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, 1September 2009
Issue 155

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.

18 THINGS YOU OUGHT TO DO TO INNOVATISE YOUR BUSINESS

Is your business innovative enough? If not, here are 18 actions you should be taking in order to innovatise it; that is to turn your business into an innovation powerhouse. The description of each action is necessarily short. But you can find more details on most of them by browsing the archives of Report 103 at http://www.jpb.com/report103/archives.php

1. Do it!

The first thing you need to do is stop talking and start acting. A lot of businesses are talking up the strategic importance of innovation. Far fewer are actually doing anything about it. But before you take action, read the rest of this article.

2. Set some goals

Once you've decided to take action, the first thing you need to do is to set goals. Determine what you wish to accomplish in terms of innovation and work out the steps you need to take in order to achieve those goals. Don't be unrealistic. If your firm has long been a conservative organisation with dozens of risk adverse committees reviewing every decision and killing off all that carry even the faintest whiff of risk, you are not going to become a dynamic, innovation driven firm overnight! But you can still set realistic innovation goals that slowly but surely transform your business to an innovation powerhouse over time.

3. Set some budget

The best goals in the world are not worth much if there is no budget for them. A budget not only funds your initiative, but it also signals to middle managers and others in the firm that you are serious about innovation.

4. Set some motivation

If employees are not motivated to share creative ideas and work on risky, innovative projects, your best innovation efforts will go nowhere. Well designed rewards schemes motivate people to participate in innovation initiatives. Rewards need not be material. Empowering creative employees to implement their ideas is a tremendously motivating reward. Giving people enough freedom to test wild ideas – without the threat of reprimand should the ideas not work – is highly motivational.

5. Learn the difference between creativity and innovation

Innovation remains a sexy business term. Creativity, on the other hand, is perceived as an arty activity performed by designers and advertising people. As a result, a lot of innovation consultants and self-proclaimed experts use the word “innovative” when they really mean “creative”. I define innovation – in the business context – as the implementation of creative ideas in order to generate value for the organisation, usually through increased income, reduced operational costs or both. Thus, ideas are not innovative until they have been implemented. Idea generation is a creative activity, not an innovative activity. A brainstorming event, for example, might be very creative. But if none of the ideas generated are turned into reality, it is not innovative. It may seem a matter of semantics. But with more and more people getting their terminology muddled up, it is easy to confuse creativity and innovation.

6. Be more creative

That said, you need creativity to feed innovation. So encourage creative thinking all the time. Get people to suggest not just obvious solutions to problems, but also wild and crazy solutions. When running ideation events (see below), encourage wild ideas. Indeed, no matter what kind of ideation event you run, emphasise that you want creative ideas. Research has shown that the simple act of telling people you want them to be creative will help them be more creative!

7. Turn problems into innovation challenges

Almost all business innovation is based on solving problems or achieving set goals. Look at the problems facing your business today and transform them into innovation challenges. For example if your product is not selling well to young women, you can set the challenge: “In what ways might we make our product more appealing to young woman?” or “What features might young women want to have on our product? You can read more on how to transform problems into challenges at http://www.jpb.com/creative/innovationchallenges.php.

8. Run an event to generate ideas to solve a challenge

Once you have formulated some innovation challenges, you will want to generate ideas. You can run a brainstorming event, an ideas campaign or similar ideation event. In a large organisation, an innovation process management software can manage an ideas campaign across even the biggest enterprises. But don't jump into any event blindly. Learn more about effective brainstorming, ideas campaigns and other activities. There is a lot of information on how to run such events on our web site at http://www.jpb.com/creative/ and in the archives of this publication at http://www.jpb.com/report103/archives.php

9. Look at challenges from different perspectives

When framing an innovation challenge (see 8 directly above), try framing it from different perspectives, such as from your customers', suppliers' or even competitors' perspectives. For instance, instead of asking “What new features might we add to product X?”, ask: “What would our ideal customers like to find on product X?” or “In our worst nightmares, how might our competitors improve their product X?”

10. Use structured evaluation processes

Be careful about simply choosing what seems to be the best idea generated during an ideation event. Because we humans tend to judge new concepts on what we already know, we have a tendency initially to like incremental improvements more than radical new ideas whose value may not be immediately obvious. A proper evaluation of ideas against a business criteria set is a much better way of identifying ideas with the greatest innovation potential.

And whatever you do, do not select the “best ideas” by a simple vote. One person is likely to choose an incrementally innovative idea over a radical one. A crowd will certainly do so. Expert evaluations using business criteria is the only way to ensure you are selecting ideas based on value potential rather than popularity.

11. Get in the habit of not implementing the first good idea you discover

When solving problems, we tend to take the first viable idea that comes to mind and implement it. This often solves the problem at hand, but is seldom a very creative solution. Instead look for multiple solutions to a problem and determine through evaluation (see 10 immediately above) which solution or combination of solutions will best solve the problem.

12. Bring in outside experts to kick off the innovation process

If your firm does not have a shining record of innovation, getting started on an effective innovation initiative can be difficult, especially if the champion behind it is someone from inside your firm. An expert outsider can bring new ideas and new ways of kicking off an innovation process. But be careful. I am often astounded by the lack of innovation knowledge demonstrated by many so-called innovation experts.

13. Invest in innovation process management software

If your firm has more than 100 people, the best way to provide the structure for an innovation process and to manage it is via an innovation process management (IPM) software application. I frankly think ours is best. See the advertisement below.

14. Incremental innovation is still innovation

When we think about innovation, we tend to think of exciting new products. They are indeed great to have in your line-up. Nevertheless, continuous incremental innovation is also important. Incremental product and process improvements increase your bottom line, keep you ahead of the competition and maintain the innovation process in your organisation. So, when not working on the next big idea, work on developing lots of small ideas. And, as always, implement those with value potential.

15. Set up implementation plans for radical ideas

Radically creative ideas are riskier than incremental innovations. Moreover, they may be very different from the usual concepts launched by your firm. As a result, you need to have a suitable implementation plan that takes into account the risk, the hurdles to implementation and metrics to measure success. Most likely the plan will include a series of milestones against which the implementation should be measured. If an implementation project does not meet a milestone, it should be re-evaluated and, unless there are compelling reasons to continue, it should be dropped so resources can be applied to a new creative concept.

16. Keep on innovating

Many firms have introduced highly innovative products and services, but have failed to innovate continuously in order to ensure their products stay at the cutting edge. As a result, their competitors copy their initial innovations and then go on to produce even better products. (see One Innovation Wonders in the 7 November 2006 issue of Report 103: http://www.jpb.com/report103/archive.php?issue_no=20061107 ).

17. Consider mistakes a part of the learning process

Successful innovation is usually at the end of a trail of many mistakes. Employees try new ideas, fail, learn from them and try again. However, each failure increases knowledge and strengthens your firm. If your work culture does not have room for mistakes, it also does not have room for innovation.

18. Sustain it

Innovation is not a one off event nor even a series of one off events, although such events are an integral part of innovation. Rather it should be a sustainable process in which employees are always encouraged to think creatively and invited to take calculated risks with new ideas and concepts. Once innovation becomes a way of life at your firm, it becomes a way of life!

EXPLOITATION INNOVATION

Have you ever heard of Seattle Computer Products? How about PortalPlayer? Both of these companies are responsible for minor innovations that became major innovations for other firms.

The Operating System

In the late 1970s, Seattle Computer Products developed a simple operating system called DOS (or Disk Operating System). About the same time, a then small company known as Microsoft desperately needed an operating system for a deal it was working on with IBM. Microsoft wanted to produce operating systems for the latter's soon to launch personal computer (PC) using the new Intel 8086 chip. Since Microsoft did not have a product of their own, they licensed Seattle Computer Product's DOS operating system in 1981. In fact, Microsoft bought out all rights to DOS for just US$75,000, renamed it MSDOS (for Microsoft disk operating systems) and the rest is history.

Although MSDOS is no longer used by Microsoft, it nevertheless became the basis for the company's growth and wealth. Early versions of the company's Windows even ran on MSDOS. Meanwhile, Seattle Computer Products went bankrupt long ago.

The Music Player

PortalPlayer, founded in 1999, was a fabless semiconductor firm that developed system-on-a-chip semiconductors, firmware and software for personal media players. The value of their pioneering work in the field was recognised by Apple and used in making their seminal iPod. Although there is no doubting PortalPlayer's inventiveness in the field, they possibly lacked the commercial vision of Apple CEO Steve Jobs. In 2007, the company was acquired by NVIDIA Corporation for US$357 million.

Innovation Value Return

There is no denying the creativity and innovativeness of Seattle Computer Products and PortalPlayer. Their technologies supported two major innovations of recent decades: MSDOS/Windows and iPod. Nevertheless, neither firm benefited substantially from the value potential of their products. And while I do not know the details of either firm, I would guess they were managed by people with greater engineering expertise than commercial acumen.

On the other hand, Bill Gates in the 80s and 90s had a tremendous ability to spot opportunities and exploit them. That's why the company he co-founded, Microsoft, has consistently been one of the world's most profitable and he is one of the richest people on the planet.

Likewise, Apple's CEO, Steve Jobs, shows a remarkable ability to launch products that tap into what gadget loving consumers will want next. Both iPod and iPhone have been huge successes which transformed a company, known for its quirkily user friendly computer operating system, into a hugely profitable giant – and one of the trendiest multinationals.

Lessons to Be Learned

Contrary to popular belief, innovation is not about having great ideas or inventing incredible products. Rather innovation is the implementation of creative ideas in order to generate value, typically through reduced operational costs, increased income or both. The ideas behind those innovations need not be devised or even initially developed by the innovator.

Thus DOS was a relatively minor innovation for Seattle Computer Products and a major innovation for Microsoft.

Likewise that innovative breakthrough your firm is due to launch in the near future need not be based on a technology or concept developed in-house. Indeed, it might be based on a concept you license from another firm that has the relevant expertise to develop the concept. Your firm can take care of the exploitation.

By the same token, if your organisation has the expertise and ideas to develop innovative new technologies, products and processes but lacks the commercial clout to market them – perhaps you should make yourself known to the big firms that can better exploit your inventions. But be sure you strike a good deal! But note, few firms are interested in buying ideas. They typically want well developed concepts.

References

Wikipedia on MSDOS: http://en.wikipedia.org/wiki/MS-DOS
Wikipedia on PortalPlayer: http://en.wikipedia.org/wiki/PortalPlayer

PATENTS AND INNOVATION

The theory behind patents is that they protect the intellectual property behind innovations, thus enabling inventors to profit from their ideas. As a result, patents are said to spur innovation. However, this is a contentious issue among many. Patents are notoriously expensive to acquire, putting them out of the reach of small companies and independent inventors. Moreover, a few organisations seem to focus on submitting patents for the sole purpose of waiting until another company uses a similar technology – and then suing that company!

Still, governments insist that patents, in spite of their flaws, are good for innovation. However, recent research by Andrew W. Torrance of the University of Kansas - School of Law and Bill Tomlinson of the University of California, Irvine suggests that the opposite is true: patents may actually stifle innovation!

The Patent Game

Torrence and Tomlinson developed a multi-user interactive patent simulation game that allowed participants, who were first year law students who had never done any patent related coursework, to invent, make, sell and steal innovative concepts. Their findings are interesting...

“The Patent Game uses an abstracted and cumulative model of potential innovations, a database of potential innovations, an interactive interface that allows users to invent, make, and sell these innovations, and a network over which users may interact with one another to license, assign, infringe, and enforce patents. Initial data generated using The Patent Game suggest that a system combining patent and open source protection for inventions (that is, similar to modern patent systems) generates significantly lower rates of innovation (p<0.05), productivity (p<0.001), and societal utility (p<0.002) than does a commons system. These data also indicate that there is no statistical difference in innovation, productivity, or societal utility between a pure patent system and a system combining patent and open source protection.”

In other words, when participants did not patent their ideas, but rather developed them in an open “commons” environment, they tended to demonstrate higher levels of innovation.

You can download their complete paper at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411328

Reference
Torrance, Andrew W. and Tomlinson, Bill,Patents and the Regress of Useful Arts(May, 28 2009). Columbia Science and Technology Law Review, Vol. 10, 2009. Available at SSRN: http://ssrn.com/abstract=1411328

INNOVATION IN YOUR LANGUAGE

We are delighted to announce that Jenni innovation process management web application now is now available with a multilingual interface. This means that Jenni can now communicate to your employees in any language on Earth. And, thanks to our streamlined localisation tool, we can deliver Jenni in your language, or choice of languages, very quickly.

As a result, if your firm is a multinational one and you want an innovation process management application that everyone can use irrespective of their language skills, Jenni is your best choice – if not your only choice!

About Jenni

Jenni is a service that provides your firm with an innovation process and a web based platform for managing it. Jenni comprises an application your employees access over the web and a human innovation coach you can access by telephone or e-mail.

The result is a turn-key innovation process management (IPM) system that you can have operating in your firm in no time and for a low, predictable monthly subscription fee. And the more you use Jenni, the more you profit through the implementation of innovative product, service and process ideas that increase income, reduce costs and make your clients happier.

Global in Scope

Our clients include financial institutes, chemical manufacturers, food manufacturers, utilities and media companies in the USA, Europe, Australia, Brazil and Africa. They have used Jenni to develop new products, repackage existing products and reduce operational costs through improved efficiency. The result is cost savings far in excess of the cost of Jenni.

Our Guarantee

We are so sure that Jenni can enable your firm to generate new income opportunities and cost savings through innovation that we offer a unique guarantee: if Jenni does not pay for itself several times over in your firm, you can cancel your contract at any time and without penalty!

Want to Know More?

If you would like to know more about Jenni, its multilingual options and how it can help streamline your innovation process, visit http://www.jpb.com/jenni/.

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 your, your client and jpb.com!

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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