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Report 103

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

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Tuesday, 17 March 2009
Issue 145

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.

 

INNOVATION PROCESS MANAGEMENT

With the growing popularity of innovation initiatives, ever more companies are launching their own actions. However, many are going forward in a piecemeal fashion, running a brainstorming event here, trying out an ideas campaign there and promoting innovation in vague ways in marketing communications. Such an approach works, somewhat, but it is not ideal.

The best approach is to have a comprehensive innovation process management structure that treats innovation as a series of cycles that run within a grand, enterprise innovation process cycle.

The Innovation Process Cycle

innovation process management diargram
An innovation process cycle combines creative problem solving (CPS) with scientific peer review evaluation and some typical business tools.

The Challenge
The cycle starts with a problem or goal which needs to be formulated into an innovation challenge. Once this is done, the challenge is presented to the problem solving group. This may be done in the form of a brainstorming event, ideas campaign or other activity. The group problem solving group may be a team, all employees in the firm, the public or any other group of people.

Collaboration
In order to maximise the creative potential of the problem solving group, the idea generation activity should be collaborative in nature. This can be accomplished in many ways. Idea management and innovation process management software often provides on-line collaboration tools, while facilitators of brainstorming and other ideation events should promote collaborative idea development.

Combination
Because an innovation process cycle starts with a challenge, ideas tend to be interrelated and many are complementary. Hence, before going further, it is best to combine such complementary ideas into larger, more sophisticated ideas so that they can be handled as a single package. This makes the next steps in the cycle more efficient.

Scientific Peer Review Evaluation
Here is where a lot of innovation initiatives break down: choosing the best ideas. Many poorly thought out approaches use voting, which is a good way to identify the most popular idea, but an appallingly ineffective method for identifying the most potentially innovative idea. I have also seen organisations put a great deal of effort into idea generation, leaving the final decision to a manager who basically picks out her favourite idea. Assuming the manager has suitable business expertise, such an approach is better than voting – as it is based on expertise rather than popularity – but it is typically far from perfect.

The scientific approach of peer review by expert, on the other hand, is ideally suited for identifying the most promising ideas in a cycle. Instead of basing selection on popularity (can you imagine Einstein sending his special theory of relativity to the public for a vote in order to determine its validity?) or the whim of a manager, you apply a set of business criteria to the idea and rank how well the idea meets each criterion. If an idea achieves a sufficiently high ranking, either as is or through additional modification, it should be developed further.

Testing and Development
Ideas identified as being potential innovations are now ready to be tested and developed. Here is where typical business tools come in useful. A business case is a useful means of hypothetically implementing an innovative idea and projecting the potential results. Of course it is not perfect, but it indicates possible issues in the implementation of the idea, as well as benefits that may not have been obvious to the original idea developers.

Prototypes are an excellent means for testing ideas. Not only do they allow you, your colleagues, customers and others to see how an idea would actually look in implementation, but building and playing with a prototype is a good method of further improving upon the core idea. Prototypes are, of course, ideally suited towards material ideas such as new products. But more abstract ideas, such as new services, process improvements and other concepts can often be prototyped through role-play, building structural models and making diagrams.

Implementation
Ideas that make it through testing and development are ready to be implemented. Unless the idea is a radical change from your usual activities, you don't need me to tell you how to do this!

Review
Once ideas have been implemented, they need to be reviewed, probably against an ongoing series of milestones. If an implementation does not achieve a milestone, it needs to modified or killed. Moreover, even the most spectacularly effective and profitable breakthrough innovations need to be improved on a regular basis.

New Needs and Inspiration
Hence, reviewing the implementation of new ideas should indicate new needs which can be transformed into challenges which, in turn, start a new innovation process cycle. Likewise, implementations can inspire new corporate goals. Again, these can be turned into new challenges and new cycles.

Integrated Innovation Process Management

An innovative company, however, should not have a single innovation process cycle in operation. Rather it should have many of them! Large cycles are suitable for enterprise-wide innovation. Meanwhile, business units can run somewhat smaller innovation process cycles in order to manage their own ideas (although it should be noted, collaborative groups need not be limited to employees of that business unit). Teams, departments and any other group can also run their own innovation process cycles.

Innovation process manaement diagram cycles

However, these innovation process cycles should not be in isolation. Rather they should inspire and feed other cycles elsewhere in the organisation. For instance, the implementation of a new product idea should inspire innovation cycles in the marketing, sales and customer service divisions as well as at the enterprise level.

Managers should watch their colleagues' innovation process cycles and ruthlessly copy ideas as inspirations for their own cycles.

The Result: a Highly Innovative Organisation

By applying innovation process management across your entire organisation, you can transform it into one which is innovation driven. And that is a sure way to keep well ahead of the competition, survive this financial crisis and make your firm a great place to work. Is there anything more you could possibly want from work?

PS: Culture Is Important too

Innovation process management is the best structure for an innovative firm. Nevertheless, it is equally necessary to develop a culture of innovation that ensures people participate in the process. I will go into detail about “culture of innovation” in a future issue of Report 103.

 

INNOVATION OPPORTUNITIES AND THREATS IN MERGERS

As the economic situation stabilises, we will most likely see a lot of mergers as those companies which have weathered the recession profitably will look for bargains among their competitors. In particular, large companies that are not so good at innovating themselves can buy up more innovative smaller companies and exploit their innovations, sometimes more effectively than can the small innovative company.

In Theory, Mergers Should be Good for Innovation

In theory, mergers should be idea for innovation. They bring in new people with new ways of thinking and new ways of solving problems. Mergers bring in new kinds of expertise and new ways of doing things.

Mergers also herald change. And it is always easier to add change to a changing environment than to add change to a stable one. When there is little change, employees become comfortable with their jobs, their tasks and feel secure. As a result, they become reluctant to change the way they work. However, if the environment is one of change already, then change becomes part of the norm and feels more comfortable.

In Practice, the Opposite Is often True

In truth, mergers bring about a lot of insecurity. In part that is because most mergers are largely about taking advantage of “Synergies” which is a euphemism for closing divisions and losing jobs. And in an environment of insecurity, people tend not to be innovative.

Even when jobs are not under threat, mergers bring together two different cultures which can often be alarmingly different. Indeed, one of the primary reasons cited for the failure of the merger of Daimler Benz and Chrysler some years ago was a tremendous culture clash between the employees of the two organisations; a clash which was not properly addressed by management until too late.

Lastly, mergers often mean a change in the way of doing things due to the integration of the two firms' operations. This can result in people being unsure – at least temporarily – about how to do their jobs. Again, this brings about insecurity and insecurity tends to kill innovation.

Indeed, as I have mentioned in this journal several times, research has shown that trust is a key component in any culture of innovation. The world's most innovative firms all have an exceptionally high level of trust. That makes sense. Being creative, trying out innovative new ideas and experimenting is risky. If people feel that failed ideas will lead to reprimand or fear that managers will steal their ideas; they are unlikely to be comfortable sharing any but the most incrementally innovative ideas.

What You Can Do

In a nutshell, as a manager in a firm undergoing a merger there are two simple things you need to do with your teams: communicate and involve.

Communication Is Critical

Insecurity is largely the result of lack of information. If people do not know whether they will still have their jobs in a few months' time, they become insecure. If they do not know how their divisions will be affected and how their jobs will change, they become insecure. Knowing bad news in advance is almost always better than not knowing. So be upfront and communicative with staff, even if that means sharing bad news.

At the very least, if staff know the bad news they can begin to work around it and even innovate around it.

Involvement Is Ideal

But you should go one step further than communication. Involve staff in planning around the merger. Running ideation events such as ideas campaigns that invite staff to suggest solutions to integration problems, culture problems and other issues that occur during mergers is a great way to innovate and give employees the sense that they have some element of control over how a merger affects them, their jobs and their futures.

And then Explore

If you communicate and involve employees in merger related innovation to the point where they are comfortable, you are in an ideal position to explore more innovative opportunities. Run ideas campaigns on how to exploit combined technologies, service packages and more. Brainstorm about how the products from one company might be delivered in an all new market by the other company.

As I said in the beginning of this article, mergers are potentially fantastic opportunities to innovate. If you can make your people comfortable during the process, then do not be afraid to push the envelope and explore highly creative ideas and opportunities.

 

THE INNOVATION PROCESS MANAGEMENT WEB APPLICATION: JENNI

With more and more idea management, suggestion scheme, crowd-sourcing and other idea capture products coming onto the market these days, choosing the right innovation solution can be a challenge. Fortunately, if you are looking for a comprehensive innovation process management product that not only facilitates the capture of ideas, but lets you focus innovation on business needs; provides web 2.0 collaboration options, enables peer review evaluation and facilitates the development of ideas using your existing business tools, there is only one option: Jenni.

Jenni is a highly flexible innovation process management web application that can provide the backbone of your innovation process, irrespective of whether you have 100 employees or 100,000. And because it is a web application, we can normally have your implementation of Jenni up and running within a day of your go-ahead. Sooner if need be!

For more information about Jenni, to arrange a demo or to talk to an expert near you, visit www.jpb.com/jenni.

We look forward to helping you manage your innovation process efficiently and effectively.

 

ARE YOU AN INNOVATION CONSULTANT?

If you are providing innovation services such as consulting, training or coaching and want to add a great idea management software solution to your portfolio of products and services, contact me (here or telephone +32 2 305 65 91 or Skype Eurojeffrey) and let's talk about how Jenni can help your clients innovate better – and help you gain new clients.

You benefit from our generous commission programme, marketing on the popular www.jpb.com web site (over 150,000 page hits/month) and collaborating with a fantastic global team of innovation, marketing and sales experts (http://www.creativejeffrey.com/about/index.php). In addition, by packaging your services with Jenni, you can provide your clients with value added innovation services that help them increase profitability.

It's a fantastic win-win-win scenario for us all!

 

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 twice monthly eJournal 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.

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium