Report 103

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

Wednesday 18 May 2011
Issue 188

Hello and welcome to another issue of Report 103, your twice-monthly (or thereabouts) 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.

JEFFREY IS ON TWITTER: @creativeJeffrey

I have been playing with Twitter the past few weeks and am still trying to 1) find my voice there and 2) ensure I add mostly meaningful noise to an already very noisy place. My Twitter name is CreativeJeffrey and you can find me at http://twitter.com/creativeJeffrey.

OPEN INNOVATION FOR SMALL COMPANIES

Open innovation may seem to be the preserve of big business. After all, it is often associated with long established monstrosities like Proctor and Gamble and IBM. But it is an approach that can be used by all companies, especially start-ups and small businesses. After all, when a business comprises just the owner-operator or a handful of partners or employees, it lacks diversity of mind. Yet, diversity feeds creativity and innovation.

As you doubtless know, open innovation is the action of involving in your innovation process people from outside your company. It may be as simple as inviting a trusted supplier to help you develop ideas or as elaborate as launching a web site to collect innovative proposals from the public. For the most part, however, open innovation focuses on the fuzzy front end of innovation: that is idea generation and development.

Initial Considerations
Before you get started on your open innovation actions, you need to consider a number of issues that will help you determine the best approach as well as prevent you from making disastrous mistakes.

How Much Are You Willing to Share?
Open innovation means sharing information that most senior managers prefer to keep secret. It may mean sharing confidential information about how your product is manufactured, it may mean letting people know your marketing strategy for the near future, it may reveal certain problems or weaknesses about your company. That can be hard to do.

By the same token, if you invite the public to share ideas on an open platform, your competitors can also read those ideas and act upon them!

So, one of the first decisions you have to make is how much and what information you are willing to share with whom. You need not share everything with everyone. You may simply decide to involve your suppliers more directly with your product conception and design process. That would make them privy to confidential information, but your lawyer can draw up non-disclosure agreements that would ensure anything you share remains secret. In any event, most suppliers are aware that giving away their customers’ trade secrets is a sure route to a destroyed reputation.

Intellectual Property
Before you even hint to an outsider that you want to involve her in your innovation process, you need to consider intellectual property issues. If an outsider suggests an idea to you, that does not make it yours. Indeed, you could develop such an idea into a highly successful product only to be sued inside out by the idea contributor if she can prove ownership of the idea – such as a patent.

The easiest solution is to have a legal expert draw up a disclaimer that grants your company all rights to any ideas generated in any open innovation initiative that you launch and have participants sign the agreement before getting their ideas. If you are capturing ideas from the public via an on-line tool, this disclaimer is normally an on-line agreement the user accepts by clicking a clearly labelled button acknowledging that acceptance.

Disclaimers are used by nearly every organisation running an open innovation innitiative. The downside to them is that some people may be reluctant to share their incredible ideas with you only to let you profit from them. So your initiative will need some kind of reward system. But we will get back to that in a moment.

You may also run into the scenario that a patented concept is shared with you. In this case, the patent owner is almost certainly not going to grant you free rights to exploit her idea – that’s why she patented it. In such a scenario, you will have to license from her the right to use the idea.
Incidentally, intellectual property is not normally an issue with internal innovation. The employment contracts you have with your employees should make it clear than anything developed on company time is company property. If this is not the case, or you have no employment contract, you need to do something about this immediately!

Rewards
Your customers, of course, will always be happy to share with you ideas about how to make your product better – at least in their minds – and will generally share those ideas with no expectation of reward, beyond a better product. But such ideas are inevitably incremental improvements on existing products and not breakthrough innovations that will propel your company into the international limelight and make you and your shareholders filthy rich. For the latter sort of ideas, you need to offer some kind of compensation or reward for ideas and their development.

The kind of rewards you offer depend on the open innovation initiative you intend to launch and who will be participating. Rewards may be favoured supplier status or exclusivity deals with suppliers who contribute ideas that you decide to implement. For instance, a well known pharmaceutical company runs open innovation initiatives with suppliers. Those suppliers whose ideas are implemented are required to share ideas with other suppliers, but they get favoured status status enabling them to do more business with the pharmaceutical company.

When working with the public or customers, however, rewards will usually need to be money or products. For instance, if you run a competition, you will normally need to offer a cash prize for the idea or ideas implemented. Alternatively, if you invite outsiders to participate in a day long brainstorming event, you will probably be expected to pay them for their time. Such payment could be in cash or it could be in kind: such as products your company makes.

Actions
There are number of open innovation actions you can launch. These can invite all the world and their grandmothers to participate or can focus on a select group or can be restricted to people whom you invite. Each action has its advantages and disadvantages.

Suggestion Web Sites
One of the most visible open innovation actions these days are suggestion web sites that invite customers and the general public to submit ideas on how to improve a company’s products and services. No rewards are offered and some of these site boast 1,000s and 10,000s of ideas. This may seem awfully seductive: you just make a web site and wait for your customers to submit gazillions of ideas.

Don’t. Open suggestion web sites are an administrative disaster! They give no direction on the kinds of ideas wanted.. They simply ask for ideas. As a result, very few of the ideas received are in any way relevant to your business. Worse, you will see many idea submissions repeated again and again – after all, who is going to review 10,000 ideas to see if someone else has submitted the same suggestion? And a lot of ideas will actually be complaints about your products. But those are not the real problem with suggestion web sites.

The real problem is the 1,000 or 5,000 or 10,000 ideas. Stop and think how long it would take you and your team to read all of those ideas and determine which are worth taking further? In my experience it will take 5-10 minutes per idea on average. So even 1000 ideas will take over 80 hours, or two working weeks to review! Can you afford that? Moreover, based on my experience, no more than 2% of the submitted ideas will be actionable – and they will be incremental product and service improvements unlikely to have more than a trivial effect on your bottom line.

Public Competitions
A better alternative to simply asking the public for ideas is asking the public for specific solutions to problems. This concept has been around for ages, but was recently made famous by the Ansari X Prize which offered a reward of US10 million to the first non-government team to launch a manned spacecraft into space twice within two weeks. The prize was eventually won by a team led by Burt Rutan who not only won the prize, but was also bombarded with investment offers and business proposals.

Since then, companies such as Hypios and Innocentive have launched similar initiatives on a smaller level. Companies and non-profits can post on the their web sites challenges together with prizes which typically range from US$5,000 to US$1,000,000. Problem solvers, either as individuals or teams, can submit solutions. The submitters of the selected solution win the prize. Many of the challenges on these sites are highly technical or scientific in nature and require a detailed solution. But all kinds of problems can be posted. A small handful of similar sites are also doing business. If you need innovative technical ideas to solve problems, one of these sites might be a suitable place to solicit ideas.

Of course you could also launch an innovation challenge on your own company web site and promote it through local media. However, the advantage to using a well known, international site, that specialises in promoting challenges, is that you have access to an international collection of expert problem solvers. The downside can be that substantial rewards will be expected.

Another approach, which can be effective for technical and scientific innovation, is to partner with a local university and invite students to submit solutions. This would have the benefit of tapping into the creative expertise of young people as well as the possibility of identifying potential future employees. At the same time, you give university students the opportunity to work on real-world problems and get real-world feedback on their suggestions.

Private Brainstorms
The alternative to inviting the public to suggest ideas is to invite a very select group of people to suggest ideas as well as begin developing them. This is something my company has done to great success on a number of occasions. As an example, a company which makes heavy duty construction equipment was looking for a way to simplify the design of a complex component. Doing so would reduce their manufacturing costs as well as increase the reliability of the component – and hence their equipment. They invited employees from one of their suppliers as well as their own employees to submit and collaborate on-line using an innovation process management software (Jenni). Within a couple of weeks, they had a handful of great ideas, several of which were combined in order to substantially reduce the complexity of the component. They will save a lot of money thanks to the ideas.

On another occasion, a European non-profit, working with cultural heritage sites, wanted to explore how such sites could generate additional value to visitors by using new technologies. Representatives of museums, tourist attractions and historical sites went to Brussels for a day of brainstorming. People were put into smaller, diverse groups and given exercises based around specific creative challenges. A number of intriguing ideas were generated and have since been implemented across Europe.

In scenarios such as these, the external participants have a stake in finding and developing innovative solutions, so no additional reward is necessary. However, you may also wish to bring together people who have no stake in the solution, but who have expertise you would like to tap into. In such instances, you may have to provide a fee for their time. Although this adds to the cost, it does permit you to bring greater diversity to the problem solving table – and that can lead to a high level of creativity in the idea generation.

Quick and Dirty Open Innovation
In addition to the structured approaches we’ve looked at already, there are a number of quick and dirty solutions you can use in order to tap into the creativity of others. For example, I use Facebook primarily as a means of keeping in touch with friends, sharing jokes and seeing which on-time classmates look older and fatter than me! Aside from occasionally promoting my book, Facebook is a non-business space as far as I am concerned. As a result, it can be a great place to post questions to a diverse range of people who are often willing to give feedback.

LinkedIn, the professional networking site, has special interest groups and forums for asking questions – which can provide places for requesting ideas and getting suggestions. However, your competitors are probably hanging out on LinkedIn as well. So you need to think about what you share there.

In addition, there are numerous bulletin boards and specialised networking web sites where you can post questions and get solutions. Again, others in your line of business may hang out in such places, so the ideas you get will not be secret. Nevertheless, you can get some great ideas and feedback from people in these groups. Moreover, a business which would be a competitor in Johannesburg is a potential resource for information and ideas if they are based in New York (assuming you both focus on local markets, of course).

Be Careful About What You Ask Customers
Henry Ford once said that if he had asked his customers what they wanted, they would have said faster horses. There is great truth in this. Asking customers what they want will generally lead to product improvement ideas. But it seldom, if ever, leads to breakthrough innovation. Indeed, if a customer has an incredible yet viable idea that is a radical improvement on your product, she is more likely to launch a business making and marketing her improved product than to share her idea with you. In other words, she is your future competitor!

Nevertheless, you are in the business of pleasing your customers better than your competitors are capable of doing. So it is important to communicate with those customers and potential customers in order to ask them questions. But your questions should be more focused on gathering insights that you can use to develop radical new products and services.

Great questions to ask include:

“What do you use our product for?” You may find that some customers are using your product in ways you never intended. Once you know this, you can look at ways to make the product more suited to this alternative use. More importantly, you may discover a whole new way to market your product? You might go one step further and ask “What unusual or unexpected things do you do with our product?”

“What do you wish to achieve when you use our product?” Clearly Henry Ford’s customers wanted personal transport that would get them to their destinations faster.

“What are you unable to do with our product?” This again may identify that people wish to use your product in ways other than you intended. Find out what those ways are and identify how you can change the situation.

“What else do you do when you use our product or service?” This may identify additional opportunities to sell products to your existing customers.

In addition to asking questions, it is useful to visit places, where customers use your product, and observe. How do they use your product? What else are they doing? What other products are in this environment? What seems to cause difficulties?

You can also run brainstorming sessions in environments where customers use your products. Invite in a few customers and suppliers and get to work. Actually putting yourself into your customers’ shoes while brainstorming is great for insight and inspiration.

Putting It All Together
Open innovation is an approach every company, from the one-man-band to the world’s biggest multinationals, can use. It has the advantages of bringing new perspectives, insights and inspiration to your idea generation and development process. Nevertheless, you need to consider how much internal information you wish to share with whom and ensure that you retain – or can license – the intellectual property to ideas that you receive. You also need to design initiatives that generate relevant ideas that meet your business needs.

DO YOU KNOW THE WAY OF THE INNOVATION MASTER?

Do you know the way of the innovation master? If not, how can you expect to lead an innovation initiative in your company?

But don’t worry, you can read my book entitled, appropriately enough, The Way of the Innovation Master and become an innovation expert! The Way runs you through the key steps of launching an innovation initiative, from planning to implementing and more.

You can learn more about the Way here, or order it from Amazon and most other on-line and off-line bookshops.

ANOTHER KIND OF IDEA JAM

Recently, I was contacted by a fellow innovation consultant who had run into a problem I have seen many times before: great ideas, zero implementation. You have probably come across the same kind of situation yourself. You run an ideas campaign, brainstorm or other well designed idea generation activity that generates a number of viable ideas that get great evaluation scores. But, in spite of their quality, the ideas never get implemented.

Here is my answer to him (slightly edited for publication):

Unfortunately, this kind of thing happens a lot with innovation initiatives. I remember attending brainstorming events where lots of expensive people were brought in to generate ideas. At the end of the day, the walls were covered with post-its, everyone congratulated themselves and had a drink. Then.... nothing!

This happens because, although there is a well defined process for generating ideas (particularly when people like you or I are brought in to oversee the process), there is no well defined process for implementing selected ideas.

A Couple of Questions
In order to determine what steps to take, we need to ask a couple of questions.

Ideally, what should the next steps after successful idea evaluation be? Are people expected to pick up on their own ideas and take them forward? Or are managers expected to authorise ideas and order people to make them happen? Or is some kind of internal selling to senior management expected?
Considering question 1, what is the bottle-neck that is preventing this step from happening?

At this point, it may already be clear what needs to be done. If not, it may be that you, together with people at the client company, need to define a process for developing creative ideas into implementations.

One of the best motivations you can give people is empowerment. Empowering an employee to develop and implement the idea can be a tremendous recognition of that employee's creativity and ability. However, of course, there need to be mechanisms in place that enable her to do the implementation. This may mean making some budget available or ensuring that she is reporting to a manager who will support her (this can be a problem in itself. If the manager fears that the employee may outshine him through the successful implementation of her idea, he may do all he can to thwart her --- don't you love office politics???).

So, if there is not a process for developing ideas, you probably need to guide the client towards defining and implementing it. I recommend a process that empowers people to take charge of their ideas. But watch out for office politics.

STORYTELLING MAGIC AT THE BRUSSELS IMAGINATION CLUB 25 MAY

How we choose, formulate and tell stories shape the way we are and how we perceive. Exercising the imagination muscle is medicine for creating a meaningful story. We will be playing with imagination to create stories that take us beyond limitations and stimulate expansion of thought.

If you are in Brussels on the evening of 25 May, join us at the Imagination Club for this experimental workshop. More information on the Imagination Club web site: See also the next article for some background information.

IMAGINATION SESSIONS

Some years ago, my good friend Andy Whittle and I launched the Brussels Imagination Club (http://www.imaginationclub.be) as a place for facilitators and trainers to experiment with new ideas before a receptive audience. They get the opportunity to try out new ideas and get feedback from the participants. The participants, meanwhile, learn something new, enjoy an unexpected experience and meet other interesting people. It has proven successful, informative and jolly good fun, not least for Andy and I.

Recently, I’ve been discussing with Andy the concept of creating an Imagination Club that could operate inside a medium to large company. Here is my vision, I call it an Imagination Session.

What Is an Imagination Session?
An Imagination Session is a corporate activity that helps organisations evaluate, refine and develop experimental ideas. It is particularly suited for developing a creative idea or concept which has the potential to become breakthrough innovation. Such ideas are seldom easily evaluated using conventional methodology. A more creative approach is necessary.

An Imagination Session includes as participants at least one person from every division of an organisation. The person or team, let’s call them the “innovators”, who have developed a highly creative idea are asked to prepare a creative event to present the idea. The event should be interactive, involving the participants as much as possible, and include a prototype where relevant. If the idea involves a service, it may be prototyped through role-play or a short drama.

Example Imagination Session themes include (but are NOT limited to):

Training Session. The innovators train the participants to perform the new service or use the new product.
A role-play of various kinds of sales calls, in which participants pretend to be sales people and prospective customers.
The innovators create a mock exhibition stand and explain the product to visitors to the stand.
A trial by jury in which one team defends and idea and another prosecutes it. A jury listens to both sides and makes its verdict.

The event should last between 60 and 90 minutes and must not incorporate PowerPoint slides or anything that might be mistaken for a PowerPoint slide.

At the end of the session, a facilitator asks the participants a few questions designed to generate productive, thoughtful feedback. The aim of the feedback is not to reject or criticise the idea. Rather to identify strengths and weaknesses as well as means of overcoming those weaknesses. I suggest questions like these. But particular kinds of ideas may demand special questions and feedback.

What did you like about the presentation/demonstration?
In what ways could the proposed concept be improved? Why?
What could potentially go wrong if we launch this concept? What can we do to guard against this? What can we do if this happens?
What could you and your division offer the innovators in terms of support, resources and contacts?

The first few times you run an Imagination Session, we recommend it be facilitated by an expert in order to help the Innovators develop a creative presentation as well as to ensure rules are followed.

Advantages
The primary advantages to Imagination Sessions over traditional and committee based evaluations is twofold. Firstly, in developing a creative and interactive presentation, rather than PowerPoint slides, Innovators are pushed to develop their ideas better. Secondly, by having a structured feedback process designed to elicit constructive support, highly creative ideas that might be rejected by committee are strengthened and made more viable.

Give It a Try in Your Company
If you are keen to try out an Imagination Session in your company, I would be delighted to facilitate it for a reduced rate (to reflect its experimental nature). Email jeffreyb@jpb.com to discuss this.

JENNI IDEA MANAGEMENT SOFTWARE

If you need to facilitate an effective innovation initiative in an organisation with 100s or 1000s of people, then Jenni innovation process management is your ideal solution. Better still, my colleagues and I will steer you through the innovation process, ensuring you get relevant ideas that meet your strategic needs.

Learn more here (http://www.creativejeffrey.com/jenni/) or email me at jeffreyb@jpb.com to talk about how Jenni can support your innovation plan.

MEET JEFFREY

What do you think of the crazy picture of me they have posted on the South African Innovation Summit web site? http://www.innovationsummit.co.za/jeffrey-baumgartner.php

I will be speaking and delivering a workshop at this exciting event at the end of August and am very much looking forward to it as well as meeting some people I have corresponded with for years, but whom I have never met in person. What about you? I’d love to meet you too. If you live in South Africa or plan to be in Johannesburg in late August, join this event! http://www.innovationsummit.co.za/)

Just a couple of weeks after that and I will be off to Portugal to deliver a workshop at the European Conference on Creativity and Innovation. This is the biggest and most exciting European creativity and innovation conference and I am honoured to be participating. Moreover, Portugal was my home for a while in the mid 80s and it is always a treat to revisit the country. If you are in Portugal or want an excuse to spend some time in the Algarve (the beautiful, beach resort part of Portugal) in September, come join the event! I’d love to meet you and there will be much to learn. http://www.eaci.net/eccixii/index.php

And, of course, I can almost always be found at the Brussels Imagination Club every 2nd and 4th Wednesday of the month. More information at http://www.imaginationclub.org/brussels and http://www.imaginationclub.be/

I could also be speaking or delivering workshops in your company. If you and your colleagues want to learn how to use anti-conventional thinking (ACT – see article above) in order to be more creative, if you want to train your managers to be more receptive to creativity and more participative in your innovation initiative or if you need to plan an innovation process based on strategy, contact me today to discuss your needs. It would be a treat to work with you. More importantly, think how much more value your company could deliver with more creativity and innovation.