Monday, November 28, 2005

Where there's a way, there's a will

Do you ever play the game where you turn around a phrase to see if it makes sense in reverse? You know, for example - plan your work, work your plan. That makes sense both ways. Some statements only work one way and not reversed. Sometimes, you'll discover that a phrase turned around has an interesting and relevant new meaning. Like the one we are using today to talk about innovation.

Most innovation processes and thinking seems to take the form of "Where there's a will, there's a way". In other words, if someone will just believe enough, and push enough and advocate enough, we make convert an idea to a new product or service. Regardless of the obstacles, the lack of compensation and process, a true believer can convert an idea into a new product. At least that seems to be the prevailing school of thought.

Suppose, though, that we turned the phrase around. What if we considered the phrase to be "Where there's a way, there's a will". Would by definition ideas move more quickly and would people become more involved if there were processes and systems to move ideas to launch effectively? Would an established, standard process mean greater likelihood of participation and results, over the solo hero approach? I have to think the answer is yes.

Why? In the first approach, the only ideas that will move forward are those with fearless champions who are willing to scale any obstacle to push their idea ahead. While these folks can be very vocal and aggressive champions, usually you'll find these people have an agenda when they push and idea, or that the reason they are pushing alone is that no one else bought in. Also, it is difficult, dangerous and time-consuming to be what I call a "solo hero". Tilting at windmills in your organization usually does not lead up the corporate ladder. So, in this case it is difficult and unusual to find the best "champions" and difficult and dangerous to try to push the idea through the corporate bureaucracy. What's not to like?

On the other hand, standard processes and systems around innovation means that anyone can contribute an idea, and know that the idea will receive some standard evaluation. No one person has to be the "hero" and everyone can participate. Open, transparent standards made many systems more effective. Consider the difference between early computing and where we sit today. Almost all of the advances are based on standards. With a standard approach, more people can participate. There's also the increasing marginal return of a network involved. As more people participate, the value of the network increases. So with standard processes and systems, the individual wins, the firm wins and the ideas flow.

What does this say about our innovation initiatives? As with any other process, define a standard business process around innovation and compensate and motivate people to use and follow the process. As they do, the value of the process, and the value of the ideas that result, will increase.
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posted by Jeffrey Phillips at 1:40 PM 34 comments

Wednesday, November 23, 2005

What's an innovation?

When we are out talking to people about innovation and idea management, there seems to be a "fork in the road" in many of our conversations. Like good adherents of the Yogi (Yogi Berra that is) when you come to a fork in the road, take it.

The metaphorical fork is to define what an "innovation" is. The fork drives whether we talk to people about innovations that are purely "product" in nature - that is, ideas that are really products or product extensions, or ideas that are more intangible. The fact is, both of these concepts are innovation, and both should be managed effectively.

In our definition, an innovation is an idea that you move into valuable action. This definition encompasses the idea, which is somewhat intangible, and suggests that innovation is more than simple creativity, which is idea generation with no tangible result. No, our definition suggests that real, valuable innovation creates a valuable outcome. That outcome could be a new product, a new service, a new business model, a new initiative, or a new program.

In this manner, every firm, every organization, small and large, for profit or not for profit, manages innovative ideas. A not for profit may generate ideas about ways to better serve its community. An automotive company may generate ideas about how to obtain greater fuel efficiency. A marketing firm may generate ideas about new marketing campaigns for its customers. All of these ideas should be captured and evaluated, and some of them launched as new products, services, programs or initiatives. The "launching" part of the definition is where part of the "valuable" action takes place.

Too many times, people assume a new idea has to be very tangible to be valuable, that it has to represent a product or a product extension. These folks believe ideas about intangible things or initiatives are too hard to manage and justify. We don't believe that is the case. In fact, many really innovative ideas are business model or service model changes.

A good example - Apple and the iPod. Apple didn't invent the portable music player. I'm old enough to have a Sony Walkman, a Sony Discman, an MP3 player and a portable radio in my closet gathering dust. What Apple did was combine the player with a trusted music distribution source and an easy way to obtain the music, get the music from the distributor to the hardware, and enjoy the music. Apple didn't change the music player - they changed music distribution.

I doubt that they "meant" to do it, but there it is, nonetheless.

Ideas that represent intangible initiatives, programs and business or service models are just as important as ideas that represent products, and should be valued as such and treated as carefully.
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posted by Jeffrey Phillips at 8:19 AM 36 comments

Tuesday, November 22, 2005

Innovation Perception Gap

In studies we've read about innovation initiatives, there's been a fairly significant trend. Every survey or study on innovation I've seen indicates that a very high percentage of respondents indicates that innovation is very important for their business. This result is true across studies and surveys from Arthur D Little, Bain and several other consulting firms.

We conducted a smaller, probably less "statistically significant" survey of our Outlook Add-In users recently, and also asked questions about innovation. Our results confirmed what we've seen in other studies - most firms are very aware of innovation as a differentiator and growth engine for revenue and profits, and many firms are beginning to turn their attention to innovation.

In our survey, over 90% of the respondents felt that innovation was important in their industry, and over 85% of the respondents indicated that their management team emphasized innovation. Over 66% of those responding said that there is a current innovation initiative within their organization.

The perception gap occurs when we begin to dig a bit deeper to understand what's actually happening in these firms. When we asked about actual cultural and process changes, the numbers drop significantly. We asked in the survey whether or not the firm had specific metrics tied to innovation. Of those that responded, only 38% indicated their firm had metrics tied to innovation. In addition, only 25% indicated that their firm had standard processes and systems to support innovation.

Again, these findings are consistent with other surveys, and indicate that innovation as a business initiative is just in its infancy. Innovation has a perception gap - the gap between what managers are saying and the changes they've implemented to reinforce innovation. This same gap appeared early in the emphasis to become "closer to customers" as CRM began to penetrate large organizations, and as Six Sigma and quality became a significant corporate initiative.

Generally speaking, management teams start talking and emphasizing these initiatives long before the systems, processes and metrics are put into place. The real measurement over time will be to evaluate how many firms design and build systems and processes to speed innovation, and establish and report innovation metrics.
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posted by Jeffrey Phillips at 7:57 AM 38 comments

Monday, November 21, 2005

Repeatable Innovation

It seems to me that there are a few firms that have a repeatable, sustainable innovation process or framework. Proctor & Gamble, Chlorox and a few other consumer packaged goods firms seem to have a fairly well defined process to turn the crank and figure out how to innovate incrementally - that is, how to add bleach to Tide, or how to add the "grease fighting power of Dawn" to a tablet for your dishwasher.

I think some of the semiconductor firms like Intel and AMD probably have a fairly good idea of a product roadmap. They have a good understanding of the demands of the market and the speeds their chips must produce, and can produce, over the next 18-24 months.

These examples are ones where the market is fairly consistent and linear, and the incremental innovation is relatively obvious - the next turn of the crank so to speak. To give credit where it is due, these firms are looking ahead, reading the trends and incorporating customer needs and some future expectations into new products and services. They understand the product roadmap and the need to innovate new products and services - even if that innovation is simply an extension of an existing product. Most firms, however, don't even have a good sense of what to do next, much less a process to support new products and services.

What do most firms do to begin innovating? I suspect many of them think innovation is an occurence - something that happens once and cannot be sustained. In some cases, this might be true but that's unfortunate. I like to think of successful innovators as emulating the teams at GE and Motorola who implemented quality systems in the late 80s and early 90s. Their mantra was "Quality is a journey not a destination". What they meant by that was there was no "end point" - quality must be consistently improved. Innovation is similar - it should not happen once, and it must be carefully nurtured and grown.

If innovation is not going to be just a "once in a lifetime happening" but something we'll have to do consistently, then we need to define some process, which we can use and repeat and improve over time. Sustainable, repeatable innovation is our goal - constantly improving the approach till innovation is almost second nature in our business. Otherwise, the innovation focus will wither on the vine, as everyone understands it is just another passing management fad.

Whether you focus on incremental innovation, transitional innovation or a truly disruptive innovation, you and your team must implement the methodology and process to support the team for the long term. Innovation can be a once and done event, but it will not be sustainable without the process, methodology and cultural changes that take effort and time to build.
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posted by Jeffrey Phillips at 8:30 AM 35 comments

Wednesday, November 16, 2005

Waiting for Innovation

For another blog I write (Thinking Faster), I once wrote a riff on Dr. Seuss's book "Oh, The Places You'll Go". This made perfect sense because the book is meant to charge up a kid (or an adult) to be proactive, to have confidence and to get going. The contrast within the book is the horrible place Dr. Seuss called the "Waiting Place". That's a place where people are constantly waiting for things to happen and not taking action or control.

For a lot of people interested in innovation and idea management, they are stuck in the Waiting Place. They'd like to be more innovative, and they can see that many great ideas and initiatives never get considered or even see the light of day. They are constantly waiting for someone, anyone to put a process or template or framework in place and to receive permission from on high to get started.

Well, get comfortable with the Waiting Place. Find a good bench and read the paper. Innovation is not going to come to you, you'll need to go to it. Even as an individual in a company hostile to innovation (and what firm would admit to that?) you can get started and make a difference every day. How?

There are several things you can do right now to become more innovative individually and more importantly collectively:

1. Write down your ideas and those of others and begin to develop your own frameworks about how to assess or evaluate the ideas.
2. Share your ideas and your framework with others that you interact with. Yes, it will have to be your own personal crusade for a while. Innovators have thick skins.
3. Make a difference right where you are. Make some change to your process, your work habits, how you interact with your office mates. Almost everyone in business is part of a business process at some level. Can you create an idea that improves the process upstream or downstream?
4. Pester your customers and vendors to improve how they work with the firm.
5. Tell your manager that you'd like to work on projects to help innovate a new product or service.
6. Become a Chuck Frey. Chuck has become a virtual clearinghouse of information about innovation. He has well positioned himself as an expert in the field through aggregating information and commenting on innovation.
7. Start your own blog and find people who agree with your viewpoint.
8. Start eating lunch with like minded people from your organization or other business functions and build a virtual innovation team.

I could go on and on (and probably have). Innovation is important to your manager, and to her manager, and right on up the chain to the CEO. Problem is, most of them can't or won't admit that they don't have the magic formula to bring innovation into the business. Rather than wait for the blessings on high to rain down, get started. Otherwise, get comfortable on the bench.
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posted by Jeffrey Phillips at 8:16 AM 35 comments

Tuesday, November 15, 2005

Predicting the future

In the Wall Street Journal Friday there was an interesting news item. A large PR and marcom firm, Weber Shandwick, established a partnership with BrainReserve, the firm run by Faith Popcorn. For those of you who aren't familiar with Faith Popcorn, she is one of a small group of futurists, who gather data and trends and make attempts to understand and put into context what they think will happen in the near future.

Faith Popcorn is relatively famous for coining the word "cocooning" to mean that adults would start to spend more time relaxing and entertaining at home. This meant more money would be spent on home improvements, larger houses with larger entertainment centers, more and larger televisions and other personal electronics gear. To a great extent, she was right. Ms. Popcorn has published several books, including one entitled The Popcorn Report.

The article continued to state that Weber Shandwick saw the partnership as a way to drive more and larger projects from large marketers.

What's this got to do with innovation? Everything.

As I've written before, there are three types of innovation: incremental, transitional and disruptive. Futurists can definitely impact incremental innovation. By incremental we mean the next turn of the screw, additional features and capabilities for existing products and existing customers. Transitional innovation means creating a new market with an existing product or service. Futurists can probably help here as well.

However, I have some concerns about futurists advising teams working on disruptive innovations. By definition, futurists are consider existing and potential future trends and drawing conclusions based on experience. What can we say about trends and experience if a product or service is intended to completely disrupt the status quo? It seems like a futurist would be just as likely as anyone else to discourage a disruptive innovator.

I think every firm should have a small team dedicated to gathering and analyzing trends and reporting that in some type of synopsis as part of a competitive database. I'd rather see that work done in house rather than outsourced to a firm with potential biases, but if you can't do this in house then get it from somewhere. Just keep it away from the disruptive types.
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posted by Jeffrey Phillips at 2:07 PM 34 comments

Monday, November 14, 2005

What's in your innovation basket?

Innovation, like any coming fad, means many things to many people.

There are firms across the country innovating every day, if by innovation we mean small, incremental improvements and changes to existing products. However, I suspect that for many firms, innovation means more than that.

There are at least three significant types of innovation. Well, there are probably more but since this is a blog and not a book, we'll look at just three: incremental, transitional, disruptive.

Incremental innovation is about the next ratchet of an existing product or service. Do you like Tide? Would you like Tide with Bleach? Much of this type of innovation is driven by focus groups. It takes things that make sense and seem natural together - laundry detergent and bleach for example - and puts them together. Incremental innovation is important and probably the most consistently practiced. However it is not really very defensible and does not radically change a product, service or market.

Transitional innovation is about a new thing that takes a significant leap but is not a truly "radical" or disruptive change, as we'll define in a minute. My favorite example of this is something that should have been obvious but wasn't - the Swiffer. Take a mop and make the head detachable and disposable. It's like sweeping and mopping at the same time! Who knew they needed this? But the Swiffer has become a really great new product. However, it still requires that we sweep or mop the floors, so it's not a truly radical innovation.

A truly "radical" or disruptive innovation is something that completely changes the status quo or disrupts a market. A good example is the switch from solid state to semiconductor, or from horse and buggy to automobiles. In the automotive example, thousands and thousands of people lost jobs making buggy whips as the need for buggy whips disappeared and the need for mechanics was created. Clayton Christensen is probably the best author to read to learn more about disruptive or radical innovation.

So, what's this got to do with you and your firm? Everything. Any firm should be considering ideas, products, services and business models that reside in all three categories. Placing all your emphasis on incremental innovation means someone will come along and change the space while you're not looking. Betting all the farm on radical innovation could mean a lot of heartache as many radical innovations fail, but just one successful one can create an entire new industry. No, as good portfolio managers we need ideas in all three categories, distributed according to the risk tolerance of your firm and speed of innovation in your industry.
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posted by Jeffrey Phillips at 5:55 AM 31 comments

Friday, November 11, 2005

Where is innovation happening?

Things are never quite what they appear to be, or what you might think they "ought" to be. For example, I thought that we'd find "innovation" happening in firms that are known for idea creation - specifically, advertising agencies, marcom firms, product design firms etc.

Well, we did - to a point. These firms are constantly generating new marketing slogans, advertisements, and product designs. Yet not one of them seems interested in processes or software to support innovation. In fact, the "creative" types in these organizations that we've worked with have indicated that they view it as "beneath" them to suggest that they'd want or use such tools and processes. The problem you encounter in some of these firms is the cultural aspect. These firms already consider themselves "innovative" - why would they need cultural or process change? What can an outsider tell us about innovation?

A good counter example has been the amazing reception we've received in industries where you'd never think that any innovation was occurring. In fact, in some of the most down and dirty, commodity businesses imaginable, innovation is taking off and those firms are clamoring for help with their culture, processes and systems. I guess it's a recognition that they know what they don't know, and are willing to ask for help.

One of the best examples to me that innovation is entering the mainstream consciousness is the fact that Ford is running a series of advertisements stressing its differentiation around innovation. When a Big Three car company gets on the innovation bandwagon, you can rest assured that innovation is entering mainstream thought. Now the question is - will they be an innovation company that merely talks about innovation without processes or tools, or will they, like many companies fighting for differentiation, change their culture, their tools and their processes to really implement innovation?

Real investments in innovation are being made in what may seem very unlikely places. I've seen more focus on innovation in industries that most folks would consider commodities, or even ones that might not remain long in western countries, since their labor and manufacturing costs are so high. The rationale most of these firms have for innovation is the need to 1) continue to find the best way to design, make and deploy their products and 2) find the next new product or service before their competitors do.

That's where innovation matters and that's where I want to be.
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posted by Jeffrey Phillips at 8:33 AM 32 comments

Thursday, November 10, 2005

Too important to be left to chance

In many organizations, innovation and idea management are considered something of a "black art". Since there aren't any "hard edges" around how innovation is accomplished, and since it often seems only "creative" people can generate ideas, many people look at innovation as a black box - they are unsure what happens that generates ideas.

With this fairly common viewpoint, many firms don't have methodologies or processes to generate, capture and evaluate ideas. In fact, in many firms we've worked with, there are no standard approaches to generating and capturing ideas, and no consistent approach to evaluating ideas and launching new products or services. If innovation is so important, why is it so often left to serendipity or chance?

A recent study by Booz-Allen indicated that over 80% of CEOs surveyed felt that innovation was the best path to sustained organic revenue and profit growth. A recent Arthur D Little study on the importance of innovation found that senior executives ranked "enhance innovation ability" as the number one most important "lever" to increase profitability and growth. These studies and others indicate that senior managers and executives are at least THINKING about innovation. The question here is whether or not they are going to IMPLEMENT purposeful innovation methods, processes and systems, and change corporate cultures to reinforce innovation.

For many businesses, innovation is simply too important to be left to chance. We can outsource almost anything - from manufacturing to accounting to sales. We can and have cut costs out of our businesses. Yet none of these actions creates new products and services. A firm simply cannot cut its way to greatness. Innovation offers a clear cut path to developing new revenue streams and models. Right now many executives have experience "right-sizing" operations and taking cost out of the operating model. Will they realize soon enough how important revenue growth and differentiation through innovation can be?
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posted by Jeffrey Phillips at 8:15 AM 33 comments

Wednesday, November 09, 2005

Innovation Bandwidth

According to most theories about process and process management, every process has a theoretical bandwidth - that is, the maximum amount of units per hour that the process can sustain. According to The Goal and other theory of constraint systems, every process has a bottleneck which limits throughput.

What's that got to do with innovation? Well, maybe quite a bit if your innovation process is limited in its throughput capability. If you need to manage several ideas at the same time and bring them forward as new products and services, does your firm have the bandwidth to do that successfully?

There are several strategies for moving a good idea through a process to become a new product or service. One of the more common approaches is to assign a "champion" who acts like a guide and wrangler, moving an idea forward through incubation, evaluation and new product development. This is a fine and accepted approach, but is clearly not an optimal approach for any business with more than a few ideas. Why? Well, for starters there's just not that many people who make good idea champions. It's a hard job to push a string uphill and takes a special kind of person with real commitment to the idea. In many cases the champion has to take on the management of the idea along with his or her regular workload. I think the number of these types of "champions" in any organization is going to be low.

Additionally, if your firm relies on a "champion" model, it stands to reason that the processes and systems probably aren't that great to support the idea management and incubation process. Where systems and processes are lacking, people fill in the difference. If that's the case, then the champion is working an idea with little help from any existing processes or systems, and that makes the work that much harder. The innovation bandwidth has to be small.

Another strategy is to implement a defined process and supporting systems to move ideas through an incubation and evaluation framework. While this approach is not a panacea, it can provide more innovation bandwidth as many people can participate in their specific phase or section of the process, rather than the entire process. Another benefit is that as more people are involved, the idea is evaluated from many different viewpoints and gains value.

A hybrid strategy that we've seen connects the "Champion" model with defined processes and systems. In that case, a champion is responsible for moving the idea with the participation of others using the established systems and processes.

Without established innovation and idea management processes and systems, the role of the champion is very difficult and the number of ideas which can be considered and incubated is small. In a time when innovation is increasingly important, why would you rely on an approach with such a severe bottleneck?
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posted by Jeffrey Phillips at 5:02 AM 37 comments

Tuesday, November 08, 2005

Converting the masses to innovation

I was thinking just yesterday that there are some very interesting parallels between the adoption of innovation in a business and the adoption of a religion in a society. Let's use the adoption of religion as a metaphor for bringing a focus on innovation into your business.

A new religion enters a region usually as the result of a person - we call them missionaries. They bring their belief systems and a zeal for sharing that belief system with others. Missionaries are not so worried about personal status, money or fame, just sharing the religion they believe in. Believe it or not (had to throw that in there), I think innovation takes root in many organizations in the same fashion. Each company has a few true believers who want to change the status quo, and will do what it takes to change how people think and act. For many years companies even had a title for individuals who did this dirty work. They called them evangelists.

Now, when a new religion enters a region, it is usually resisted by the existing population if there are strong belief systems. A new religion is therefore almost always initially subversive, and threatens the status quo. Innovation is similar. It begins to force teams and businesses to think about the future. What are the next products, the next services that we should offer? How do we get from here to there? That work almost always requires change.

Next, a religion usually establishes a beachhead in a region. Generally speaking the "establishment" grudgingly accepts the religion and seeks to contain the spread of the religion. Same thing happens in innovation. Instead of infecting the entire organization, we notice that some people can't be persuaded to back down from their ferverent beliefs in innovation, so to mollify them we create a skunkworks. Stick all the "innovative" types out in a place where they can work together and not bother the other folks.

Next is the critical mass moment. For a religion, there's a tipping point. At some point the number of believers grows to the point where the status quo becomes the religion, or the religion is forever relegated to a small minority of people. I can't say for sure what causes the tipping point in religion, but the same model holds in business. Sometimes the skunk works simply can't contain the energy and enthusiasm of the innovators and the entire business gets infected with the belief system. This usually happens when senior management recognizes the value of the innovation system and begins to become a convert. Then what generally happens is that the senior management creates evangelists from the skunkworks and sends the team out to convert the company, with the blessing and backing of senior management.

At some point, the once subversive religion becomes the norm. Let's face it, innovation is initially a belief system. Truly innovative firms believe they can influence the direction of products and services and work consistently to impact the way we work and live, and the products and services we buy. You cannot work at a firm like P&G or 3M or Apple and not recognize the belief systems about innovation and how they are reinforced throughout the culture.

A focus on innovation requires a strong cultural component, and that cultural change can be effected from the top down or the bottom up. Unless the CEO is willing to become the evangelist, I think the best way to impact the culture is through small, innovative teams that demonstrate results. Management needs to set the cultural direction and encourage innovation, and reward success and early failures. The people in a firm that wants to become more innovative need to believe that innovation is important. The culture must reinforce that belief.

Welcome to the church of innovation. In business, there's no higher calling.
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posted by Jeffrey Phillips at 4:52 AM 35 comments

Monday, November 07, 2005

Creativity is overrated

For a long time now we've been told that to be "creative" is cool. Creative folks are the people who come up with the snappy patter, the cool mantras, interesting user interfaces, best new ideas. Well, I guess that's all true, as far as it goes. My question is: So what?

I don't want a really well articulated idea on paper. I want a new product or service or feature. Being creative and generating a lot of ideas is almost pointless if those ideas merely fall by the wayside.

Instead of celebrating the folks who generate ideas, we should celebrate the people who can take a raw idea and evolve it and incubate it through a system or methodology until it's ready to be used, consumed or implemented by a customer. That's when the idea has real value.

Take a look at any marcom or advertising firm. Most of them will have one or two "visionaries" who generate the next big thing. They come up with the ideas. After that, there are marketing people, marcom people, messaging people, production people, operations people and others who are charged with making the vision a reality. In other words, there's probably a 1:10 relationship between the folks who simply create the ideas and those it takes to fully flesh out and package the idea in a way that others can use it. So, it seems to me that the "hard work" of creativity (and by analogy innovation) is in the methodology and process.

Most people can be creative, if by creative we mean coming up with an interesting new idea or vision. But in most "creative" firms there are one or two primary creative people backed by many "operations" and "production" people who make the idea workable. These are the people we should celebrate. Creativity is interesting but not particularly useful by itself, since without the means of production most ideas don't become valuable goods and services.

Let's stop focusing on the "creative people" and start focusing on the innovation process.
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posted by Jeffrey Phillips at 10:08 AM 41 comments

Sunday, November 06, 2005

Idea Organization

This is really no way to run a railroad. Fortunately, most of us aren't running railroads. Unfortunately, most of us do have to continually differentiate our companies, create new products and services and innovate constantly.

Most firms we speak to have ideas literally lying around on the floor. Ideas everywhere. It reminds me of the "Rime of the Ancient Mariner" - ideas everywhere but no way to organize or implement them.

This is quite honestly a very perplexing issue for me. If 85% of CEOs believe innovation is important, and a key driver for organic revenue and profit growth, and if we have ideas literally lying around the shop, why aren't there more processes and systems to manage these initiatives, products and ideas?

Think about this for a second - your CEO identifies an initiative as very important. His or her compatriots at other firms in the same industry agree and also place focus on the initiative. "Everyone" knows the raw material to fuel the initiative is simply lying around in the firm. Wouldn't you expect that someone, anyone would decide that a process or system to implement these great ideas would be very valuable?

Why are there so few idea management systems in existence? I can only think of a couple of reasons:

1. Innovation and idea management really aren't that important - all this dicussion is only lip service.

2. Innovation and idea management are important, but no one is quite sure how to implement systems and processes to support innovation.

3. Innovation and idea management are important, but no one believes a system or process will change anything.

I doubt that anyone thinks that innovation is not important. I think that generally people either don't believe that systems will improve idea management, or are just uncertain how systems or processes would impact them.

Even if all these arguments are true, wouldn't you expect more people to implement systems and processes to harvest the best ideas in any firm?
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posted by Jeffrey Phillips at 5:46 PM 36 comments

Friday, November 04, 2005

Atomic model of innovation

I think we've got the model all wrong in some respects about innovation. It seems to me that the idea is to generate dust clouds of ideas and thrust some smart people into the cloud, and by osmosis or sheer insight they'll pick the ones that make the most sense. In this model, lots of ideas are generated - good and bad - and a few people are "in charge" of figuring everything else out.

This approach forgives the lack of process - in fact it really doesn't need any process - but it certainly relies on having a few very insightful people who can glean the great ideas from the mass of irrelevant and meaningless ideas. Sort of like seeking needles in needle haystacks. What happens in this model is that the people in charge of selecting the ideas often just generate their own, since it's too hard to identify good ideas among so many generated. The idea submitters see their ideas go into a virtual cul-de-sac, and become discouraged and fail to continue to contribute ideas.

My recommendation would be to reverse the model - still using a rather atomic model of innovation - but in my model the people and process become the "electrons" spinning around a nucleas of ideas and systems to support the ideas. I'm arguing, in fact, that MORE people working on FEWER ideas is probably a better bet. Why?

Well, it's not as though the old model is really working that well, but that's not a great rationalization. There are probably three reasons why I think my model is better.

1. More people working on ideas and interacting with each other will naturally spark combinations and new ideas that weren't thought of before. In some cases, more heads do make better decisions and can create better frameworks.

2. Ideas need a home. Trying to push a few smart guys and gals through a dustcloud of ideas hoping one will differentiate itself is just not a great strategy. Too many "ideas" are sitting in Excel spreadsheets, shared folders, Word documents and other containers, which don't provide visibility, ranking and importance factors. One central location - the nucleas - is needed for ideas.

3. In any atomic nucleas, there are the protons, which hold the nucleas together. In my model, this would consist of the systems, processes and cultural factors which bind the ideas and the people working on the ideas together. Like it or not, an orderly process is more powerful than disorder. Nature reminds us of this constantly. We humans need order - we are not good at managing things that don't have some order associated or imposed.

Let's put things right as we innovate. Put the ideas, processes and the systems that support them in the center, as the nucleas of our model, and encourage more people to participate.
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posted by Jeffrey Phillips at 8:00 AM 36 comments

Thursday, November 03, 2005

Idea Killing System

Speaking with a large corporate customer early last week, we met with the innovation champion and the CIO. As with any large organization, the innovation champion is excited by the number, breadth and depth of ideas floating around in his organization. He's trying to harness those ideas and convert them into new products, new services, new business models.

The CIO on the other hand is skeptical. He thinks all the ideas floating around are bothersome. What does he want? Not a system to improve idea management - he wants an "idea killing system". And in some respects I think he's right.

Let's assume for the sake of argument that a sales pipeline can be a rough model for an idea pipeline. In most businesses, 100 contacts are made for 10 meetings to close one deal. Of course it's not nearly that "clean" and precise, but you get the point - a lot of conversations and contacts have to be made to close a deal. In the same manner, lots of ideas have to be generated and evaluated to create one new product or service. This is because we don't have perfect information at the start, and as we work with ideas new information comes to light to discredit many of those ideas.

What the CIO wants is a way to move from 100 ideas generating one new product or service to a situation where it takes only 10 ideas to generate one new product or service. The other 90 ideas are not necessarily wrong or invalid, but there are limiting factors and those need to be identified quickly so more time is spent on the ideas which can have a near term impact.

What's needed is a method to capture all the ideas and work them in a framework so the best ideas can "bubble up" and receive more attention and funding. The remaining ideas will be retained and consistently evaluated, since the limiting factors may be issues like market conditions or technology hurdles which will change in time.

Hopefully, we'll give him an idea killing system, just one dressed in the clothes of a system intended to capture, manage and evaluate ideas more effectively.
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posted by Jeffrey Phillips at 7:23 AM 39 comments