Report 103

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

Tuesday, 20 October 2009
Issue 158

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.

ALIGNING INNOVATION TO YOUR CORPORATE STRATEGY

For any corporate innovation initiative to succeed, it is important that it is aligned with corporate strategy. This is more likely to occur naturally when senior management takes the lead with an innovation initiative – and this is a key reason why top management buy-in is a major factor in the success of any innovation process. But when middle managers or innovation consultants reporting to middle managers take charge of your innovation activities, there is a good chance that these actions will generate many good ideas, but few of those ideas will be relevant to your business's strategic aims.

To make matters worse, many innovation tools are designed for random, rather than focused, idea generation. You need the latter in order to align idea generation, and hence innovation, with strategy. Suggestion schemes which invite random ideas may encourage incremental improvements. But, in my experience, few big ideas are proposed and those which are seldom fit with strategic needs. This results in a high level of idea rejection and substantial time wasted in preparing idea proposals which must be rejected irrespective of their intrinsic quality. After all, if your corporate strategy is all about selling apples, great ideas for improving the flavour of oranges will do you little good.

And when suggestion tools are opened to the public, in so-called crowdsourcing activities, the results are worse. If middle to low ranking employees are less than clear on corporate strategy, non-employees and customers are likely to be even less clear. Indeed, an evil competitor could easily take advantage of a crowdsourcing web site to submit and build enthusiasm for ideas that contradict your strategy. This can result in wasted time, the need to reject powerful ideas and embarrassment.

If you think such a scenario is unlikely, consider then presidential candidate Barak Obama's suggestion tool (set up by his election committee and not Mr. Obama). A pro-marijuana legalisation group submitted and promoted numerous proposals on legalising drugs. These quickly became the top voted ideas on the web site. In view of the abhorrence American government has towards the legalisation of recreational drugs and the pressing importance of solving problems associated with the economic meltdown, the war in Iraq and other issues, these ideas were less than useless. Worse, other top ideas bore little relevance to the key – or strategic issues – of his campaign.

The result? The suggestion web site became an embarrassment and was quietly closed. A huge amount of effort was completely wasted and a lot of ideas that might have been relevant to strategic issues were either never submitted or lost to the less relevant ideas that were promoted to the top.

A Three Step Approach

It does not have to be this way! A simple three step approach using some very basic methodology is all you need to align your innovation activities with your strategy. You simply need to ask some probing questions, follow creative problem solving (CPS) in idea generation and have experts judge ideas using clearly defined business criteria. This, incidentally, mirrors our innovation process management approach (http://www.creativejeffrey.com/creative/ipm.php).

Step 1: Ask Lots of Questions

In order to align innovation to strategy, you need to know how well your firm is meeting it strategic objectives. Arthur VanGundy, in his book GETTING TO INNOVATION recommends establishing Q-banks of questions related to strategy and then posing these questions to stake holders in a two or three rounds. The first round would include very general questions in order to identify strengths and weaknesses. Based on the answers, a second round would ask more probing questions in order to identify more clearly defined problem areas. Depending on the results of this second round, a third round might be needed.

According to VanGundy, questions should be divided into categories such as “Our Organisation”, “Our Customers”, “Our Brand” and so on. Questions in the first category might include “What does our organisation do?”, “What are our core competencies?” and the like.

This exercise is important for identifying areas where innovation can lead to dramatic improvement. Nevertheless, be warned, you may find that you may not like some of the answers you receive. In a sprawling organization with poor communications (most large companies, in fact!), you may find that you are not getting consistent answers to basic questions about what your company does, core competencies, values and so on.

Do not see this as failure. Rather see it is a fantastic opportunity for breakthrough innovation!

Step 2: Pose Innovation Challenges Based on Strategic Needs

With the information gleaned in step one, you are ready to formulate innovation challenges based on the answers to your questions. For instance, if you find that your products do not reflect your brand values in the eyes of your employees and customers, you need to frame challenges that resolve this problem (see Turning Problems into Challenges at http://www.creativejeffrey.com/creative/innovationchallenges.php). These challenges might focus not only on the products themselves, but on marketing communications, packaging and possibly even pricing.

Once your innovation challenges have been formulated, you need to focus on generating ideas (see article “The Idea” below for more about ideas) that address your challenges. Idea generation can be done using innovation process management software, brainstorming, experimentation, and a host of methods depending on the challenges and the stakeholders.

If you are putting a specific team in charge of addressing a particular challenge, be sure that it is a diverse team. For instance, if the challenge relates to marketing (such as “How might we better demonstrate brand values in our marketing communications?”), do not put a team comprised solely of marketing people in charge of idea generation. Alone, they are unlikely to generate the breakthrough ideas necessary to innovatively solve your problem. By the same token, do not exclude them. Their less than innovative performance to date may be part of the reason your marketing communications does not reflect brand values. But they do have expertise and they will need to implement the solution. But complement them with people from various departments and, ideally, business partners and customers.

If you are using software based tools for idea collection, be sure that the tools enable you to run ideas campaigns. (http://www.creativejeffrey.com/creative/campaigns.php). Suggestion schemes, whether ad hoc solutions using e-mail or Sharepoint, or custom designed web applications; may be useful for collecting incremental improvements, but do not permit the focus necessary for aligning ideas with strategic needs.

Step 3: Evaluation

After investing substantial effort into their idea generation activities, it is amazing how many organisations and innovation professionals blow it by putting ideas to a popular vote in order to identify which ideas to develop further. Votes are fine for democracy, but full of poop for innovation! Indeed, voting for ideas has two serious flaws. Firstly, popular votes tend to favour incremental improvements. Such ideas are easier to envision than breakthrough innovations and, hence, people are more likely to vote for the incremental improvements instead of the more radical ideas. Secondly, when participants in an idea generation activity know they will be rewarded for having “the best” ideas, they actually think less creatively than if there are no rewards or if they are rewarded for having the most creative ideas. This has been demonstrated in research.

Hence, voting for ideas encourages less creative thinking and selects incremental improvements. This is clearly not a recipe for breakthrough innovation! If you are absolutely obsessed with idea voting and understand that voting is unlikely to select ideas that align with corporate strategy, then at least specify criteria by which the vote should take place. Criteria should be along the lines of “vote for the most creative idea”, “vote for the idea you would LEAST like to see our competitors implement” or “vote for the idea which offers the greatest potential value to the firm.”

But a better approach is to assign a team of experts, ideally from diverse backgrounds, to preform a criteria based evaluation, perhaps using an evaluation matrix, in order to judge whether or not an idea has the potential to become an innovation for your firm.

An evaluation matrix is very simple. Start with a list of several criteria (we find five works best) and ask your experts to compare each idea to each criterion on a sliding scale (we use zero to five points). Once you are finished, each idea has a score representing how well it meets your evaluation criteria. Thus ideas can easily be compared for potential value add. Most importantly, the evaluation criteria can and should be designed to emphasise strategic concerns.

Diversity and Numbers for Idea Generation; Expertise and Focus for Evaluation

Note that while it is often effective to have a large number of people involved in generating ideas, it is best to have a relatively small number of experts actually evaluate the ideas. This is because during idea generation, you want to encourage divergent thinking and this is best achieved through a diverse group of idea generators. At this stage of the process, non-experts may bring a fresh open mind and a touch of naiveté to idea generation and this can result in some outlandish and highly creative ideas.

However, when it comes to envisioning the implementation of ideas, you need experts who can determine how well an idea actually meets strategic needs, likely implementation costs and more.

Wrapping Up

As noted, the steps necessary to aligning your innovation initiative with your strategic needs are simple in principle: identify strategic issues where innovation is necessary, focus innovation on those issues and measure idea viability according to strategic issues.

However, discipline in setting up the initiative as well as top management buy-in are needed to ensure the initiative is a success. Poorly conceived suggestion schemes in which generated ideas are based on the whims of the idea submitters and selection is based upon the same people's votes, will result in incremental improvements that often bear little relationship to corporate strategy. This is not only a waste of time, money and resources, but can be highly demotivating to employees (or the public in the case of crowdsourcing), who see a lot of effort made for little result in terms of idea implementations.

If you are hiring an innovation consultant or other service provider to support your firm's innovation initiative, ask her how her services will align YOUR innovation with YOUR strategy. If you are not happy with her answer, look elsewhere.

BACK TO INNOVATION BASICS

In the last issue of Report 103, I announced that over the next few issues of this journal we will look at the basic terminology and processes associated with corporate innovation. My feeling, and apparently it is shared by many, is that the business of innovation lacks a common terminology and understanding of processes. This lack of clarity makes it harder for innovation professionals to present (and sell) their services to prospective clients and it makes it harder for those clients to select suitable service providers.

To read my introduction to the series of “Back to Innovation Basic” articles, please look at the 6 October 2009 issue of Report 103, or go to http://www.creativejeffrey.com/creative/innovation_basics.php

THE IDEA

If an innovation (see the 6 October issue of Report 103 at http://www.creativejeffrey.com/report103/archive.php?issue_no=20091006 for a definition of “Innovation”) starts with an idea, it is worthwhile understanding what an idea actually is. This is no easy task. The discussion of what constitutes an idea began with Plato – if not earlier – and has been a regular topic of philosophical discussion since then.

The Concise Oxford Dictionary defines an idea as: “a conception or plan formed by mental effort”. That is certainly concise. How does that work from a physiological perspective?

To hugely simplify the process: the human brain is comprised of more than 100 billion neurons. These are paths along which information flows. Neurons connect to each other via hundreds of billions of synapses, which allow the flow of information from one neuron to the next. It is at these synapses that different thoughts come together and form ideas.

However, these ideas basically comprise all kinds of thought and most thoughts are distinctly non-creative and focus on the day to day routine of life. So, we need to distinguish between creative and non-creative ideas.

(Incidentally, for a fascinating video on modelling this structure on a supercomputer, check out Henry Markram's talk at TED: http://www.ted.com/talks/henry_markram_supercomputing_the_brain_s_secrets.html

Creative Ideas

Creative ideas form the basis of all innovations. And when innovation experts talk about ideas, idea generation and idea management, they are almost always referring to creative ideas.

In the mind, creative ideas form when your neurons, carrying disparate thoughts, connect through synapses and bring two or more dissimilar (non-creative) ideas together in a new way in order to create an all new (at least for the thinker) idea. For instance, Steve Jobs or someone at Apple mentally combined the concepts of a mobile telephone and a computer touch screen to devise the idea behind the popular iPhone.

Indeed, it is for this reason that introducing random elements into idea generation activities is a proven creativity tool. Random words, applying unrelated elements or visiting new places can all help individuals and groups bring together in their minds a wider variety of disparate ideas – and that leads to more creative ideas both in terms of quantity and quality.

Innovative Ideas

What is the difference between a creative idea and an innovative idea?

This is a trick question. In fact, we probably shouldn't use the term “innovative idea”. As you may recall from the last issue of Report 103, we define innovation, at least in the corporate sense, as: “The implementation of creative ideas in order generate value, usually through reduced operational costs, increased income or both.” Ideas themselves, creative or otherwise, add little value to business. It is their successful implementation that adds value.

Hence, if we really want to use the adjective “innovative” with the noun “idea”, we should probably talk about a “potentially innovative idea”. However, this is the same thing as a “creative idea” and it is probably easier and less confusing to talk about a creative idea.

Putting It all Together

To summarise, when we talk about ideas in the context of innovation, we are usually referring to creative ideas. A creative idea can be defined as a combining two or more concepts in order to create a unique (at least in the mind of the thinker) concept or idea. An idea in itself is neither an innovation nor innovative. However, it is a potential innovation and may form the cornerstone of an innovation.

What do you think? Can you do a better job of defining the idea? If so, e-mail me! I'd love to know your thoughts and may even publish them here (with your permission, of course).

INNOVATION - WITHOUT IT WE'RE SCREWED

Tim Morris, co-founder and director of Dynamic Horizons, a leading Australian innovation consultancy (and our Jenni IPM representative in Australia), has produced a fantastic video entitled "A brief exploration of the state of innovation in Australian business. Irreverent, frank and hopefully interesting." Although the statistics in this video refer to Australia, this message holds true everywhere we do business.

READING RECOMMENDATION: THE MYTH OF EFFICIENCY

Adam Hartung has written a brief article, “The Myth of Efficiency”, for Forbes magazine. In it, he argues the incremental cost cutting innovation is a waste of time and does not provide any real benefit. He further argues that companies should strive for breakthrough innovation.

Considering companies like Dell and Toyota have become giants through production efficiency improvements, many of them incremental, I suspect he is choosing his evidence based on his hypothesis. Nevertheless, the article is thought provoking and well worth reading.

JENNI: ALIGNING YOUR INNOVATION WITH YOUR STRATEGY

Assuming you read my first article in this issue of Report 103, you will understand the importance of aligning your innovation with your corporate strategy. But did you know that Jenni is the only idea management software specifically designed to align innovation with strategy? From Jenni's sophisticated ideas campaign module that allows you to set up precisely targetted ideas campaigns to her criteria based evaluation tool that not only sets up multi-expert evaluations, but compiles the results in an easy to interpret report, Jenni is all about focusing innovation on your strategic needs. Better still, our experts are at your beck and call to coach you through the innovation process and its management.

Perhaps that's why a leading water provider in Australia selected Jenni to support innovation according to their complex strategic needs. Owing to severe drought, they needed to improve significantly the efficiency of their water delivery system, encourage customers to use less water and still make a profit. Moreover, with super busy employees, they needed a system that was incredibly easy for employees to grasp and use. They chose Jenni. And for three years, Jenni has supported ideas campaigns that have generated ideas leading to substantial efficiency improvements, resulting in reduced operational costs, communications ideas and more.

And perhaps that's why a global convenience food provider, that needed to improve the healthiness of their snack foods, choose Jenni for their research and development unit. They needed not only healthy snack food concepts, but also packaging that communicated this new brand value. Jenni did the trick and enabled their creative thinkers to generate all kinds of terrifically tasty and healthy food ideas.

How about your firm? Tell us your strategic needs and we will tell you how Jenni can help you align your innovation to meet those needs – with complete confidentiality from our first conversation. Find your nearest Jenni representative at http://www.creativejeffrey.com/jenni/contact.php.

More information about Jenni, meanwhile, can be found at http://www.creativejeffrey.com/jenni/

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 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 (150,000-200,000 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 your, your client and jpb.com!

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!