Category Archives: Open 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.

The Problem with Open Innovation

A recent article by Randall Wright in MIT Technology Review discussed the problems with open innovation. There has been lots of articles recently about how open innovation is the next big thing in innovation. In a nutshell, it involves open up your innovation to a large group of people in order to find new ideas.  It’s popular, and has been adopted by lots of well known organizations, such as Starbucks, Coke, and Nike.  Coke purportedly used this methodology, and came up with ideas that were very successful.  However, most of the ideas were based on consumer marketing.  In other words, they got the people that drink Coke (a large percentage of the population is at least familiar with what it is), and had them design a campaign to more effectively sell the product.  The results rivaled the quality and appeal of ads produced by top advertising agencies.  But did they innovate?  No, they “reverse surveyed.”  Instead of surveying consumers with a set of questions, taste tests, etc., to determine the best way to market, they just asked a whole bunch of people to give them the best way to market.  This is similar to asking every customer who leaves a restaurant, “How could we improve our appeal/food/restaurant?” except you do it all at once.

I think this method works well for consumer-oriented organizations.  It can help you select the best new paint colors, catch phrases, and product packaging.  It works in areas where the problems are well known and understandable, i.e., what is your favorite color.  However, when you talk about ground-breaking innovation, you’re referring to areas where the average person has no experience.  Consider Linux, the darling of open innovation, is still outpaced by the commercial products.

According to Wright, “real innovation is always the outcome of ongoing discourse among a small group of innovators who truly understand the importance of what they’re working on.”  Read his article for more insight.

 

Innovation: Do customers really know what they want?

In an article by Tim Kastelle, entitled, “Innovation Opportunity: People Don’t Know What They Want” uses the example of selling Coke to demonstrate how people (when solicited) don’t really know why they are buying something. This hits at the heart of crowdsourcing which taps the knowledge of this same group of people to innovate.  You decide.

How to Kill Innovation

I read an article by Jason Hiner in Tech Republic talking about the 5 things that can kill innovation. Here they are:

  1. Don’t give ownership of projects
    His basic premise is that individuals do better at managing projects/ideas than teams. The old saying that “Too many cooks spoil the broth” is the acting principle here.  While it may seem “progressive” and socially acceptable to allow the team to make decisions by committee, in practice it just doesn’t work.   There is a difference between “working as a team” and being run as a team.  Consider the real world example of an airline cockpit.  Great effort has been put into getting the pilot and co-pilot to act as equals while managing the aircraft.  It’s called cockpit management, and resulted from accidents where one person–typically the pilot–acted without regard to the opinion of the other.  The pilot and co-pilot now work together, but ultimately, there is only one person in charge.  Consider the case of the USAirways flight that crashed into the Hudson river.  As soon as the birds struck the airplane and they began to lose power, captain Sullivan states, “I’ve got the plane” indicating that he is the one now in charge.  With that said, there is still an active collaborative dialogue as captain Sullivan asks his co-pilot, “can you think of anything else [to do]”.
  2. Create too many layers of management
    To create an innovative environment, Mr. Hiner states, “that you have to find ways to flatten your organization and create less hierarchy, while making sure every employee still gets a little bit of time with the boss on a regular basis in order to stay energized and on target.”  I agree completely.  Management is one of the most critical aspects of innovation, and in addition to his suggestions, you also need management that is supportive (and demonstrates their support) of innovation.
  3. Ignore brainstorming rules
    If you want to be innovative, he suggests that you keep good brainstorming rules, such as limiting negativity because, “some of the craziest ideas could morph into something amazingly useful.”  Unfortunately, the opposite seems to be true, as there is little evidence (in the research literature) that anything of industrial/commercial value has come from brainstorming.   There are plenty of examples of people coming up with a 100 different ways to use a paperclip, but commercially successful innovation almost never involves brainstorming.  It goes against our nature–we’re too competitive.    Nonsense, you might say, “everyone at our organization is happy to help others develop ideas,” and I believe this to be true.  But if you open an idea up to an entire group, you’re going to do a couple of things.  First, you’re diluting the inventors’ idea, possibly in a way that doesn’t make sense, especially if the group is trying to reach consensus.  Second, you’re removing a large part of the incentive for the inventor to push the idea to completion, because you’re reducing the impact of his/her reward. One of the best examples of this is in academia.  I used to believe that this was the most open and collaborative area around, however, this is not the case.  Researchers/Professors are extremely guarded with their ideas, and rarely “brainstorm” them with an entire group.  Why?  Because in most cases, their career, prestige, and funding are directly related to the number of successful ideas that they can come up with.  Sharing can be catastrophic.    Do they collaborate?  Sure, but usually with a very, very limited number of trusted associates.  These people are solicited specifically and are invited to participate because the originator believes that they’ll benefit. When I invent something, I hope (and expect) to be rewarded in some way, i.e., keep my job, get a promotion, get a raise, get a better position, etc.   There are very few people who freely give their best ideas to their colleagues.  More realistically, when people want to collaborate, they do so with some understanding of secrecy, such as NDAs and other agreements to guard their intellectual property.
  4. Rely too heavily on data and dashboards
    Innovation has a tough ROI.  Mr Hiner writes, “Beyond some of the basic data, such as sales and customer traffic, a lot of the data requires sophisticated analysis (because it’s so ambiguous) and many of the truths it contains are relative — or worse, they hide other truths.”  This is really true.  It’s hard to create a return on investment report for an idea.  If the idea is successful, the ROI could so high it would seem unrealistic.  On the other hand, innovation rarely lasts (beyond a 6 months to a year) without payback.   One of the best ways to generate payback and ROI is to innovate against specific problems/issues.  If you innovate against strategic issues, you already have a built-in ROI.
  5. Under-resource your hidden opportunities
    The article states, “Having too many resources makes people sloppy. When you have to get something done with fewer resources than you think you need, it often sharpens your wits, forces you to hustle, and leads you to break through barriers.”  Completely agree.  It’s a great mental challenge to find an answer with limited resources.  It reminds me of the story of the Apollo 13 mission where they had a catastrophic failure shortly after launch.  One of the pressing issues was that the carbon dioxide in the module where the astronauts were living was increasing.  In order to remove the carbon dioxide, the engineers at NASA had to figure out how to fit a “square filter into a round hole” using only the materials available to the astronauts.  They obviously did it and saved the astronaut’s lives.

A Fictional Example of Innovation

Tara had just finished visiting with her largest customer, a network of 13 hospitals in her county. She had met with many people that day, but one meeting in particular had stood out. She had met with Dr. George Freeman, chief of surgery, who explained the problem they were having with their aging set of surgical instruments.   Dr. Freeman explained that they have the budget and are prepared to buy new sets, but they have one major reservation with the ones that Tara’s company makes.  They are uncomfortable for left-handed surgeons, and George happens to be left-handed.  He goes on to explain that without something different, the sale will go to Tara’s competitor.

Tara knows that this is a major problem.  This hospital system is a major customer and purchases millions of dollars of products from her company.  Letting her competitor get an advantage like this could be devastating.  Tara takes her problem to her supervisor.
Tara works in the marketing department and presents her issue to the group.  She explains Dr. Freeman’s problem, and how they’ll lose the sale without a change.  Tara champions a suggestion made by Dr. Freeman, which simply involved moving the finger clasp about 20 degrees off center.  Tara is familiar with her company’s manufacturing capabilities and realizes that although this is a significant change, they can (and have) made this accommodation in the past.  After they talk with a few others in marketing, they realize that this is their only chance to make the sale, and take their issue to the engineering department.

A few days later, a meeting is scheduled with engineering, and they make their presentation.  The engineering group has assembled their senior engineers, and they’re joined by the company’s controller and manufacturing VP.  Tara prepared slides outlining the issue, and she documents how sales will likely increase substantially as a result.  No one else has instruments with this capability.  Engineering spends a few days and designs a new set of instruments, noting that the clasp should only be moved 19 degrees off center.   Preliminary mock-ups prove the point, and the change to manufacturing is estimated at $850k (a fraction of what the potential sales will be).  Finance approves the money and the project is started.

Tara’s company is responsive, voice-of-the-customer oriented, and innovative.  They addressed the need of a major customer, secured new sales revenue, and improved their product.  But did they really do the best that they could?

Tara’s company has repeated the missteps of many organizations.  They answered the question for an important sale, but they really didn’t innovate.  Find out how using MindMatters’ processes and the Innovator™ software system can make supercharge your organization.  Click here to request a copy.

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

7 Rules for Improving Innovation: #7 Customer Input

Improving Innovation: Customer Input.

To fuel the innovation engine, companies need to pay extremely close attention to their customers and form strategies based around everything they can possibly learn.

To accomplish this, most organizations spend a chunk on R&D, market research, focus groups and feedback programs, simply to gather insight and suggestions for “potential” innovations.

To survive and remain competitive, regardless of your industry, your company needs to be the first to market with new offerings. That means understanding what your customers are like. Naturally, customers’ needs and wants are ever-changing, but you need to do everything possible and know as much as you can about your users. Earmark the time, money, and people to find out how customers interact with every aspect of your product, service, company, delivery, support, and so on.

And ask their opinions. It sounds rudimentary, but so many companies fail to do it, and make the information they find out actionable. This devotion to the “voice of the customer” could set you apart and become the gamechanger for your business.

www.mindmatters.net

www.StepByStepInnovation.com

 

7 Rules for Improving Innovation: #5 Process

Process.

Manycompaniestruly want to innovate, but don’t know where to start. It all begins with defining a clear, straight-forward process. If you want success, you simply have to create, implement, andenforce a process for how innovative ideas and projects will flow through your organization from early stage to completion.

Without getting too technical or obtuse in the course of a 300 word blog post,here are some of the general questions you’ll need to be prepared to answer up front:

  • Howareconcepts found or uncovered in your company? How could that be better?
  • Who needs to be involved in reviewing and making decisions on “go forward” strategies?
  • What are the stages a project or concept must go through to move from development to action? (Make it as few as possible).
  • What are the criteria and benchmarks for moving the concept through each of these phases?
  • Who are the folks who need to be involved in enforcing the rules and criteria at each various stage?
  • What are the approximate costs of each stage and do you have the money earmarked to execute?
  • Who is ultimately accountable?

If you can answer most or all of these questions, then you’re starting to fill out the data you need to mapthe process. Now think of the workflow whicha concept must travel through and create a diagram of all of these stages.

If at all possible, it’s highly important to hire employees that have “been there and seen it before”. Before you bring in a consultant toteach you the ways of innovation, see who you already have in your company that are experienced with process. Innovation is no different than any other strategic or functional business process, and needs to be built and managed by folks whose clear strengths are in these areas.

If your company does a lot of talking about innovation, but really isn’t producing measurable results, thenyou’re definitely in the majority. Chances are what’s missing is either strongleadership or a solidprocess.The good news is you can easily change both of those things.

www.StepByStepInnovation.com

www.mindmatters.net

7 Rules for Improving Innovation: #4 Recognition

Recognition.

Employees need to be recognized for their efforts, plain and simple. This is especially trueas you’re trying to drive innovation forward at your company. If you’re not doing this already, you need to start a regularprocess forrecognizing (better yet, rewarding) workers in your company.If the wholeinnovation process is new to your organization, oryour current process is being updated or changed, then you’re most likelyasking employees to perform new tasks that are not already part of their jobs. If this is the case, there must be someunderstandingon their part thatthere’s”something in it for them.”

One way to do this, of course, is to recognize them or give out awards in some sort ofpublic forum. You can pick out these “superstars” by creatingavalue system that ties intothebenefit(aka: cost savings, revenue, ROI, or some other financial metric) ofimplementedideas that sprang from the employee well. If you’re doing innovation right,then you’realreadybenchmarking this, of course, too!

Many companies use a points-based system to trackparticular activities within the innovation process: “Submitting an idea,” “Management approvesan idea,” or “idea gets implemented” are all goodevents to start tracking. Still other companies choose to simply share a monetary award based on the benefits received from a good idea.

It’s all about creating an incentive for employees to share ideas andfollow through onthe resulting new projects.Without that incentive, there is little motivation to strive beyond the daily expectations of their typicaljob function.

Another fairly simple suggestion you can put into play is to create a program for employees to write articles, knowledge base entries, contribute to publications, and make a name for themselves in their discipline. Even ifthese pieces are only used internally, the sharing of expertise isavery powerful way to become recognized for your knowledge and contributions to the company. Supporting employees in this way is asure-firemethod forgetting themto solve problems and share ideasthat they’ve seen work in different environments.All of thisdrives innovation to it’s peak.

www.StepByStepInnovation.com

www.mindmatters.net

7 Rules for Improving Innovation: #2 Sharing Information

Sharing Information.

In order to innovate, information must flow freely and be readily accessible to employees and, in some cases, outside participants. First off, create a space, whether virtual or physical, where people can “get together” and share what they’re working on, project info, notes,etc.

While giving utmost respect tosecurity and intellectual property procedures, there are still lots of waysthatyour company can improve opennessbymakingknowledge bases anddocument directories open to everyonefor whom sharing is appropriate. (Note: We understandthere arecertainly groups for whom sharing sensitive details and data arenot areasonable request, and that’s perfectly understandable.)

The general population of yourcompany should know whattheir counterparts in other departments areworking on. More often than not,people are siloed and don’t know how to find info about projects that are going on elsewhere in thecompany. What you end up withis a lot of wasted research, duplicated effort, and disparate groups pursuingprojectsthat have alreadybeen implemented, or worse yet, have been proven to fail.

In addition to creatingthat “shared space”, there are innovation and idea tools that can track and archive ideas, suggestions, and projects. These are not only useful in real time to help you select the right initiatives, but you can also go back andmine themprior to launching projects to see if something similar has been suggested orattempted in the past.

Encourage collaboration by scheduling set times during the year when workers present their work to their coworkers. Better yet, integrate the use of collaboration and project tools into the culture of your company so people canaccess that informationas part of every day life,not just justmonthly or quarterly.

www.StepByStepInnovation.com

www.mindmatters.net