Report 103

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

Tuesday, 5 June 2007
Issue 106

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.

FRAMEWORK INNOVATION AND DETAIL INNOVATION

No, framework innovation is not about new ways of displaying pictures. Rather it is about creating broad new business frameworks or concepts, such as an all new product, a radical new business process, a new way of delivering products or a completely new way to manufacture products to name but a few examples.

Framework innovation is often disruptive innovation (if you are not familiar with disruptive innovation, read this article: http://hbswk.hbs.edu/item/3374.html), but not always. Disruptive innovation implies there is an existing process that will be overturned. A framework innovation may result in an all new product or concept that does not disrupt an existing kind of product or concept. The world wide web is a good example. It was a highly innovative concept that has changed everyone's life in the rich world and has had a profound affect on the developing world. Yet, the web did not really replace an existing technology or framework. Admittedly, people watch a little bit less TV and are less likely to read a printed newspapers now than a decade ago. But television and newspapers are still big businesses – both of which exploit the world wide web to their advantage.

Detail innovation, on the other hand, is about innovating within a framework. Detail innovation can be very small, such as incremental innovation. But it can also be very big. Mosaic was the first graphical web browser. It allowed people to see the web not as interlinked documents, but as a rich visual experience combining text with graphics – and eventually sound and multimedia. Mosaic eventually became the Netscape web browser and arguably kicked off the dot-com boom in the mid 1990s.

Mosaic, then, was a highly innovative product. Nevertheless, it was more of a detail innovation which fit within the innovation framework of the world wide web.

Most innovation is detail innovation. We focus on improving existing products or developing new products that fit within an existing product line. But we seldom design all new products. We look at how to improve operational efficiency regularly. But we seldom even think about completely changing our operational process. We often consider how to enhance brand values in the minds of our customers, but rarely consider completely changing our brand identity.

There is nothing wrong with that. Detail innovation is important and it can be highly innovative. BMW and Mercedes Benz's top line models are highly innovative cars marrying the latest in information technology with the latest in automotive engineering. Nevertheless, these are detail innovations. Both companies still make cars that fit within their brand identities and function as we expect cars to function (albeit with more functions than some people even want).

Still, it is important to at least think about innovation frameworks from time to time. Review the established frameworks of your company. Your operational frameworks, your logistic frameworks, your marketing frameworks, your product frameworks and brainstorm (or better still, run ideas campaigns using Jenni idea management software service with our full support -> read more at http://www.creativejeffrey.com/jenni/) what new frameworks you might adopt to enhance or replace existing frameworks.

Both Mercedes and BMW do this with products. While much of their research and development focuses on improving existing cars at the detail level of innovation. They regularly explore alternative frameworks, in particular regarding engines and controls. But I like to think they also think about things like hovercrafts, rocket cars and other far wilder product frameworks.

In the mid to late 1990s, many companies looked at their operational frameworks with an eye to moving to an e-commerce framework. At the same time, numerous entrepreneurs devised innovative new business models based around e-commerce and later m-commerce (mobile telephone business).

The mistake a lot of organisations make when establishing a new framework is to be innovative about the structure, but fail to innovate at the detail level. During the e-commerce boom, many companies designed business models around selling their products on the web. But every other detail of their business model followed traditional bricks and mortar selling.

The result was that they innovated insufficiently at the detail level and so were unable to build a sustainable business model using an innovative new framework with old-fashioned details tacked onto it.

For example, Webvan, a US based e-business, allowed consumers to order groceries on-line. A fleet of vans would deliver products to the consumers' door – and, if memory serves, delivery was free. I recall when Web van launched, a 60 year old Scottish friend of mine remarked that when he was a lad, the same service was available in his village. His mother would ring up the grocer with her order and later in the day, the shop would send a boy on a bicycle to deliver that order.

So, the only innovative component of Webvan's business model was selling groceries over the web, thus reaching a vast consumer base in a large city – which is far more complex to deal with than serving a Scottish village. You didn't need a Harvard University MBA degree to work out that their business model was unsustainable. That's not surprising. They innovated the framework, but none of the details.

Yet, had Webvan innovated further than just the shop-front, and filled their innovative framework with innovative ideas, they might have created a sustainable business.

So, when you do brainstorm innovative new business frameworks and find one that seems to work. Don't stop with the framework . Dive into the details and innovate there as well. And keep on innovating (see “One Innovation Wonders” in Report 103; 7 Novemnber 2006 issue: http://www.creativejeffrey.com/report103/archive.php?issue_no=20061107)

WHAT IS CLOSED INNOVATION?

If you follow innovation news, you have probably heard the term “open innovation” which is being bandied about on blogs and in the press. The concept is simple enough: companies should open their innovation process to people outside the organisation.

It is a good concept. As anyone who facilitates brainstorming events or ideation activities well knows, a wide variety of participants in terms of experience, background and culture translates into a wide variety of ideas, which translates into a higher level of creativity, which promises more innovative ideas.

But surely any thoughtful person who sees the term “open innovation” immediately asks “what's closed innovation, then?” I know I did!

Indeed, can you imagine an organisation proclaiming “we take pride in our closed innovation processes!”? Not likely.

Presumably, closed innovation is innovation in which a small group of people within an organisation – or possibly the entire organisation – is responsible for all innovative ideas as well as their implementations. And, in truth, this is what happens in many companies.

Even so, there is a range of openness – and closed-ness. In some organisations, each department is on its own when it comes to innovation. So, research and development might have a well defined innovation process in which they solicit and capture the department's ideas in order to implement the best. At the same time, marketing people go on regular brainstorming outings to generate ideas and accountants are simply not involved in the process at all because it is wrongly assumed that accountants are not very creative.

Another company, however, might have an enterprise wide innovation process soliciting ideas from all employees via a variety of activities. In such companies, accountants can share new product ideas, marketing people can share accounting ideas and R&D people can share operational ideas – all with the knowledge that their ideas will be reviewed and stand a chance of being implemented.

While this would still be a closed system, it is certainly more open that the first example in which every door of the company is closed. Yet, even that is better than an organisation with no innovation process whatsoever.

Yet, even in closed innovation systems, ideas can come from outside. Partners of employees may suggest ideas which the employees being to work. Reading, television, conferences, life experiences and long walks can all inspire outside ideas which are brought into the company.

On the other hand, companies which invite ideas from business partners, customers and others usually prefer a one-way flow in which outside parties feed ideas into the company. However, once the company captures the ideas, it protects them as intellectual property. Thus, initial ideas from outsiders may come into the company, but the outsiders are often not involved in the actual innovation process – thus limiting their value.

Indeed, the ideal scenario from, an innovation perspective, would be an open and public system in which anyone inside or outside a company could not only contribute their own ideas, but could also collaborate on ideas contributed by others. Outsiders might even be asked to develop ideas – again publicly in order to capture feedback and even more ideas from all interested parties.

Such a scenario is doubtless frightening to managers and lawyers. Nevertheless, in some situations it can work. Indeed, a totally open innovation environment is essentially what the open source software movement is about. And the open source movement has proven effective at providing innovative tools as well as forming the basis of some profitable businesses. So perhaps we should start thinking about open source innovation models.

But most businesses are simply not prepared to open their innovation process to such a level.

In fact, any innovation process is better than no innovation process. And, in general, the more open it is, the better. But even in closed processes, companies should make a point of expanding their innovation process across the company rather than limiting it to a division by division activity. In companies that sell to consumers, it is important to bear in mind that your employees are also your customers. And so can bring in new ideas from either perspective.

ACTIVATE YOUR BRAINSTORMING SESSIONS

There are various approaches to brainstorming. I favour the shout-out-your-ideas approach where the facilitator notes all ideas on a white board. Others prefer what I call the lick-and-stick variety of brainstorming in which participants write ideas on post-its or similar bits of paper and stick them to the wall while the facilitator encourages participation. There are other variations that are broadly similar to the above.

But both varieties of brainstorming generally involve participants sitting while they think of ideas – although the lick-and-stick version makes people stand in order to stick their ideas to the wall.

I've been talking to some brainstorm facilitators recently who have had very interesting results in which participants are not sitting, but are actively walking around and interacting with their environment in some way. Examples include (or might include, I am using my imagination here too):

Participants imagine they are on the shop floor, walking around a display of their products. While doing this, they brainstorm ways to improve packaging.
Participants and facilitator visit a location where their products are used. For example, a company that produces school equipment might walk around a school for inspiration and perform the ideation inside a classroom.
Participants and facilitator visit a busy, unrelated location in order to be inspired by the activities and sounds in the background. Such sessions could be held in a busy shopping mall or city parks.
Run a brainstorming event in a train carriage on a moving train. (I find moving trains very inspirational).

And so on. I'm sure you not only get the picture. But a creative person like you could even come up with some better ideas about how to hold active brainstorm events.

A NOTE ON MY SPELLING

From time to time, I get an e-mail criticising me (or more typically “criticizing” me) for spelling errors. These kind notes inevitably come from Americans – which is not because Americans are particularly critical or fussy. They just use American English, so British spelt (spelled) words like organisation (organization), criticise (criticize), colour (color), tyre (tire) and aeroplane (airplane) – to name but a few – look wrong to them.

I've been educated in both America and England and so am familiar with both forms of spelling and grammar. But I did some professional writing (magazine columns and copywriting) for several years when I was younger. These works were all in British English. As a result, British English is hard-wired into my brain now and I am simply too old to retrain myself to write in American. Indeed, I wish I could. American English has become the international standard.

I hope then, dear American readers, you will have patience with my peculiar spelling and enjoy the content of Report 103 instead.

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 edited by Jeffrey Baumgartner (jeffreyb@jpb.com) and is published on the first and third Tuesday of every month.

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