Report 103
Your newsletter on applied creativity, imagination, ideas and innovation in
business.
Tuesday, 18 March 2008
Issue 124
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.
COST CUTTING INNOVATION
There is a tendency to think of business innovation as being about exciting
new high technology products. Indeed, one of the popular measures used in creating
lists of the world's most innovative companies is the number of patents each
company has. Other metrics define innovative companies by what percentage of
their income comes from new products developed within the past five years.
The other side of business innovation is cutting costs, such as by improving
the efficiency of operational processes, decreasing wastage of all kinds and
building cheaper products. For innovation managers trying to convince senior
management to increase their budgets in this time of economic slow-down, focusing
on cost-cutting innovation might be a good strategy!
Moreover, getting employees involved in ideas campaigns (or other ideation
initiatives) on how to cut costs offers two huge advantages over leaving such
thinking solely to senior management: employee satisfaction and Hands-on knowledge.
Let's look at each of these.
Employee Satisfaction
Maximising employee satisfaction during cost cutting initiatives is critical.
There few things people in medium to large companies like less than being given
a set of new rules designed to cut costs. Employees hate being told they will
have to trade in their company cars for a smaller models (or worse, bus passes),
that they can no longer fly business class or that their photocopier use is
being monitored to ensure it is only being used for company business. To you
as management, the savings across the enterprise from such activities is substantial.
To employees it is being petty and “another example of how little the
company cares about me.”
On the other hand, if employees propose the suggestions themselves and feel
they are a part of the cost cutting decision making process, then they are not
only more likely to be willing to co-operate, but they may well be enthusiastic
about participation. After all, if an employee's cost saving idea is implemented,
she has a stake in its success. If the idea succeeds, she can take part of the
credit for its success.
Moreover, when employees in a medium to large firm start generating and collaborating
on cost saving ideas, they are more likely to look at the big economic picture.
An employee told that she cannot use the office printers for personal reasons
is likely to think: “I don't understand why I can't print these recipes
I found on the web. It only costs the company a few cents.” But, if she
is asked to find ways to cut costs across the company, the issue is no longer
personal. It is an enterprise issue and that encourages enterprise calculations:
“Hey, I've just noticed that the company spends $2 million a year on paper.
If we could reduce that by 20% it would equal a cost savings of $400,000 a year!
Hands-On Knowledge
The larger a company becomes, the further removed top management are from its
physical day to day operations. The CFO might receive a report that indicates
electricity costs have increased 12% since last year. A junior accountant, on
the other hand, is more likely to notice that 3/4 of her colleagues leave their
computers on when they leave the office at the end of the day. Driving by the
office at night, she might also notice that the building is lit up like a Christmas
tree even when no one is working.
As a result, if the CFO is looking for ways to cut electricity costs, she is
likely to look at broad solutions and possibly negotiating with the electricity
supplier. The junior accountant is likely to suggest requiring people to turn
off computers and lights when they leave the office at the end of the day. The
combination of ideas is likely to lead to more substantial cost savings than
either individual's ideas alone. But the accountant's ideas have the advantage
of being easier and faster to implement.
Employees are the ones performing the operations of the company. They see inefficiencies
that management does not. By combining the hands-on knowledge and experience
of employees with the big picture knowledge of top management, you are likely
to develop the most comprehensive cost savings ideas.
How to Generate Cost Cutting Ideas
There are various ways. In a large organisation, you can use an idea management
tool (like Jenni) and run
ideas campaigns using challenges such as:
“In what ways might we reduce our use of electricity?”
“How might we cut down on the amount of paper we use?”
Doubtless, you can devise numerous more such challenges based on your operations
and areas where you need to cut costs.
What the Experts Say
I decided to pose the question of “How do you challenge employees in
an organisation to come up with cost cutting ideas?” to the International
Imagination Club (www.imaginationclub.org) which includes innovation consultants,
academics, students, scientists and others from all walks of life (and you can
join us too!). There were several good responses.
Andrew Greaves of The Idea Hunter (www.theideahunter.co.uk)
suggested some more thought-provoking challenges:
“In what ways might we make our interactions with other departments
more effective/efficient?”
“How might we avoid certain processes being repeated by others?”
“What things could we re-use that we currently don't?”
“Where might subsidies (govt. or otherwise) be available? Who could
co-fund any of our activities?”
These are terrific. I have never yet come across a medium to large organisation
that did not have substantial room for improvement in terms of inter-departmental
interactions and repetition of processes. In the worst case scenarios, I've
known organisations that send different sales people to the same prospective
client, each delivering a different message. The result is that the client is
confused and less than impressed while the employer of the sales people has
wasted substantial money sending two people to confuse a message that one person
could have delivered coherently.
Looking for subsidies is perhaps a particularly European approach to income
generation. Not only do national governments offer all kinds of grants and subsidies.
But the European Union is also generous in this respect.
Other Approaches
If your ideation is being done by small groups, it is possible to be even more
creative than simply posing challenges.
Itha Taljaard of Sense2Solve (www.sense2solve.com)
suggests taking a more hands-on, experienced based approach to generating cost
cutting ideas. She says:
“I had a team once who wanted to reduce the use of paper (don't we
all?). Instead of just coming up with ideas, I suggested they select a day
as a paperless day and on that day have very specific ways to measure how
much paper is used and which team used the least. It was a fun way to discover
very practical ways to save paper.
“Initial ideas are often too vague or high level to be of any value.
Forcing people to "live" it, switches on their minds.
“In South Africa the energy crisis certainly is making people think
about how to reduce energy dependence. The suggestion to switch the electricity
off for a day/few hours could get people to think creatively about electricity
– provided they know it is an intentional black-out. Normally when electricity
goes off here in South Africa, people go home if it happens in the afternoon,
or they sit around and talk, waiting for the electricity to come back on again.
Instead they could be turning that "dead" time into brainstorming
time.”
Creativity consultant and researcher Randah Taher suggests going even further
and becoming – in your mind – part of the issue. She sites from
the work of Michael Michalko:
“The managers at a utility company wanted to dramatically reduce capital
equipment costs. They spent three months imagining themselves as a kilowatt
traveling through the company's various fossil fuel and nuclear power systems.
As they imagined themselves traveling through each stage, they began to understand
the complexity and diversity of the systems and saw ways to improve them.
Their imaginary travels led to a redesigned maintenance plan that reduced
the cost of maintenance ten times by replacing key parts instead of whole
system." - Michael Michalko "Cracking Creativity" p. 46
Benefit: Fast Return on Investment (RoI)
One the best things about getting employees involved in cost cutting innovation
is that you very quickly see a return on investment. Moreover, that return on
investment is often easily measurable..
For many senior managers who are uncomfortable with the foggy RoI (return on
investment) often associated with innovation, clear dollars and cents returns
helps innovation make sense!
And It's Good for the Environment
If I haven't sold you on the advantages of cost cutting innovation yet, consider
this: most cost cutting results in reduced usage of natural resources. Using
less electricity is good for slowing down global warming. Using less packaging
means less wastage when customers open up your products. Improving production
line efficiency usually means reduced energy costs. All of these things not
only save your company money – but they help our environment too!
JENNI CHALLENGE
Want to go further with cost cutting innovation? Here's our challenge: try
Jenni idea management software service with our complements for one month. Run
an ideas campaign based on a cost cutting challenge (we'll help you with this).
We are convinced that the ideas you generate will not only cover the cost of
using Jenni for the long term, but will result in additional substantial cost
savings for your firm.
There are restrictions to this offer. If you are interested, please read http://www.jpb.com/jenni/challenge.php
first and then contact us to start your trial.
GUEST WRITER
Penny Hooper is an artist and art teacher based in Cornwall, UK. She is constantly
looking for new ways and innovative to help her pupils – in the 11 to
18 year range – to grasp what is being taught as they all learn in different
ways. As a result, she knows a thing or two about group and individual creativity.
She has kindly contributed this article to Report 103
FINE TUNE YOUR RAS
By Penny Hooper
WHAT is this and HOW can you tune this you might ask?
We are all blessed with a personal RAS. Short for Reticular Activating System.
In simplistic terms your RAS acts as a filter to all the multitude of sights
and sounds that bombard you every second of the day. Your own personally developed
RAS filters OUT what you, as an individual, do not want to hear, see or deal
with for what ever personal reason; and it filters IN what you want to hear,
see and deal with.
How often have you been in the house watching TV or listening to the Radio,
yet not really listening to what is being transmitted? Then, all at once you
hear something that connects with you and you take notice. This is your RAS
at work, filtering in information relevant to you as an individual. Another
person, however, might filter out this information as it is not relevant to
her.
As a result, we often filter out information that could in fact be of immense
help in problem solving, creativity and more.
By recognising the importance of your RAS and its function, you can consciously
programme your RAS to tune into and react on certain triggers, for example sights,
sounds, words, text, and so on, thus filtering in relevant information.
How do you do this you may ask?
Simple
For each scenario you need to research, question, solve or otherwise take action
on, make a list of associated (directly or indirectly) words, phrases, sounds,
pictures and/or text and consciously link these to your scenario by whatever
method aids your long term memory. This list will then be implanted in your
subconscious memory and will be activated when a connection is made. You can
do this on a daily basis with a short list of specific triggers to pick up on;
especially when visiting the library, browsing the internet or doing anything
that might stimulate the mind.
For example I have a current project related to fibres that can be used for
art. I have made a list of associated items and now my RAS is tuned into things
connected to fibres. When going about my daily work, rest and play my subconscious
and my RAS will be working for me, making connections. This is where you need
your note book or a system to record your connections.
This is a great group activity when seeking a creative solution. Everyone has
the list and reports back the various connections made by them over a certain
period.
You will be amazed with the range of feedback.
Try it!
THE FIVE INNOVATIVE IDEATYPES
You have very possibly read about different kinds of innovation (such as “Four
Kinds of Corporate Innovation” at http://www.jpb.com/creative/article_4kinds_corp_innovation.php
). But these models look at the process where the innovation is to be applied.
It is also useful to look at how different kinds of ideas – or “ideatypes”
vary. Indeed, knowing what kind of ideas you are looking for can help you formulate
more effective innovation challenges for your ideas campaigns, brainstorming
events and other activities.
There are five different kinds of innovative ideas..
1. Additive
2. Subtractive
3. Replacement
4. Recycled
5. Invention
Let's look at each of them in detail.
Additive Ideas
An additive innovative idea is one that adds to an existing object, process
or concept. Ideas for innovative new features on cars, computers or web sites
are additive as are ideas for adding a new component to a training service or
a new security check for entering your building. Most business innovations,
particularly incremental innovations are additive. Our latest upgrade of Jenni
idea management software service (http://www.jpb.com/jenni/) included the implementation
many suggestions for new features from our clients and business partners as
well as some of our own devising. Since these ideas add additional functionality
to Jenni, they are additive ideas.
Subtractive Ideas
A subtractive idea is the opposite of an additive one. It involves removing
something from an existing object, process or concept. Removing unnecessary
processes in a production line in order to boost efficiency, taking features
away from a product to make it easier to use or removing unnecessary jumps in
an e-commerce web site are all examples of subtractive ideas.
Focusing your business on a niche market rather than trying to offer broad
appeal to a larger market is a subtractive ideatype that many business leaders
are remarkably afraid to follow. The Wii gaming console is a good example of
a collection of subtractive ideas. The initial aim was to make a simpler more
intuitive gaming device and many of the ideas that went into the overall concept
were about removing features, functions and technology from existing gaming
consoles.
Of course, sometimes the implementation of a subtractive idea requires implementing
additive ideas. Although very old, the automatic gearbox (transmission), as
found in many cars, is a good example. It was a subtractive innovative idea
in that it removes component of driving: changing gears. Yet the technology
added to a gearbox, so that it can shift gears for the driver, is additive.
Replacement Ideas
A replacement idea is when a new component, concept or process replaces an
existing one. For example, digital photography has largely replaced film-based
photography. In large astronomical telescopes, the single large mirror which
is tremendously expensive to make and maintain is being replaced by numerous
smaller mirrors each of whose alignment is being constantly updated by a computer
which also combines the information from each small mirror into a single image
comparable to the image obtained from a single large mirror.
Replacement ideas are often sought in engineering projects where alternative
component solutions are sought to improve performance, increase efficiency or
reduce costs.
Recycled Ideas
A recycled idea uses an existing object, process or concept in a different
context. Often, recycled ideas are used to introduce a new technology in a context
that consumers will understand. The mobile telephone is a good example. Engineers
recycled the way a person interacts with a telephone and to some extent the
look and feel of a telephone when designing early mobile telephones. This made
the new technology, originally based on radio signals and now on packets of
information, easier for consumers to understand and use.
Many e-business ideas, such as Amazon's on-line bookshop, were recycled ideas
from existing businesses. Indeed, e-business innovation largely broke down,
because entrepreneurs were simply recycling concepts without truly innovating.
The difference between a recycled idea and a replacement idea is that the replacement
idea seeks to replace an existing concept with something new. The recycled idea
aims to apply an existing concept to something else, but not to replace the
existing concept.
Inventions
Inventions – that is, all new ideas - are often what we have in mind
when we think about creativity and innovation. But they are in fact extremely
rare. The original telephone is an example of an invention. Although it used
existing technologies, the concept or underlying idea behind a telephone was
essentially all new.
The Internet is a more modern example not only of an invention, but an invention
that became a platform for many more inventions. The Internet was basically
a common protocol for sharing files and information between computers by breaking
those files into tiny packets of information, sending them to another computer
and reconstructing those packets back into the original file.
This invention then provided a platform for other inventions, such as the World
Wide Web, digital entertainment download and more.
Who Cares?
This may all seem like a pointless exercise in categorising ideas, but it does
have a practical purpose. As we have argued many times before in this journal,
organisational creativity and innovation works best when it follows the ideas
campaign model (http://www.jpb.com/jenni/campaigns.php) in which you focus employee
creative thinking on innovation challenges based around business needs.
The focus of an ideas campaign is its innovation challenge: “In what
ways might we improve product X?”, “How might we improve the performance
of our engines?” and so on.
Innovation challenges are typically rewordings of business problems or issues.
For example: problem=our competitors are launching an exciting new product –>
we need to make our product even more exciting -> challenge = “What
new features might we add to our product?”
When formulating your challenge, it is useful to think about what kinds of
ideas you want to capture and implement. Are you looking for product improvements
(which would be additive ideas); or are you looking to make the product simpler
(which would be subtractive); or are you looking to launch an all new, much
improved product (which would be replacement)?
In each of these instances, a somewhat differently framed challenge would be
more likely to generate the kinds of ideas you want. “What new features
might we add to our product?” would focus on more incremental new feature
improvements and result in additive ideas; whereas “How might we redesign
our product to make it more attractive to young woman?” is likely to result
in a combination of replacement ideas and additive ideas. “What new products
might we develop?” on the other hand, will probably result in some invention
and a significant number of recycled ideas. Finally, “How might we cut
costs in the manufacturing of our product?” will mostly generate subtractive
ideas.
When designing an ideas campaign, it is also worth reviewing what kind of ideas
might actually serve you best. When it comes time to improve an existing product,
the focus is often on additive ideatypes: new features, new functions and new
gimmicks. But in many cases, customers might actually like fewer features, especially
if those fewer features result in reduced cost, improved usability or better
focus on core functionality.
In short, when soliciting ideas from employees or, indeed, business partners
or customers, think about the kinds of ideas you want to work with and be sure
to solicit them.
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
---------------------------------------------------
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.
You may forward this copy of Report 103 to anyone, provided you forward it
in its entirety and do not edit it in any way. If you wish to reprint only a
part of Report 103, please contact Jeffrey Baumgartner.
Contributions and press releases are welcome. Please contact Jeffrey in the
first instance.
|
