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, 19 August 2008
Issue 133

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 FEEDS ON CHALLENGES

I've written many times in this journal about innovation challenges. Well framed challenges form the basis of effective ideas campaigns, brainstorming activities and other innovation initiatives. Today, I'm taking it one step further and establishing Baumgartner's First Law of Innovation: challenges are essential to successful innovation.

Innovation challenges can come in a variety of guises. Some are blatant innovation challenges, some are not explicitly challenges, but they nonetheless challenge an individual or group to innovate their way out of a problem. Let's look at the various types.

Creative Challenge (aka Explicit Verbal Innovation Challenge)

An explicit verbal innovation challenge -- what might more accurately be called a "creative challenge" -- is a terse question that challenges a group to suggest solutions. Creative challenges form the basis of brainstorming events, ideas campaigns and other activities in which a facilitator is soliciting a group of people for ideas. Examples of creative challenges include: "In what ways might we improve product X?", "How might we reduce production costs in our factories?" or "What new business opportunities might we exploit in Belgium?"
Creative challenges aim to encourage people to generate a lot of ideas. Hence by nature they should be relatively open ended.

For more information on how to formulate creative challenges, read Dr. Arthur VanGundy's article on Framing Innovation challenges (http://www.jpb.com/creative/VanGundyFramingStrategicInnov.pdf - pdf document approx. 338kb)

Competitive Challenges

Competitive challenges are also verbal in nature, but they are more explicit in detail. The aim of a competitive challenge is not simply an idea, but rather a more sophisticated solution such as a business plan, a prototype or a scientific formula.

In the article below, Tim Morris describes just such a challenge which his organisation is overseeing in Australia.

Perhaps one of the best known competitive challenge is the Ansari X-Prize, which offered a prize of US$10 million for the first non-governmental organisation to launch a reusable manned spacecraft into space twice in a two week period. A number of groups vied for the prize which was eventually won by SpaceShipOne, a vehicle designed by Scaled Composites. Interestingly, Scaled Composites' solution, as well as other entrants' attempts, cost significantly more than the prize money. So the aim of competitors was not to profit from the prize - although it was doubtless useful. (see http://www.xprize.org for more information)

Venture capitalists and others with an interest in launching new companies often set up competitions whereby entrepreneurs can submit business plans on a certain theme with the aim of winning a prize of investment and other support for their business venture proposals.

The key to a organising a successful competitive challenge is to focus on the end results, rather than the means of achieving them. Clarify simply that you want a spaceship, a business plan or some other result. Then let the competitors design the means of achieving those results.

Situational Challenge

Changing business environment, economic fluctuation, technologies, legislation and social trends can all pose challenges to businesses. For instance, as the American economy started to slow down, I became worried. Idea management, which is our main business, is a relatively new business activity. From experience I know that often, when the economy slows down, businesses become more conservative, preferring tried and tested methods rather than new ones. I could recall my experiences in Bangkok running a web and multimedia development company in the mid 1990s. When the Thai and Asian economies collapsed in '97, the market for web development dried up almost overnight. With smaller budgets and great uncertainty about the future, managers preferred to stick with communications tools they already knew, rather than to risk using new media. I feared the same might happen with idea management.

In fact the exact opposite has happened. Sales are growing faster than in the past and we are thriving. That appears to be because, owing to the financial challenge posed by the economic slow-down, managers realise that they need to innovate to reduce operational expenses. And they appreciate that idea management is an excellent means of generating and identifying innovative ideas that can cut costs. Better still, it is easier to calculate potential savings from efficiency improvements than it is to calculate the profit potential of an innovative new product.

An Anomaly

This is more frequently a challenge to scientists than it is to business managers, nevertheless, it can spur creative thinking and innovation. An anomaly is a deviation from the norm or expected behaviour in a system. Albert Einstein's famous Special Theory of Relativity came from trying to bridge the anomaly between the laws of mechanics and the laws of electrodynamics as they were understood at the time. Many other scientific theories are developed in the same way.

A Vacuum

Sometimes the lack of anything can form a challenge - albeit more typically a creative challenge than an innovative one. The empty Report 103 template on my computer is a regular challenge for me to come up with article ideas for this journal. An empty canvas is a challenge for the painter to come up with a painting.

In business, the lack of a product where there would appear to be a need - or at least a desire -- for one is a challenge for entrepreneurs to devise product ideas that might fill the vacuum. Indeed, if you spot such an empty space and develop a product that fills it, it is often an opportunity to corner a new market.

Such examples are rarer than you might expect. There are few radically new ideas launched into the market. Most innovations are variations on existing products and services. Still, bottled water, mobile telephones, e-mail and bungee ropes are all items which filled an empty space that few people knew existed before these items were invented.

Conclusion: Innovation Is Always Generated by Challenges

I would argue that every innovative idea, product and service is the result of a challenge. Sometimes the challenge is not explicitly stated - for example when companies create open suggestion boxes for ideas. But even in these instances, employees often pose their own challenges, such as "what new products might my company wish to launch?", "How might my company improve internal communications?" and so on.

As a manager, you will always do a better job of stimulating creative thinking and generating innovative ideas by posing challenges to your teams. Those challenges might be creative challenges, or they might be situational. But the more you challenge your teams, the more creative ideas you will generate and the greater potential you have to innovate.

GUEST WRITER

Australian innovation expert Tim Morris has kindly contributed an article on his company's innovation challenge to Australian business. Although the article focuses on Australian issues, their project is relevant to any location. Read on and learn.

NATIONAL INNOVATION CHALLENGE TO INSPIRE AUSTRALIAN BUSINESSES

By Tim Morris

There’s a common perception that Australia is an innovative country. Unfortunately the facts (and our experience) very much dispute this. Dynamic Horizons has a bold plan to boost Australia’s innovation capability by running a national innovation challenge. (re)innovate challenge is based on a proven framework that Report 103 readers can adapt to their own innovation initiatives.

According to the Australian Bureau of Statistics, less than 40 percent of Australian businesses pursue innovation (meaning more than 60 percent are happy to simply stand still). And in this year’s Global Competitiveness Report by the World Economic Forum Australia ranks 22nd on innovation… behind a several countries you would expect… and many more you wouldn’t.

Meanwhile, multiple domestic and international innovation surveys report a distinct lack of capability in Australian businesses to innovate. Don’t get me wrong, lots of Australian businesses talk about innovation; my colleagues and I at Dynamic Horizons just think it’s time they translate words into action!

That’s where (re)innovate challenge comes in. (re)innovate challenge is a national business planning challenge designed to rouse Australian businesses into action and teach them how to be more innovative.

Promotion of (re)innovate challenge started just a few days ago with the launch of www.reinnovate.com.au. Our target is for 300 teams representing Australian businesses to enter their big ideas in November 2008. These teams will then receive extensive support and training to help build their ideas into executable business plans.

Final business plans are pitched to our judging panel in May 2009. At the state level, awards are given to the teams with the most innovative and well developed ideas. These teams will then be eligible for the national level prizes which are announced at the gala awards night in July 2009. The total prize pool for (re)innovate challenge is over $100,000.

Aside from our daring claim that (re)innovate challenge will improve Australia’s innovation capability, we also believe the initiative will provide significant benefits to participants and the businesses they represent.

• At the individual level, participants of (re)innovate challenge will get:

• Access to practical creativity tools to help them come up with ideas.

• Full training in building an idea into a viable business case. This is delivered through training manuals, video workshops and on-line mentor forums.

• The chance to pitch a fully developed idea that their business can invest in.

• And last but not least, the chance to be showered in glory and win awards and prizes for their business!

At the organisational level, businesses that enter a team in (re)innovate challenge will:

• Have a team of employees trained in taking an idea from concept to reality.

• Develop a group of “go to” innovation experts that will impart their experience and capability throughout the organisation.

• Gain in-depth knowledge of the (re)innovate challenge process. This stays in the business to drive innovation in the future.

• Have at least one high potential idea developed to the stage where senior management can make an investment decision

And if the team wins a state award or national prize, the business will be recognised as one of the most innovative in Australia!

So what's the relevance to you? (If like many Report 103 readers and indeed 99.7% of the world's population, you are not living in Australia…) Well primarily it’s the challenge framework itself. Dynamic Horizons has run business planning challenges for a number of clients and can demonstrate they are one of the best ways to teach businesses about innovation and encourage them to explore new ideas. Business planning challenges allow the organisations to call for big ideas (no double-sided printing or 1 ply toilet paper) and provide employees with a structured framework to do something with those ideas.

Organisations we know who have run business planning challenges have all enjoyed positive financial, social and environmental benefits. Their employees have been trained in generating, building and implementing new ideas and significant innovations have resulted. Perhaps even more importantly, each company has seen positive growth in their people and the development of a corporate culture that embraces and engages in innovation.

So if you’re keen to really drive innovation in your business have a look at www.reinnovate.com.au and think about how you could apply the framework to your own innovation program.

About the Author

Tim Morris is a Partner with Dynamic Horizons; a Melbourne Australia based Innovation Company. For the past six years Dynamic Horizons has specialised in developing the innovation capability of medium and large organisations. The plan to run a national innovation challenge first began in 2007 - when Dynamic Horizons got impatient with everyone “looking into” innovation but not being prepared to do something about it. Rather than write a report, the DH team decided to practice what they preach and actually make something happen… the idea for (re)innovate challenge was born!

YOUR CONTRIBUTIONS TO REPORT 103 ARE WELCOME

If you would like to contribute an article to Report 103, please get in touch with me at jeffreyb@jpb.com with a description of the article you would like to write. If you've already written something, you may also forward it to me for consideration. However, in the latter case, please be sure you have the right to have your article reproduced. Many publications retain copyright of articles published between their pages and even if you are the author, you may not have the right to allow others to reproduce your article.

Articles for Report 103 should be relatively short and should have a clear association with creativity and/or innovation.

INNOVATE BETTER WITH JENNI IDEA MANAGEMENT

This newsletter is supported by sales of Jenni, our idea management software as a service. Jenni is being used by a small but growing collection of medium to large companies in The USA, Belgium, Australia, South Africa and Brazil to generate innovative ideas for new products, new packaging, improved operational efficiency, being greener and more.

Jenni allows your managers to solicit focused business ideas from across the workforce or from specific groups; it enables users to collaboratively develop ideas and provides evaluation tools so that you can identify those ideas with the greatest potential to become profitable innovations. Learn more at http://www.jpb.com/jenni/ or contact your nearest sales and service professional (http://www.jpb.com/jenni/contact.php).

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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