Report 103

A fortnightly newsletter on applied creativity, imagination, ideas and innovation in business.

Tuesday, 5 April 2005
Issue 54

Hello and welcome to another issue of Report 103, your weekly newsletter on creativity, imagination, ideas and innovation in business.

As always, if you have news about creativity, imagination, ideas, or innovation 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.

DON'T SETTLE FOR FIRST

When looking for solutions to problems, we humans have an unfortunate tendency to embrace the first solution that comes to mind. Worse, if upon analysing the problem further, we discover our solution is not sufficient to solve the problem, we try to modify that first solution rather than consider alternative solutions.

However, the first solution to a problem is seldom the most creative and only occasionally the best solution. The first solution is, on the other hand, usually the most commonplace solution. It is the solution that most people – including your competitors – would adopt in the same circumstances. Applying the same solution as your competitors is not very competitive.

As an example, consider the (imaginary) Acme Garden Furniture Company which makes tables, chairs and that sort of thing for your garden (yard, if you prefer American English). Acme discover that sales, and hence profits are down. The CEO's immediate reaction is to increase sales. In order to do this, she tells the marketing people to get on the phone with the ad agency and launch a new campaign to increase sales. When the Finance Director points out that Acme has increased advertising spend over the past five years, but has not seen a corresponding increase in sales, the CEO suggests they look for a new ad agency.

In spite of the evidence that advertising is not increasing sales, the CEO sticks to her original solution. A better approach would be to get out a piece of paper and spend an hour writing down every possible solution – no matter how crazy – to the problem. The best approach would be to bring together a variety of people from the company to consider every possible solution. This could be done via brainstorming or an ideas campaign (http://www.creativejeffrey.com/jenni/ideascampaign.php).

Had the CEO trawled for alternative suggestions, she might have come up with ideas like these:

Stop selling cheap garden furniture and focus on the upmarket furniture which brings a higher margin. Thus, the company does not need so many sales to achieve the same profits.
Stop selling the expensive garden furniture and focus on the cheap stuff because the cheap stuff sells better. Thus Acme can reduce operational costs and focus on easier to sell products.
Start selling on-line with the aim of eventually moving all sales on-line, thus saving the logistical costs of serving retailers and customers.
Start selling door-to-door using “Exterior Designers” who can help people choose the perfect set of garden furniture for their gardens.
Stop selling in certain locations because sales in those locations do not bring in enough income to cover the costs of serving those locations. So, although this would reduce the quantity of sales, it should increase profitability

Given time and a number of creative minds, the CEO can readily collect dozens of ideas. A criteria based evaluation (see http://www.creativejeffrey.com/articles/article_evaluation.php on how to use criteria based evaluations) helps the CEO choose the ideas that best fit her needs and a little market research should help her decide which solutions to implement.

As we saw above, the best solution might be counter-intuitive. For example, selling on-line exclusively might seem like a way to reduce sales. After all, it would mean effectively closing a major part of the company's distribution chain. But the world's biggest computer manufacturer (Dell) and the world's biggest bookseller (Amazon) have found that focusing on on-line selling can be a very effective strategy.

That the best solution is seldom the first to come to mind is one reason behind the effectiveness of brainstorming as a problem solving technique. Rather than simply taking the first solution that comes to mind, we push our minds further to come up with additional ideas. Typically, the first few ideas will be rather obvious and not very creative solutions. But once we've cleared our minds of the obvious, we must push our minds further to come up with new ideas. This is when creativity kicks in and powers our thinking.

The other reason why brainstorming can be so effective is that it is not one person's creativity working on the problem, but several people's. Ideally, those people will have different backgrounds and different areas of expertise. With such a variety of thinkers focusing on a problem – it would be hard not to come up with creative solutions.

Of course, even with a room full of creative thinkers brainstorming a problem, evaluation of the top solutions may well show that the first idea is in fact the best idea. But at least you will know that you've considered and evaluated all the options before selecting your first idea.

PARTERSHIPS AND INNOVATION SYNERGIES

Over the past decade, businesses have moved from the do-it-all-yourself (DIAY) model of business (what business pundits would call vertical integration; but I don't like jargon that I don't make up myself!) to the partnership model of business.

A classic example of the DIAY model would be the early Ford Motor Company, which did everything from milling steel to making cars out of that steel. Sticking to the car industry, Toyota is an excellent example of the partnership model. Toyota works with a large, intimate group of suppliers who provide all kinds of bits and pieces necessary for building Toyotas. Yet the relationship is not one of supplier and buyer. Rather, Toyota works closely with its partners to build better Toyotas. This involves getting partners involved at the development stage of each car, working with developers to provide just in time delivery (delivering parts just as they are needed on the assembly line) and so on. In fact, I spent a year advising ITP, one of whose main business lines was producing owners' manuals and service manuals for Toyotas. ITP has about 100 people actually working inside Toyota's factories. They get access to pre-production Toyota models and write the manuals that owners and service people will eventually use.

The main reason why companies have been jumping at the partnership model is, of course, money. It is usually more cost effective for your company to focus on its core competencies and work with partners whose core competencies are necessary for producing the bits and pieces that comprise your final product.

But there is another advantage to partnerships that is less known: innovation synergies. Just as bringing people together with different backgrounds and ways of thinking can produce more creative ideas than those individuals could dream up on their own; bringing two disparate corporate cultures together can produce dynamic ideas that neither company could produce individually.

For example, 7-11 (a popular convenience store or mini-mart in the USA and Asia) worked closely with Hershey (a major American chocolate manufacturer) to produce edible drinking straws for use in 7-11's “Slurpee” drinks.

Hershey, who produced the straws, gave 7-11, 90 days exclusivity before putting the straws on the market. Afterwards, Hershey sold the new straws via other channels. Thus, both sides benefited from the mutual innovation. 7-11 got the right to bring the product to market first – and so reaped the advantages of being first to market with a new product. Nevertheless, Hershey was able to sell the product via other channels and so could derive additional long term income from the concept.

Likewise, we at JPB work with a handful of partners around the world. One of our closest partners is QCS Communications (http://www.qcs-communications.be), who sell Jenni idea management virtual software here in Belgium. After most major meetings with QCS, we come away with ideas about how to improve Jenni in order to make it more sell-able. As a result, QCS gets a product that becomes easier to sell. On the other hand, QCS markets Jenni under the name “InnovationManager” (http://www.innovationmanager.be – in Dutch) as a part of it's portfolio of Manager products, such as “MailManager”, “GiftManager” and so on. When we discuss the marketing of InnovationManager, it is often as a part of QCS's entire portfolio. And we often give QCS new marketing ideas, for all their products, which they can develop with their creative agency.

This is not to say that we are more creative about marketing than QCS – they are very good. But, because we have a different corporate culture with a different way of thinking, we see things differently than the good people at QCS – and we share those insights with them. It benefits us all.

These innovative synergies are arguably the greatest value that can be derived from business partnerships. Cost savings are great. But, if you end up hoping from one partner to another with the aim of minimising your costs, the chances are you will end up offering the cheapest product on the market.

Assuming you would prefer to have the best product on the market, you will do far better to partner with companies that can provide innovative synergies.

CAMPAIGN BASED IDEA MANAGEMENT

Since the last issue of Report 103, we have had a couple of queries from people wanting a better understanding about how campaign based idea management works. Here's an example...

Imagine that you are the Sales Director of a multinational building materials manufacturer and distributor. You find that although your sales team is generating a lot of leads, the quality of those leads is not very good and your sales people are wasting a lot of time chasing bad leads.

With a corporate sales meeting coming up in mid-May, you decide to run a four week ideas campaign: "Ideas for generating higher quality sales leads". Moreover, since you know a thing or two about organisational creativity and innovation, you know that you will get the most varied ideas by opening the campaign to everyone in the company.

At the end of four weeks, you have 100 ideas. Of those, there are about 20 small ideas that are worth implementing immediately. These might be ideas about questions to ask while cold calling or structural changes to your customer database. Then there are a dozen big ideas that look very promising.

You choose a couple of highly experienced sales people and perhaps a good customer to act as evaluators. Using Jenni, you create an evaluation for the best ideas and apply it to all 12 ideas. Jenni builds the evaluation forms and e-mails the evaluators informing them of the ideas and the URL where they can find the evaluation tool.

Once the evaluators are finished, you review the evaluations and decide to implement eight of the ideas by doing limited trials, which you manage through the implementation manager.

Of the trials, six show significantly better quality leads and two are dramatically better. So, you decide to implement two of the ideas as standard lead generation tools for your sales team and further test the remaining four ideas.

With the evaluations and implementations completed, you archive the campaign. This closes it and moves it to the archives. So anyone can review the campaign and results via the archives, but no more ideas can be added or built upon. It is also in different part of Jenni than the operational ideas campaigns.

You also present the results of the campaign together with the new lead generation tools at the big sales meeting.

Meanwhile, the HR manager of your Boston office notes that there is a much higher than average turnover rate and absentee rate in the Boston office. So, she launches an ideas campaign: "How to improve the working environment at our office" But, since the issue is relevant only to her office, she only opens the campaign to people in Boston.

Jenni then only permits Boston based people to see and participate in the campaign. Likewise, the promotion tools only send e-mails to people permitted to participate.

At the same time, someone in R&D wants to run a campaign on improving the weather-resistance of a particular kind of roofing tile. Because of the technical nature of the issue, she only opens the campaign to R&D people across the company.

Jenni permits all of these ideas campaigns to run simultaneously, each managed by the manager who is most interested in the results.

Thus, unlike most systems which put the onus of managing the system on a single person or team, Jenni decentralises management to managers across your organisation.

Best of all for creative employees (people like you and me who love creative challenges) is that campaign based idea management provides a steady stream of new creative challenges to exercise our minds on.

More information at http://www.creativejeffrey.com/jenni/.

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Happy thinking

Jeffrey Baumgartner

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Report 103 is a complimentary weekly electronic newsletter from Bwiti bvba of Belgium (a jpb.com company: http://www.creativejeffrey.com). Archives and subscription information can be found at http://www.creativejeffrey.com/report103/

Report 103 is edited by Jeffrey Baumgartner. And
is published on the first and third Tuesday of every month.

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