Report 103
Your newsletter on applied creativity, imagination, ideas and innovation in business.
Tuesday, 15 July 2008
Issue 132
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.
REDUCTIVE INNOVATION: LESS IS MORE, MORE OR LESS
Over the past few years as innovation became a trendy business concept, the word has typically evoked additive innovation, that is: new products, new product features, new services, customisation of products and so on. All of these innovations involve adding to existing product lines and products.
However, between energy costs which are sky-rocketing and the economy which is at best slowing and at worst moving into recession (depending on where you are based), there has been a huge change in business's use of innovation. Whereas in the past, a large number of our clients were using innovation to develop new products, product improvements and packaging; today most clients are looking at improving efficiency and reducing costs.
I first wrote about reductive innovation in this journal in 2004,(http://www.creativejeffrey.com/report103/archive.php?issue_no=20040727) suggesting it as an alternative approach to innovation. But it is now becoming a mainstream approach.
Reductive Innovation = Cost Cutting
You can apply reductive innovation to many areas of your business.
Cost cutting is, of course, the main form of reductive innovation that comes
to most people's minds. That's not surprising - it is critical. If sales of
your product are down as the result of an economic slow down, you probably need
to slash your operational costs in order to remain profitable. Using creative
thinking approaches such as brainstorming and ideas campaigns to generate ideas
for reducing operational costs can be very cost effective. However, sometimes
simply asking "in what ways might we reduce costs?" is an overly broad
innovation challenge. It can be more effective to focus innovation challenges
on specific issues. Let's look at some of them.
Removing Steps in Business Processes
Most business processes are a series of steps. For instance, you might look at the sales process as a series of steps that start with one of your salespeople taking an order; progress through to fulfilment of the order; and finish with invoicing the customer. There are numerous steps in this process and typically the larger your firm is, the more steps there are. Bureaucratic firms are even worse.
Yet every step in a process incurs costs. Even if it is just an administrator checking a few boxes on a computer screen - that takes time. As a result, any step you can remove from a process translates into cost savings.
A useful exercise is to list or illustrate the steps in a process You might sketch it on paper or build a model out of children's building blocks (the latter can be remarkably effective!). Then determine which steps can be removed from the process without adversely affecting the process itself.
In the sales process example, you may discover that a lot of unnecessary documentation is created along the way. Some of that documentation is redundant and so the process of preparing it and filing it can be eliminated. This reduces several steps in the process and so cuts operational costs.
The danger with removing steps from a business process is that doing so usually results in diminishing the importance of an individual or group within your organisation. These people will understandably place higher importance to their step in the process and may fight bitterly to prevent it from being removed. Preparing for this problem and dealing with it - for example by reassuring threatened employees that their jobs are safe - can help reduce such issues.
Combining Steps in a Business Process
Although it is often the case that few steps in a business process may be dropped all together, it is also often true that multiple steps can be combined into a single step -- or at least fewer steps. This again reduces labour costs and improves the efficiency of your operations. But it is also subject to the same dangers as removing steps.
Turning Things Off
It is easily overlooked, but what percentage of computers in your offices are left on overnight? How many lights are left burning the whole night through? It always amazes me driving through business districts late at night and seeing how many office buildings are lit up like Christmas trees even when there is clearly no one inside. Likewise, many electrical items are left in standby mode throughout the day. This allows these devices to be powered up almost instantaneously when needed. But even being in standby mode requires electricity and adds to your costs.
Reusing Items
I am constantly writing notes, making doodles and sketching diagrams while at work. Yet we never spend a penny on notebooks for this. Rather, I use the reverse side of old (non-confidential) paper, such as direct mailers, draft documents, unwanted PowerPoint presentation print-outs and many other documents which pass my desk regularly, but which do not require archiving. I even give extra paper to my kids to draw on, there is so much of it!
Many years ago when I ran a small marketing communications firm and we were producing a brochure for a client, our printer told us that owing to the unconventional size of the brochure, there would be substantial unused space on every large raw sheet of paper that would go through the printing press. So, we quickly designed a little flyer that could be printed side by side with our client's job. As a result, we produced a nifty little promotional piece at almost zero cost.
In most businesses there are materials that can be reused and doing so will reduce operational costs. It is a matter of identifying those items and how they can be reused. Brainstorming, ideas campaigns and other idea generation activities are good approaches for identifying opportunities.
Simplifying Your Products
Very possibly your products are more complex than they need to be. By removing unnecessary features, you can produce them less expensively. And while some of the reduced cost will doubtless have to be passed on to your customers (customers will be happy to see your product simplified, but will expect its cost to be reduced accordingly), your company can still benefit by selling more products and maintaining or increasing your per item margin.
Product simplification can also reduce the operational cost of powered products. For instance, a very basic mobile telephone that simply makes phone calls will appeal to customers who only want to make phone calls. Moreover, by having fewer functions, the basic mobile phone will consume less battery power, hence requiring fewer recharges.
Reducing Energy Consumption
In addition to turning things off, there other ways of reducing energy consumption. These might include reducing business travel, adjusting temperatures in workspaces, replacing company cars with smaller more fuel efficient vehicles and improving the efficiency of your logistics system. Anything that reduces energy consumption reduces your operational costs.
The list goes on. The important thing to bear in mind is that there are many ways to reduce operational expenses. And one of the best methods for finding these ways is by posing challenges to employees through idea management initiatives, brainstorming sessions and other idea generation activities.
TRUST AND INNOVATION
From time to time, when talking with a new or prospective client, I quickly discover that trust -- or lack thereof -- is an issue in their companies. Recently, for example, when demonstrating our idea management solution, a client asked about adding a filter for rude words. Clearly, there was a fear that employees within the company would submit ideas that included unsuitable language. Whether this fear was warranted or not, I have no idea. What was clear was that the level of creativity we would see in their innovation initiative was likely to be limited unless the trust issue was dealt with soon.
Why am I concerned? Well consider, if management does not trust employees to use appropriate language when submitting ideas to a public (within the company) forum, how likely is it that employees will trust management with their ideas and, more importantly, with their dignities.
Trust with Ideas
Over the years, I have heard many complaints from people about how managers have stolen their ideas without giving them credit. Sometimes particular managers are blamed. More often, the company itself is. When this happens, people feel negatively towards their employers and are unlikely to think about and share good ideas in the future. This is a shame. A little recognition is all that is needed to turn bad feelings into good feelings.
But it gets worse. If an employee has a bad experience with ideas being 'stolen' at a previous employer, she will be suspicious of a new employer. And, if the new employer is not perceived trustworthy, the employee will fear that the new employer will also steal her ideas. This may well not be the case. But if the employee fears having her ideas stolen, she will be reluctant to share them.
Mind you, it is important to bear in mind that almost all employment contracts explicitly state that all intellectual property developed by the employee on company time become the property of the company. Hence, legally, any employee's ideas and implementations of those ideas are indeed property of the company. But this is not the issue. The issue is about recognition of ideas rather than actual ownership of their resulting intellectual property such as patents, trademarks and the like. Employees don't expect the latter, but they crave recognition and reward for their ideas.
Trust with Dignity
When trust is an issue, however, employees are less concerned about ideas being stolen than they are with their dignities being damaged. The more creative an idea is, the harder it becomes to determine whether it is an exceptionally good idea or an exceptionally stupid one! Hence when an employee has a highly creative idea she may fear being ridiculed or even reprimanded for sharing it with managers. This is doubly true if she does not trust managers or the company which employs her.
As a result, she is unlikely to share her more creative ideas - even when she is explicitly asked for them such as by participating in an enterprise ideas campaign to solicit ideas.
Building Employee Trust
Building employee trust is no easy task. Moreover, explaining how to do so is beyond my expertise and the remit of this journal. However, it starts with top management trusting the people below them to act in ways that are appropriate and beneficial to the company's operations.
SHARING IMPLEMENTATION NEWS
Although suggestion boxes have been around for centuries, most of them have been remarkably ineffective. One of the primary reasons for this is that most people believe that nothing will happen to their ideas once they have been dropped into the suggestion box.
Logically, this does not make sense. Why would any organisation set up a suggestion box if they have no intention of doing anything with the suggestions stuffed inside? Yet the assumption persists. And it is easy to understand why. Once you put your idea into a suggestion box, it disappears. You have no idea what happens to it. Hence the idea might as well no longer exists as far as you are concerned.
Unfortunately, as many firms make their first awkward forays into idea management, they use the suggestion box as their model. As a result, employees, customers or whatever group is invited to use the box have the same problem: a disbelief that their ideas will ever be implemented.
This is a tragedy! One of the greatest rewards you can give to someone who shares an idea with your firm is to implement the idea. It tells the idea submitter that you liked her idea so much you intend to transform it from a creative idea to an actual innovation. Her suggestion, in other words, helps the company perform better.
It's Not Just Suggestion Boxes
Aside from suggestion boxes, many other innovation initiatives and idea generation activities focus too much on the idea generation component and not enough on the post-idea generation communication.
Brainstorming sessions result in numerous ideas being suggested and written down. But how often are idea submitters notified that their ideas are going to be implemented? You might argue that if the idea submitters are employees, they will see their ideas being implemented. That's true. But it's not the same as being told their ideas are being implemented.
Simple Solution: Communicate
Fortunately, the solution to this problem is remarkably simple. Whatever innovation initiatives you launch, be sure to include a component about telling idea submitters when their ideas are to be implemented.
Doing so will reward the idea submitters. Moreover, it will communicate to all participants that your initiative is not like the closed suggestion box into which ideas seemingly disappear. Rather it is a real innovation initiative in which ideas are so valued they are actually implemented.
It will do wonders for your initiative!
JENNI IDEA MANAGEMENT
Recently, one of our business partners remarked that I was referring to Jenni idea management too often in Report 103. He felt this detracted from the quality of the articles. I believe he is right, so I am implementing his suggestion. However, we need to keep selling Jenni in order to keep providing this journal. So, in future, I shall limit myself to one separate paragraph - like this one - to remind you that if you want to solicit, capture and evaluate innovative ideas from your employees, customers or any other group of people, Jenni idea management software service is simply your best choice! For more information, visit 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 edited by Jeffrey Baumgartner and is published on the first and third Tuesday of every month.
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