Report 103

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

Wednesday, 7 July 2010
Issue 168

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.

CREATIVE SELF HELP

There are a lot of self-help (also sometimes called “self-improvement”) books on the market. Most of them give you a series of steps you can take in order to lose weight, become more confident, earn more income, have a better romantic life or otherwise become a better person.

Applying the creative problem solving (CPS: see http://www.creativejeffrey.com/creative/cps.php) process to areas where you seek improvement can also help you to improve yourself in your own unique way. Moreover, because such self improvement is personalised the results are likely to suit your needs better than step-by-step instructions designed for the masses.

With this in mind, we have decided to help you improve yourself through creativity! We have just set up a “Creative Self -Help” section on the jpb web site at http://www.creativejeffrey.com/selfimprovement/ . I will also run occasional articles on the topic here in Report 103. The first is below.

GET CREATIVE WITH YOUR ELEVATOR PITCH

An “elevator pitch” is a short, self promotional statement which you can deliver when time is limited. The term came to prominence during the dot-com boom when every other person seemed to be starting up an Internet company and looking for venture capital funding. It comes from the scenario of finding yourself in a lift – or elevator, as Americans call it – with someone who can help you out professionally, such as an investor, business partner or potential employer. In a minute, the lift will reach its destination and the other person will leave, so you only have a few seconds to say something to capture that person's interest.

The aim of an elevator pitch should not be to make a sale, get a job or nab a sack full of money from a venture capitalist. Rather, it is to start a conversation. The ideal outcome of an elevator pitch is for the other person to look at her watch and say, “I've got a free hour. Let's go have a coffee and talk about this.”

About a decade ago when I was hired by the European Commission's Information Society Directorate General as an expert (which is Commission-Speak for a consultant with expert knowledge), I had the memorable contract title of “expert on the dissemination of information about electronic commerce to small and medium sized enterprises in the European Community.” It was such a delightfully convoluted title, that it functioned as a great elevator pitch. People simply wanted to know what the heck it meant!

Most often, however, we are not so lucky and must craft our own lift pitches. Moreover, with the exception of people with very specific expert knowledge (my life partner, for instance, specialises in a very specific area of scientific research. Either people understand what she does or they do not. If they do not, she probably doesn't need to connect to them professionally), most of us are competing with others for the attention of clients, business partners, investors or employers. So we need elevator pitches that stand out, are unique and stimulate a response. Clearly, some creativity is what is needed to design such a pitch.

What Do You Wish to Achieve?

As I have already stated, the aim of an elevator pitch is to start a conversation. Nevertheless, you will want the conversation to be a significant step towards achieving an aim, such as getting investment in your company, closing a sale or winning a project contract. This means your pitch should stimulate the right conversation. Think about what you wish to achieve.

Of course you might have multiple needs. For instance, an entrepreneur might be looking to build a business relationship with a mobile marketing specialist, negotiate a deal with the purchasing manager of a chain of clothing shops and get some investment from a venture capitalist. If this is the case, you will need either to come up with a single multifunctional pitch, which would be ideal, or several pitches which you can select from depending on circumstances.

Once you are clear in your mind about your elevator pitch goal, write it down.

What Is So Special About You?

Now it is time to do some idea generation. Think about you, or your company if it will be the focus of your pitch. Think about what is special about you. In particular think about values or services you can provide to your customers or employer or employer's customers as the case may be.

Spend some time on this and draw up a list of at least 50 ideas. Don't worry about accuracy or whether a particular skill really is special. That comes later. For the time being, just write down every thought that comes to mind. Indeed, follow usual idea generation protocol: no squelching, no criticism and write down everything. In particular, do not be afraid to note attributes which you are striving to achieve even if you have not actually achieved them yet.

If possible, ask friends, family, colleagues and associates for their suggestions and add them to the list.

Rate the Ideas

Now you should have at least 50 ideas and possibly many more. Feel free to go through the list now and cross out any ideas that are unsuitable. But don't cross out ridiculous ideas. Sometimes the ridiculous notions prove to be the most creative and hence most effective!

Once you have cleaned up your list, call on a couple of friends or family members to help you with the next step. Ask them to go through the list once to ensure they understand everything. If any ideas are not clear, they should ask you for clarification. After this is done, ask your friends to rate each idea on a scale of 0-5 points for each of these three criteria:

1. Impact
2. Memorability
3. Uniqueness

You should also do the same. Once you are all finished, select the one, two or three top ideas based on the number of points received. These are your strongest attributes.

Putting It all Together

Using these top attributes, try and craft them into a short, sweet and intriguing elevator pitch. If you can convince your friends to collaborate with you on the process, all the better.

You may need to write down several variations until you get it right. If you have chosen more than one attribute, but cannot fit all of them into a pitch, don't worry. Remember, you don't need to provide a comprehensive self-promotional speech. You just want to start a conversation! Also, bear in mind that your pitch should indicate that you (or your firm) offers value to the listener and does not merely glorify yourself.

Once you've got something, try it out first in front of a mirror and then with friends. Then look for an opportunity to try it out in real life. Perhaps there is a networking activity or similar event coming up in your area. If so, sign up for it, attend and practice with your pitch. If you've never used an elevator pitch before, you will be amazed at how it makes you more confident about presenting yourself in a public environment like this.

Organic

Finally, bear in mind that an elevator pitch is not set in stone. You can change it any time you want. You may find, after your first networking event, that it didn't get the response you expected. If so, it may simply need a little tweaking. Or it may need reformulating.

Moreover, you can and should repeat this exercise from time to time in order to ensure your elevator pitch is fresh and reflects changes in your activities and your market.

Good luck!

SECRET TO SUCCESSFUL NEW PRODUCT INNOVATION: KEEP THE BOSS OUT OF IT

Billions of dollars are spent on developing and launching new consumer packaged goods (CPG) products each year, and some companies see tremendous success while others – don’t. Why? One secret appears to lie in the degree of senior management involvement in the creative process, according to a first-of-its-kind study unveiled today by The Nielsen Company at its Consumer 360 Conference in Las Vegas (Nevada, USA) last month

Nielsen’s research of the innovation processes at 30 large CPG companies operating in the U.S. reveals that companies with less senior management involvement in the new product development process generate 80 percent more new product revenue than those with heavy senior management involvement. Companies that employ this and other best innovation practices derive on average 650 percent more revenue from new products compared to companies that do not.

“New product innovation is a top priority of every major company CEO, yet success varies so widely that it’s absolutely critical to understand what drives successful innovation and what undermines it,” said Tom Agan, senior vice president and managing director, The Nielsen Company. “Once you understand it, then you need to ask yourselves, are we living it?”

Nothing But Blue Skies?

Nielsen’s research shows that simply being physically near corporate headquarters can stifle new idea generation. In fact, it turns out that having no Blue Sky innovation team at all is better than having a team on-site at corporate headquarters. The best place for your breakthrough innovators? Far, far away. According to Nielsen, companies with an off-site Blue Sky innovation team report 5.7 percent of revenues coming from new products, compared to 4.8 percent from companies with no Blue Sky team at all. Companies with Blue Sky teams on site report just 2.7 percent of revenues coming from new products.

“One of the keys to successful new product innovation is to manage new ideas lightly,” said Agan. “While we don’t dispute senior management’s strengths and good intentions, they are often too quick to get involved in the creative process, especially when things are not going well, and their mere presence can stifle free-thinking and boundaryless ideas – which can doom the new product development process to failure.”

New Product Development Mantra: Consistently and Precisely

Senior management needs to play a different, more important role in new product development. Nielsen’s research shows that another important key to success is for senior management to precisely manage the new product development process, not the ideas themselves. According to Nielsen, CPG companies with rigid stage gates - - decision points in the process where a new product idea must pass certain criteria to proceed forward - - average 130 percent more new product revenue than companies with loose processes.

“New product development success comes down to two important principles - - managing ideas lightly while managing the process precisely,” said Agan.

Nielsen’s evaluation shows that CPG companies with the most successful new product innovation
records tend to have:

Two to three stage gates that are strictly followed across the organization. The first stage gate is typically designed to identify ideas that will then be developed into a concept and prototype, while the last stage gate is usually designed to determine whether a product should be committed to production and market.
A focus on growing brands, not ones acquired or designated by senior management
A development focus two to three years out
A formal scorecard to provide structure to organizational learning
A standardized and required post-mortem on all new product development efforts
A knowledge management system to retain learnings from previous product launches.
In total the study identifies about two dozen best practices that drive better-than-average incremental revenue from new products.

“From the outside, it can often feel like innovation simply ‘happens,’ arriving like a bolt of lightning out of the sky,” said Agan. “The truth is that companies with successful innovation track records go to great lengths to create an ideal creative environment and the right behaviours, supporting policies and procedures. When they execute well, the best ideas rise to the surface and into consumers’ homes.”

About Nielsen’s Study

Nielsen’s research is the most comprehensive and objective new product development study,
documenting more than 50 dimensions of new product development. Objective survey results were
compared to actual in-market success and the percent of revenue from new UPCs in Q4 2009.

About The Nielsen Company

The Nielsen Company is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related assets. The privately held company is active in approximately 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com.

YOUR ARTICLE IN REPORT 103

If you would like to write an article for Report 103, or wish to reprint an existing article, let me know. Many of the best pieces in this journal have come from contributors and at least one article eventually became the basis of a book.

Report 103 has over 6000 subscribers, many of whom share the ejournal with colleagues. Moreover, the archives receive 1000s of hits every month. So if you wish to share your knowledge of creativity and innovation with a global audience of innovation professionals, business leaders, scientists, researchers, academics and others, get in touch with me.

INNOVATION MISCONCEPTIONS

This is the second in an occasional series of articles on misconceptions in the field of organisational innovation. In spite of the proliferation of research on, and related to, creativity and innovation in groups, an amazing amount of misinformation is circulated in the field of business innovation.

That's bad enough. To make matters worse, many of the misconceptions that exist in the field are so completely the opposite of empirical research findings that companies following these faulty notions are actually damaging their innovation processes with consequences that range from loss of potentially innovative ideas to demotivation of employees and even income loss.

And that's not good for your firm, is it?

Today, we will look at voting in suggestion schemes, a pet peeve of mine.

VOTING IN SUGGESTION SCHEMES

With the growth of interest in innovation, a number of firms have recently launched suggestion scheme software products. These products make it easy for employees (in closed systems) or even the public (in open systems) to submit ideas about anything. The great thing about such suggestion scheme software is that, properly promoted, they can generate 1000s of varied ideas. The bad thing about such suggestion schemes is that, properly promoted, they can generate 1000s of varied ideas! After all, if you actually want to innovate, you have to devote resources to reviewing those 1000s of ideas in order to identify which ideas might become innovations. And without a structured innovation process behind the suggestion scheme, each idea needs to be individually reviewed.

Not long ago, in an unknown software company somewhere in the world, some bright spark had the idea to add a voting system to their suggestion scheme software product. On the surface, the logic seems good: with so many ideas coming into the suggestion scheme, why not let users of the system vote on ideas in order to identify the best ideas? Clearly the ideas with the most votes will be the best, after all they will have been elected following proper democratic due process. Then the owners of the system need only implement the ideas with the most votes and innovate like crazy.

There are two flaws with this seemingly lovely theory. Firstly, research in social psychological behaviour, group motivation and incentives demonstrate that the theory is completely wrong. Secondly, no one seems to have actually read up on the research and, as a result, nearly every suggestion scheme software company uses the same highly flawed voting system.

Let's look at the flaws.

People Do Not Vote on Best Ideas. They Follow Trends

Research has shown that in transparent systems where people can vote on submissions, their voting is based more on trends than on the quality of the actual submissions. Particularly interesting and relevant is a recent study by Matthew Salganik, Peter Dodds, and Duncan Watts, entitled “Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market.”(1)

The researchers had 14,000 volunteers participate in a web based music download system. Participants were able to listen to songs from obscure bands, vote on how much they liked the songs and then download those songs.

Users were divided into groups. In the control group, users could not observe the actions of other users. They simply listened, voted and downloaded. The remaining users were divided into eight parallel worlds, each using an interface available only to other members in the same parallel world. In each of these worlds, participants could see which songs other members of their world had downloaded and watch the voting in real time.

In each group, a strikingly different collection of musical tracks was voted in as best. In the control group, the top choices were spread widely, with no one track getting a huge number of votes. And this was assumed to represent participants' actual liking of individual musical tracks.

In each of the worlds in which users could watch the voting results, something interesting happened. Users first listened to the tracks which had the most votes. In many instances, they also voted for these tracks and downloaded them. Moreover, they often did not even bother to listen to the tracks with no votes. This created a snowball effect, with a small number of tracks getting a high number of votes and many other tracks ignored.

Most interestingly, the top voted songs in each of the worlds were very different from one world to the next. Indeed, economists have long noted that this “network effect” occurs within populations.

Think About It

If you stop and think about your own behaviour, you will see that this makes sense. Imagine you visit a suggestion scheme for the first time. You see that there are 100s or 1000s or more ideas in the system. Although the ideas are categorised, there is no logical order to them. Most likely you will initially look at the ideas with the most votes, assuming that these are the better ideas. And, if you like the ideas, you will vote in their favour. You probably will not want to admit it, but you will also very likely assume that highly voted ideas must be a good in order to have achieved their high scores. As a result, you will push up the popularity of the popular ideas but are unlikely to even have the time to look at the unpopular ideas.

If 100s of people behave similarly, it is no surprise that those ideas, which are submitted early and receive a few positive votes, quickly become the most popular. However, the most popular ideas are not necessarily those that have the greatest innovation potential. Indeed, if you look at typical behaviour in a brainstorming or other ideation event, you will realise that they are unlikely to be the most creative ideas. And remember, it is the highly creative ideas that are most likely to become breakthrough innovations.

Creative Ideas Come Last

If you have ever participated in a brainstorming exercise, you will know that the first ideas tend to be the obvious ones. By definition, then, they are not particularly creative and are unlikely to become breakthrough innovations. It is only after the obvious ideas have been exhausted that people start pushing their minds and being creative.

However, as we have seen, in an on-line system with popular voting, the first ideas are likely to capture the votes. As a result, more visitors will look at them and fewer will look at the latter, ideas which will not receive many votes. However, it is among those unpopular ideas that the most creative are likely to sit!

So, it is clear that voting in suggestion schemes does not identify the most creative ideas and may even act to hide those ideas. But it gets worse!

Topic Fixation

Topic fixation is a danger in any kind of brainstorming activity. In traditional brainstorming, it occurs when an individual suggests an idea that other brainstormers like. As a result, they suggest similar ideas and, as a result, you see a large number of very similar ideas being submitted with the further consequence that participants are not exploring other themes for ideas. This has been demonstrated empirically since the 1950s.

However, more recent research has shown that this happens in on-line systems too. Nicholas Kohn and Steven Smith of The University of Texas at Arlington, USA recently published a paper on "Collaborative Fixation: Effects of Others’ Ideas on Brainstorming”(2). Rather than looking at traditional brainstorming in a conference room, the researchers put volunteers in front of computers and had them suggest ideas using AOL instant messaging software. In other words, they submitted ideas on line. Mr. Kohn found that “Fixation to other people's ideas can occur unconsciously and lead to you suggesting ideas that mimic your brainstorming partners'. Thus, you potentially become less creative.”

While this research used small groups and did not include voting, it would seem likely that voting for or against ideas would encourage topic fixation. After all, if an idea gets a lot of votes in a suggestion scheme, users are likely to assume that such ideas are best and will want to submit similar ideas – not realising that the best ideas received their votes as a result of the network effect rather than because they are actually the best. (Actually, rewarding the “best ideas” is also a flawed concept that leads to reduced levels of creativity in ideation activities. See The 2 June 2009 issue of Report 103: http://www.creativejeffrey.com/report103/archive.php?issue_no=20090602)

I have not yet come across research on this precise scenario. But, if you look at popular public suggestion schemes, you can certainly see not just similar ideas, but nearly identical ideas being submitted again and again and again. And this only adds to the workload of the administrators!

Conclusion

So, we can see that voting for ideas in suggestion scheme software encourages people to vote for ideas that achieve early popularity, usually for no better reason than that they were the first submitted ideas. Moreover, new visitors are likely to view only those ideas with the most votes, thereby being less likely to see, let alone vote on, more recently submitted ideas that are actually more creative (as a side note, most suggestion scheme software products do not identify how you should vote and those that do suggest you vote for the best ideas – see note above – rather than the most creative or the most unique). Finally, voting is likely, but admittedly unproven, to encourage topic fixation and result in a lot of duplicate and very similar ideas.

For administrators of suggestion scheme software, it is clear that voting will not make their jobs any easier. For submitters who know their ideas are more creative, but find their ideas are ignored, the result is likely to be frustration with the software and the suggestion scheme itself. Finally, users who see no correlation between votes and implementation; or who wonder why their popular ideas are ignored by administrators, there is also likely to be frustration and demotivation.

In summary, voting is actually highly detrimental to suggestion schemes. If you wish to have some kind of user interaction on quality, however, there are two approaches you can take. Firstly, rather than popular voting, use a sliding scale such as Amazon uses with book reviews. Users on Amazon can give between one and five stars depending on how good a book is. Moreover, ratings are based on the number of stars and not the number of votes. Secondly clarify that stars should be awarded for creativity, uniqueness, added value or a similar attribute that is relevant to innovation potential. While these simple actions cannot replace a structured evaluation of ideas, they at least make the user interaction more relevant to the aims of the suggestion scheme.

References

1) “Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market”; by
Matthew J. Salganik,1,2* Peter Sheridan Dodds,2* Duncan J. Watts; Science 311, 854 (2006); DOI: 10.1126/science.1121066 (http://www.sciencemag.org/cgi/reprint/311/5762/854.pdf -- PDF document)

2) “Collaborative Fixation: Effects of Others’ Ideas on Brainstorming” by Nicholas W. Kohn1* and Steven M. Smith; Applied Cognitive Psychology; 29 March 2010 (http://www3.interscience.wiley.com/journal/123329584/abstract?CRETRY=1&SRETRY=0)

LEARN WITH IDEA MANAGEMENT

We have recently added to Jenni, our innovation process management software, a new Learning Centre. The Learning Centre includes a growing library of over 50 papers and articles about creativity and innovation. The focus of all the articles is on practical advice for improving creativity and innovation within organisations, something we here at jpb.com specialise in.

Moreover, the learning library is the perfect complement to Jenni, the only idea management software product scientifically designed to support and follow a structured innovation process that enables you to align idea generation to strategy and then provides tools (and not popular voting!) that enable your managers to make intelligent business decisions about which ideas to implement.

The market is currently being flooded with me-too products that make it easy to capture ideas. But without the process or back-end evaluation, these tools do little more than collect ideas. Jenni, on the other hand, delivers innovation.

For more information or to arrange a discussion, please visit the Jenni pages at http://www.creativejeffrey.com/jenni/.

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.