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BIG AND LITTLE INNOVATION

Since “Innovation” became a sexy word for big business, companies have been tripping over themselves to become more innovative. Some merely take a marketing approach and add a slogan that emphasises innovation without bothering to actually become more innovative. Others struggle without succeeding.

One reason is that most of these companies are looking for a big innovation: that earth shattering new product that will leave the competition in the dust. Such companies overlook small innovations which bring incremental additional income or – more likely – result in relatively small but nevertheless significant cost savings.

Fortunately, the solution is simple: recognise the value of little ideas. Consider what is probably the world's most innovative car manufacturer. It is not BMW or Porsche (although they make wonderfully engineered cars). Rather it is Toyota.

Toyota's innovations are generally small and are often about improving the efficiency of their just-in-time logistics (that is getting parts delivered to factories just before they are needed, thus reducing storage costs). But the results have been very big: Toyota is consistently one of the most – if not the most – profitable car companies in the world year after year.

Toyota also boasts one the longest established and most effective idea management systems around. Every year since the 1970s, the company has received over a million ideas from its employees. Over 80% of those ideas have been implemented. Toyota has not only created a culture which actively encourages everyone in the organisation to contribute ideas, but also has got people thinking about the right kind of ideas for the company.

DaimlerChrysler is another company that has come to appreciate the value of many small ideas. In 2001, their web-based idea management system received some 69,000 suggestions – which resulted in a total savings of 62 million Euro.

Clearly, the lesson to be learned here is that you should not put all your innovative effort in finding that next earth shattering idea. Even if you find it, you may not recognise it (see article below). Rather focus on maximising the overall innovative environment of your company.

There are three steps to achieve this.

Firstly, you must actively encourage and promote innovation across your entire organisation. Everyone from the mailroom clerk to the vice president of innovation has ideas about improving processes in the company. Encourage them to share those ideas. This is not easy and requires total commitment from top management. (This topic will be covered in more detail in a future issue of Report 103. Meanwhile, see previous issues of Report 103 for articles related to developing a more innovative company: http://www.creativejeffrey.com/report103/archives.php)

Secondly, you need to implement an idea management system that captures employees' ideas and provides tools for evaluation, implementation and, ideally, collaboration. I of course believe our Jenni enterprise idea management solution is the best (http://www.creativejeffrey.com/jenni/) – but there are other good tools in the market as well.

Thirdly, you need to implement publicly the ideas that come in. Amazingly, we have seen companies implement suggestion box schemes and idea management solutions; but who either never implement suggestions or are so secretive about the implementation that no one knows about it. As you can imagine, if employees do not believe you will implement their ideas, they will soon learn not to share those ideas with you any more.

If you would like more specific advice on how to make your company innovative one, call or e-mail me for a no-obligation and completely confidential initial discussion.

(This article was inspired, in part, by an excellent article: Special Report Business Innovation in the Economist magazine; 24-30 April 2004 issue; also on line at http://www.economist.com/business/displaystory.cfm?story_id=2610485.)



© 2004 Jeffrey Baumgartner

 

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium