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.

INNOVATION THREATS IN 2009

Thanks to an economic slow down, an abundance of innovation tools – some of which are of poor quality – and misunderstandings about organisational innovation, many firms' innovativeness is under real threat in 2009. Let's look at the those threats and how they can affect every business – including yours!

1) Downsizing Destroys Collaborative Webs

According to Deborah Dougherty and Edward H. Bowman in their article “The Effects Of Organizational Downsizing On Product Innovation” (in California Management Review, 37/4, Summer 1995 28-44 – http://cmr.berkeley.edu/search/articleDetail.aspx?article=3565) reducing staff numbers also destroys collaborative webs within organisations. Creative ideas, which are the seeds of innovation, are mostly developed through collaboration. People share ideas and build upon each others' ideas until the germ of an idea becomes the basis for an innovation. Since downsizing reduces the number of people in a firm, collaborative webs become smaller and remaining employees find that the people with whom they used to develop ideas are no longer with the company. Their webs get smaller and key collaborative support is lost.

2) Reduced Trust

According to the PWC Innovation Survey (of which I only have an undated copy that appears to be from 2002), the single most important characteristic of an innovative company is a “higher degree of management trust”. Certainly, if management expects employees to share ideas that might be crazy, but might also be brilliant, they have to trust management to respect those ideas. Employees also need to trust their immediate managers not to claim subordinates' ideas as their own.

However, if employees see their colleagues being laid off, are getting fewer benefits from the company and are taking on ever more work without additional compensation, trust is likely to be diminished quickly. Unfortunately, it takes far longer to build up trust than it takes to destroy it.

3) Less Time to Innovate than Before

One of the reasons many people give for not participating in corporate ideation activities is: lack of time. As we noted in Report 103 in October 2007 (http://www.jpb.com/report103/archive.php?issue_no=20071002), this really means that management is not giving innovation the priority it deserves. Hence employees give other tasks greater priority than innovation and consequently believe they do not have time to participate in idea generating actions.

Irrespective of the cause, if employees felt that they did not have time to innovate when the going was good, they are likely to feel they have even less time now that the going is bad. If people are being laid off or believe their jobs are threatened, innovation will get an even lower priority than before. As a result, employees will focus on tasks that deliver more concrete results and hence appear to better demonstrate their immediate value to the firm. Consequently, time to innovate will seemingly disappear.

4) Risk Aversion

One problem any innovation process has to overcome is risk aversion. Innovative ideas are inherently risky. After all, they are new, untested and different. And the more innovative they are, the greater the risk. Getting risk adverse management to support crazily innovative ideas is a challenge at the best of times. But, when the economy has gone bad, most managers become more risk adverse. Their firms are not as financially secure as they used to be and hence managers worry more about the consequences of failure than the rewards of success.

5) Risk Excess

A few managers, however, take the opposite approach, particularly if their firms are in serious trouble. They feel that only drastic measures can save their firms and hence are overly likely to take big risks in hopes of big pay-offs. This thinking is similar to that of the gambler who has lost almost all her money, but believes her next bet will make her rich.

Unfortunately, risk hungry managers are unlikely to be reasonable judges of risk and seldom stop risky projects if it becomes apparent they will not succeed.

6) Reduced Investment in Innovation Support

Less income typically translates into reduced budgets for almost all activities in an organisation. This includes innovation. Reduced budget means putting off investing in idea management software, cutting back on training and consulting projects, cancelling innovation initiatives and more.

Professional brainstorming and ideation facilitators are replaced with employees who seldom can perform the job as well as professionals. As a result, innovation becomes more difficult and results are often poorer. This is particularly true in large firms where innovation tools and support are necessary to manage the process across hundreds or thousands of employees.

Any of these threats can seriously damage an innovation process. Several of them together can be fatal. Unfortunately, budgets are reduced and lay-offs are sometimes necessary in times of economic hardship. Hence if your firm has to make cut-backs, it is critical to revise your innovation strategy thoughtfully and communicate changes to employees in order to maximise your innovation results.

INNOVATION SOFTWARE DOESN'T INNOVATE BY ITSELF

One sign of the growing seriousness with which businesses are taking innovation is the increasing number of innovation related software solutions coming on to the market. Some solutions are specifically made for innovation tasks, such as idea management, brainstorming and mind-mapping software. Other solutions, such as blogs, wikis and e-mail are used in an ad-hoc way to facilitate collaborative innovation.

All of these solutions can indeed help firms like yours innovate better (and I will avoid the temptation to claim that my company's solution is the best of all!). But none of them will succeed if they are simply installed and your employees told to use the new tools.

There are several issues which must be addressed to ensure that your innovation software investment gets results.

Where's the Culture?

Any innovation process, whether driven by software – which almost becomes essential in medium to large firms – or by other processes needs a culture of innovation in which to thrive. If management is not taking the lead with innovation, if colleagues do not understand why your firm needs to innovate, if good ideas are not rewarded and bad ideas are cause of reprimand, no innovation process is going to work.

Hence the first step in any firm is to build a culture of innovation. This is not an easy or quick task. But just as a building needs a suitable foundation of cement, an innovation process needs a suitable foundation of corporate culture.

Software Does Not Solve the Problem

Once you have established an innovation culture, it is important to bear in mind that a software tool will not solve any problems by itself. It will only facilitate the (usually) collaborative solving of a problem. But it is people that solve the problem. Not the software.

As a manager, then, you need to define goals for your innovation software and then delegate to suitably qualified people the task of defining a structure for using software in order to achieve those goals. Such people may be employees or they may be consultants hired to help you implement an innovation strategy.

Add a Healthy Dose of Motivation

A frequent killer of innovation initiatives is lack of motivation. Even with the best software in the world combined with well defined goals and structure, getting people to actually use the software can be a challenge. Employees will claim that they have no time, have no ideas or are not creative. This issue has been addressed numerous times in Report 103 and we won't go into details here. Suffice it to say that you need to develop methods of motivating employees to use your innovation software. If the software is good and intuitive to use, people will continue to use it after they have been motivated to discover it.

The most frequently used method of motivation is rewards and recognition. Small gifts for every idea submitted to an idea management system or a slightly larger gift for everyone who simply tries out a new software can be very effective.

At the same time, a good culture of innovation – in which management takes the lead and innovation is clearly demonstrated as a corporate priority – also helps. If people feel that they always have time to innovate (sadly, most people feel just the opposite at work!), they are more likely to make use of innovation tools.

Your Biggest Expense Is Time

The actual cost of innovation software varies from nothing; in the case of wiki, blog and other open source tools; to tens or hundreds of thousands of Euro (or dollars or pounds) in the case of dedicated enterprise solutions.

Yet the biggest cost is almost inevitably not the software itself, but employee time. Submitting an idea to an idea management system, collaborating on innovation in a wiki and using on-line evaluation tools to determine the best ideas all take time – valuable employee time. And the higher the level of participation, the greater the number of employee hours spent on using innovation tools. In addition, time spent by experts in reviewing ideas adds to the human costs of innovation software.

Moreover, if software is installed on your servers or clients (ie. each employee's computer), you also need to factor in costs of installation and maintenance. Add training in use of the software and it is clear that the cost of using any software is far higher than the cost of the software itself.

This is important to bear in mind when evaluating software solutions. The least expensive software may not be the least expensive option. The most intuitive to use software, on the other hand, is more likely to cost less to use over the long term. Likewise, software as a service (SaaS), in which the vendor installs the software on their own server so that you and your colleagues access it via the Internet, may be less costly over the long term than investing in software licenses, installation fees and maintenance costs.

What About Support?

Using innovation software should come with a higher level of support than other kinds of software. But it often does not. If you invest in such a solution, you need more than simple technical advice. You probably also need innovation advice. In supporting our clients, we readily help them frame innovation challenges, determine why people are not using the software (see motivation issue above) and help develop idea evaluation strategies as part of our standard support package. After all, if our software does not help a client innovate better, it hardly matters if the reason is technical or methodological.

Wiki and blogging software can be an excellent platform for innovative collaboration. Moreover, it is open source, which means you can install it free of charge. However, it does not include any kind of support structure. You can overcome this by hiring a suitably experienced consultant or innovation manager to oversee the use of these tools as part of your innovation process. But, you need to factor in the cost of such an expert into the cost of the software. Indeed, the cost of a consultant can easily be greater than the cost of alternative software solutions! Beware.

With an innovation culture, feasible goals and a good plan in place, innovation software can be an extremely effective tool for facilitating collaborative creative thinking across the enterprise. And that is the basis of innovation. Nevertheless, it is critical to have all the elements in place to ensure whatever software you choose does the job effectively.

PRIME DIVISORS OF A PROBLEM

The Fundamental Theorem of Arithmetic states that any integer can be broken down to a unique set of prime numbers which, when multiplied together, equal that integer. (Note: a prime number is any number other than one that is only divisible by itself and one. For example: 2,3,5,7,9,11,13 and so on are prime numbers). Hence, a number like 288 can be broken down to 2 x 2 x 2 x 2 x 2 x 3 x 3. It is not possible to break any of those integers down into smaller integers. Hence, this set of numbers are the prime divisors of 288.

You can and should take the same approach to your problems in creative problem solving (ie. the basis of brainstorming, ideas campaigns and most creative thinking initiatives). Once you have determined what you believe to be your problem, break it down into the smallest possible components.

This can be done usually be asking “why”, “why not” and “what else” questions continually until it is no longer possible to break down the problem any further.

For example, if you are running an ideas campaign to generate innovative new product features, you should break this down into components or prime divisors by asking “why do we need to improve this product?”, “why is that?”, “why is the product not good enough?”, “what else should our product do?”, “why can it not do that?” and so on.

You may find that what you thought was a single problem is in fact several problems which should be solved separately in order develop a truly innovative solution.

JEFFREY ONE OF THE TOP TEN INNOVATION THINKERS

I was honoured to learn that I have been included in Innovation Tools' (www.innovationtools.com) list of “10 innovation experts to whom you should be listening” (http://www.innovationtools.com/Weblog/innovationblog-detail.asp?ArticleID=1218).

It's an interesting list and introduced me to a couple of innovation thinkers with whom I was not familiar.

Sadly, the list missed out one key thinker and aggregator in the field of innovation: Chuck Frey, the man behind the Innovation Tools web site and blog. Unlike many of us on the list and elsewhere, Chuck is not selling a service or a product. As a result, Innovation Tools is one of the least biased innovation resources you can find on the web. And that is all thanks to Chuck's hard work and expertise on the subject.

JENNI IDEA MANAGEMENT

If you are impressed with the level of innovation expertise you regularly see in Report 103, you will probably also be impressed with the idea management software and service we provide to clients like you. Jenni is probably the easiest to use, most flexible idea management solution on the market. More importantly, we sell Jenni as a service, not a software. That means when you invest in Jenni, you don't just get a tool, you get a full service designed with one goal in mind: to help you innovate better.

Learn more about Jenni at http://www.jpb.com/jenni/

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.

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.

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