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, 20 February 2007
Issue 100

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.

INNOVATION: THE SIMPLE BIT AND THE DIFFICULT BIT

Simple is a word you come across frequently in Report 103. I have often argued that the innovation process should be kept simple. After all, children, artists and entrepreneurs all seem to have little trouble generating creative ideas which can be turned into innovative results. Moreover, innovation should often focus on simplification. Technical products, business administrative processes and professional services all tend to be complex. Any simplification of these is usually a good thing. Even our idea management software (Jenni: http://www.jpb.com/jenni/) emphasises simplicity and ease of use.

Nevertheless, the actual act of innovation has a simple component and a difficult component. The simple bit is the idea generation and evaluation process. This is especially true for creative thinkers like you: generating ideas is not taxing. Indeed, it is often fun. And evaluating those ideas to determine which have the greatest potential, while not as fun as generating ideas, is a relatively easy task.

But implementing ideas can be difficult. Implementing highly innovative ideas can be very difficult. Consider the following exercise:

A. Make a list of 25 improvements you would like to make on your home. Then choose the three most innovative ideas. This is the simple bit.

B. Implement your three best ideas. This is the difficult bit.

In order to implement your innovative home improvements, you will probably need an architect to determine the technical viability of your idea as well as to design a way to implement it. You may need to get planning permission to go ahead. If you are a capable carpenter, you may be able to turn your ideas into reality yourself. Otherwise, you will probably need builders and possibly an electrician and plumber. Other experts may also be needed.

Then, of course there are materials. You also need to bear in mind the inconvenience of living in your home while people are building, not to mention the mess.

If you are now thinking: “Ha ha, Jeffrey, my ideas don't require nearly so much work; I only wanted to paint the front room, rearrange the furniture in the living room and plant some flowers in the front garden!”, I would argue that your ideas were not that innovative. Sure, some innovative ideas are very simple to implement. Most are not.

Now, let's take your ideas to the organisational level. Imagine you want to develop a housing complex with 100 houses all of which include your innovative ideas. This makes things even more difficult. Of course, you probably only need the architect once, but you will need to build your idea 100 times. If your idea is really radical, you might need to build a prototype, test, make moulds, train workers how to build you idea and more.

Worse, if your idea is a radically innovative idea, you won't even be sure people will want to buy your houses. You expect them to, but there is always the possibility people will say “Yuckers! [a favourite term of my five year old son], we just want a good old fashioned style house – and none of this high-tech nonsense!” If that happens, you will be out a lot of money indeed. And risk always makes things more difficult, doesn't it?

So, why take on the risk and difficulty of implementing innovative ideas in your new housing complex? After all, you could build traditional houses and sell them. In most countries, that is a relatively safe investment. There are several reasons to innovate, of course:

1. Although your houses might fail to sell, they might also be wildly successful with everyone in the market wanting to buy a unit and land owners hiring you to develop similar housing units on their property. Moreover, you can mitigate the risk in various ways, such as by building a model of one of your innovative houses, showing it to prospective buyers and collecting down-payments from them.

2. Profit margins on innovative new products can be high, particularly if there is a limited supply. There are many people who want to be the first to own an innovative new house, car, television, or other product.

3. The process of implementing your innovative new housing ideas can often lead to other innovative ideas which can be implemented in your houses and which can benefit your business. Such innovations in the housing business might include new ways to build housing components, new ways to structure utilities within a building or even new materials that can be used in construction, to name but a few.

4. Launching innovative new products is good public relations (PR). It helps set your corporate image as being a leader in your field, rather than a follower. And that makes it easier to sell all of your products. People feel more confident buying from a leader.

5. If you do not implement your innovative housing ideas, a competitor might do so and be wildly successful, gaining all the benefits described above and leaving you to have to follow that competitor.

6. Worse, as your competitors adopt their own innovations, you are left behind; perceived by your market as an outdated housing developer unable to provide the exciting new features your competitors are offering. Admittedly, this is more of an issue in some industries than in other industries.

The result is that, while the innovation process is a simple one, actually innovating is typically a difficult process with substantial inherent risk. Nevertheless, the rewards can also be substantial.

THE FIRST RULE OF INNOVATION

Here's a new innovation rule for you, one that should be every organisation's first rule of innovation:

Don't try to innovate unless you intend to innovate.

Sounds silly doesn't it? It's not. Over the years I have seen far too many examples of what I call “boomerang innovation”. It's a tremendous waste of money and highly demotivating for all concerned.

Boomerang innovation is never intended. It just happens. Typically an organisation will invest in some kind of idea generation activity such as brainstorming, an ideas campaign or something similar. Let us imagine that Acme Watering Cans Inc. decides to brainstorm new product ideas.

First, they call together a dozen division managers to come to headquarters in order to spend a day brainstorming. In addition, a facilitator is hired to manage the brainstorming. Adding managers' time, facilitator's fee and travel expenses, the cost thus far is probably at least €/$/£ 20,000.

The facilitator is good and the managers are creative, so the result is a lot of ideas are generated, including a number of very creative ideas that could transform the way people think about watering cans.

Sometimes the process stops here. Sometimes it continues. In the case of Acme Watering Cans, Inc, let us assume the innovation process continues. The best ideas move on to a review process, where they are evaluated by experts and business cases are drawn up. This of course adds to the cost of the innovation exercise, perhaps another €/$/£ 10,000 in staff time.

The best ideas are presented to top management together with some very rosy potential figures. Management questions the figures and all sides accept that because these ideas are very innovative, concrete numbers cannot be established. Nevertheless, there is clear potential to meet or even beat the financial projections.

Then: nothing. Management does not implement the ideas. Indeed, they simply seem to forget the innovative ideas and continue with business as usual. Just as a boomerang arcs back to the thrower, the innovative effort arcs back to the initiator and, in spite of having made the effort to generate and develop innovative ideas, her organisation does not implement those ideas. The initiator is left with nothing more than that with which she started. And, of course, the entire effort to generate innovative ideas which will never be implemented costs the organisation tens of thousands of Euro or Dollars or Pounds.

I have come across numerous others in the creativity and innovation business who have had the same experience, so it would seem to be commonplace. Yet, I have not seen any research, nor have I performed any research on why innovative ideas are sought but not implemented. However, we can make some safe assumptions:

1. A desire not to rock the boat. Innovative ideas tend to be disruptive and the more innovative they are, the more disruptive they are. Note, I am not referring to Disruptive Innovation as coined by Clayton M. Christensen. Rather disruption in the day to day operations of your business. A radical product modification, requires retooling your assembly line, writing new product documentation and more. Changing an internal process to improve efficiency means that many employees need to relearn how to perform certain tasks. Some employees may even be made redundant by the change. Many people – if not most people – do not really like to rock the boat. They don't want radical change. They want predictability and security at work.

2. Risk. Innovation, as has been stated numerous times in this journal, is an inherently risky thing. Radical product changes may make your product more appealing, open new markets and result in substantial profits. Think of Chrysler's mini-vans, the forefather of the gazillions of mini-vans we see on the roads today. On the other hand, radical product ideas can bomb tremendously. Think: DeLorean or Bricklin. Do you even remember the DeLorean or the Bricklin?

3. Lack of idea stakeholders (see Report 103, 15 August 2006 issue: http://www.jpb.com/report103/archive.php?issue_no=20060815). Idea stakeholders buy into an idea and promote it within an organisation. This happens naturally in some firms, but has to be a conscious action in other firms, especially firms which are not big on innovation. Obviously, if no one in the firm is buying into an idea, it is unlikely to be implemented no matter how good it might be.

The lesson to be learned here is simple: don't start to innovate, unless you really mean it. Not only are innovation initiatives which result in no idea implementation a waste of time and money, they are also highly demotivating to your employees. Who is going to want to waste her valuable time generating ideas for a firm she knows will not do anything productive with those ideas?

And that brings us back to the first rule of innovation: don't try to innovate unless you intend to innovate

PUBLIC IDEA MANAGEMENT

In a very short period of time, we have been contacted by two different groups regarding using Jenni for huge public idea management implementations. One is for a US State. The other is for all the school children in an entire country.

One aims to launch state wide innovation challenges that will invite the public to submit ideas on improving services to the community. The other aims to launch science challenges at various levels to school children in order to invite them to devise innovative scientific solutions to problems.

Both programmes are excellently thought out and innovative in their own right. The US State in question is geographically huge (okay, to be honest almost all US states are huge in comparison to Belgium where I live!), but thinly populated. As a result, a web based idea management solution is an excellent means of communicating with the public and soliciting their ideas on how their government and government services can be improved. If government is to be for the people, then idea management is an excellent, democratic method of getting ideas for the public from the public.

The country is not a place typically associated with science education. Likewise, it is vast and sparsely populated. As a result, idea management is an excellent means of launching innovative challenges for everyone.

Moreover, poor science performance in school is an issue affecting many countries in the world, such as the USA – which has a long history of scientific innovation (note: the USA is not the country that is talking with us about idea management). A public, web based idea management tool offering kids the opportunity to respond to scientific challenges on-line, in a familiar web environment is an excellent way to make science more fun, more interesting and more collaborative than science text books can ever be.

I am excited about both programmes and expect to bring you more news as they develop.

Meanwhile, if you are interested in Jenni idea management software service, please visit (http://www.jpb.com/jenni/).

THE INNOVATION BACKLASH

An intriguing article in Business Week argues that innovation is just a trend and one that involves too much hype and not enough profits.

Agree or disagree, the article is a worthwhile read: http://www.businessweek.com/innovate/content/feb2007/id20070212_728732.htm

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!

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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