Innovation in Practice

Innovation Suite 2009

Here is an opportunity to learn innovation from the same people who taught me.  The course is called Innovation Suite 2009, and will be held July 27-29, 2009 in Rochester, Minnesota.  For registration and more detailed information, please go to www.sitsite.com/2009innovationsuite. 

Here are some excerpts about the course from the registration site:

Innovation Suite 2009 will help you successfully apply innovation to three critical levels in your company: individual, team, and organization-wide. Each day of this 3-day course focuses primarily on one level. We will take you step-by-step from the basic tools and principles of the SIT method through hands-on team innovation and company-wide sustainable processes.

Agenda

Day 1 – Innovation part I: Use SIT to be more effective by thinking and acting differently. The first day is all about you and your work: improve your ability to act, think, react, and deliver, by using our tools and principles, while generating unique, efficient solutions for practically any situation. You will know how to apply the following to your tasks:

• SIT’s principles and thinking tools for New Product Development
• SIT’s approach to Problem Solving

Day 2– Innovation part II: Be an innovative manager by working innovatively with your team. The second day is all about you and your team, harnessing their knowledge and resources to meet your targets and raise the performance bar.  You will know how to run a local innovation process after you:

• Learn how to identify needs and opportunities for innovation
• Plan and lead a team-innovation session on your topic of choice

Day 3 – Sustainable innovation: How to make it work for your company. This day is about adapting the knowledge you have acquired in the first two days to your company’s strategy, structures and needs. You will learn how to further extend the innovation process and gain support on all management levels, from departmental execution to corporate level strategy.  You will know what is needed to make innovation a long-term, sustainable element of your area of responsibility:

• How to measure innovation success
• The necessary conditions for ensuring successful innovation processes
• How to use existing organizational structures and resources to support the innovation process
• How to foster innovation and motivate peers and subordinates in your area of responsibility.

 

The LAB: Innovating a Credit Card with S.I.T. (June 2009)

Credit card companies must innovate to overcome the financial and public relations consequences of recent government legislation.  The Credit Card Reform Act of 2009 is a "bill to protect consumers, and especially young consumers, from skyrocketing credit card debt, unfair credit card practices, and deceptive credit offers."   These changes go into effect in 2010, and they will undoubtedly reduce the financial performance of card issuers.

The concept of using a card for purchases was described in 1887 by Edward Bellamy in his utopian novel Looking Backward.  Bellamy used the term credit card eleven times in this novel.  The credit card has become a ubiquitous symbol of consumerism since then.  Many credit card innovations have emerged, some useful and others wacky.  Recent innovations include: paperless statement; online statements; custom logos to display your affiliations with colleges, companies, and other groups;  a magnetic strip to read information more efficiently and securely.

The key for credit card companies is to reduce their reliance on price (in the form of interest rates, penalties, and fees) and increase their pipeline of innovative services for which consumers will be willing to pay.  That is the focus of this month's LAB.

Are YOU an Innovator?

Do you consider yourself an innovator?  I asked this to a group of participants at a recent PDMA workshop, and the results surprised me.  Only about half of the participants raised their hand.  Many of those had that hesitant look of self-doubt on their face. 

It's a difficult question.  How do you really know if you are an innovator?  Is it based on the number of patents you hold?  Is it a function of your job title?  Is it based on your creative endeavors like music or art?

Take this self-assessment to find out.  Place a check mark beside the statement you believe is more true.  (Click here for a printable version and for scoring instructions.)

Innovation Archetypes

An archetype is an original model of a person, ideal example, or a prototype after which others are copied, patterned, or emulated; a symbol universally recognized by all.  Archetypes put context to a situation.  We use archetypes, for example, in marketing.  We create brand archetypes to assign a personality to the brand.  An example of such a model is shown at right.  In political debate, it's useful to understand whether a commentator is an "archetypical democrat" or an "archetypical republican." This helps frame their comments so we know where they are coming from.

Listening to the Voice of Innovation is the same. As I read blogs, interviews, and books on innovation, I try to determine the author's innovation archetype so I know where they are coming from.  I observe at least four of these. 

The four Innovation Archetypes are:

Design the Future of Mobile Communications

It's time to put innovation into practice.

LG Mobile Phones, the fastest growing mobile phone brand in North America, is partnering with crowdSPRING, an online marketplace for creative services, to announce a new competition to define the future of personal mobile communication.  U.S. residents age 18 and over can have a chance to design their vision of the next revolutionary LG mobile phone and compete for more than $80,000 in awards.  See http://www.crowdspring.com/LG for details on how to submit your ideas.

Here is how submissions will be judged:

Innovation at the U.S. Automakers

As some U.S. automakers face inevitable restructuring, the key questions are what should they become?  What is the best way to do it?  The answer depends on what battle they think they are fighting.  In simplest terms:  should they build better cars?  Build cars better?  Build cars?

Consider the battles U.S. automakers have fought against the Japanese and other automakers.  How has Detroit done in:  design?  quality? productivity? brand building?  Given the steady loss of market share and margin, they seem to be losing.  There are a variety of reasons, some of their own making and some not.

There is one battle worth winning more than the others - the battle of ideas.  U.S. automakers need to outperform the competition in one definitive way - systematically develop and deploy a steady, uninterrupted stream of novel ideas and inventions across all aspects of their business.  At the risk of falling deep into the "easier-said-than-done" category, I offer my blueprint for change for U.S. automakers: reframe, retrain, and redeploy...a model based on my own experience.

Innovation Adjacencies

Finding adjacent market spaces is an attractive way to grow.  Adjacent markets are not too far away from your core business in terms of channels, technology, price point, brand, etc.  Adjacent means: lying near, neighboring, having a common border, touchable.  Although chasing adjacencies can be distracting, it is a much easier to sell internally.  Adjacencies seem more achievable than far out, ethereal white space opportunities.

Adjacent markets are even more appealing when you apply a systematic innovation method to it.  Giving yourself the gift of novelty in a new market space right next to your own seems like the best of both worlds.  The trick is finding the right adjacencies.

The starting point for thinking about adjacencies is to ask yourself, "Adjacent to what?"  It is much harder to find adjacent spaces when you don't have a clear understanding of your existing spaces.  For this, I recommend a framework called The Big Picture developed by Professor Christie Nordhielm at The University of Michigan.  The Big Picture outlines four quadrants that, when properly constructed, completely define any market category.  Here is a visual of those quadrants.

Innovation Anxiety

Innovating is hard work.  Perhaps the most difficult aspect is dealing with the anxiety that comes with following a systematic innovation  method. The process forces innovators to start with uncomfortable, abstract concepts that seem silly and worthless.  These are called preinventive concepts because they occur right before the moment of innovating.  Successful innovators learn how to deal with and control the anxiety at this critical moment of invention.  But there is a catch: some are better at it than others.  Fortunately, there is a way to determine if you are more or less anxiety-ridden from these effects.

Anxiety is a natural part of the SOLUTION-TO-PROBLEM approach.  What causes it?  Finke, Ward, and Smith describe it in their classic book, Creative Cognition.  Once you have transformed an existing situation (product, service, etc), it becomes a hypothetical solution to a yet-to-be-found problem.  The trick to great innovation is to construct preinventive structures that have these properties:

Innovation Dream Team

Innovating takes teamwork.  Properly selected teams using a facilitated systematic method will outperform ad hoc teams using divergent, less structured methods such as brainstorming.  How do you create the "dream team" for an innovation project?  There are three key factors: team roles, diversity, and processes.

Roles

A carefully selected team for innovation will have specific roles that can make or break it, not just during the innovation sessions, but afterward too.  The most essential role, not surprising, is the leader.  The team "captain" is the one who gives momentum and direction to a team in terms of where it will innovate.  Here is the catch.  The team leader must be a full participatant in the innovation workshops.  The leader cannot be an occasional, part time member who surfs in and out while attending other business.  That shows a lack of commitment.  The leader misses opportunities to reward team members and misses the sense of team direction and excitement around new ideas.  The leader also plays an essential role of being the "brakes"of the group - stopping ideas that he or she knows do not fit the vision of the franchise or company.  This prevents teams from wasting time on weak ideas so they can channel their ideation in more productive areas.

Mapping the Innovation Gap

Once you have a systematic and routine way to innovate, you are confronted with a new problem - how to decide how much innovation is enough.  For many, this is an odd question.  If innovation is essential for survival and growth, most people would want all the innovation they can get.  But that is oversimplifying.  Too much innovation can overload the system, confuse the organization, and lead to ideation fatigue.  So how much is enough?

Here is a useful analysis that can tell you how many ideas are needed to reach your specific growth targets called "Mapping the Innovation Gap."  The steps are:

1. Determine your revenue goals in each year over a specific time horizon.  Base this on your firm's strategic planning time horizon (usually 3 to 10 years depending on the industry).  Use the actual revenue targets from your company's business plan. 
2. Break these annual revenue targets down over a mix of products, new and existing, in each year.  Some firms call this a revenue cascade or revenue waterfall.  It shows for each year how much of the revenue comes from existing products and how much comes from new products.
3. Estimate your Innovation Yield (number of new ideas needed to produce one new product).  This varies by industry and by company depending on factors such as level of investment, core competencies, and access to technology.  Various think tanks and consultancies have estimates such as the curve pictured above.
4. Estimate your typical idea-to-launch Lead Time (how much time it takes to develop and launch a product once it is conceived).  As with the Innovation Yield, this will vary.  Take a look at past product development experience and determine an average time (in years).
5. Plot the number of new ideas needed in each year to produce the necessary new products in subsequent years.  Take the number of new products needed in a specific year and divide it by the Innovation Yield.  Then plot this number back in time by the amount of Lead Time to develop ideas.

What you end up with is the number of new ideas that need to be generated each year to have a realistic chance of achieving future revenue growth targets.  It can be a sobering number depending on how aggressive your targets are.  With this number, a general manager can then task the team to "schedule" innovation, and then hold them accountable for generating the necessary number of ideas. 

The bottom line:  to grow, companies need a systematic innovation method, and it needs to be applied systematically.

Download "Mapping the Innovation Gap" here.

Applied Marketing Innovation

Learning a corporate innovation method begins with formal training, and there is no better place to do that than in graduate business school.  I am looking forward to meeting the 37 students enrolled in my MBA course at the University of Cincinnati this month. The course, "Applied Marketing Innovation," is a full credit course.  It is a fusion of Systematic Inventive Thinking and The Big Picture marketing framework.  The Syllabus can be downloaded, but here are some details about it:

"This course focuses on how to create value and growth through innovation in new and existing markets. Students will learn the skills of innovation and how to apply those skills within the context of a marketing strategy framework. Students will apply innovation methods across the entire marketing management continuum including strategy, segmentation, targeting, positioning, and the 4P’s. The course will be taught using interactive workshop methods and techniques throughout. Students will first experience these facilitation techniques while learning innovation. They will then learn and practice these techniques so that they can apply them routinely throughout their graduate experience and beyond."

Two aspects of this course are unique.  First, we don’t just talk about innovation…we DO innovation.  MBA students in particular are aggressive and skillful when learning and applying innovation. I am sure this group of students will be no different.  The other unique aspect is the creation of new products and services that are formalized in a hypothetical company catalog – The Dream Catalog.  This is a clever way to take new innovations and rationalize them into a coherent pipeline for growth.  Students work in teams to create an actual Dream Catalog within a business of their choice.  In past courses, some students have used this assignment for their own companies.  It is a graded assignment.  I will publish the results of this exercise here on the blog.

The final exam is scary!  Students will be given a product randomly (with no advance preparation).  They must use each of the five templates of innovation (Subtraction, Task Unification, Multiplication, Division, and Attribute Dependency) on that product to create new-to-the-world inventions.  They have to take each invention and plot what strategic quadrant of The Big Picture would be most suitable.  It is a tough exercise.  It demonstrates: 1. mastery of the skills of innovation, and 2.  the ability innovate within the context of marketing strategy.  I will also post some of the results from the final exam here on the blog. 

If you have a product that you would like to see innovated by my students on the final exam, please let me know!

I want to thank Professor Jacob Goldenberg at Columbia Business School and Professor Christie Nordhielm at the Ross School of Business at The University of Michigan for their support in developing this course.  It is intended to be a blend of their tremendous contributions.  It is a privilege to teach it.

Teaching Your Children to Innovate

Parents teach their children many things: morals, etiquette, religion, sports, cleanliness, walking, cooking, riding a bicycle, reading, writing, math, discipline, safety, driving a car...the list goes on and on.  What if you could give your child the  life-long ability to innovate?  What a gift indeed.  This issue surfaced after a string of emails with one of our blog readers who wants her child to learn innovation (thanks, Trish!).  Can children learn a corporate innovation method at such an early age? 

I've taught children how to innovate, and it is one of the most rewarding feelings you can have.  I taught 6th, 7th, and 8th graders the method called Systematic Inventive Thinking.  I was surprised and a bit unnerved how well they did.  After teaching the five templates of innovation (over a five weekly sessions), each child completed a "final exam" by innovating a new-to-the-world product using one of the templates in just 30 minutes!  I was amazed.  The PowerPoint slides I used for this training are in the READING section of the blog if you wish to download them.

Here are some pointers for teaching your children to innovate:

1.  Equate innovation to other skills-based activities.  Innovating takes skill just like sports or dancing.  Don't let your children think innovation is some special, innate talent that only certain people have.  This creates an artificial barrier, one that I see too often in the corporate environment, and it prevents people from trying to be innovative.  Innovating is a skill, and it can be learned by anyone, even those who are not creative in the traditional sense.

2.  De-emphasize patents.  For some reason, kids are fascinated with patents.  They tend to see patents as the ultimate reward of innovation.  Patents do not equate to successful innovation; rather, they equate to getting legal status regarding an invention.  If a child invents something that has already been invented, this is a success.  In fact, it is a huge success because it shows an ability to create novel ideas that have a track record of success.  Be sure to reward your child if they invent something that exists.  Send the message: if you can invent something that is already shown to be successful, you can definitely be the first to invent something new and useful.

3.  Apply innovation across a wide variety of situations.  It is not just for inventing new products.  Teach you children to apply innovation methods to things like writing a poem, doing school work, or getting dressed in the morning.  Have them invent a new way to clean their room or play with a toy.  Help them equate innovation with creating novelty in the everyday things.  Make innovation a routine way to tackle new situations.

4.  Distinguish between innovation skills and problem solving skills.  Both are useful, but are often confused as the same.  They are related, but different.  Help them see problem solving as what to use when the problem is very well defined and must be solved.  Help them see innovating as the set of tools to use when new approaches are needed for an existing task.  Example:  Innovate a new way to clean their room, but problem-solve when they want to avoid having to do it.

5.  Teach "ambidextrous" innovation.  Help them understand the two directions of innovation: Problem-to-Solution and Solution-to-Problem.  Example: if the kitchen toaster burns the bread every morning, and they see a novel way to fix it, that is Problem-to-Solution.  Other the other hand, if they imagine the toaster is like a TV that is "on demand," then make the connection that this would help mom get toast ready precisely when everything else is ready, that is Solution-to-Problem innovation.   

6.  Set an example.  Parents struggle teaching children anything unless the parents demonstrate those skills themselves.  Whether it is table manners, proper grammar, or how to treat other people, parents must "walk the talk."  Innovation is no different.  Let children see how you and others, especially other children, use innovation methods to do cool things, fun things, important things.

(Pictured are two future innovators, Emerson and Margo, from Cincinnati, Ohio)

The CMO's Guide to Driving Innovation

Forrester Research, Inc has released a new publication titled "The CMO's Guide to Driving Innovation." Cindy Commander at Forrester, has outlined best practices for chief marketing officers to drive innovation across the organization.  As part of the research, she interviewed senior marketers from BMW, Equifax, GE, IBM, Johnson & Johnson, LeapFrog, and Samsung Electronics America.  In addition she spoke with consultants from Innovaro, InnovationLabs, and PRTM.  For companies seeking insights about innovation methods and programs, this report is essential.

The report outlines four key areas of focus for marketing leaders: culture, team, process, and insights.  The report goes into detail within each of these and includes best practices and examples as well as recommendations for overcoming common challenges. I had the privilege of being interviewed for the report.  Here are the people highlighted:

• Jochen Schmalholz, Head of Marketing Innovation, BMW
• Alex Gonzalez, SVP, Strategic Marketing, Equifax
• Patia McGrath, Global Director - Innovation and Strategic Connections, GE
• John Kennedy, Vice President, Marketing, North America, IBM
• Nancy MacIntyre, EVP, Marketing, Product, and Innovation, LeapFrog
• Drew Boyd, Director of Marketing Mastery, Johnson & Johnson
• Peggy Ang, VP, Marketing Communications, Samsung Electronics America
• Tim Jones, Principal, Innovaro
• Langdon Morris, Principal, InnovationLabs
• Rob Shelton, Director, PRTM

Taken together, the advice in this report gives CMOs a ready made blueprint for improving the state of innovation in their firm. The report is for members of Forrester's CMO group, so contact them directly for information about ordering it.

Complementary Innovation

Companies are enamored with chasing "white space opportunities."  White space is the nickname for new, undiscovered growth segments.  It spins the notion that opportunity lies just ahead of us.  Telling colleagues you are working on white space opportunities suggests you are doing really important stuff.  It is the ultimate growth endeavor, the risk worth taking.  White space will save the day. 

I'm not so sure.  I have two problems with white space.  It is neither white, nor a space.

White space has come to mean many things: 

• WhiteSpace (Resource Scheduling), name used since 2002 to denote available time for People or Resources when scheduling time
• White space (visual arts), or negative space, the portions of a page left unmarked
• Whitespace (computer science), characters used to represent white space in text
• Whitespace (programming language), an esoteric programming language whose syntax consists only of spaces, tabs and newlines
• White space (telecommunications), unused radio frequencies in the VHF and UHF bands allocated to television transmission.
• White space (education), term used since 2007 in the Singapore Education System to denote time reserved for teachers' personal reflection and planning.
• White Spaces Coalition, a group of technology companies aiming to deliver broadband Internet access via unused analog television frequencies
• White Space (business), the part of a market or segment that is available to a business or entity for new sales or customers
• White Space (Process improvement and management), the area between the boxes in an organizational map, often an area where no one is responsible.

The common theme seems to be the notion of white space as a void, untapped and unused, free and clear - like powdered snow yet to be skied.  If only we could find it (or get the government to give it to us as Google is seeking)!

Where do companies look for white space?  Jim Todhunter at Innovating to Win has published a survey with some very important insights to this.  Most noteworthy is how low respondents rated Complementary Products, a mere 6.3% as a source for white space opportunities.  Jim's advice:  "Reconsider how to look at the red ocean opportunity spaces to expand your market footprint through complementary offerings.  This could be a great less traveled path to revenue growth."

I agree with Jim, but what is curious to me is why this path is less traveled in the first place.  My sense is that companies overlook these complementary innovations because they are too focused on new opportunity defined as a market space rather than a boundary or frontier.  White space is not a space at all.  It is the fringe of what your are currently doing.  The term - adjacency - seems to be a much better way to define it.  White space is not white either.  Complementary innovations are deeply colored by what we know and have experienced.  There is always an old idea buried in a new one.  This is why tools such as S.I.T. and Goldfire are so effective at innovating at the fringe of the current business model - they leverage what is known.

Fortune 100 companies will find more growth opportunities at the margin of what they are doing than by chasing far-flung, ethereal market voids.  Leveraging at the margin takes advantage of existing core competencies and strategic assets.  It yields innovations that stretch the portfolio and the brand.

Stop chasing white space and look for the brightly colored complementary innovations right next to you.

Innovation Allocation

Who leads innovation in your company: marketing or R&D?  It's a trick question, of course.  But it's a useful question for Fortune 100 companies to consider.  Has your company made a conscious choice of how it "allocates" this leadership role?

Allocating innovation to one group over the other will yield a different business result.  The approaches to innovation by marketing are dramatically different than approaches to innovation by R&D, so the outputs will be dramatically different.  The question becomes: which group will outperform the other?   Technical-driven innovation or marketing-driven innovation?

But there is another layer of complexity.  Allocating innovation resources to one group over the other will also yield a different kind of innovation.  Market-driven innovation speaks to what is salable.  Technology-driven innovation speaks to what is technically possible.  Which group delivers the type of innovation that is best suited to the company's growth strategy?  Now the decision of who leads innovation becomes even stickier.

This question is a bit like deciding how to allocate your money in an investment portfolio. Which allocation of funds will give you the total return and the type of return (tax advantaged, etc) that you need?  The tempting answer here is to assert innovation leadership should be shared between the two.  Diversify your innovation allocation just as you would diversify your personal investment allocation.  I'm not so sure.  Here's why.

For a company that knows exactly what its customers need, then it's just a matter of developing it. A technically-led innovation approach makes the most sense. L'Oreal, for example, does virtually no market research with its customers.  It gathers no "Voice of the Customer."  Yet it knows exactly what customers need because.....L'Oreal tells them!  In that case, innovation is led by the technical team to deliver the beauty compounds and formulas that will thrill their customers. The innovation approach here is described as "Problem-to-Solution.  Engineers lead this because they excel at solution matching.

A company in the refrigerator space such as GE or Whirlpool needs a different approach.  Breakthrough innovation is more likely to be found in the "Solution-to-Problem" mode, best driven by the commercial marketers who excel at problem matching. The marketer needs to use an approach that relieves them of their preconceived notions about what customers want. They seek to avoid "fixedness" around their current product so they can solution spot more freely.  Only then will they be able to envision new concepts of home refrigeration that never would have emerged with a technical approach. 

The best companies maximize their innovation investment return by consciously allocating leadership to either marketing or to R&D.  In the end, innovation is best driven with a team approach but with clear role accountability and direction depending on market conditions and corporate strategy.    

Ideation vs. Prioritization

Ideation or prioritization?  Imagine you had a choice of being really good at one, but not the other.  You could be a master at creating ideas, or you could excel at selecting winning ideas, but not both.  Which would you choose? 

Two things intrigue me about this trade-off.  First, companies spend too much time and energy prioritizing ideas and not enough on creating ideas.  Second, the innovation space seems to demand a completely different set of tools and techniques for selecting ideas than the tools and techniques used for making other business decisions.  In reality, there is no difference.  The tools used to make everyday business decisions should be the same ones used to prioritize ideas. 

I face this issue a lot when speaking about innovation.  "How do you select the best idea to pursue?  How do you know which idea is going to be the next blockbuster?  What is the secret to spotting great ideas?"   I just spoke to an outstanding group of MBA candidates at the Columbia Business School.   One of the students wanted to know my views on this.  It is as though I have a special eye or an innovation Magic Eightball for picking winners.  If you can unlock my formula, you will find the path to riches.  Not even close.

 

In my view, prioritization of ideas is not an innovation issue, and it does not belong in the discussion at all.  The problem of which idea to pursue from among a list of choices is a subject well covered by the behavioral decision sciences.  An amazing body of research exists in this field.  Researchers have described highly effective methods of choice that circumvent the inherent weaknesses of humans in making decisions.  The choices we make in the innovation space are no different.  The choice of which innovation to pursue should be approached the same way one decides on what clothes to wear or what person to marry:  1. consider the criteria that are important, 2. weight those criteria, 3. score each candidate on those criteria, 4. add up the results, and 5. let the chips fall where they are. The highest rated idea is the one you should pursue.  It's that simple.

 

But innovation choices get special privileges over other choices.  We seem to require methods of choice that deserve royal treatment over other methods of choice.  A cottage industry within a cottage  industry has evolved to create a sense of uniqueness when in fact no uniqueness exists.  A wide variety of special tools have emerged to select and manage ideas.  The good news about many of these tools is that they have the right science built into them.  Here is a sample (from Innovation Tools - thanks, Chuck!)

•  Accolade Idea Management •  Ameli •  BrainBank •  BrightIdea.com •  Cognistreamer Innovation Manager •  EGIP Idea-Modul •  Engage ThoughtWare •  Idea Management System •  Idea Reservoir •  IdeaBox •  IdeaCenter (Akiva) •  IdeasTracker •  IdeaValue •  Imaginatik •  Ingenuity Bank •  Insight Results •  Jenni Enterprise Idea Management •  OVO Innovation •  Prism Idea Management •  Target Idea Management for mySAP

Executives obsess over  finding the right method to select ideas when they should be more focused on how to generate ideas.  The zeal over prioritization puts a drag on the core issues surrounding innovation such as how to innovate and how to make it routine and part of the culture.   Why do executives sweat more over selecting ideas than generating?  My sense is they feel more accountable when choosing an idea than when generating the idea.  Generating an idea doesn't carry with it any risk or obligation to spend.  Choosing an idea does both.  If companies want executives to put more priority on generating ideas, they will need to change this.

 

It is time to strip out this issue entirely from the innovation discussion.  Don't mix the two.  Put the emphasis on a method to generate many great ideas and not on the method to choose the right one. For that, use the well-established science.  Just as Fortune 100 companies use the well established methods to innovate, we should use well established methods to prioritize innovations.

Innovation Stigma

There is an inherent bias against innovation despite the enormous value it holds for organizations.  Corporate executives know that innovation is the only true long term growth engine for their firm.  Yet innovation carries with it a certain stigma, a perception in the minds of executives, that it is "soft" and frivolous compared to other hard core business activities like productivity, quality, and demand generation.  This stigma deters executives from taking risk and investing in serious innovation initiatives.

The innovation industry itself is partly to blame.  Participants in the innovation space tend to perpetuate a mystique about innovation and creativity as though it is a deeply hidden secret that needs to be unleashed.  Walk into many innovation sessions and what you see are cans of Silly String^TM, Slinky^(R) toys, Frisbees, and funny nose glasses.  The notion here is that people need to be more playful to have that "eureka" moment and invent the next blockbuster idea.  People are conditioned to believe innovation requires "skunk-works" in a specially-designed room to pursue "white space opportunities."   Innovation is voodoo.

In an effort to differentiate themselves, participants in the innovation space create novel names for their programs and services.  Here is a very small sample: Innovations-Radar^(R), Innovation Cube^(R), Challenge Accelerator^TM, 360-IA^(R), Spinnovator^TM, Idea Bucket^TM, AlphaStorming^TM, Excursion Deck^TM, Mindscan^(R), IdeaSpring^(R), Super Digilab^(R), etc, etc.  The list is overwhelming and it tends to confuse the market.  More importantly, what is the efficacy of these tools?  Do they work?  The granddaddy of them all, Brainstorming, is certainly suspect given the many studies that suggest otherwise.

Is there an innovation bias?  I am polling Fortune 100 executives to describe the characteristics of people who champion certain business causes.  I ask them to describe the typical age, experience, credentials, aspirations, and personality of:

• Productivity Champions
• Process Excellence Champions
• Innovation Champions
• Leadership Champions
• Brand Champions

The early feedback suggests innovation champions, compared to the others, are seen as more eager, altruistic "dreamers" who are out of touch with the business.  One executive described innovation champions as necessary but had low expectations of actual results.  Of more concern is the perception executives have about themselves in this role.  My sense is business people shy away from championing innovation because they believe the stigma of failing at innovation is more career-damaging than failing at other ventures.

The innovation industry needs to play a role in improving the image of innovation.  Fortunately, there are resources like Innovation Tools and CREAX that consolidate the innovation space and help companies make sense of the different offerings.  More prominence needs to be given to the classic researchers in innovation and creativity like Ronald Finke, Thomas Ward, Mihaly Csikszentmihalyi, and Jacob Goldenberg.  We need to get back to the basics of what makes innovation work so we can skip the hype.

The innovation bias has to be overcome if companies want to make progress and grow.  Leaders need to address this head on.  How?  Just as they learned to champion leadership by first becoming an authentic leader, they need to champion innovation by first becoming an authentic innovator.

Social Innovation

Web 2.0 social tools are swelling all around us, and the Fortune 100 are embracing them for two purposes - managing and engaging the internal employee base and managing and engaging the external customer base.  Wikis, blogs, mashups, and social networks will improve productivity, connectivity, knowledge transfer, and ultimately profitability if deployed correctly.

What about innovation?  Can the Web 2.0 environment increase, enable, accelerate, and deepen innovation within companies?  I am impressed with the emergence of tools such as Wridea and others that have taken on the challenge.  But I have yet to see one that works effectively.  I am trying to figure out why.  Are these applications using the wrong innovation tool or process?  Do they have an effective innovation process, but deploy it incorrectly?  Or, are people not using the application in an optimal way?

I experimented with online innovation about five years ago, about the time MySpace was introduced.  I used an online learning platform (eCollege 4.0) with a group of colleagues, and we tried to create new products within the health care space.  We used Systematic Inventive Thinking as the innovation process, and we structured the "event" over a four week period of time.  The goal was to invent new products without ever meeting face-to-face using asynchronous communications online.  I called it O.P.I.E for short - Online Product Innovation Exchange. 

Here is how it worked.  Using simple threaded postings, a member of the group suggested an existing product as a starting point.  Another member took that product and listed the components of it.  Then, each member would select one of the components to work on.  Their job was to use one of the five templates of the S.I.T. method and create a virtual product.  They had to post these virtual products in a separate area of the online site.  Then, other members would review their suggested virtual products and use "Function Follows Form" to envision a viable use or benefit of the virtual product.  It was classic S.I.T. in an online, asynchronous environment.  The result?

O.P.I.E. was a miserable failure.  It generated few ideas, nothing really original, and it was frustrating for the participants.  I struggled with why for a long time.  Was it the wrong process, people, or platform?  As I have learned more about social media and Web 2.0 and how people really use and experience this environment, I am beginning to understand why.  All three aspects of O.P.I.E. - the process, people, and platform - needed some modification for this to work effectively.  Here is what I would do differently.

For social innovation to work, the platform has to be optimized for this purpose.  I had used a platform that was intended for traditional online learning, and it lacked the tools to properly facilitate the exchange and touchpoints needed for innovation.  The optimal platform needs to do a few things better.  For example, the site needs to notify other members when a virtual product has been posted.  With O.P.I.E., too much time elapsed in the asynchronous mode, and members were not sure when to login to check what was going on.  Other members would get frustrated because nothing seemed to be happening.  If members were notified, Twitter-like, that a new virtual product was available, they could engage the process more efficiently and all at once to create a flurry of ideas for discussion.  Secondly, the site needs to allow richer descriptions of virtual products.  This could be done either visually where participants somehow draw the virtual product, or audibly where participants leave a short, recorded description on the site for others to hear, either online or via their cell phone.  This would promote a richer response in the form of innovative uses and benefits of the virtual product.

What about the process and people?  I am still working on this, but I believe changes are needed in both.  The inherent flow of innovation is correct within the S.I.T. method, but I wonder if there are perhaps certain templates that are better suited for the online environment.  Also, there needs to be more work done in how the process is facilitated online and how expectations are set for the participants.  What components do they work on?  What virtual products do they respond to? How many ideas do they generate?  How many other ideas do they attempt to modify or improve?

Social innovation is promising.  It will reduce the cost of innovation and the time commitment allowing companies to innovate more often.  But the big win is the same as what many other Web 2.0 applications bring - it will greatly expand the numbers and diversity of participants.  This will yield more original ideas and innovations than ever before.

Innovation Muscle

The best Fortune 100 companies see innovation as an ongoing capability, not a one time event.  These companies work hard to build muscle around this capability so they can deploy it when they need it, where they need it, tackling their hardest problems.  Companies do this to keep up with the ever changing landscape both inside and outside the firm.

What does it mean to build innovation muscle?  I think of it as the number of people trained, the frequency of using an innovation method, and the percentage of internal departments that have an innovation capability.  Call it an Innovation Muscle Index:  N (number of trained employees) x F (number of formal ideation events per year using a method) x P (percent of company departments with at least one employee trained in an effective innovation method).   IMI = N x F x P .

Building innovation muscle is not much different than building body muscle.  Let's turn to an authority, http://www.muscleprogram.com/, and see how to build body muscle.  Here is an exact quote taken from that website.  Then I have overlaid my interpretation of it from an innovation point-of-view in parenthesis and in bold font.

"You need to decide what kind of (innovation) muscle form you're looking to achieve. Drawing on examples nearly everyone is familiar with, you need to decide if you want to look like Arnold (GE) Schwarzenegger (bigger bulk) or Bruce (Apple) Lee (lean and toned). This decision will help you determine which kinds of exercises you do and how you do them.

Now, with all of that out of the way, let's look at some things you can do to build your (innovation) muscles!

If you don't already, start getting your body (company) used to working out. Start running (innovating) every day, not jogging (brainstorming) or walking (copying others), to help get your blood (growth) moving and your (innovation) muscles primed for building. You're not running a race so you don't need to be a speed demon. Instead, maintain a comfortable and steady pace, taking long and powerful strides (initiatives).

If you want to have the lean, Bruce (Apple) Lee appearance, you need to work with lighter weights and have a higher number of repetitions (innovation workshops) in each set. By doing this, you are toning and shaping your (innovation) muscles into longer and thinner forms. If you want the Arnold (GE) look, you need to work heavier weights (more departments using innovation) and do fewer repetitions. By doing this, you are toning and shaping your (innovation) muscles into short and thicker forms.

Ensure that you have a regular plan, focusing on specific (innovation) muscle groups, and stick to it. Don't try to work every (innovation) muscle in your body every day of the week. At best, this will lead to burnout (budget crunch) and at worst it will lead to injury (downsizing). Your (innovation) muscles will be getting worked hard, so they need to have time to recuperate.

However, you should rotate your plan every month. For example, let's say that you are working on your chest, shoulders and biceps (new products) on Monday; your abdomen, forearms and upper back (new services) on Wednesday; and your lower back and legs (new strategies) on Friday. Every four weeks, rotate one day so that you'll be working on your lower back and legs on Monday; your chest, shoulders and biceps on Wednesday; and your abdomen, forearms and upper back on Friday. The following month, rotate one more day.

This will allow each of your (innovation) muscle groups to take advantage of the fact that you probably workout differently on each of those days. If you simply stick with the exact same schedule forever, then you'll find yourself quickly running into what are known as "plateaus," where you just can't seem to build that (innovation) muscle group past a certain point. With a rotation schedule, you will avoid this problem by giving each (innovation) muscle group the benefit of your natural changing body (company) rhythm.

If you keep these general guidelines in mind and consistently work at your plan with passion and intensity, your body (company) will be more toned (competitive) and shaped (growing) than you ever imagined it could be. While it won't happen overnight, it probably won't take as long as you're afraid it will."

Innovation Behavior

Innovation is a skill, not a gift.  Top organizations drive growth by nurturing and investing in innovation as a competency.  One way organizations make it real is by including innovation within formal competency models. 

Professor Rodney Rogers of Portland State University defines a competency as a persistent pattern of behavior resulting from a cluster of knowledge, skills, abilities, and motivations.  It is the persistence of those behaviors that matter most and help your organization succeed.

Competency models are a useful way to formalize that behavior and make it persistent.  They help describe the ideal patterns needed for exceptional performance.  They are a blueprint for the type of person needed for a specific job. And they help diagnose and evaluate employee performance.  It takes a lot of work to develop one, but it's worth it.

My approach is to see innovation competencies at two distinct levels: The Innovator, and The Innovation Leader. Here is how to think about it.

The Innovator Competencies:

• Generating Innovative Solutions - Systematically innovates using a model with proven efficacy; routinely innovates products, services, processes, and strategies; values and harnesses team diversity; reframes problems in a different light to find fresh approaches; entertains wide-ranging possibilities others may miss; takes advantage of difficult or unusual situations to develop unique approaches and useful solutions.
• Seeing the Big Picture - Has broad knowledge and perspective; pieces together seemingly unrelated data to identify patterns and trends and to see a bigger picture; understands the pieces of a system as a whole and appreciates the consequences of actions on other parts of the system; possesses a big-picture view of the situation.

The Innovation Leader competencies are different.  It is not necessarily the innovation leader who must generate new ideas; rather, they must understand how to instill innovation according to Penn State researcher, Dr. David G. Gliddon.  "Commitment to innovation as a culture is prevalent in organizations as it is commonly woven directly into mission statements. However, leaders still lack the ability to plan, measure and implement innovative programs, products and services.  These challenges are enhanced by the pressure to juggle several different and often conflicting roles." said Gliddon.  In a three-year study, Gliddon identified the competencies that underpinned these roles and developed a competency model of innovation leaders.  The competency model can be tailored to any organization as part of a competency-based human resource development initiative.

An innovation leader collaboratively interacts with their employees and supports high levels of teamwork, providing opportunities to share innovations.  Once an innovation has been shared, employees should be empowered to then adopt the innovation if it is useful.  Employees can then support the innovation leader by initially adopting the innovation, and encourage the diffusion of the innovation throughout organization's social system, Gliddon says.  Innovation leaders must also take personal responsibility for and be dedicated to projects that require innovations.  Therefore, innovation leaders must establish a trust culture and maintain relationships based on trust.  They must display initiative, set challenging project goals, and link those goals to the needs of the customer, department, and enterprise, according to his study.

Persistent innovation behavior by the leader and innovator is a recipe for growth.