correlation, there was never a thorough scientific study. What they were able to determine, was that people who walked, were more likely to be more creative than those who did not walk. They defined creativity as the number of ways that people come up with different uses for particular object, such as how you might use a tire. They compared this creativity, against normal mental capabilities, such as determining the answers to tests that required particular answers (as opposed to free thinking). They found that walking had no improvement over these “convergent thinking” tests versus “divergent thinking” tests.

During the course of their research, they were able to demonstrate an 81% increase in creativity associated with walking. And you’ll be in good company if you do the same–Aristotle Steve Jobs, and Nietzsche, all made walks part of their daily routine. Unfortunately, researchers were not able to come up with any reason why walking actually improved creativity, but they did empirically test it and determined it to be true. So, if you want to improve yourself, go for a walk–it’ll do you good.

Ultradian Rhythm

Ultradian Rhythms

Ultradian RhythmWe’ve all heard of Circadian Rhythms, the natural 24 hour daily cycle that our bodies go through.  On the other hand, Ultradian Rhythms, are periods that are shorter than a day, and typically longer than one hour.  Ultradian Rhythms are naturally occurring cycles in the body, such as hormonal release, thermoregulation,  and eating. This article by shows you how you can tap into these naturally occurring rhythms to maximize your body’s productivity. They refer to this state where you’re acting in the highest mental capacity as “Hero Mode”.

To figure out the times when your most productive and have the highest level of concentration, you go through a process of determining and building your perfect schedule. For each hour the day, you document the amount of physical energy, concentration, and mood.  They are scored from 1-low to 3-high. At the end of this 5-day process , you have an diagram, or graphic that shows you when you’re most alert during different times of the day. The article includes links to a spreadsheet and other helpful tools for creating your own chart. The article further suggests, that most of these cycles occur between 90 and 120 minutes. At the end of these periods, they suggest that you drink some water, have a small snack, and disengage in what you’re working on. This ensures that you’re working at your optimal mode.

 

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Innovation in Recessions

thick_arrow_up_5575Successful innovation in recessions was examined in a Harvard Business Review article, Roaring Out of Recession, by Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen.  They looked at increases in sales and earnings during a recession, and the strategies that were employed.  The goal was to determine the best strategy during a recession.  The strategies were grouped into four general categories:

 

  1. Prevention-focused,
  2. Promotion-focused,
  3. Pragmatic, and
  4. Progressive organizations.

Prevention-focused organizations focus on cost cutting and avoiding losses–a purely defensive strategy.  Within this category, the authors examined two major subcategories:  employee reduction and organizational efficiency.  These types of organizations are risk-averse, and will “batten down the hatches” when a storm approaches.  As a general strategy, prevention is the worst, however, organizations that pursued organization efficiency (vs. employee reduction) were more successful in this category.

Promotion-focused organizations focus on building assets and marketing–a purely offensive strategy.  The thought is that during a downturn, by investing in your core assets and building your branding, you’ll hold onto your current customers and build new ones.  Compared with organizations that pursue the prevention-focused strategy, they tend to do better.   The authors divided this category into market building and asset building.  In general, building marketing worked more effectively than building assets.

Pragmatic organizations do everything.  The pursue both offensive and defensive strategies, in essence, throwing everything they have at the problem.  This strategy is significantly better than either defense or offense alone, but is still not the most optimal.  In this case, they don’t “fine tune” the amounts of each type of strategy, and waste resources.

Finally, there are the pragmatic organizations.  They too pursue both offensive and defensive strategies, however, they only pursue operational efficiencies (with respect to prevent-based methods), and pursue both marketing and asset/capital investment with respect to promotion-based methods.  With this strategy, the financial outcome compared with the next best method, as measured by sales improvement is nearly 40% greater, and the improvement with respect to earnings is nearly 160% greater.

So, the bottom line is you keep your employees, and make capital investments that improve operational efficiency and marketing development–two areas that are best addressed with innovation.  Your people are your best asset, again.

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The Hungry Mind

brain_in_profile_Clipart_FreeI recently read an article by Kaufman, Openness to Experience and Creative Achievement, that stated that “Openness to experience– the drive for cognitive exploration of inner and outer experience– is the personality trait most consistently associated with creativity.”

He ran a variety of tests to determine several aspects of openness, two of which seemed most pertinent to creativity in science/inventions: IQ, and Intellectual Engagement.

He defined Intellectual Engagement as those with a “drive to engage in ideas, rational thought, and the search for truth.”  and stated that these types of individuals tend to be more industrious, assertive, and persevering, and are more likely to seek out variety, question traditions, try new food/activities, appreciate reading, solve puzzles, and debating.

The surprising result of his research was that while IQ and Intellectual Engagement were related, it was Intellectual Engagement that was the better predictor of creativity.  In other words, just because you are smart, doesn’t mean that you are creativity, whereas, if you are constantly seeking out knowledge, you’re more likely to be creative, regardless of IQ.  (But it certainly helps to have both a high IQ and a high level of Intellectual Engagement).

This same conclusion was reached in the academic environment, by von Stumm, Hell and Chamorro-Premuzic (2011), The Hungry Mind : Intellectual Curiosity Is the Third Pillar of Academic Performance

If you’d like to test your own openness, try this quiz at: http://www.gotoquiz.com/personality/big-five.html

Best Leadership style for Innovation

A recent bit of research by Jack Zenger and Joseph Folkman in the Harvard Business Review looked at the types of leadership qualities most likely to spur employee engagement, or in other words which employees were the most happy/(or not) with their jobs. Generally, they grouped individual leaders as either Drivers or Enhancers. Specifically,

Drivers are very good at establishing high standards of excellence, getting people to stretch for goals that go beyond what they originally thought possible, keeping people focused on the highest priority goals and objectives, doing everything possible to achieve those goals, and continually improving.

Enhancers, by contrast, are very good at staying in touch with the issues and concerns of others, acting as role models, giving honest feedback in a helpful way, developing people, and maintaining trust.

They drew on research from nearly 150,000 interviews (with approximately 30,000 leaders). Not surprisingly, employees believed that the leaders who were the best enhancers were considered to be the best at engaging employees. However, after carefully reviewing the survey results, they discovered that the leaders who had the best employee engagement scored highly in BOTH areas–as drivers and enhancers.

From an innovation perspective, this fits neatly with much of what I’ve seen in many organizations.  Leaders in innovation must get people to focus and stretch on important goals, while acting as role models and providing feedback.  The Challenge methodology provides a framework for building and maintaining this structure and helps guide organizations to innovation success.

Innovation Requires a Process

Innovation isn’t the only creative area where a process is beneficial.

I read an interesting post by Kevin Eikenberry on how creativity is more effectively enabled with a process. While I have long seen the poor results of organizations that fail to embrace any type of process/system for innovation, I never really considered the parallels in both writing and improvisation.  Since Kevin is a writer he speaks specifically to this element demonstrating how he uses a process to facilitate his writing, such as writing during a specific time of the day, collecting articles, and forcing associations using metaphors.  Another interesting comparison is improv.  I had originally thought that improv was based entirely on the actor’s skill.  Although these types of actors are very skilled, they also follow several rules and “practice” different types of exercises to hone their abilities.

It’s tempting to just start innovating by pulling a group of people together and brainstorming.  However, research and results have shown time and time again that the organizations that run innovation as a process are substantially more successful.