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, 17 March 2009
Issue 145

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 DOZEN INGREDIENTS FOR A CULTURE OF INNOVATION

The term “culture of innovation” is one that is bandied about a lot by people in the field. Indeed, you have doubtless read about how important a culture of innovation is to the success of any corporate innovation initiative. Nevertheless, you would also be forgiven for wondering just what the heck a culture of innovation is and, if it really is so terrific, how the heck you could get one for your firm!

Let's find out...

Definition of a Culture of Innovation

A culture of innovation is very simply a workplace environment that constantly encourages people to think creatively and facilitates implementing creative ideas so that they may become innovations. It is important to note that our definition includes the terms “creativity” and “innovation”. That is because innovative solutions are the result of implemented creative ideas.

Since humans are creative thinkers and groups comprise humans, a culture of innovation needs to motivate the groups and individuals to think creatively. At the same time, if the most viable of those creative ideas are not implemented, the company might be considered creative, but it would not be an innovative firm. Thus to achieve a culture of innovation you need both creativity and innovation.

The Ingredients

1. Top Management Buy-In

A culture of innovation has to start at the very top of an organisation. If top management do not embrace innovation, they can hardly expect their employees to do so either. If you are not top management and your firm does not have a culture of innovation, forward this article to the CEO now!

2. Trust

Several surveys into innovation, including one by PWC earlier this millennium(1), cite trust as being one of the most crucial ingredients to a culture of innovation. This is not surprising. Being creative, particularly in a corporate environment, is risky. Sharing a creative idea with your colleagues might well result in your being ridiculed. Worse, if the idea conflicts with the pet project of another employee, especially if she is your senior, it could easily get you in trouble. Even in firms that value creative ideas, there is the danger that a manager might steal your idea and present it to top management as her own in order to get credit for the idea.

However, if people trust top management, their colleagues and the firm itself, they can be more comfortable about sharing ideas without fear of unpleasant consequences.

3. Priority of Innovation (Often Confused with Time)

Several surveys I have seen, including one published here in Report 103 (2) have indicated that lack of time is a major hurdle to innovation. But a moment's thought suggests that this is nonsense. Every full time employee in Europe works at least a 35 hour week. Most work more. Americans and Japanese tend to work much more. Clearly people who say that they do not have time to innovate are wrong. They have time. But, in their firms, innovation is of a very low priority. They give priority to other tasks ahead of creative problem solving, creative thinking, experimentation and the implementation of innovative ideas.

But bear in mind that employees in very innovative firms do not have access to a time warp device that gives them more time in a day. No. Their firms simply give innovation a top priority.

If you want a culture of innovation in your firm, creativity and innovation have to take priority over excessive reporting, PowerPoint slide making, long meetings, reading irrelevant e-mails and other tasks that take priority in non-innovative firms.

4. Freedom to Take Action

In many firms, especially large bureaucratic ones, taking action on any idea requires following complex procedures, obtaining multiple approvals and often trial by ultra-conservative-thinking committees. Getting an unusual idea (most creative ideas are unusual ideas, otherwise they would have been thought up long ago) past all of these hurdles is nearly impossible. In a culture of innovation, it should be dead easy for employees to take action on creative ideas. Of course safeguards should exist; but not to avoid risk at all cost. Rather to identify when an idea is not working and stopping its implementation so that another creative idea can be tried out.

In a culture of innovation, employees should constantly be experimenting with new ideas and reporting on results whether negative or positive.

5. Freedom to Make Mistakes

Of course if employees have the freedom to take action (as described in point 4), they will make mistakes. In many firms, mistakes lead to consequences ranging from reprimand to dismissal. In a culture of innovation, on the other hand, employees must have the freedom to make mistakes, the opportunity to learn from them and the means to share what they have learned without fear of consequences.

6. Rewarding Rather than Stifling Creative Thinking

If an employee shares with you a crazy idea that you know top management would never approve and for which you could not possibly get the budget, how do you react? Most people, of course, would immediately say to the employee: “that's crazy! Management would never approve an idea like that and we don't have the budget anyway.” But such a response is highly detrimental to creative thinking. It tells the idea-sharer that you won't even consider highly creative ideas.

A much better response would be to pause for a moment, think about the idea and reply: “That's brilliant! I love the fact that you are thinking creatively. But you know management will have some problems with your idea, not least of which will be budget. How might we convince management to give it a try?”

This time, you have verbally rewarded the idea sharer with a complement and by giving her a creative challenge to improve her idea even further. That shows respect for her thinking.

In a culture of innovation, creative ideas are always recognised and rewarded and creative thinkers are challenged to improve their ideas so that they are more likely to become profitable innovations.

7. Collaboration Tools

A key to organisational innovation is collaboration. Great ideas are seldom the exclusive work of a lonely, but brilliant scientist toiling away in the laboratory. Rather they are the result of collaborative development of ideas by multiple individuals and teams. Implementing those ideas requires further collaboration, bringing in people to help in the various stages of developing the idea.

In small innovative companies, collaboration is easy. People simply meet up in various corners to share ideas. They e-mail and telephone each other and discuss their thoughts over lunch. But, once a firm has 100 or more employees, collaborative tools such as innovation process management applications, wikis, on-line conferencing applications, document sharing facilities and other tools foster collaboration. Particularly important is to encourage the development of diverse teams of people from different locations, divisions and backgrounds. In large organisations, people tend to know their closest colleagues – usually others in their divisions – best. This makes it harder to develop collaborative relationships with people in remote locations and completely different divisions. Tools to help find expertise and encourage networking across the enterprise as well as outside the enterprise can help tremendously.

8. Places and Opportunities to Talk

In order to collaborate, people do not only need collaboration tools. They need places they can meet up and talk. Ideally, you should have lots of places in your firm where people can sit down and share ideas. These should range from large conference rooms, for structured meetings, to small clusters of chairs around tables where people can simply meet and talk. In a culture of innovation, creative collaboration is a daily activity.

9. Places and Opportunities to Work in Isolation

While collaboration is critical for innovative thinking, people also sometimes need to be able to work in isolation, undistracted by colleagues. They may need quiet or the opportunity simply to sit and think without fear that they will look like zombies. In open plan offices where people face each other and work in crowds all day long, employees do not have the opportunity for quiet thought and meditation. If your office is an open plan one, be sure there are not only places for people to meet up, but also places for people to go in order to be alone!

10. Access to Information

In order to develop and analyse creative ideas, people need access to information. Fortunately, Google makes it easier than ever to find data. But information does not come only from web pages. Being able to call contacts in other firms, participate in web fora, go to professional events and even visit the library is important in the development of ideas.

11. Transparency

Employees should also be able to access internal information of all kinds. Thus, in a culture of innovation, the organisation should operate with maximum transparency, sharing not only ideas, but information on the evaluation and implementation of those ideas. Management should keep employees informed of new strategies, anticipated change and more. The more employees know and understand about the operations of their firm, the better they are able to help the firm innovate. Moreover, transparency leads to trust. And we have already learned about how important that is to a culture of innovation!

12. Humour

Humour and creativity go hand in hand, particularly in the business world. In the most innovative companies, you will regularly hear people laughing. Employees share jokes and appreciate jokes. There are two reasons for this. Firstly, humour is very similar to creativity. It is about bringing together disparate concepts in unusual ways – ways that are funny in the case of humour. Secondly, if people are in a comfortable, trusting environment, they are more likely to relax and laugh. And this is important for creativity too. When people relax and joke about ideas, they become increasingly likely to come up with really crazy ideas. And every now and again, one of those really crazy ideas becomes the basis for a breakthrough innovation.

Wrap Up

There you have it. A dozen basic ingredients for a culture of innovation. Unfortunately, you cannot create a culture of innovation overnight. It takes time to build up trust, introduce new tools and processes and implement change in the way people work. But if innovation truly is important to your firm, you need to begin working on establishing a culture of innovation now.

On a positive note, this article could also have been entitled “A Dozen Descriptors of a Really Great Place in which to Work!” That's because a culture of innovation empowers creative thinkers, enables them to take pride in their work and allows them enjoy what they are doing.

Footnotes

(1) PriceWaterhouseCoopers Innovation Survey (Undated), Frank Milton

(2) “A Survey of Organisational Creativity” 2005, Wayne Morris, http://www.jpb.com/creative/OrganisationalCreativityMorris.pdf

BIG PAYOUTS FOR TOP MANAGEMENT OF BAD FIRMS

There has been much ado of late about top executive in banks, the car industry and other troubled businesses, who are getting outrageously big payouts in salaries, bonuses and other benefits. The US Government is trying to limit the compensation packages for top management in the banking business. It has already pressured leaders of the motoring industry to accept tiny salaries. And it seems the public would dearly love to slash the salaries of the fat cats.

On one hand, this seems fair. If the manager of a large financial firm has lead her firm to making tremendous losses, possibly to the extent of damaging her country's economy, she should hardly be rewarded with a massive pay package. This is especially true if thousands of her employees are being laid off in order for the firm to survive.

Likewise, for various reasons, the US car industry has not been well managed and continues to develop cars that not enough people particularly want to buy. Why then, should their CEOs get pay packages in six or seven figures?

Danger of Low Pay for Executives

However, there is a danger that bosses in the banking, motor and other industries will be pressured to accept low compensation packages for the foreseeable future. And this is dangerous for innovation.

Two sectors that are absolutely desperate for innovation are finance and cars. Financial businesses need to become solvent and rethink how they operate. They need to inspire trust from governments, businesses and individuals. And they desperately need to make money. This is not going to happen through business as usual. Rather it requires innovative thinking and change. CEOs with the skills and ability to lead such innovation initiatives will not perform their magic in exchange for a small salary. Rather they will work where they can get amply rewarded for their ability to lead innovation.

Likewise, the motoring industry needs to develop more environmentally friendly cars. And this will involve a major rethink on some standards that have been around for decades, standards such as the internal combustion engine.

American car companies, who have until recently profited almost exclusively from large truck-like SUVs that no one much wants any more, desperately need to innovate in order survive. Moreover, since these huge vehicles are difficult to use on narrower, winding European and Asian roads and horrendously expensive to operate in places where petrol is expensive (here in Belgium, it is typically 2-3 times the price in the USA), they are of little appeal outside of America. Indeed, the US car industry needs to radically rethink its offering. And that will require a lot of innovation. And that, in turn, will require top management talent that can lead such a major innovation initiative.

There are not many people in the world capable of leading such an initiative. Moreover, as far as I know, they will not work for peanuts.

In short, the industries that are in the worst shape need the most innovation and that will only come from top-calibre senior managers who expect huge compensation for their abilities.

Low Pay for Bad Performance Big Pay for Incredible Performance

Thus, as much as the government, employees and the public wish to cap the pay packages available to executives of troubled industries; if they really want troubled industries to become untroubled, big rewards must also be on offer. The trick is to ensure that the big rewards only come to those who deserve them.

THE INNOVATION PROCESS MANAGEMENT WEB APPLICATION: JENNI

With more and more idea management, suggestion scheme, crowd-sourcing and other idea capture products coming onto the market these days, choosing the right innovation solution can be a challenge. Fortunately, if you are looking for a comprehensive innovation process management product that not only facilitates the capture of ideas, but lets you focus innovation on business needs; provides web 2.0 collaboration options, enables scientific evaluation of ideas and facilitates the development of ideas using your existing business tools, there is only one option: Jenni.

Jenni is a highly flexible innovation process management web application that can provide the backbone of your innovation process, irrespective of whether you have 100 employees or 100,000. And because it is a web application, we can normally have your implementation of Jenni up and running within a day of your go-ahead. Sooner if need be!

For more information about Jenni, to arrange a demo or to talk to an expert near you, visit www.jpb.com/jenni/.

We look forward to helping you manage your innovation process efficiently and effectively.

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 (over 150,000 page hits/month) and collaborating with a fantastic global team of innovation, marketing and sales experts (http://www.jpb.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 us all!

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 twice monthly eJournal 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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