Report 103
A weekly newsletter on creativity, ideas, innovation and invention.
Tuesday, 14 December 2004
Issue 46
Hello and welcome to another issue of Report 103, your weekly newsletter on Creativity, ideas, innovation and invention.
As always, if you have news about creativity, idea innovation or invention please feel free to forward it to me for potential inclusion in Report103. Your comments and feedback are also always welcome.
Information on unsubscribing, archives, reprinting articles, etc can be found at the end of this newsletter.
BRAINSTORMING FOR DISASTERS
We usually associate brainstorming with positive goals. We set a goal in mind, such as devising product improvements, or creating a new slogan and then generate ideas that may achieve that goal.
However, brainstorming can also be an effective tool for predicting and preparing for disasters. As 11 September 2001 has taught us, the absolute worst possible disaster we can imagine actually can happen.
Disaster brainstorming starts like brainstorming. You bring together a variety of people from various departments in your company as well as external consultants, business partners and clients if you wish.
Everyone then generates ideas on what could damage your company. All ideas are documented and no criticising of ideas is permitted. While a normal brainstorming session is finished in about 30 minutes, disaster brainstorming should probably include a 30 minute initial session and a 30 minute follow up session 24 hours later. This allows participants to sleep on the problem. At the follow up session, new ideas are documented. The next step is to go through all the potential disasters and give each two scores:
Likelihood. On a scale of 0-20, how likely is this disaster? 0 = absolutely impossible and 20 = almost certain to happen within the next twelve months (or whatever time period you wish to consider).
Damage. On a scale of 0-20, how much damage would this disaster cause? 0 = none at all; 20 = would completely and irrevocably destroy the company and seriously harm the people in the company.
Thus, the entire headquarters being destroyed by a terrorist bomb would have a likelihood of about 2 or 3 (unless you are a US embassy in a high risk area) but a damage factor of 15 or more. A hard drive being destroyed in one of your computer servers would have a likelihood rating of about 16 (or more if you have lots of servers), but a damage factor of 3 if you have a good back up system.
Any disasters which get a score of 0 in likelihood or damage should be removed
from the list. Finally, list all disasters in order with the highest scoring
disasters at the top of the list. Depending on the score and the nature of the
disaster, choose individuals or teams to:devise methods to prevent or reduce
the likelihood of the disaster occuring
draw up an action plan to follow in the event the disaster does occur.
Although disaster brainstorming is largely about insurance and generating solutions for problems you hope will not happen, it can also bring new ideas for improving your products and services. Indeed, you should keep an open mind for such ideas throughout the disaster brainstorming exercise.
Speaking of disasters: as I proofread this newsletter, a commercial building not 200 metres from me is burning down. The fire brigades from three nearby towns have come to fight the fire. Fortunately, no one seems to be hurt.
CHINESE COMPANIES, BRANDING AND INNOVATION
Look around you, there are probably at least a dozen products in your range of sight that were made in China. And many more which include components made in China. Yet, how many Chinese brand names could you write down at this moment?
Probably not many. Chinese businesses are generally weak in establishing strong brand identities. Indeed, this is why Western upmarket fashion products sell very well not only in China, but in other countries where business is dominated by the Chinese.
Chinese businesses also tend to be weak on innovation. And these two weaknesses are intimately linked. Before I go into that, though, it is important to point out that the Chinese people are not weak in innovation. One only needs to look at the names on scientific papers and high tech patents these days and one will see Chinese names galore. The children of Chinese immigrants in the West have been making a huge impact in science and technology innovation.
But Chinese businesses in China and Southeast Asia follow the small trader model: buy cheap, add a little value and sell at the highest margin you can. This model has worked well and has made many a Chinese entrepreneur extremely rich.
However, such a model leaves no room for innovation. Without a recognised brand name, there is little reason to innovate. Who will remember that your products are more innovative than your competitor's when no one remembers your company's name – or your competitor's name for that matter.
On the other hand, without innovative products, or innovative features on your products, there is no reason for customers to remember your brand name. They'll buy your products based on price – or on the brand name that someone else puts on your products.
And it is the company slapping their logo on your products that innovates and reaps the rewards of innovation. For them, there is substantial value in innovation. Consider...
A Chinese clothing maker – let's call them Liew Clothing - purchases fabric for a dress for $1, they add another $1 worth of labour and sell the resulting woman's dress for $5 to a wholesaler. They might incur another $0.50 in marketing, sales and administrative costs. That still leaves a profit of $2.50 a dress, which is not a bad profit, especially if your factory can produce a couple thousand such dresses per day.
Now consider a Western fashion company – let's call them Gabriella. They invest in creative designers and create exciting dresses. Gabriella subcontracts the manufacturing of their latest design to Liew for $5 per dress. Liew, meanwhile, incurs the same $2.50 per dress in costs.
But, Gabriella, being an established brand name, can sell those dresses for $100 apiece in their shops. Admittedly, they have higher costs: paying expensive creative designers, marketing to establish their brand name, maintaining shops in high class shopping areas and so on. But, even if those costs equal $50 per dress, they still end up with $50 per dress profit.
Even if Gabriella sells substantially fewer dresses than Liew, Gabriella will still reap higher profits from the innovation.
At present, China's ample low-cost labour force means that businesses there can continue to compete on price. But as they bring in more sales and grow the economy, China will lose her price competitiveness. Before that happens, China will need to develop some solid brand identities and innovative products under those brand identities.
FEELINGS
Although creative people, particularly those in the arts, are notoriously sensitive, it is surprising how little attention is paid to feelings and creativity in business. This is a mistake. Feelings are critical to creativity and hence to innovation.
Most people find it difficult to be creative when they are feeling intense emotions, particularly negative emotions such as depression, anger or stress. If people are worried about their jobs, they will feel stressed and are more likely to focus on securing their jobs than on generating new ideas for your company.
If your head of research and development believes his girlfriend is having an affair with the head of marketing, his creativity is more likely to focus on issues related to his jealousy than issues related to innovative new product development.
Artists can often draw upon their feelings to create art. Indeed, the number of writers who are not only manic depressive, but take advantage of their depressions – as well their manias – to write great works suggests that manic depression is almost a prerequisite for being a good author. But in business, depression is more likely to distract than to inspire. A great tragedy works as a novel, but not as a marketing plan!
Even when your employees have ideas, their self confidence is critical for getting them to share their ideas. As I have stated before, sharing creative ideas with others is a risky endeavour. At first hearing, it is often difficult to tell whether an idea is brilliant or stupid. If people are not feeling confident, they will not take the risk in sharing their more creative ideas – the ones that are most likely to be brilliant.
As a manager, what can you do?
You cannot be expected to be a psychotherapist – but you can help. It is certainly to your advantage to boost the confidence of your colleagues. This is not difficult. Complimenting good work, following progress as mentor rather than as a nag and supporting good ideas all help boost your employees' confidence.
Also important is being transparent about work related issues. If the office is full of rumours of downsizing, then people are likely to worry about their job security and that will affect their creative performance. Hence it is important to address these issues early - before they can cause problems.
If an employee is upset over an office related issue such as tension with a co-worker, inability to cope with the workload or other issues, either you or someone in human resources should discuss the issue with the employee and attempt to resolve the issue in a way that is satisfactory to all.
When an employee is upset over a personal issue, it is often best to simply give the employee time and space to resolve the issue. But sometimes employees will find you a good person to talk with about personal issues. If you are comfortable with that role – you will probably already know how to deal with such problems. If not, it would be best to discuss the issue with human resources or direct the employee to an organisation that can provide professional help.
Dealing with employee problems is not within the scope of this newsletter, so I have been necessarily brief on the subject. There are many good books as well as resources on the web that go into more detail should you be interested.
JPB.COM NEWS
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Happy thinking
Jeffrey Baumgartner
