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Report 103

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

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Tuesday, 15 August 2006
Issue 88

Hello and welcome to another issue of Report 103, your fortnightly 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.

 

IDEA STAKEHOLDERS

Big ideas are ideas which result in significant changes in an organisation's operations, products or services. Because big ideas cause changes, they fight against corporate inertia at every stage of their early lives, from selling the idea to senior managers, colleagues and others to implementation of the idea. Most people in larger organisations do not really like change. Managers worry about the risk implicit in any major change. If the company is performing well, they fear that a big change could adversely affect performance. If the organisation is in trouble financially, managers worry whether the change might hasten the collapse. That said, managers of companies in serious financial trouble are often more willing to take chances with new ideas than are managers of companies that are performing acceptably.

Employees, for the most part, become comfortable in their job responsibilities. They know they are performing competently, they understand their jobs and they know where they fit in the corporate structure. Big changes engender uncertainty. And for the average employee with a mortgage – or monthly rent bill – car payments and possibly a family to support, uncertainty is not a desirable feeling.

It is only when an idea is implemented and functioning that people become accustomed to it, settle into their new responsibilities and convince themselves that they had always favoured the new idea.

One of the best ways to overcome corporate inertia is to bring as many people as possible into your idea by making them stakeholders. A stakeholder, of course, is someone who owns a small piece, or stake, of an idea. The challenge is how to give away stakes in something that people fear – or about which people are wary.

Once the idea has been devised and its potential recognised, the next step is typically to bring together a team to evaluate and develop the idea. You should populate this team with diverse people who are sufficiently influential in their divisions, particularly with senior managers, to help push the idea through. Ensure that each person feels she has contributed to the idea (even if she has been a critical trouble-maker, antagonising other team members, being counter-productive whenever possible and generally abusive, make her feel she has made a positive contribution). Once people feel they have contributed to an idea, they will also feel they have a stake in the idea. Thus it behoves them to push the idea through to implementation.

The project team in charge of overseeing the implementation of the big idea should likewise include a diverse group of people from different divisions in the organisation. However, this team should be particularly influential with their subordinates and colleagues. A significant part of their responsibility will be 'selling' stakes in the idea to the people in their divisions.

To accomplish this, the project team must not only be encouraged to contribute to the idea's implementation – in order to acquire their own stakes – but they must also be given the tools to get their colleagues and subordinates involved in the idea.

Getting regular employees involved in the idea, so that they have stakes in the idea, requires working with them to define their responsibilities once the new idea has been implemented.

In other words, rather than giving an employee a new job description and orders to follow it. Her manager should sit down with her, discuss the new idea, the value it will bring to the company and the value it will bring to her. Then, together, they should draw up new job responsibilities for the employee. By participating in redesigning her job description, the employee becomes a stakeholder in the new idea.

Depending on the scale and scope of the new idea and the people involved, such discussions can take place on a one-on-one basis or in groups, getting entire divisions or subdivisions to work together to redesign their individual and divisional job descriptions.

As more and more people acquire stakes in your idea, they become more enthusiastic about the idea and the value the idea's success will bring not only to the company, but also to themselves. Once this happens, it is relatively easy to overcome corporate inertia and implement a big idea.


PARTNERING FOR INNOVATION

One of the major business trends of the past decade or so has been a focus on core competencies. Where once large companies did everything, now they focus on what they do best and outsource production and other services to suppliers with expertise – or core competencies – in that which they supply. For example, the early Ford Motor Company originally performed every aspect of car manufacturing themselves. They even made the steel they used to make the cars. Today, most car manufactures focus on putting cars together using parts manufactured by dozens of suppliers. Indeed, it is even possible to outsource the entire production of a car these days.

Partnering has proven not only an effective method for improving efficiency, but also a powerful tool for developing innovative synergies as well. However, the latter demands collaborative partnering. Simply buying products and services from suppliers is not collaborative partnering.

In the previous issue of Report 103, I wrote about IBM's development of the revolutionary PC computer. In conceptualising and developing the prototype PC, IBM allowed the project team to do several things that were unusual – at the time - for the technology giant. One very important action was to allow the project team to source parts for the PC from anywhere. Previously, IBM product developers were required to source parts from within IBM.

By looking to partners for components for their new PC, IBM was not only able to tap into the production capabilities of its partner companies, but also the expertise and innovative potential of its partners. IBM benefited from new ways of thinking as well as new components. The result, of course, was an innovative computer that changed the world (and even facilitated your finding and reading this e-Journal).

Procter & Gamble's CEO, Alan G. Lafley, clearly appreciates the innovative potential of collaborative partnering. He has indicated that he wants to see 50% of his firm's innovation come from outside P&G. Moreover, these outside partners have been brought into P&G's innovation system.

Toyota, arguably the world's most innovative car manufacturer, is a pioneer in working collaboratively with partners, getting them involved in the design process of cars as well as operational activities such as just-in-time deliveries of components.

Many of Toyota's partner companies have teams of people working inside Toyota, ensuring they are actively involved in every aspect of Toyota's operations. The result? Toyota is the world's most profitable car manufacturer and may well become the world's biggest in a few years.

The key to working with partners, in order to maximise innovation, is to work collaboratively. Many companies, particularly large companies with substantial financial muscle, who work with suppliers simply order suppliers to deliver specific products or services at a specific time and a low price. If the supplier cannot meet those demands, then a new supplier can readily be found.

Such partnerships that depend on suppliers providing specific products at a specific price according to the buyers specifications are hardly conducive to innovation. When only the buyer is making all of the decisions, they are not taking advantage of the innovation potential of the seller.

Intelligent managers of large companies, on the other hand, realise that suppliers can not only provide products. They can also provide expertise, know-how gained from experience and ideas. By bringing the creativity of the supplier together with the creativity of the buyer, you are also bringing together the creativity of different people from different corporate cultures and different ways of thinking. And that, of course, is a fantastic recipe for innovation.

Smaller companies also benefit from partnerships. Indeed, because smaller companies lack the financial clout of larger firms, small companies often have no choice but to co-operate and communicate – and collaborate - with suppliers, rather than dictate terms as some larger firms tend to do.

At the same time, partnering reduces risks for smaller firms. Instead of having to maintain cashflow to support (for example) a dozen employees, a small firm can work with several partner companies, tap into their expertise and pay according to immediate business needs rather than a fixed payroll.

The result: a win-win-win situation for the main company, partner companies and customers. You can't beat that.

 

INTRODUCING A BIT OF CHAOS

Most creative ideas are the result of two or more apparently unrelated thoughts coming together in a way that solves a problem, a desire or a need. The more unlikely the separate thoughts are, the more creative the resulting idea usually is.

This is probably why a lot of extremely creative people, such as artists, scientists and writers are also very disorganised people. The absent minded scientist often benefits from this weakness. In his mind, all kinds of thoughts are coming together, checking each other out and moving on. When an idea results, the scientist tries it out. The chaos in his mind may leave him absent minded, but it helps him think more creatively.

Unfortunately, from a creativity point of view, the corporate world is moving towards ever more structure. Spreadsheets, databases, analysis tools and other tools all force users to structure their thoughts in very conventional ways.

Moreover, in large organisations, positions are becoming increasingly focused on very narrow specialisations. This results in an environment that is becoming increasingly less conducive to creativity and innovation. And that's not good.

As important is putting order to chaos is, it is sometimes necessary to put a little chaos to your order if you want fresh ideas. Chaos brings together dissimilar thoughts, concepts and bits of information, providing the mind with all kinds of creative possibilities.

The question is, how to bring a little chaos to an organisation without destroying the efficiency that is necessary for operations? Here are some suggestions...


At the Organisational Level:

At the Individual Level:

If You Want to Push Chaos Further...

Indeed, any action that provides a jolt from typical day to day activities in your firm can also bring a little chaos and fresh thinking. And that leads to creativity.

Go on, give it a try.

 

LATEST IN BUSINESS INNOVATION

If you want to keep up with the latest news in business innovation, I recommend Chuck Frey's INNOVATIONweek (http://www.innovationtools.com/News/subscribe.asp). It's the only e-newsletter that keeps you up-to-date on all of the latest innovation news, research, trends, case histories of leading companies and more. And it's the perfect complement to Report 103!


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.

You may forward this copy of Report 103 to anyone, provided you forward it in its entirety and do not edit it in any way. If you wish to reprint only a part of Report 103, please contact Jeffrey Baumgartner.

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium