Category Archives: Innovation Culture

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.

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.

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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.

Neat or Messy Desk for Innovation

messy_deskSome recent research by Vohs, et.al, looked at the personalities/characteristics of people with orderly desks and those with messy desks. They ran several experiments and came to the following conclusions:

  • People in an organized room chose healthier snacks and donated more money.  Being in a clean room seemed to encourage people to do what was expected of them. So, if you want compliance and good behavior, then you want people who keep their desks clean and well organized.
  • On the other hand, the experiments showed that participants in a disorganized room were more creative than participants in an orderly room.

From an innovation perspective, this helps with the overall process.  For creativity and idea generation, find the people with the messy desks.  When the ideas need to be implemented, find the people with the organized desks.

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?”

 

 

 

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Innovation and Pain

surgeryI was reading an article in the New Yorker comparing the adoption of surgical anesthesia versus antiseptics–two very important medical innovations. Some background is essential.

Anesthesia

In 1846, surgery was both painful and brutal. For most procedures, even a tooth extraction, patients were pinned down by assistants as they screamed and writhed in pain. Surgeons were trained to work with lightening speed to minimize the duration of the pain. Clearly, there was an emotional toll for both the patient and the surgeon. In October 1856, a gas was discovered by William Morton (a dentist) that could completely render a patient motionless and quiet. He demonstrated the gas to a surgeon, who was awe-struck by its effects, and who quickly published a paper in November 1846 in the Boston Medical and Surgical Journal. By the middle of December of the same year, surgeons were using the gas in London and Paris, by February 1847, anesthesia had been used in almost all of the major capitals in Europe, and in June 1847 by almost all regions in the world—mind you that this is before the internet–all of this communication was by letters, meetings, and other “slow methods.”  So, in took on 8 months from discovery to wide spread use! By 1852, anesthesia for surgery was a standard procedure everywhere.

Infection

Now consider infections. During this same time period, infections were the major cause of death for surgical patients, with as many as 50% of patients falling victim to post-surgical infection, sepsis, and death. Clearly, this is a big problem. In the 1860s, a surgeon named Joseph Lister came to the conclusion that infections were caused by microorganisms after reading a paper by Louis Pasteur.   Lister perfected his sterilization techniques and eventually published a paper in The Lancet in 1867 that documented spectacular reductions in death following surgery. His process consisted of many steps, such as washing hands, sterilizing instruments, and using sterile gowns and gloves.  Unfortunately, in wasn’t until nearly 40 years later that this practice became universal.

Why?

So we have two techniques that revolutionized medicine, yet one was adopted in 7 years and another in 40 years. Arguably, more lives could have been saved if surgeons had adopted the sterile techniques that were presented, but they didn’t. Both techniques required scientific/technical discoveries, i.e., the composition of the gas for anesthesia, and the realization that germs are present and need to be eliminated for infections. There are two main differences. With anesthesia, the doctor’s problem was solved, i.e., screaming, writhing patients (not to mention the emotional toll) making their job easier and less stressful. Also, the solution solved a very visible problem–screaming patients, something that was readily understood to be a problem. With sterile techniques, the problem was solved for the patient (they didn’t die!), but the doctor had little to gain. The patient was quiet during surgery, and would die several days or weeks later. Also, the problem was invisible–the killing of germs. It was hard to see that washing your hands or using sterile instruments was really solving the problem.

How does this apply to Innovation?

There are lots of good ideas that come up in organizations, but it’s the implementation that is the problem. It becomes hard to implement something when you are not directly solving your own problem and when the problem you are solving is invisible (to you). Organization’s are typically relying on “customer feedback” about a problem. In many cases, the people solving the problem don’t encounter the problem on a day-to-day basis like their customers—they may know and understand the solution better, but are not forced to “make it work” in order to get their job done like their customers are.   Consider just the simple example of a headache. If a co-worker of friend is having a terrible headache, you’ll probably lean back in your chair and recommend they find an aspirin, but if you are having the headache, you’ll knock over walls and doors to find a bottle of Advil.  The other aspect is the visibility of the problem.  Consider that you’re car stops working and you pull to the side of the road–you have no idea what is wrong. You open the hood and everything appears to be in order. In this instance, the problem is invisible, and you will probably just wait for your car to be towed to a service station.  Now imagine when you open the hood, you see that the battery connection is completely off–you immediately re-attach it and solve your problem. It was a problem that was visible and you fixed it right away.

These are the several major issues you must resolve when implementing new innovation:

  1. You must clearly articulate the pain/problem that is solved into something that everyone understands.  (If I don’t think I have a headache, then I am not going to be interested in your solution)
  2. You must make it visible. I think it is just a fact of life that it is easier to solve something where the solution is tangible. In business, it’s harder to sell services than products primarily because it is hard to see the results of services.
  3. Timing.  I believe that the time between the problem and the resolution must be short, or you’ll have to explain more.

In the case of infections, surgeons realize that having patient’s that live increases their collections (and they make more money), experimentation and microscope improvements make the problem visible, and it the benefit was immediate (the patient stopped squirming right in front on you).  Simply said, we need “sales” techniques to convince others of the value and benefit to themselves.

One way to do this is through innovation challenges. Challenges are problems proposed by organizational leaders.  The problem has value because solving it could result in a promotion, financial rewards, or other recognition.   Challenges force the problem to be explained in concrete terms and in simplified language so that everyone understands the issue, value, and benefits.  Challenges are also time-limited in order to force the timing between problem and solution.

 

 

Innovation and Internal Competition

rodneyThere are many elements critical to a successful innovation program, such as focus, a good process, and resources. Many organizations put all of these elements in place, but they still end up failing. Interestingly, their programs end up creating worthwhile projects, but the projects never materialize or are rapidly killed.  What happened?

When this occurs, many times it’s because the innovation teams worked in a vacuum from the rest of the organization.  (I immediately think of this clip from the movie Back to School with Rodney Dangerfield  In this clip, Rodney talks with a business professor about how to start a new company).  By this, I mean that they didn’t consider the “real way” that things work in the organization and believe that the sheer brilliance of their ideas and projects would cut through any organizational issues.  In most cases they are wrong.  For the most part, large organizations are built to kill ideas–they can’t help it.  There is competition from existing projects, political connections, important customer issues, and legal areas.  New ideas can easily be quashed by any of these, so it’s important to figure out a way to navigate through the organization in order to bring these ideas to fruition.

One of the best ways to mitigate many of the problems you’ll encounter with internal competition is to get a sponsor.  Sponsors have several characteristics:

  • They have political clout–usually higher level executive
  • Have experience in an area important for your project
  • Can pull resources
  • Provide sound advice

Sponsors will help drive success for a project by providing these valuable assets.   They also will help you with the 80-20 rule, or in other words, they know how to get the most out of the organization with a minimal amount of effort.  Think about something simple that you want to do, like plant a garden.  You may have come to the conclusion that a garden would provide your family with lots of benefits, such as low cost, organic, and fun.  If you’ve never done this before, there are a couple of ways to go about it.  You could go to the library, local nurseries, and the internet and research the best practices for planting. You’d try and learn the best times, best plants, and best cultivation techniques.   Without a mentor, you’d most likely make some mistakes, i.e., planting too early, picking the wrong varieties, or not using the right fertilizer.  However, if you talked to your neighbor (who has had a successful garden for the past 10 years), he’d be able to tell you exactly what to do.  He’d provide helpful advice on the best things to plant so that you’d get the best yield, avoid bugs, and prevent rabbits from eating everything.  He’d know where to get the best deals on supplies, and he’d probably have helpful tools for you to use, like a rototiller.  The best part is that you’d learn all of this information is a short amount of time, and you’d get someone who would help you through the entire process.

The same is true for an organization.  A sponsor can help you quickly navigate all of the issues that you’ll encounter and provide you with advice and resources to get to your end goal.  Sponsors usually have “skin in the game” as well, and will benefit from your success.  They may be the ultimate manager of the product you develop, or it might be their customer’s problem that gets solved.  They’ll be able to shield your project from others, and insure that it moves forward, in essence, they’ll mitigate the competition.

There are two ways to go about finding a sponsor.  First, you can sell your idea to potential sponsors, hoping that one of them will adopt your project.  Second, you can talk with potential sponsors about what issues that they need solved and try to innovate for their success.  I believe that the second way is easier because you’re helping them with their problems, and the “sale” is easier.  The downside is that your ideas may not be 100% yours, and you’ll have to be flexible to make it happen.  However, if you’re successful with this approach, then you’ll gain more and more success, and have more control over what you create.  Think about teaching one of your kids to drive.  The first few times, you make certain that you have lots of control over the situation by picking the location and time.  However, as they progress, you become more comfortable with their decisions, and eventually send them on their own.