Category Archives: Corporate Innovation

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Innovation Everywhere

InnovationIn a recent article by BCG, Casting a Wide Innovation Net, they explain how the best innovators gather ideas from a variety of sources, such as employee ideas, internal sources, and customer ideas. The cornerstone for maintaining this information are the software systems that can tie together disparate organizations and people while enforcing security.

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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.

Innovation Project Funding

remove_riskOne of the most important factors in innovation is funding. Without it, your ideas are worthless, even the small ones. When people think of funding, they initially think money, and they’d be correct. However, money is only one form. Funding might be allowing someone time off of a project to complete an innovation, or providing them a team to divide up tasks. It’s also necessary to talk about funding from the very start of innovation. Whether it’s explicitly stated or not, your innovators will gauge their participation (or lack of participation) based on whether or not your organization has the ability to follow through on the innovations that are created–therefore funding is critical.

Once project have started, funding obviously continues to play a strong part.  While many organizations periodically rank and evaluate projects for either moving forward or abandoning, they typically look at a myriad of factors, such as marketing, manufacturing, and competition.  One way of categorizing all of your analysis factors is on the amount of risk that is removed.  Consider an entrepreneur and venture capitalist.   The venture capitalist invests in the company for the primary purpose of helping the entrepreneur remove risk.  For example, I’m given money to build a prototype to answer the question of “Can it be build quickly and inexpensively”.  When you are managing many projects, the best way to look at a go/no go decision is a) did the funding in the current stage remove risk (and did it remove enough risk) and b) is the funding for the next phase being used to reduce the next set of risks.  This is why venture capitalists are not interesting in “paying salary” they are interested in remove risks.  Try this the next time you evaluate a project.

It Wasn’t Raining When Noah Built the Ark

noah_arkAnd so goes innovation.  It’s easy to dismiss it on a sunny day, but once the floods start, it’s too late.

Innovation is an underlying cultural strategy.  Because it requires the coordination of many different aspects, such as management, human resources, and work processes, the foundation must be established before results can be seen.

Low workplace motivation remains a clear and present danger to productivity in 2013, and according to multiple studies/articles/research, employee engagement continues to remain at very low levels.  Perhaps the fear of looming layoffs, being skipped over for a raise, seeing an important project cut due to budget constraints, or some other factor, has caused the disconnect.   The end result is that it is impacting innovation.

In order for innovation to work, these issues must be addressed continuously.  Think about this simple example.  An airline pilot trains repeatedly on flying an airplane when one or more of the engines are not operating.  They learn how the airplane handles, what the procedures are, and the best way to solve the problem.  In reality, most pilots will never have to face the issue.  But, when they do, solving this problem is second nature, because they have done it so many times before.  (Read about the Gimli Glider which is even more amazing the the landing on the Hudson.)

In order to build a culture of innovation, use this methodology to drive innovation from the top of the organization:

  1. Engage a key decision maker in your organization on the need to solve one of their pressing problems.
  2. Meet with experts and flesh out all of the details of the problem. Make sure that
    the statement is understandable and “visible”.
  3. Advertise your problem (and process) in company newsletters, web home pages, bulletin boards and meetings.
  4. Review and comment on submitted solutions.
  5. If you’ve been successful, then you should have no trouble finding and assigning accountability to the ideas that should be implemented.
  6. Award your submitters. To figure out the best motivators for your
    organization, answer the question: “What’s in it for me?”

 

 

 

Managing the Creative Process

Managing the creative process is daunting.  When enveloped by an organization, the organization knowingly and unknowingly forces constraints upon the process.  They look at the financial, market and manufacturing feasibility of ideas and ignore the ones that don’t fit into the model.  On one hand this is necessary.  Management is tasked with building wealth and creating profits.  Ideas that don’t match those strategic goals have to be eliminated.

The problem arises because creativity and profitability are not related.  It’s impossible to design a business process that yields a high percentage of quality innovations because high quality innovation is a lower percentage reality.  Psychologist Dean Simonton said it best when he wrote, “Quality is a probabilistic function of quantity.”

You get a few high quality innovations because you create many, many innovations.  An example of this is highlighted by Keith Richards (I hope everyone knows he was in the Rolling Stones) in his memoir,  about the origins of the song “Brown Sugar”:

I watched Mick write the lyrics. . . . He wrote it down as fast as he could move his hand. I’d never seen anything like it. He had one of those yellow legal pads, and he’d write a verse a page, just write a verse and then turn the page, and when he had three pages filled, they started to cut it. It was amazing. It’s unbelievable how prolific he was.

Eventually, Richards came to understand that one of the hardest and most crucial parts of his job was to “turn the f**king tap off,” to rein in Mick Jagger’s incredible creative energy.
This same creative energy was witnessed before in the likes of Einstein, Bach, Edison and others.  From purely a percentage viewpoint, they all created more “junk” than they did “good ideas”, but compared to others, they created more higher quality innovations.  What this causes for the organization is lots of spurious stuff to look through.  Processes need to be designed to allow creativity to be unfettered.

One way of getting unfettered creativity and meeting the goals of the organization is to use Challenges.  Challenges focus innovation in the areas that are most interesting to the organization while allowing for creativity.  The Challenge is simply to address the issue with a solution, there is no constraint on the solution.  This is a midpoint in the creative process with each side getting a little of what they want and need.

http://www.newyorker.com/reporting/2011/05/16/110516fa_fact_gladwell?currentPage=all

People with Glass Houses Shouldn’t Throw Stones

The old adage that “people with glass houses shouldn’t throw stones,” suggests that not everyone is perfect, and that before you criticize your neighbor for doing something foolish, you should think about whether you have acted similarly.

Did you ever go to a restaurant and watch parents try to manage a group of rowdy kids?  They’re making noise, throwing food, and causing a general raucous.  I know more than once I’ve rolled my eyes and thought how I would easily be able to control “those kids!”  But, unfortunately, I’ve been that parent trying to control my own children during a particularly rough day.  It’s easy–from a distance–to see the solution, “I’d just sit those kids right down and tell them that if they didn’t behave themselves, I’d….”  In many cases, you’d probably be right.  The farther we are from the problem/situation, the easier it becomes to find a solution.

A recent article by Psychologist Yaacov Trope posits that the further we move in distance from the issue we are trying to solve, the better our thinking/creativity and decision-making become.  And distance is not just physical.   It can be imagining yourself either at a future point or historical point in time, looking from a different dimension (up/down, left/right), the distance between two people in terms of social connections (my best friend versus an acquaintance), or even hypothetical, such as what might have happened.

The article suggests that the farther we move from the issue, the more general and abstract our perspective becomes and we are able to consider solutions from a wider angle.  Conversely, the closer we are to the problem, the more concrete and practical our thinking becomes.  Think about how easy it is to solve other people’s problems, and you’ll understand exactly what the article is getting at.

This is one of the principles of innovation as well.  People often think that they should only challenge engineers with technical problems, and only marketing people with sales problems.   Using these principles in the article, and based on many years of experience, I can tell you, that you should definitely open up your problems to a wider audience.  You’ll be drawing on different experience/knowledge bases, but you’ll also be creating distance–they key to problem solving.

Three Learning Phases of Innovation: Thinking, Automating, Predicting

Three phases of innovation learningInevitably, every organization goes through these three learning phases of innovation, and hence innovation maturity. Some move more quickly than others, but they typically can’t be avoided. To help your organization become an expert in innovation, embrace the stage that you’re currently working in, and understand the risks and limitations.  With a clear understanding of where you are and where you’re going, it’s easier to map out the steps to improve your organization to the expert level.  Get the free white paper at http://www.mindmatters.net/Resources/WhitePapers/TheThreeLearningPhasesofInnovation.aspx

Employee Innovation: Should we include everyone?

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employee innovation

At a recent client meeting, they asked whether employee innovation include everyone.  They wondered whether involving everyone—the ones who never really participate or come up with anything “good”—should be invited into the process.  The reasons for limiting participation were sound.  They had limited resources and couldn’t afford to chase down every suggestion, these people had never really added to their innovation in the past, so they’d be wasting resources on training, not to mention the individuals would be working on non-work related projects, and finally, their “main” innovators had lots of domain expertise and contributed most of the innovation to the organization.

All of the points were valid.

For a white paper with more details on this topic, click Dramatically Improve Employee Engagement.

However, I suggested that perhaps these others weren’t participating due to unseen obstacles.  Would a junior engineer really speak up in a meeting when the senior “expert” had already rendered the most logical opinion—probably not, they’d see no need to stick their neck out.   While there are surely some who don’t mind starting a fight, most already have enough on their plate.  The last thing they want to do is raise the ire of senior management or expose themselves to ridicule for suggesting something outlandish.

The other thing to consider is the real depth of their expertise.  Just because an employee has only been with the company for a short time, it does not mean that they haven’t solved a similar problem in the past.  They may have expertise in a domain that is so new that your senior engineers might not have any real knowledge about a new approach.   They might have experience from volunteer work they’ve done, or knowledge of a similar issue in a spouse’s work environment.

Lastly, the problem of limited resources is real.  However, consider focusing the scope of your innovation, rather than limiting the participation.  For example, ask your participants to solve a particularly vexing organization challenge, such as how to reduce the cost of a current product.  By focusing, you’ll receive more ideas related to what you want and conserve your resources.

For successful innovation, you need the participation of everyone along with the expertise (seemingly relevant or not) of everyone.

The Big Idea: Are you Ready for it?

Big Ideas and little ideasThe other day, I met with a client who told me that she was looking for big ideas from their innovation program.  When I asked her what she meant, she told me that she didn’t want cost-saving ideas, or process improvements, she wanted big, multi-million dollar businesses.  She wanted to know how to get them.

This is a fair question and a desired result of most any strategic innovation program.  But the real question is whether you are ready for it.

Imagine a brand new licensed driver stating that they want to take the car on a cross country trip alone.  If you’re like many, you’d be asking yourself if that person had the experience to not only handle the car in lots of different situations, like highways, during thunderstorms, or narrow mountain passes.  You’d also wonder if they have the experience to successful navigate in a safe and effective way.  If you’re a parent, you’d simply say, “No.”

Innovation is very similar, in that you have to walk before you can run.  If you don’t have a process for effectively capturing (the little) ideas and successfully reviewing and implementing them, then you don’t stand a chance on the big ones.   The big ideas are inherently more risky, both in terms of money and time, but also in possible success.  You have to consider your customers, the market, and political forces.  The other interesting aspect is that the big ideas are usually hidden within the little ideas.  You don’t have to look any farther than the Apple iPad.  I can’t think of a single pundit who predicted it would be successful, because it was so different, but it certainly was.  My guess is that this little idea probably was killed dozens of times in other organizations because of the risk.

Big ideas require a portfolio mentality, along with a willingness to fail—big.  You have to spread your investment across different market/product segments, i.e., new market-old product, existing market-new product, etc. to fully realize the gains from innovation.  The best way to get to this level of risk is to start small.  Become successful at capturing and implementing the little ideas, the ones that don’t necessarily have a large impact.  You’ll demonstrate your understanding of the process, your ability to accept risk, and you’ll build the confidence of your organization’s attitude toward innovation.

Failure is Important

A recent article in the Wall Street Journal, titled, “Better Ideas Through Failure“, highlights the concept of embracing failure to attain success. While there have been similar articles and books written on this concept, all point to brilliant creations realized through a failure such as 3M’s Post-it notes or the discovery of Teflon. However, failure does not typically present itself in this ‘spectacularly brilliant’ way. Instead it usually just follows as this typical joke about project management:

  1. Euphoria and Excitement
  2. Disenchantment
  3. Search for the Guilty
  4. Punishment of the Innocent
  5. Reward for the Uninvolved

Sadly, these steps are fairly common, and as a result, it teaches people to not take risks.

What you really want is a balance between craziness and apathy. You want to encourage behavior that includes trying something that’s worth it–to the organization, and then rewarding/praising the result–even if it resulted in a disappointment. What makes great individuals great is their lack of concern about being judged by other people based on their failures. If you can get everyone in your organization to believe that strongly in themselves, then you’ll create an innovative environment.