Report 103

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

Tuesday, 18 December 2007
Issue 119

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 IMPLEMENTATION RATES IN IDEA MANAGEMENT

I recently received a query from a major international retailer about the implementation rates of ideas submitted in idea management systems. The gentleman asked if the implementation of 50 ideas out of 1000 was a reasonable number. It's an excellent question for which there is not a simple answer. So, I've rewritten my reply to the gentleman for Report 103.

Of course my experience with idea management focuses mostly on Jenni idea management (http://www.creativejeffrey.com/jenni/) – our web based software service that delivers an idea management solution via the Internet – hence this answer refers to Jenni. Nevertheless, the answer is relevant to many well planned idea management initiatives.

As you may well know, Jenni uses the ideas campaign approach to idea management. An ideas campaign starts with a focused innovation challenge, such as "In what ways might we improve the efficiency of our fresh produce deliveries" or "How might we encourage more young people to shop in our outlets?" or "How might we use less energy?"

Then you have a period of idea generation followed by an evaluation phase in which ideas are sent to experts for peer review in order to determine which ideas are likely to bring the best results when implemented. This should be followed by the implementation of the best ideas.

Different Kinds of Innovation

Innovation can very broadly be divided into two categories:

Incremental innovation: small innovations which are improvements on existing products, services and processes.
Transformational innovation: massive innovations that transform a product, service or process. This is sometimes called disruptive innovation. But, disruptive innovation should in fact be considered a high-end transformational innovation.

Bringing Everything Together

Most ideas campaigns will also tend to generate ideas that belong in one category or another. For instance, an ideas campaign with the challenge: "In what ways might we reduce energy usage in our supermarkets?" is likely to generate a lot of incremental innovations and even ideas that are hardly innovative at all, like: "turn off the lights at night". If such a campaign were to produce 1,000 ideas, I would expect several hundred of them to be worth implementing. Each idea in itself might not make much of a difference to your electricity consumption. But 300 incremental innovations would probably have an impressive effect on electricity bills.

On the other hand, you might run an ideas campaign with a challenge likely to spur transformationally innovative ideas, for instance: "In what ways might we incorporate new mobile technologies into shoppers' retail experience?"; or "In what ways might we better communicate our brand image to customers in [some new market]?"

Such campaigns are likely to produce far fewer ideas, but the best ideas are likely to bring significant value to your business. Hence, you might see only a handful of implementable ideas out of 1,000. Perhaps as few as one or two. But those one or two transformational ideas might be the ones that results in a radical change that leaves the competition way behind and is worth tens or hundreds millions of pounds (or dollars or Euro or...) in revenue.

One Last Note

That said, I have seen a surprising number of companies invest in creative and innovative idea generation tools and activities in order to generate excellent ideas - only to have management lack the gumption to implement those ideas. The result is a lot of money is invested in innovation - but no ideas are implemented!

So before investing in any initiative, management must be prepared to invest in the results of that initiative!

Conclusion

So, all in all, 50 ideas out of 1000 is a viable goal in terms of innovation, particularly if you mix a number of transformational ideas campaigns with incremental ideas campaigns. But, if you focus more on transformational innovation - you may implement fewer innovative ideas; while if your innovation initiatives aim more towards incremental innovation you should expect to implement many more ideas.

In any event, your goal with any real innovation initiative, particularly one facilitated by Jenni Idea Management, should not be in the number of ideas implemented or even the return on investment. Rather it should be keeping ahead of the competition. Whether that comes from one big idea like computerised shopping trolleys that do your shopping for you while you drink coffee in the adjoining espresso bar – or hundreds of small ideas that make your supermarkets more desirable shopping locations than the competitions – doesn't really matter. What matters is that you are in the lead. And idea management is the best way to do that.

I should point out that if you base your idea management initiative around Jenni you gain the added benefit of being able to tap into our expertise at any time in order to manage successfully your idea management process. For more information about Jenni, please visit http://www.creativejeffrey.com/jenni/)

GUEST AUTHOR

I am delighted to include in this week's issue of Report 103 an article by marketing expert David Yates.

David Yates is Managing Director of Agoralogic IM Ltd. He works with businesses on innovation, strategy and marketing whilst also making time to lecture in the subjects.

David is Chairman of The Chartered Institute of Marketing (CIM - www.cim.co.uk) UK South East Region.

If you would like to contribute an article to Report 103, I would like to hear from you. But do contact me before you write an article especially for this journal. Also, bear in mind that Report 103 is about creativity and innovation. You'd be surprised how often I get contributions that bear little association with either!

INNOVATION – THE INTERNATIONAL DIFFERENTIATOR

By David Yates

The search for strategic competitive advantage is a major driver for both governments and businesses in the delivery of economic change, differentiation and delivery of increasing value. In these contexts, innovation is as much a cultural philosophy as a commercial need.

At a macro level, the ability of a government to use its fiscal and legislative authority to harness national assets to encourage innovation enables a nation to build international competitive advantage and create wealth. An example was the decision by the US in the 1960’s to invest in space exploration in the search for strategic national competitive advantage over the USSR. The outcome was the development of many technologies that are now in
daily use throughout the world. The same search and encouragement of innovation in capitalising on national assets can be seen to be underpinning the economic growth of China and India. However it can lead to social imbalance, unrest and a concentration on short-term gain to satisfy immediate needs rather than long-term
international sustainability.

In business, innovation is too often limited to new product or service development. This narrow perspective limits the ability of a business to fi nd the full benefi ts of competitive advantage in its markets, and can simplify the opportunities for competitors to replicate and add value without incurring the cost of original innovation. This may be a comfortable position to adopt and is symptomatic of a market follower strategy with a product orientation. It is comparatively low-risk and delivers shareholder value although at a lower rate of return. However it can also lead to an undervaluing of the business which makes it more susceptible to competitive pressures such as pricing or buy-out.

The successful application of innovation in the delivery of competitive advantage at a national or business level is the result of recognising that markets and customers are in a state of constant change, and having a culture that is outward looking, responsive to change and able to harness internal resources. For a business, innovation requires understanding of the way the organisation works in reality together with creating a chain of value for customers through its business processes, and underpinning the relationships with its markets through its brands, products and services.

Innovation becomes the focus of a holistic relationship with the customer that builds loyalty, supports retention and market differentiation. An example is the development of worldwide markets by European and US food and household product retailers. Their substantial home markets are under increasing economic and financial pressure as the markets mature and margins decline. This could lead to shareholder dissatisfaction and a devaluation of the companies. In response, they look for opportunities to enter new markets. However, a major strength that has enabled their growth
has been their innovative cultures which have contributed to their dominant brand positions. As a consequence, their entry into new markets is as much about developing the inherent national ways of doing business and selling nationally sourced products as
bringing in international systems and processes. The risk is that these can cause culture conflict in both the new and home markets.

For many leaders, investing culturally and financially in a holistic, outward focused, innovative and sustainable approach is threatening because it challenges the hierarchical assumptions of responsibility, control and paternalism at the same time as removing the apparent certainty of the product–customer relationship. However, in a world of oversupply with decreasing resources and boundary-free international trade, the failure by governments and businesses to recognise that a country or company is no longer an island will adversely affect their ability to both compete and to deliver expectations of the value and benefi ts that their citizens and customers see through international communications.

Intellectual Property Note: the copyright of the above article belongs Agoralogic IM Ltd and the author, David Yates, is the Managing Director of the company. No direct or indirect benefit has been received for it. David wrote the article for the Sri Lankan Branch of the Chartered Institute of Marketers (CIM) to appear in early 2008 in their Chartered Marketer magazine. The graphic and layout of the article is owned by the Sri Lankan Branch of the CIM.

JENNI CASE STUDY: SOUTH EAST WATER

Most companies innovate to sell more of their products. South East Water, one of Melbourne's three state-owned metropolitan water retailers actually innovates to sell less of their product, deliver it more efficiently and increase revenues. Melbourne suffers regularly from droughts and has been suffering from particularly low water shortages in recent years. As a result, the company needs to encourage their 1.3 million customers to use less water as well as to improve the efficiency of their water delivery and sewage services in order to minimise wastage. At the same time, revenues need to be maintained in order to continue to deliver their services to a growing population. It's no mean feat for any company, let alone a state enterprise where the culture is often adverse to innovation and new ways of thinking.

Fortunately, South East Water is not a typical state enterprise. Indeed, they have embraced innovation in a manner typical of a Silicon Valley start up thanks to a comprehensive innovation programme designed and delivered by Dynamic Horizons (our partners in Australia – see http://www.dynamichorizons.com) and supported by Jenni idea management software service (see http://www.creativejeffrey.com/jenni). The result: South East Water has been able to add several million Australian dollars to revenue and substantially boost their environmental sustainability efforts.

Brain Waves – an Innovation Strategy

Dynamic Horizons has been working with South East Water, which provides drinking water and sewerage services to customers spread over over 3,640 square kilometres, since late 2004 to develop the successful Brain Waves innovation program. Brain Waves is about growing South East Water’s culture to support innovation in all forms – from operational to service to business model innovation. It is also tasked with uncovering, evaluating, and implementing opportunities for revenue growth, productivity increases and social and environmental initiatives.

Since inception Brain Waves has had successes right across South East Water. From 2005 to 2006 more than 200 ideas were registered with Brain Waves. 50 of these ideas have been implemented and the same number again are still being monitored or assessed.

Business Planning Competition: Big Ideas for Big Changes

In 2006 Dynamic Horizons helped South East Water run its biggest innovation initiative to date – an internal business planning competition called the Brain Waves Cup. Specifically, the Brain Waves Cup called for ideas that could greatly enhance performance, significantly change the way South East Water operates or had a strong community or sustainability focus. Twenty percent of the business participated in 18 teams that spent five months turning their ideas into viable business plans. Final business plans were submitted in June and winners were decided based on innovativeness of the concept, benefits to South East Water and quality of the plan.

Nine of these final business plans were approved by then Managing Director Dennis Cavagna to move forward. Included in these plans were new business models, safety initiatives and new services for residential and commercial customers. Projected financial benefits from the projects are well into seven figures and there are numerous social and environmental benefits.

Dynamic Horizons again helped South East Water run the Brain Waves Cup in 2007. The second Cup ran from July to December 2007 and like the year before uncovered some fantastic opportunities for South East Water – with six teams making it to the final round and having their business plans approved for implementation.

Continuous Innovation Programme

In the 12 months between the end of the first Brain Waves Cup and the beginning of the second, South East Water also used Jenni to run a number of shorter ideas campaigns designed to focus employee creativity on specific business issues. This process was developed based on extensive research indicating that short, focused events significantly increases the number of top ideas uncovered. Almost 30 percent of South East Water’s workforce is registered with Jenni and have participated in several campaigns on topics ranging from “What should be included in a sustainable development?” to “In what ways could you better service your customer?” These campaigns successfully stimulated South East Water’s employees and Jenni made it easy to capture, review and progress their creative ideas. In 2008 South East Water will be running more campaigns for its employees as well as exploring how to use Jenni to tap into the ideas of customers and business partners.

INNOVATION CONSULTANTS WANTED

Dynamic Horizons is one of Australia's leading innovation consltancies – and the Jenni sales and service partner for their region. In fact, Jenni is sold and serviced in Belgium, the UK, the USA, Norway, Denmark, Australia and Brazil by a small number of service oriented companies.

If you run an innovation service provider offering consulting, training and/or coaching in creativity and innovation and would like to be able to offer Jenni to your clients – as well as get occasional leads for new clients – please contact me.

However, please be clear that we are a 100% service oriented organisation and we expect our partners to be the same. You must be prepared to respond to client queries within an hour or two at the most – and preferably within minutes. You must also be enthusiastic about innovation. A sense of humour also helps – especially when dealing with me!

We are particularly keen to find innovation consultants in North America where we have a high-powered sales and technology team at Reliant Tech (http://www.relianttech.com) in New Jersey (USA) that can provide substantial sales support.

Finally, please note we are looking for working professionals who wish to include Jenni in their portfolio of services and actively promote the sale of Jenni. This is not an offer for salaried employment.

If you are interested, please contact us here...

To see where our current partners are located – or to contact any of them, please visit http://www.creativejeffrey.com/jenni/contact.php

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.

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