Report 103

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

Tuesday, 19 June 2007
Issue 108

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.

SLASH YOUR BUREAUCRACY!

I've often stressed in this newsletter the importance of simplicity in innovation. From the structure of your innovation initiative to your product improvements, you should always aim to make things simpler rather than more complex. Simple innovation tools are more likely to be used by your employees. Simplified functionality will make your technical products more appealing to most consumers. Services that simplify complex processes appeal to clients.

But what about your company's bureaucracy? Study after study has shown that those organisations with the least rigid bureaucracies tend to be the most innovative. Companies like WL Gore and Associates (cited by Fast Company as the most innovative company in America: http://www.fastcompany.com/magazine/89/open_gore.html) and Google are renowned for their lack of bureaucratic hierarchies and steady stream of innovative new products. IBM was once infamous for its bureaucracies, right down to the corporate 'uniform' of dark suit, white shirt, conservative tie and wing tip shoes. IBM was also in deep trouble in the early 1990s owing in part to its bureaucratic ways. Among the many things Louis Gerstner did, after being made CEO of IBM, was to reduce internal bureaucracy and restructure IBM as numerous smaller and less bureaucratic business units.

Government bodies, which are normally entrenched in bureaucracy, are usually perceived as being among the world's least innovative organisations (although there are, of course, notable exceptions).

Clearly, if you want to make your company more innovative, one of the first actions you must take is to slash the bureaucracy. Take a look at all the procedures that must be followed in any operational activity. And remove as many steps as possible. Indeed, aim to remove all the steps!

An Overly Hierarchical Firm

I once did some consulting work for the Brussels office of a highly hierarchical international company. Although the local office only had about 30 employees, there were clear rules of communication. The hierarchy comprised employees, managers, a general manager and a president for Europe, who was based in the home country and only came to the Brussels office a few times a year for a couple of weeks. The senior president for the entire company was based in the home country and was totally unreachable by any but the European president.

In spite of the office's small size, it was absolutely forbidden for an employee to communicate directly to the general manager, let alone the president, unless the general manager spoke first (of course). Thus, for example, if an account executive wanted to make a suggestion to the president, she needed to put it to her manager, who needed to put it to the general manager who needed to put it to the president. As you might imagine, very few ideas made it to the top. And, indeed, the company had a reputation among clients for its lack of vision and creativity.

Such a rigid hierarchy might seem reasonable – although I would argue it is not – in an office with thousands of people. But it is ridiculous in such an office with 30 staff. Not only does it stifle creativity, but it is horrendously inefficient.

As a consultant, I was not subject to the hierarchical rules and several times made 'off the top of my head' suggestions to the European President who appreciated them. Indeed, at least one was implemented. Imagine how many more good suggestions he would have received if his employees and middle managers could also suggest ideas directly to him!

Two Sides to Slashing Bureaucracy

There are two sides to slashing bureaucracy. The first is actually slashing the bureaucracy. The second is retraining employees to stop following the step-by-step processes they have become accustomed to. If a business analyst has never been allowed to approach the CEO directly, she will have a hard time feeling comfortable walking into the CEO's office to share an idea – no matter how much the CEO might want her to do precisely that.

If a division manager has had to sign off every purchase with a dozen people, she will have to learn to feel confident in making the purchase based on her own decision. It won't be easy at first.

Retraining for Zero Bureaucracy

Thus, staff need to be retrained to skip the bureaucracy and focus on actually doing things, such as sharing ideas, trying out new concepts and experimenting. These are the very activities that lead to innovative new products, services and operational processes.

Pixar University (part of Pixar Animation Studio, the extremely creative production house behind Toy Story, Monsters Inc, Cars and other films) actually trains employees to share their ideas at an early stage and to solicit the ideas of others in the firm in order to help them feel more confident about sharing ideas early on.

Removing the Bureaucracy

Just like the best way to quit smoking is simply to stop smoking immediately, the best way to quit bureaucracy is to slash it all in one go! Realistically, you may not be able to go that far in your firm. Nevertheless, it is worth slashing what you can. If you are in Europe, where business quiets considerably during the summer months, you could take advantage of this quite period to experiment by slashing as many bureaucratic processes as is possible in one division or operational activity in your firm. You can then use the quiet period to evaluate the results and plan further removal of bureaucracy. Elsewhere in the world, removing bureaucratic processes in a single division – as a test bed – may be a practical approach.

Go on, give it a try. You've got nothing to lose but pointless paperwork!

BOOK REVIEW: GROUP GENIUS

Regular readers of Report 103 know that I always like to differentiate between individual innovation and organisational, or group, innovation. My main interest and our company's business focus is very much on the latter: organisational innovation. Many so called creativity and innovation experts lump both concepts into one. That's a mistake. What makes a company innovative is different to what makes an individual innovative. Moreover, many organisations are full of creative thinkers, yet fail to be creative, much less innovative, companies. If you want your company to be more innovative, you need to address issues of organisational innovation. Otherwise, you may have a non-innovative company full of frustrated creative thinkers!

Keith Sawyer's latest book, Group Genius, not only addresses group innovation, but argues that virtually all innovation is the result of group innovation. His is a compelling argument.

Keith argues that the notion of the sole creative genius, who makes a great discovery or devises a world changing invention as the result of a creative inspiration, is a myth. Sigmund Freud did not simply dream up his invention of psychoanalysis as the result of an “aha moment”. Rather he solidified ideas from across a vast network of colleagues. Albert Einstein, likewise, collaborated with a colleagues and teams from around the world in order to define his theories of relativity. Keith cites many similar solo inventors and innovators who actually collaborated or borrowed their ideas from many others.

Perhaps the most intriguing concept of Group Genius, and a key theme throughout the book, is that of improvisational innovation. Early on, we learn about an improvisational theatre group called Jazz Freddy (which produced a number of comic stars as well as the famous US television series Saturday Night Live). In a typical evening's improvisation, the Jazz Freddy team would ask audience members to name an event and a location. The ten member team would immediately launch into a performance centred around the chosen words. Performances were unpredictable, but entertaining and surprisingly coherent. Keith was intrigued by their improvisational process and collaboration. So he began video taping their work for his research.

Group Genius takes the concept of improvisational innovation witnessed at Jazz Feddy and looks at how companies can and do use it to get more innovative results. The findings, based on more than a decade of research, are thought provoking and instructive.

Keith summarises his theory nicely. “In both an improv group and a successful work team, the members play off one another, each person's contributions providing the spark for the next. Together, the improvisational team creates a novel emergent product, one that's more responsive to the changing environment and better than what anyone could have developed alone. Improvisational teams are the building blocks of innovative organizations, and organizations that can successfully build improvisational teams will be more likely to innovate effectively.”

Of course, the improvisational team will make a lot of mistakes in its endeavours to solve problems and develop innovative ideas. This is to be expected. Indeed, Keith regularly stresses that innovation is a very inefficient process and there is not much we can do about that. This notion will doubtless upset those who believe they have found a short cut to innovation via some business process or other (I am regularly hearing from such people, actually).

Group Genius is rich in examples from the business world and in particular looks at examples from companies like W.L. Gore and Associates, IDEO and most interestingly Semco, a Brazilian manufacturing company that has largely abolished corporate hierarchy and bureaucratic rules in order to create a firm of equals where any of the firm's 3000 factory workers can examine the firm's books and decisions are voted on by all employees. Oh, and if a factory worker doesn't have the knowledge to understand the accounts, she can sign up for a free course that will teach her. Such an open, non-hierarchical structure is unusual enough in companies of knowledge workers who are all well educated and well paid. But it is unheard of in a manufacturing company in a developing company. Nevertheless, you probably won't be surprised to learn that Semco out performed most Brazilian firms.

Keith shatters many myths about creativity and innovation, particularly those surrounding the lone creative genius, the “aha” moment when a brilliant idea appears and the notion of a brilliant idea coming in a flash of inspiration. He also tears apart the notion of carefully planned innovation – and indeed that planning should be a part of innovation at all.

Overall, the book is excellent, with only a very few weaknesses. I would have liked to have seen more about motivating unstructured teams. Although the issue of rewards was touched on briefly - it seems rewarding the group equally as a whole rather than rewarding individual members is more motivational – there is room for more about motivation. I also felt that the book became slightly unfocused towards then end.

Although the book is well researched, footnotes are not marked in the text. Rather you must turn to the bibliography and seek the source via the page number. As a result, the text of the book itself is cleaner and easier to read than are footnoted pages. But for those who want to check references or learn more about the topic, it can be awkward to have to check to see if references are there.

Of course readers who believe that all business operations must be planned to the last detail and who abhor unpredictability will not like the book at all and will fail to be convinced by Keith's arguments. But that can't be helped.

Such criticisms are nit-picking. Overall, Group Genius is an excellent book and one I would recommend to any manager who wants to improve the innovative performance of her firm. Team leaders will also benefit from reading the book. Proof of its value is that while taking notes for this book review I also took notes on concepts to be applied in our firm.

Group Genius by Keith Sawyer is published by Basic Books who provided a review copy. It is available in the USA and Canada, but has not yet been released in the UK.

SUMMER TIME IS EXPERIMENT TIME

In many parts of Europe, business slows down tremendously in the summer months. European workers generally get four weeks of holiday and take most of that time off in August. America and Canada also become quieter, although with shorter holidays, business does not quiet to the extent it does here in Europe. In other countries with different climates and cultures, different periods are the time when masses of employees take breaks and business slows down – at least those businesses not associated with tourism and leisure. So, if you are not in Europe or North America, save this article for your next holiday period.

If business in your company does slow down in the summer, that can make it a good time to experiment with new approaches and activities which are likely to produce innovative results, but which may be difficult to apply when your business is moving at full operational speed.

Here are a few summertime experiments you can apply in your firm.

Slash bureaucratic processes. You've read the article above. Now apply it. Summer holiday is the time to take action!
Experiment with office layout. If your firm is a cubical city, why not try out different layouts, removing cubical walls or just encouraging people to move around and work in different places, such as the picnic tables outside the office, the stairs, conference rooms and anywhere they can.
Creativity and innovation training. With fewer operational demands, employees have more time to focus on creativity and innovation training. If you don't have the budget, why not look for a recent graduate or an aspiring professional who might be willing to do low cost training in exchange for the reference. I often advise would-be facilitators and trainers to do freebies for references and experience.
Embark on an outrageous project. Turn your whole firm into a skunkworks in August and encourage everyone to join a team exploring a highly creative, risky and possibly outrageous idea for a new product, service or process.
Visit clients' premises and run brainstorming events, that include those clients, on how to serve them better.
Make wacky prototypes. If you manufacture things, why not run a challenge where designers and others try to make the most outrageous prototypes that they can.
Remove all job titles for the month and let people do what they want 80% of the time – reserving the remaining time for essential administrative operations.
Try out Jenni idea management software service (I expect you were wondering when I would throw in a commercial for Jenni, weren't you?). If you are interested in exploring idea management – and I know a lot of companies are – why not use the quiet summer months to give Jenni a try? You can find more information at http://www.creativejeffrey.com/jenni/ - and we can provide very attractive terms for your trial. Contact me or your nearest representative to discuss (http://www.creativejeffrey.com/jenni/contact.php).
Something else radical and new for your firm. You probably don't need me to make suggestions. Very likely you have been toying with ideas about how to make your firm more innovative, but you've been reluctant to implement your ideas for fear of the disruption they would cause and your unsureness of their success.

IMAGINATION CLUB

After many months of inactivity, we have kick-started the Imagination Club and it is active once again.

The Imagination Club is an e-mail forum for playing with ideas, responding to creative challenges and talking about creativity and innovation. Members are from all over the world and are a truly fascinating group. A recent round of introductions humbled me!

To join the imagination club, just go to http://www.creativejeffrey.com/imagination/ and enter your name in the field.

WHAT DO YOU THINK?

Have got an opinion about any of the articles you have read in Report 103? Do you simply want to talk innovation? If so, please contact me! I have meet a number of fascinating people and have even made a few good friends as the result of correspondence with readers like you.

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 and is published on the first and third Tuesday of every month.

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