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Report 103

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

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Wednesday, 7 April 2010
Issue 165

Hello and welcome to another issue of Report 103, your monthly 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.


10 STEPS FOR BOOSTING YOUR FIRM'S INNOVATION

If you thought turning your company into an innovation powerhouse was a complex and painful task, think again! Here are 10 simple (well, somewhat simple anyway...) steps you can take to turn your company into an innovation leader that races forwardswith new products, services and improved processes while your competitors remain far behind with outdated products, limited services and inefficient processes.

Step One: Know What Innovation Means

Before you start on the path to innovation, be sure you know what innovation is and is not. A lot of CEOs say, “innovation is our number one priority.” Yet, I suspect many of them would be hard put to actually define innovation in simple terms. Don't worry, the definition is simple. Innovation is the implementation of creative ideas in order to add value to the firm, usually through increased income, reduced operational costs or both.

Step Two: Innovation Is a Group Thing

Understand that innovation is not an individual thing. It is a corporate thing. Although innovation writers like to talk about individual innovators, they usually mean individual creative thinkers, or individuals who come up with clever ideas that become the basis of innovations. But an idea is not an innovation. It is only the beginning. In business, ideas need to be evaluated for viability, developed into concepts and turned into reality. A new product idea, for example, will likely involve developing prototypes, seeking feedback, testing functionality, setting up production facilities, seeking suppliers and much more. Each of these steps requires the participation of numerous different people, all of whom contribute to the overall innovation process.

Ideally, new creative thinking will go into the product concept at every step of this process, making it more and more creative all the time! Unfortunately, the sad truth of the matter is that in too many organisations, risk adverse committees tend to remove creative elements of new product ideas at every step of the production process, thereby reducing innovation potential. If you company is like this, you either need to get rid of those committees or start with incredibly creative ideas so that by the time the committees finish with the ideas, they still have lots of innovation potential.

Step Three: Define Your Innovation Goals

Just doing innovation is not enough. You need also to have clear innovation goals to shoot for. Fortunately, these goals tend to be rather similar to strategy and business goals. So, it is usually a simple matter of reformulating these. Typical innovation goals might be to ensure that 25% of your product line is replaced annually; or to improve process efficiency by 5% per year; or that your firm is the technology leader in your sector; or that your company achieves a billion dollar turnover by 2012. Once you have clarified these goals, you will find innovation initiatives are a breeze to set up.

Step Four: Put Your Money Where Your Mouth Is

If innovation is your firm's number one priority, then you have surely allotted a number one priority sized budget for that innovation, haven't you? After all, you need to set up an innovation process, put a team in charge, invest in innovation tools and probably invest in training. That all requires money. Moreover, you need to make a pot of money available for implementing highly risky yet potentially highly innovative ideas. After all, the ideas with the greatest innovation potential are by necessity radically different to business as usual. This means they are also risky. If you are going to aim for breakthrough innovation, then you need to provide budget for developing and implementing breakthrough ideas.

Finally, bear in mind that if your innovation budget is zero, the attention your managers will give to innovation will also be zero! On the other hand, if there is budget for innovation, you can be sure your managers will be scrambling to nab some of that budget for innovation in their own divisions.

Step Five: Work on Your Innovation Culture

For creativity and innovation to thrive, you need to have a corporate culture that nurtures creative thinking, sees mistakes as on the job training and embraces every step of the innovation process. Sadly, very few firms actually do this. For instance, what is the typical response to an intern who announces a wild and crazy idea during a unit meeting? Is it (a) to laugh knowingly and explain that there is no budget, the CEO would never like it and that the intern clearly does not know how things work in your company? Or is it (b) to congratulate her on a clever idea, discuss the challenges that would be faced in implementing that idea and asking her to work out how she could improve the idea so that it can overcome the challenges? If your answer is (a), you have a very typical firm in which innovation is talked about on the surface, but discouraged in practice. If your answer is (b), you probably don't need to read this article anyway! Your firm is already well on its way to being an innovative leader – if it is not there already!

Step Six: Establish Diverse Teams

Diversity is not only politically correct, it is also innovatively correct! Diversity of membership brings a broader range of knowledge, experience, thinking and creativity to any team. You should therefore ensure that project teams, problem solving teams and all teams that are expected to contribute to your innovation process are as diverse as possible.

Step Seven: Collaborative Tools

Collaborative tools can help support your innovation process, particularly if your firm has hundreds or thousands of employees. In smaller firms, Wikis, blogs and shared documents permit a lot of collaboration with little technological investment. In larger firms, innovation process management tools can help ensure cross enterprise collaboration, facilitate collaboration by predefined teams as well as ad hoc virtual teams and provide a detailed record of your innovation results. But be careful to choose tools and use them to achieve your innovation goals. Many tools might be great for generating and sharing ideas, but if those ideas are completely irrelevant to your goals, they will not help your firm become more innovative.

Step Eight: Make Mistakes

Make mistakes and learn from them. Most great innovations are built upon mountains of mistakes. As long as you can identify ideas that will not work relatively early in their implementations, you can kill them before they eat up too much budget. You can then congratulate the team responsible for their efforts, evaluate what went wrong, learn lessons and try again. But as soon as mistakes cost people jobs, no one will dare to try anything very radical – and that will kill all but incremental innovation.

Step Nine: Implement

Innovation is not about ideas or creativity or training programmes. It is about implementing creative ideas in order to add value. If your firm is reluctant to implement highly creative ideas, then your entire innovation process will be little more than a creative thinking exercise. Moreover, if employees note that highly creative ideas are routinely not implemented, they will not bother sharing or developing such ideas.

Step Ten: Evaluate and Improve

Your innovation process can also improve through innovation! That's why you need to review the process and the results on a regular basis. Moreover, use your innovation process for generating, developing and implementing ideas for improving that innovation process!

OPTIMISM IN BUSINESS CREATIVITY AND INNOVATION

Entrepreneurs are inevitably optimists. They have to be. No one will quit a steady job in order to work long hours initially for little financial reward, unless they truly believe in their hearts that their innovative ideas will succeed in the market and deliver wealth, power, prestige, fun and the other benefits that most entrepreneurs seek. Entrepreneurs optimistically believe in their innovative ideas and are willing to gamble a chunk of their lives and savings in order to make those ideas come true – and therefore become innovations.

Employees, and especially managers, in medium to large firms also need to be optimistic if they wish their innovation initiatives to succeed. That is because in business, optimism is necessary for effective creativity and innovation.

Creativity

During the creative phase of the innovation process, optimism feeds creative thinking. That is because creative ideas in business are ideas that have the potential to add value to the firm. Hence, employees need to feel that the firm is worthy of adding value. They need to believe that the firm can grow bigger, more efficient and more profitable through innovative ideas. They need to believe that the firm can build innovative new products that will capture market share and increase sales. In other words, they need to feel optimistic about their company! Without that optimism, creativity may exist, but it will not be inspired.

Likewise, without optimism, no one will suggest, let alone develop ideas that might substantially improve production efficiency, because they will not believe their firm would be willing to actually implement such radical ideas. Moreover, pessimistic employees may doubt that their firm has the competence to implement radical change in the production process – at least not successfully.

On the other hand, optimistic employees will believe that their firm has the wherewithal and desire to build and market radical new products as well as to improve processes that boost efficiency and quality.

Innovation

Innovation is, of course, the implementation of creative ideas that add value to the business. And it goes without saying that managers in a firm are highly unlikely to authorise the implementation of a radically creative idea if they do not believe the idea will succeed. That belief, of course, requires optimism both in the potential value that the idea will deliver as well as their firm's ability to exploit that value.

Moreover, the more creative – and potentially innovative – an idea is, the greater the optimism necessary for authorising the implementation of that idea. Incremental ideas require trivial change to implement and are low risk. Hence, most managers will feel that even a loser company can implement them. But implementing breakthrough ideas requires substantial change and a lot more risk. Without optimism that the ideas will succeed and generate value worth the change and risk, no manager will authorise the development of such ideas.

Bad Times for Optimism, But...

The past year has been a bad time for optimism in business. Businesses are losing sales and having to tighten their belts, people are losing their jobs, others are in fear of losing their jobs and savings are disappearing. Any employee, who knows several colleagues with whom she has collaborated in the past have been laid off and who is worried about her own job security, is unlikely to feel optimistic about her work, her firm or its future.

The manager, who has been told to improve productivity in spite of lost budget and staff, is probably not terribly optimistic about the future of her firm. The CEO, who sees sales disappearing faster than Belgian chocolates in the coffee room, is all too likely to be less than optimistic about her firm's future.

The irony is, without optimism, it only becomes increasingly hard to innovate the firm's way out of trouble. Fortunately, however, economic indicators are showing that the world is coming out of the recession. Developed economies are starting to grow again, albeit slowly, and many developing economies are growing even faster. Things are not as good as they were a very few years ago, but they are certainly improving. That will hopefully make businesses and their employees feel more optimistic. But it is only a start.

Realism, Hope and Self Esteem

Sadly, trying to make your colleagues feel more optimistic about themselves (as employees) and the company is easier said than done. It requires a mixture of realism, hope and improved self esteem. The building blocks for this mixture can be communicated to employees.

Most important is to ensure that communications are realistic. If the company is clearly losing money and market share, claims that there are no problems will not be believed. Instead, it is important to identify the problems – and what is being done to solve them. The solution should, of course, involve innovation. After all, the most effective innovation process is about identifying problems, generating potential solutions, evaluating them and identifying those solutions which solve the problems most effectively.

Secondly, you absolutely need to give employees hope. If there is no hope, there can be no optimism. The hope needs to be realistic, of course, but it must exist. Very likely this hope is partly from the potential of innovation to solve problems.

Finally, you need to build up your employees' self esteem. They need to feel good about themselves as professionals and as part of the solution to your company's future. Recognising their importance and rewarding contributions are excellent ways of building self esteem. Trainers can also help employees feel better about themselves and the place where they work.

And as employees at every level of the corporate ladder become more optimistic about their firm's future, innovation initiatives become ever more likely to succeed.


A TIP FOR HIRING INNOVATION CONSULTANTS

If you are engaging an innovation consultancy to support your firm's innovation process, here's a tip for you. Ask the consultant what is innovative about her business. Certainly, if a consultancy is preaching the importance of innovation to business, then the consultancy will be innovative in its own right. So ask and see how the consultant responds.

Of course if you run an innovation consultancy, you should ask yourself the same question: what is innovative about your business? If you cannot answer that honestly and impressively, then perhaps you should take a break from advising others on how to innovative and focus on innovating yourself!


QUALITY NOT QUANTITY IN IDEA MANAGEMENT (OUR ADV)

A number of businesses selling idea management software and services boast the high participation levels and astounding number of ideas generated by their software and services. This, of course, is fantastic if your firm is seeking ideas. If, on the other hand, your firm is actually hoping to innovate, then the number of ideas or levels of participation are largely irrelevant. What is important is the quality of ideas generated, their value potential and their relevance to your innovation goals. Generating 5,000 ideas where 50 are viable is clearly less economically efficient than generating 500 ideas in which 100 are viable. Not only does the latter scenario provide more viable ideas, but because you start from a smaller set of raw ideas, fewer resources need be invested in evaluating ideas in order to identify the winners.

We recognise this. Indeed, that's why our software: Jenni innovation process management (IPM) gives you complete control over your innovation process.

Jenni starts by using ideas campaigns to focus idea generation on strategic business problems defined by your management. Thus, ideas generated respond to actual business needs and not the whims of employees.

Moreover, Jenni's structured index of users that defines location, department and membership of teams, allow you to control who participates in any ideas campaign. You can open a campaign to the entire company, or limit it to one or more locations, business units or teams. In many cases, allowing a diverse team of 50 people around the world to focus on an innovation challenge is far more efficient and productive than opening up the challenge to all 10,000 employees in a firm.

Finally, Jenni's unparalleled evaluation tools make the process of identifying winning ideas efficient and effective.

Jenni makes no claims about the number of ideas generated. But we do guarantee that with our support, you can generate a high percentage of innovative ideas that keep your firm well ahead of the competition. More importantly, by aligning idea generation in Jenni with strategy, you can expect to improve your bottom line significantly – 1-2% annual improvement is not unrealistic.

Tell us your innovation goals and we'll tell you how Jenni can help you achieve them. For more information, visit http://www.creativejeffrey.com/jenni/index.php or contact us to discuss your needs at http://www.creativejeffrey.com/jenni/contact.php


NEW: JENNI ON-LINE VIDEO DEMONSTRATION (OUR ADV)

In order to make it easier for you to see how Jenni works – and to show your colleagues how Jenni works, we have created a series of on-line videos demonstrating Jenni's key features. You can watch these videos by going to http://www.creativejeffrey.com/jenni/demo.php and filling in the form. Within a minute or so, you will receive by e-mail log-in information that allows you to watch the video clips as many times as you wish – and even to share them with your colleagues.

Incidentally, the on-line videos were prepared by our very own, ace-creativity consultant Andrew Greaves. Greavsie, as he is known to friends and colleagues, is based in London and has helped leading companies, particularly in the media business, tap into the creative talent of their employees. If you would like to boost the creative thinking skills of your people, contact Greavsie to discuss your particular needs.


JEFFREY'S PERSONAL AND UNGODLY CREATIVE ACTIVITY SPACE

If you have been reading Report 103 for a while and have begun to wonder what sort of chap I am in real life, you can visit my newly created personal web site at http://www.ungodly.com. It contains some artwork I have created recently (I am hoping to digitise older work soon) and a rather unusual blog.


ARCHIVES

You can find this and every issue of Report 103 ever written at our archives on http://www.creativejeffrey.com/report103/archives.php


Happy thinking!

Jeffrey Baumgartner

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Report 103 is edited by Jeffrey Baumgartner and is published on a monthly basis.

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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium