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Report 103
Your newsletter on applied creativity, imagination, ideas and innovation in
business – delivered to your e-mail box on the first and third Tuesday
of every month.
Tuesday, 7 February 2006
Issue 75
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.
A BUDDHIST APPROACH TO INNOVATION
I am no expert on Buddhism, but I find much to admire in Buddha's teachings.
One of the notions of Buddhism is that we should not look with envy at the things
we do not have in life. That will only lead to dissatisfaction. Rather we should
look at what we do have, appreciate it and make the best of it.
And that notion of making the best of what we do have is a very important concept
in innovation. Very often, when we run into problems in business, we have this
tendency to want to throw money at the problem in order to buy in standard solutions.
The thing with standard solutions, of course, is that they are not usually very
innovative. Often, they are not even proven. They are simply used because they
have been used again and again as a standard solution. As a result, inexpensive
business problems call all too easily grow into expensive failures.
To see examples of expensive business failures that have resulted from throwing
money rather than innovative solutions at problems, we need look no further
than the dot-com boom and bust of a few years ago. In the late 1990s, a lot
of businesses were built on one good (and sometimes not so good) idea. That
idea brought sacks of venture capital funding and, as a result, managers and
staff did not need to look for innovative methods of solving problems cost effectively.
They simply spent more money until the problems – or the money –
went away.
A classic example includes Webvan, a San Francisco, USA, based firm that allowed
customers to order on-line groceries to be delivered to their doors. Within
18 months, Webvan raised US$375 million in venture capital, borrowed millions
more, made massive expansion plans and went bankrupt. That lack of innovation
left some 2000 people without jobs.
Whether Webvan's core concept was innovative, I am not sure. I don't think
so. But, because they had sacks full of money, they never bothered to be innovative
about their logistics. As a result, they lost money on almost every delivery.
And when you earn less than it costs you to make (or buy) and deliver your product,
you are in serious trouble. Indeed, lack of innovation in logistics sent a lot
of on-line shops to bankruptcy. The only companies which did innovate in logistics
were the parcel shipping companies like UPS and Federal Express – and
they did very well out of the dot-com boom – and afterwards.
Here in Europe, the most famous dot-com failure was on-line fashion retailer
Boo.com. The company's highly innovative web site was also highly complex, clunky,
slow to load and confusing for users. Moreover, Boo expanded into too many markets
too quickly and was unable to cope. But, since they had US$160 million in venture
funding, they didn't need to find cost effective solutions. They just threw
money at all their problems. Less than two years after its conception, Boo had
thrown away all their money and solved few problems.
On the other hand, a number of technology companies' success stories were the
restul of innovative entrepreneurs who invested their own relatively small money
in their start-up firms. They had to innovate to solve problems.
HP – the global maker of printers, computers and other products - was
started in 1939 in a garage by Messrs. Hewlett and Packard. They had a working
capital of US$538. So you can be sure that when they had problems, they didn't
throw money at them. They thought out innovative solutions that were viable
with an almost non-existent budget.
British entrepreneur Richard Branson started with less than a garage. He had
an idea and a lot of determination. He started out, while still in school, by
devising a magazine for pupils. His first step was to spend hours in a phone
box selling advertising. That advertising funded his magazine. His magazine
business grew quickly and expanded.
One day, he placed an advertisement in one of his magazines for mail order
records. The response was astounding. The problem was, he didn't actually have
any records to sell and the record companies were not about to sell to some
kid trying to undercut the big retailers. So, Branson had to strike up a deal
with a co-operative record shop.
From there, Branson developed more and more businesses often based on his hunches
and a sense of audaciousness. Today, he has substantial amounts of money available
to him. But in the early years he did not. He had to solve problems via his
ingenuity. Richard Branson, of course, is the entrepreneur behind Virgin Airlines,
Virgin Records and numerous other Virgin companies.
The moral of all this is that when you have problems, whether in business or
otherwise, do not despair over what you do not have. Do not beg, borrow or steal
money to throw at your problems. Think your way out by finding innovative ways
to use what you already have available. If you can do that, your chances of
success are so much higher.
INNOVATIVE OPPORTUNISM
When we think of innovation, we often think of new products, new technologies
and new services. Certainly, this is a key area of innovation, but many of the
people and teams who devise such innovative new concepts lack the skills to
see how they might successfully market and sell their ideas. This ability to
see and take advantage of market opportunities for new ideas we shall call “innovative
opportunism”.
Examples of successful innovative opportunism abound – in many of the
world's best known companies.
Coca Cola was devised by Dr. John Pemberton in 1886 as a syrup to be added
to soda water at pharmacies (Pharmacies or pharmacies were popular places to
get soft drinks in America up until the 1960s and 1970s). Dr. Pemberton started
selling his drink at a single pharmacy and soon expanded to others in his area.
But in the first year, sales averaged a meagre 13 glasses a day – at US$0.05
per glass. In 1888, Dr. Permberton sold all his rights in Coca Cola to Asa Candler
for a mere US$2300. Candler, with better business instincts, substantially increased
sales in pharmacies, but it was not until Joseph Biederharm discovered Coca
Cola and had the idea to bottle it that sales really took off. So although Dr.
Pemberton had the original innovative idea that produced a drink that is known
and enjoyed around the world – it was the innovative opportunism of Messrs.
Candler and Biederharm that turned the drink into probably the world's best
known brand.
Ray Krok was a multi-mixer (machines that mix milkshakes) sales man when in
1954, at 52 years of age, he chanced upon a small Californian restaurant run
by two brothers with the surname McDonalds. The restaurant was using more of
his mixers than any other client and Kroc was curious as to why. He visited
the McDonalds' restaurant and discovered a small, efficient, clean place serving
a very few items – such as hamburgers and milkshakes – quickly and
inexpensively. Krok suggested that the brothers could make a killing if they
set up more restaurants. However, the McDonalds were happy with what they had
and declined.
So, Krok bought them out and established the McDonalds chain of restaurants
that is known around the world. McDonalds was based on what at the time was
a bold yet simple innovation: fast, reliable, clean food on demand. In those
days, most restaurants were of the sit down and wait for a waiter variety. Americans,
being impatient – particularly at lunch time – loved the idea of
being able to come in to a McDonalds restaurant, get their lunch in seconds,
eat it and get back to work.
Other innovative opportunism abounds. Steve Jobs was impressed by the Alto,
the first computer to use a graphical user interface (GUI) and mouse, which
he saw while touring Xerox's Palo Alto research centre in the late 1970s. He
learned that Xerox did not intend to exploit their invention. So he did: as
the Apple Lisa computer, which eventually became the Macintosh. Microsoft also
got some ideas from Xerox's and Apple's GUI – which became the Windows
operating system.
The lesson to be learned here is that if you are the kind of innovator who
is great at inventing things, but weak at selling them, you should partner with
an innovative opportunist who will have the innovative skills to market and
sell your ideas.
And if you are an innovative opportunist... Never mind. You are almost certainly
already looking for opportunities without my needing to suggest the idea!
AN IDEA A DAY KEEPS THE COMPETITION AT BAY
If your firm – or your division within a firm – has the intention
to become more innovative, but lacks an innovation plan, here's a good way to
start: “an idea a day keeps the competition at bay”. This, of course,
is a shameless theft of the very old English cliché: “an apple
a day keeps the doctor away.”
An idea a day is a simple goal that any small to medium company or division
in a large company can aspire to. A large company could also encourage every
division to come up with an idea every day.
By the end of every day, you should have implemented (not generated, mind you,
but implemented) one new idea. The idea need not be disruptive, earth shaking
or particularly radical. It need not generate millions nor save you millions.
It should, however, offer the potential to improve your products, services or
operations.
Keep a diary and note the day's idea, the person or team who had the idea and
the people who are implementing the idea. At the end of the month, quickly review
the ideas and determine how effective they have been. You can also use the results
to commend and reward the top innovators as well as the top implementers.
Such an approach will get you and your colleagues in the habit of looking at
your work activities as an on-going creative challenge for new ideas. It will
soon make innovation an integral part of your day to day operations. And that
is a good thing.
Ideas can be captured in all kinds of ways, from brainstorming sessions, to
idea management tools (such as Jenni – see http://www.jpb.com/jenni/),
creative meetings and open communication. An idea wall where people can write
ideas on the wall or write ideas on Post-it's and stick those ideas to the wall
can be an effective idea management approach for smaller organisations, particularly
manufacturing units where part of the workforce does not have regular access
to a computer.
Try it out and let me know what kind of results you get.
THINKING OUTLOUD
Thinking Outloud is a group here in Brussels which meets twice a month for
a casual workshop or event related to creativity. The events last 90 minutes
and are often prototypes, concepts or experiments that facilitators wish to
test drive before launching as a full-scale training/facilitation product. At
other times, facilitators just like to do short events to new audiences. Sometimes,
it is just about having productive fun.
Tomorrow (Wednesday, 8 February), my associate and friend, Andy Whittle, will
do an interactive and fun workshop “How to be Happy in 2006 (and beyond)”.
On 26 February, I shall do a short workshop on “Compliment, consider and
challenge creativity” which will be about responding to ideas.
If you are interested in joining a workshop, trying out your own workshop ideas
(please note, this is a non-profit activity. Facilitators are not paid in any
way other than intelligent feedback) or just wish
to be kept informed about Thinking Outloud activities in Brussels, please contact
us via this form and we will add you to the mailing list.
Happy thinking!
Jeffrey Baumgartner
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Report 103 is a complimentary weekly electronic newsletter from Bwiti bvba
of Belgium (a jpb.com company: http://www.jpb.com). Archives and subscription
information can be found at http://www.jpb.com/report103/
Report 103 is edited by Jeffrey Baumgartner and is published on the first and
third Tuesday of every month.
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