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 January 2008
Issue 141

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.

WHAT KIND OF IDEAS?

When running an ideas campaign, a brainstorming session or other ideation activity, it is important to consider what kind of ideas you want and plan your strategy accordingly. By “what kind of ideas”, I am not referring to new product ideas or new process ideas. These are indeed important, but it is equally important to think about whether you are looking for incremental ideas, substantial modifications or transformational innovations.

The Definitions

Before going any further, we need to look at the definitions of the three kinds of ideas.

An incremental innovation is a small idea that makes an incremental improvement on an existing product, service or process. Although incremental ideas are not particularly exciting, they are an important component of any on-going innovation strategy. Moreover, many Japanese giants such as Toyota and Sony have become leaders in their industries through continuous improvement plans that rely on on-going innovation. Indeed, anyone who has worked in a Japanese organisation will be familiar with the term “Kaizen”, a structured process for ongoing incremental improvements, and which is implemented in nearly all Japanese firms.

Substantial modifications are big ideas that result in significant improvements to a product, process or service, but which do not transform the product or industry in any significant way. Much of innovation in the West aims for substantial modification. For example, a new Toyota Corolla, BMW 5 series or other car model is usually a substantial modification of the previous model, with new features, technologies and other improvements. But it is still recognisably the same car model.

Transformational innovation is an idea that transforms a business, a product or a service – if not all three. Clayton Christensen has coined the term “disruptive innovation” which is popular, but I would argue that disruptive innovation describes what we might call super-transformational innovation. Transformational innovations include Post-Its, SMS messaging on telephones, DVDs and the like. All of these innovations resulted in new products and services and changed the behaviour of their users. But they did not disrupt any industrial sector. Digital cameras, on the other hand, were not only transformational innovations, but they also resulted in a huge disruption of the photographic industry as well as industries that relied on chemical based photography. Hence, digital photography was a disruptive innovation.

Some innovation experts like to argue over which kind of innovation is better. But the truth is that a balance of all three kinds of innovation is best. Realistically, few organisations, if any, can expect to generate a consistent stream of transformational ideas. Likewise, incremental ideas are hardly inspirational. Nevertheless, it is important to keep any innovation process continuously active so that employees in your organisation become accustomed to thinking creatively, participating in ideation activities and generating ideas. By running ideas campaigns for incremental ideas between your ideas campaigns for transformational ideas and substantial modifications, you ensure your idea management process is always on and your people are always thinking about innovation.

Since this article mentions ideas campaigns frequently, a definition is necessary for new readers. An ideas campaign is a structured innovation process in which ideas are generated in response to an innovation challenge. Unlike brainstorming, which usually takes place in a single room over a relatively short period of time, an ideas campaign is usually managed through web based software allowing employees across the enterprise to participate. Ideas campaigns, which make up an idea management process, normally last one or more weeks. Although this article will look at planning in ideas campaigns, it is also relevant to brainstorming and other creative problem solving (CPS) exercises.

Planning Around Idea Types

In truth, too little planning goes into most ideas campaigns. Managers, keen to generate ideas to solve a problem or achieve a goal, often do not spend time evaluating their needs in order to formulate a good innovation challenge. However, more thoughtful managers who do invest time and thought into planning often fail to think about what kind of ideas they want to get from an ideas campaign. This is unfortunate. Knowing what kind of ideas to expect helps you formulate a better challenge, promote your ideas campaign more effectively and prepare the appropriate evaluation approach.

Incremental Ideas

For example, if you run an ideas campaign around the challenge “In what ways might we reduce our energy consumption”, you are probably looking for incremental improvements – unless, of course, you run an alternative energy engineering research firm. But let us assume that is not the case!

In terms of promoting your ideas campaign, you will be looking for numerous ideas that each result in a small reduction of your energy consumption. As a result, you will want to encourage people to submit as many ideas as possible. Rewards for quantity should be part of your promotional strategy.

Once ideas are in and it comes time to evaluate ideas, your main criteria should focus on cost savings and ease of implementation. The experts who perform the evaluation will have to have the right expertise to measure these.

Finally, with numerous incremental energy savings improvements coming out of the ideas campaign, you should be thinking about implementation. If many ideas need to be implemented by employees or are likely to affect employees, it is important to communicate to them. How will you do this? If you do not plan in advance, you could waste considerable time planning your implementation plan – before you can begin the actual implementation!

It is also worth bearing in mind that even though you are looking for incremental innovations, it is possible some ideas might lead to substantial modification or possibly even transformational innovation. If this happens, you can call in specialists for evaluation and handle such ideas separately from the incremental improvements. After all it is the latter that will make up the bulk of your ideas and hence it is they that you should plan around.

Transformational Ideas

On the other hand, if you are looking for transformational ideas, you will want a high level of creativity. And while you will not want to discourage ideas, you will want to minimise the number of incremental ideas that are generated.

As a result, your innovation challenge should be worded in a way to encourage people to really push their minds and think creatively. Rewards should focus on the most outrageous or most creative ideas. Outrageous ideas which are not practical should still be rewarded in order to demonstrate your appreciation of high level creative thinking.

When it comes to evaluating ideas, you will probably want a range of expertise in your evaluation team. Moreover, they should be told to focus more on potential value than risk at the early stage of evaluation. Once the most powerful, potentially transforming ideas are identified, appropriate experts can look into risk management.

How Many Implementations?

It is also important to bear in mind that when running an ideas campaign for incremental ideas, you can expect to implement a lot of ideas. When the goal is substantial modifications, fewer ideas are likely to be implemented. Sometimes as few as one or two. Possibly none. When looking for transformational ideas, you will be lucky to generate one viable idea. More realistically, you will generate a direction for focusing future ideas campaigns. That means that the ideas campaign may not generate any implementable ideas, yet still be a success. It is important to communicate this to participants. If people make the effort to submit ideas to your campaign but see that no ideas are implemented, they may feel discouraged about future participation. Making it clear that their ideas are leading the way to transformational innovation is important.

Clearly, planning on the kind of ideas you want an ideas campaign to produce allows you to plan strategy better, get better results and implement those results more effectively. And that all adds up to a more effective innovation strategy!

GOSSIP CAN HELP YOUR FIRM INNOVATE BETTER

Yes, you read the title of this article correctly. Gossip – or rather informal communication networks in organisations – can help your firm innovate better. In particular, they can help you in three ways: firstly to test new ideas prior to implementation in order to identify potential problems; secondly to identify the cause of bottlenecks after implementation; and thirdly as a propaganda tool.

First, let's look at the experience of the managing director of a Sydney Australia based recruitment agency. Owing to economic slow down, he only had sufficient budget to provide raises to a few particularly high performing employees. But he also knew that this would likely cause bad feelings among employees who did not receive a pay rise. So, he tried an experiment. He told a trusted subordinate that he was planning to offer pay rises only to a few key staff who, in exchange, would also have to take on added responsibilities.

Not surprisingly, this rumour spread like wildfire through his organisation. Surprisingly, employees were positive about the rumoured plan. So the Managing Director could comfortably implement it. (Story from “Psst! Heard what they're doing with the office gossip?” from Financial Times, 5 January 2009)

Testing New Ideas in the Gossip Mill

While criteria based evaluations, SWOT (strength, weakness, opportunity, threat) analyses, business cases and other tools can help determine the potential success of an idea in the market place, they often cannot predict how employees in an organisation will accept new ideas. Nevertheless, implementing innovative new ideas almost inevitably results in change. Indeed, as a rule of thumb, the more potentially innovative an idea is, the greater the amount of organisational change it will require to implement.

By the same token, many people do not like change in their routines. Change takes people out of their comfort zones, may require they stop performing tasks they understand well and start learning all new tasks. Change may make some jobs obsolete. It may change internal power structures. It may simply be too different and that alone sometimes causes stress.

By putting information about an innovative new idea into the office gossip mill, managers can get warning of staff concerns about the idea, learn where there are likely to be problems and determine who may intentionally or unintentionally disrupt the idea's implementation. This information can be used in designing the implementation plan and, in particular, helping minimise disruption.

Likewise, salespeople and customer support staff may have insights into how customers will react to new product and service ideas. It is also important to bear in mind that if salespeople have concerns that customers might react negatively to an idea, they may actually encourage customers to see the idea negatively. For example, if salespeople believe a new product's price is too high, they may be reluctant to share price information quickly with customers or may be apologetic about the high price (I have seen this happen). This communicates to the customer, who might not actually have had price concerns, that the product is too expensive. This could easily result a lost sale or a demand for substantial discounting!

Finding Bottlenecks After Implementation

In the same way, once an idea has been implemented, tuning into the rumour network in your firm can help you identify bottlenecks and other issues hindering the implementation of your new idea. For example, if people are finding a new software application less than intuitive to use, you can be sure that they will be complaining among themselves about how bloody difficult the software is and wondering aloud why management had to put in the new system when the old system was so much easier. This would indicate a need for improved communication about why a new process is better together with training on the software that manages the process.

Propaganda Tool

In the implementation of an idea that will cause significant change in your organisation, it is critical to have a communication plan in place. That plan typically uses in-house newsletters, e-mail lists and dissemination through staff meetings. In addition, you can feed information into the rumour mill. Of course, sending the same message to the rumour mill as you send in a formal e-mail announcement will convince nobody. But if in the latter you are more honest and informal about the importance of the idea's success and your concerns about implementation problems, you might well find that this information spreads quickly through your firm's informal communication network and helps lubricate the successful implementation of your idea.

In short, rather than bemoan the gossip that runs through your firm, exploit it. It can only help you innovate better!

OBAMA'S SUGGESTION BOX

I was surprised to learn that Barack Obama had an on-line suggestion box soliciting ideas from the American populace. Sadly, it is closed to ideas now. But it seems to have been effective, with over 44,000 ideas submitted by 125,000 visitors who also managed to cast 1.4 million votes on ideas. (Note: these numbers come from the web site itself; but frankly this suggests each visitor voted over 1000 times, which seems highly unlikely in my experience with such systems.)

You can visit the suggestion web site, Citizen's Briefing Book (CBB), at http://citizensbriefingbook.change.gov/ . According to the CBB, “The best rated ideas will be gathered into a Citizen's Briefing Book to be delivered to President Obama after he is sworn in.”

Like many poorly thought out on-line suggestion boxes, CBB is an open suggestion scheme in which anyone may submit any kind of idea. There is no focus on any specific problems, issues or goals. Worse, ideas are selected through voting rather than any sort of scientific evaluation process.

While I admire Mr. Obama greatly and like many people around the world, have high hopes for his presidency, I am a touch disappointed that he followed an out-of-date and ineffective approach to idea capture: an open suggestion box. If only he had come to me, I would have happily helped him put up something better.

Of course, Mr. Obama is a politician serving the people. So his expectations and requirements from ideas are different from those of a business or even a charity. Nevertheless, we can all learn from the obvious failings of CBB. Let's look at three specific problems.

Problem 1: Excessive Use of Resources with Little Return

Consider the 44,000 ideas submitted to the suggestion box. If a single person were in charge of reviewing the ideas and spent an average of just 10 minutes on each idea, it would still take her about four years to review those ideas (assuming she works regular business hours). That's a lot of time to spend on ideas. And a lot of time that would need to be paid for by an employer.

Worse, there is little to indicate that those four man-years of work are likely to produce results of any substantive value. A quick review of the ideas shows that most are simply issues that have concerned people for years. In other words: nothing new.

Problem 2: the Most Popular ideas Are not the Best Ideas

The first and third most popular ideas, by citizen voting are about the legalisation of marijuana, or specifically: “Ending Marijuana Prohibition” and “Stop using federal resources to undermine states' medicinal marijuana laws” respectively.

Whether or not these suggestions have any merit, this is not the place to debate. What is clear is that in the anti-drug climate of the United States, no national politician is even going to consider legalising any recreational drug. The anti-drug culture is firmly established in Washington. Indeed, I cannot imagine those who present the CBB to the President will be happy about the most popular ideas and the attention they will receive.

Yet to remove the ideas would be to open themselves up to accusations of censorship. Thus they, and President Obama, will have to acknowledge suggestions they would almost certainly prefer to ignore!

And that can be a problem for any open, voting based corporate suggestion scheme: the possibility that popular ideas may well be ideas you do not wish to have bandied about in public.

Problem 3: Most Popular Ideas Are Irrelevant to Current Needs

Again, irrespective of the value of legalising Marijuana, it is hardly a priority issue. No one questions that Mr. Obama will need promptly to deal with America's economic troubles. Other issues that need urgent attention are the situation in Israel, Guantanamo Bay prison camp and wars in Afghanistan and Iraq. Increasing unemployment in the USA means that medical care in the country is also an important issue.

Surely some real ideas about SOLVING these more urgent would be more warmly welcomed by Mr. Obama and his team.

And the same is true of open suggestion schemes with voting systems. The most popular ideas are seldom relevant to your immediate business needs. Yet without any method of focusing idea generation, you have no control over which ideas will be voted most popular. That requires that you at least acknowledge ideas which might be embarrassing and are very likely a waste of your and your colleagues' time.

With far better methods for soliciting and capturing ideas, Mr. Obama's team could surely have found a better tool for focusing ideas on their country's most pressing needs. Imagine if they had used the ideas campaign (see top article) approach to soliciting solutions to the country's most urgent problems? They could have expected to receive 1000s of suggestions that really were relevant. And that would have been a better use of resources and the collective innovativeness of the American people!

JENNI IDEA MANAGEMENT

If you would like to establish in your firm an idea management system based on ideas campaigns (see top article), take a look at Jenni idea management (http://www.jpb.com/jenni/). Delivered as a comprehensive software + service package, Jenni can help you run ideas campaigns that not only focus innovative thinking on your business needs, but also help you evaluate and review ideas in order to identify those which are most likely to succeed as profitable innovations. Whether you are looking for ways to slash your costs, develop highly innovative new products, alter your strategy to meet changing market needs or all of the above, Jenni and our team can help!

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

SELLING AND SERVICING JENNI

If you run an innovation consultancy or training business and would like to be able to offer Jenni (http://www.jpb.com/jenni/) to your clients, send me an e-mail (jeffreyb@jpb.com) and introduce yourself. Jenni is sold and service provided to clients through a global network of small, friendly and highly professional innovation shops. If you help firms innovate better and believe in fast client service, we would like to hear from you!

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 edited by Jeffrey Baumgartner and is published on the first and third Tuesday of every month.

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