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Report 103

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

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Tuesday, 15 May 2007
Issue 105

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.

 

CREATIVE FLOW IN A COGNITIVE SYSTEM

In any kind of cognitive system, be it a single mind like yours or the combined mind of a group, such as a team or an organisation, there is a consistent flow of thought or information from chaos towards equilibrium. This is facilitated by the mind's processing of the information and giving it increased order.

Illustration of Creative Flow in a Cognitive System

When information – which might include knowledge, ideas, experience, emotions or opinions - comes into this cognitive system, it must be processed in order that it may be used. For example, in a factory, information about how to combine the raw materials in order to make the finished product is necessary to the operations of the factory.

Creative Flow in a New Firm

In a new system, such as a new company, the methods of processing information are underdeveloped and there is more freedom to process it in various ways. However, as a system ages, specific paths of processing information are established and become the norm. As new information comes into the system, it is reviewed and processed according to the established methods for that kind of information. This is represented on the diagram by the thick arrow in the middle. It represents standard paths of processing information in cognitive systems. It also represents conventional non-creative thinking. Most thinking, or processing of information, falls in this middle arrow. Even creative geniuses and innovative organisations must process the bulk of information according to conventional rules and in non-creative ways. (indeed, being unable to process the bulk of information in conventional, structured ways would essentially be insanity.)

On the diagram, at either side of the thick centre arrow, you will find some thinner, more twisted arrows moving from chaos to order. These arrows represent non-conventional processing of information – in other words: creative thinking. The arrows are thin because they represent significantly less used processing methods. This also makes them creative approaches for the simple reason that they are less often used methods processing that particular kind of information.

That may seem overly simple, but think about it for a moment and it makes sense. Creative thinking is about processing or combining information, thoughts, ideas and the like in new ways in order to create new ideas. Over time, however, an effective creative idea becomes the norm as more and more people apply the creative idea in their lives or work.

Example: Amazon.com

For example, Jeff Bezos had the idea in the mid 1990s to combine the concept of a book shop with the concept of the Internet with the concept of fulfilling orders at the publishers' warehouse rather than the retailer's premises. That idea became Amazon.com, one of the first on-line shops, and certainly the best known pioneer in on-line shopping. His idea then seemed very creative. As a result, lots of people applied it to their own business plans. Soon there were on-line grocers, pet shops, toy shops, flower shops and, indeed, just about every kind of shop you could find on the High Street. Indeed. Even High Street shops emulated Bezos's thinking and established on-line shops using similar models.

Thus what was a creative idea in 1995 (an idea that represented a new way of processing information) has become conventional thinking a dozen years later. Now every retail business considers – if not implements - an on-line presence. They use what has become a standard approach to processing information about their businesses.

As a result Amazon itself is no longer perceived as an innovative firm. A decade ago, almost everything Amazon did was considered creative and innovative. E-businesses watched Amazon closely, because they realised Amazon was setting the standard for e-business approaches.

Today, Amazon is seldom in the news, aside from snippets in the financial pages of newspapers. Amazon is selling books, and many other things, competently and are even making a profit (something that seemed doubtful a few years ago). Yet they are no longer particularly creative or innovative.

Why Older Organisations Are Usually Less Innovative

This is normal. Look at the diagram again. As companies become established, ways of processing information also become established. The central arrow becomes thicker and there are fewer arrows on the sides.

Most teams, groups and organisations become less innovative over time. That is why it is generally easier for little start-up companies to out-innovate bigger, longer established companies. Smaller companies do not yet have the such structured approaches for processing information, so they experiment more and create their own approaches (or arrows in the diagram) for processing information.

You are probably already thinking about exceptions to the above rule that organisations become less innovative over time – and there are a few exceptions. However, organisations with a history of sustained creativity need to make an effort to explore continually methods of processing information in new ways; in other words they need to look at information, ideas, knowledge, concepts, thoughts and explore alternative ways to process and combine all of these various pieces of information in creative new ways.

At the same time these organisations need to look at the information they have already processed (ie. information in equilibrium)and explore how it might be re-processed in new ways. Such re-processing of information should be done from time to time as a re-evaluation of any firm's operational assumptions.

Disruption and Creative Flow

Sometimes, however, a disruptive innovation – such as digital photography - or market disruption – such as the privatisation of electricity generation firms - demands that organisations review and re-process existing information on a large scale.

Aside from self-initiated re-processing of information, organisations are sometimes deluged with new information that demands processing. This happens following mergers, when two different corporate cultures are combined or when drastic changes occur to markets – as happened during the dot-com boom of the mid to late 1990s when the Internet radically changed many aspects of doing business.

When organisations are deluged with new information (imagine many more chaotic spheres suddenly being added to the top of the diagram), there are three approaches people within those organisations typically take. Two approaches are bad. One is good.

The first bad approach is to try desperately to apply existing methods of processing information to all new information, even if that information does not always fit the existing structures. This happens often. Many people do not like change, particularly if that change is potentially threatening, perhaps endangering one's job.

The second bad approach is to ignore new information. Again, out of concerns about job security, adversity to change or lack of understanding what is happening to the organisation, some people simply choose to ignore new information and hope it goes away. It doesn't if the changed company is to succeed.

The third, and good, approach is to look at new information and experiment with different methods of processing it. Likewise, it is advisable in the case of a merger, to look at the other company's approach to processing information in order to see what you might learn and apply to the new company.

It is worth noting in the diagram that the spheres, which represent bits of information, are in no order in the Chaos are, but are largely structured according to colour in the equilibrium area. However, equilibrium spheres are not entirely organised by colour. A very few spheres are clustered randomly at the bottom of the diagram.

This is typical. No organisation can completely organise all information into a 100% formatted structure. And if an organisation were to completely structure their information, they would reach a stage of equilibrium in which new ideas, growth or change are nearly impossible.

 

GUEST WRITERS

I am pleased to introduce a new guest writer to you today. Robert Jericho, who is a Managing Partner at Inovo Technologies (http://www.inovotech.com/) has written an article on “Concept Auctions”, an intriguing method of evaluating and assessing ideas. He also invites you to participate in a concept auction hosted by his firm.

 

CONCEPT AUCTIONS – DECISION SUPPORT FOR THE FRONT-END

By Robert Jericho

What do you do with all the different concepts your ideation process generates? If your organization is like most, then evaluating and assessing them is a challenge. After all, they are just ideas - they can be rough, preliminary, and all very different. It’s a common problem and it can be a tricky one to solve.

Typical prioritization methods range from a simple vote, to various ranking schemes (including the famous post-it note technique), to full blown market systems where ideas are traded like stocks. Voting doesn’t tap the richness and depth of knowledge in the organization and can be subject to political forces if done publicly. Trading systems, while superior, bring difficulties of their own. These range from technical issues such as poor trading ‘liquidity’ to organizational issues such as the time required to stay involved in the market.

An alternative to a full fledged market is an auction – a concept auction. The Concept Auction™ Decision Support Tool from Inovo is based on recent research into the ‘wisdom of crowds’ and the power of markets to deliver accurate assessments. Market-based mechanisms rely on the aggregate knowledge, intelligence, opinion, experience and perspective of diverse people making independent judgments. From these judgments comes the ‘Wisdom of Crowds’ – a phenomenon where the collective assessment is almost always more accurate than any individual’s (or small group’s) judgment.An auction can also be more than just a means to prioritize. It’s a way of taking the pulse of the organization. The market dynamics of an auction show:

On www.ConceptAuction.com, we are presently conducting an auction to determine “The best methods of innovation.” Companies have limited resources to focus upon their innovation efforts but with so many different methods, which are the best to pursue? Is it Business Model Innovation, Design Thinking, Open Innovation or one of many others? Contribute you knowledge and learn what others think are the most important methods. Simply go to www.conceptauction.com to submit your bids and we will email you the results.

 

IN THE NEWS

With every business keen on innovation, every business journal writing about innovation and every other blogger blogging about innovation, there are far too many articles about innovation in the press and on-line these days. Worse, as more people write about innovation, the less interesting their content seems to be. Nevertheless, over the past fortnight, there have been a few articles of particular interest published. You may not agree with all of the opinions expressed in these articles. I don't. But they are thought provoking.

  1. In Business Week: “Companies Seek Innovation - Not Gimmicks
  2. In The Channel Register: “Software 2007: Innovation is the new black” (there is a more detailed PDF paper linked from this article)
  3. In The New Yorker: “What Else Is New? How uses, not innovations, drive human technology

 

WHERE INNOVATION IS LACKING

Business has embraced innovation. Non-profit organisations are learning to apply innovation in order to improve their operations. Even governments are applying innovation here and there. At the same time, people are learning to value and develop their own creative skills.

Nevertheless, there are a few areas in which creativity and innovation are lacking. In many cases, these institutions would almost certainly benefit from a bit of innovation.

Religion
(This one will doubtless result in a number of unsubscribes!). Most religions believe in a God (or several gods) who created the Earth, life and humans out of nothing. Now that is the ultimate act of innovation. Nevertheless, the world's biggest religions: Christianity, Islam, Judaism and Buddhism (although the last one is not, strictly speaking, a religion) have innovated little in the thousand or thousands of years they have existed. Sure, many religions have demonstrated creativity in terms of how they communicate their messages, but few have shown any creativity and innovation in the interpretation of their messages. An extreme example might be the Evangelical Christians in the USA who have adopted innovative business practices in establishing mega churches, using new media to communicate their messages and more. Yet, Evangelicals (by my understanding), believe in a strict, literal interpretation of the English translation of the bible. In other words, no innovation in the message itself.

Times have changed, people have changed, culture has changed. Perhaps it is time to look at the rules specified or suggested by the Bible, the Koran and other religious tomes, and apply a little creativity to how those rules might apply to 21st century culture.

Marriage
Throughout history people have shown tremendous creativity in their marriage ceremonies. However, the principle of marriage has remained unchanged: a man and woman agree to a life-long commitment to each other and to raise a family together. Yet in most developed countries, one in three marriages is likely to end in divorce. Divorce makes people unhappy, causes stress and is almost always most painful to the children of the unhappy couple. Maybe it is time to reconsider the structure of marriage. Shorter term marriage contracts, communal care of children, multiple partners (not just allowing the man to have many wives, but also allowing the wife to have many husbands), more detailed marriage contracts and other options perhaps ought to be considered.

Prison and Rehabilitating Criminals
If society thinks of prison as a convenient place for non criminals to dump criminals so they are out of the way of the general population for a while, prisons work just fine. If, on the other hand, society wants a means of teaching and rehabilitating criminals so they can re-enter society as potentially productive members of that society, prison is not working in any way whatsoever. That's not surprising, the concept of a prison has not changed since humankind invented the lock. There is no question about it. Lots and lots of innovation is needed here.

Information Security
There has, in fact, been a lot of innovation in the area of information security. Computer and software experts are developing security tools almost as fast as hackers, crackers and spammers are cracking those tools. Most corporate IT systems are protected by firewalls, spam filters, monitoring devices and many other tools to monitor the network closely. Yet very few firms have recently established new rules regarding employee behaviour and information security.

Consider USB sticks, the little sticks you can connect to the USB port of any modern computer in order to copy information from the computer's drive (or any accessible device on the corporate network). By one recent study, 80% of firms have no rules whatsoever regarding the use and misuse of USB sticks in the office. Even fewer firms provide any training in information security. If you don't believe me and work in a medium to large firm, try this: call or e-mail someone randomly from the personnel directory. Tell her you are from the IT department, that it appears that a virus has entered the network from her computer and could she please give you her log-in name and password (and you probably won't need the log-in name) so you can check. You probably would not have to make many telephone calls to get some one's log in information.

In short, organisations are focusing on the technical side of information security, but not the human side. And that is partly because technical security is a simple, rules based concept. People are a far more complex matter and require creativity and innovation.

What do you think? I am not an expert in any of the above fields, least of all religion. Have I grossly misunderstood innovation in religion, marriage, prison or information security? If so, tell me about it. Better still, why not write an article about it for Report 103?

 

SECURITY, JPB.COM & JENNI

Speaking of security, when we talk to perspective clients about Jenni idea management software service (http://www.creativejeffrey.com/jenni/), an issue that always comes up is security. That is not surprising. We provide Jenni as a comprehensive software service which includes hosting Jenni on a highly secure server in the UK or USA together with lightening fast support and innovation coaching. The server is located behind a dedicated hardware firewall. Tools regularly monitor the server for unusual behaviour and clients access their implementations of Jenni via SSL encrypted connections. In short, Jenni is about as secure a system as is possible. We also remind clients about the human element of security!

One thing we don't mention is that we have experience with hackers and crackers. No, not with Jenni, but with our main site: www.jpb.com.

The jpb.com web site is a popular one. We get in excess of 10,000 page hits per day and are linked to by hundreds of other web sites, blogs and newsletters. We also have first page Google results for key words such as “creativity”, “brainstorming”, “decision maker” and “idea management”.

As a result, a lot of hackers have discovered the jpb.com site and try to break in. Not, to access information. There is no confidential information on the jpb.com server whatsoever (Jenni is hosted on more secure servers maintained in specialised dedicated server farms, financial and client information is saved on local computers in our offices). Rather, the hackers are looking to compromise our jpb.com server in order to use it for attacks on other servers, to send out spam and to post their content on our server.

Indeed, the jpb.com server is attacked in various ways on a daily basis. But no one has ever broken in. The jpb.com server has remained completely secure – in spite of having minimal technical security. We have, however, worked hard to secure on-line coding, on-line forms and other aspects of the web site in order to keep intruders out. And we have succeeded.

As annoying as such attacks are, they are also helpful. By having to keep jpb.com secure from hackers, we learn a lot about maintaining a secure and continuous web service in a hostile environment. We learn what tricks and methods hackers use and we develop strategies to prevent those methods from succeeding. And we can apply this knowledge to our even more secure implementations of Jenni idea management.

If you would like to know more about Jenni, please contact me – or visit our Jenni pages on http://www.creativejeffrey.com/jenni/

 

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.

Contributions and press releases are welcome. Please contact Jeffrey in the first instance.

 

 


 

 

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium

 

 


 

My other web projects

My other web projects

CreativeJeffrey.com: 100s of articles, videos and cartoons on creativity   Jeffosophy.com - possibly useful things I have learned over the years.   Kwerps.com: reflections on international living and travel.   Ungodly.com - paintings, drawings, photographs and cartoons by Jeffrey