Innovation in Practice

Innovation Sighting: Task Unification at Airports

Placing advertisements on objects such as billboards and taxis is nothing new.  But here is a new twist using task unification.  It is one of five templates in the corporate innovation method called S.I.T.  Task Unification assigns an additional "job" to an existing resource.   Here is an example as reported in USA Today:

"Airport advertisers are after travelers' last idle moments: waiting for luggage at baggage claims.  Eager to generate more non-aviation revenue, airports including Kansas City, Seattle-Tacoma and Omaha Eppley are placing advertising on baggage carousels. At least 13 others have similar plans, including Atlanta; Philadelphia; Boston Logan; Huntsville, Ala.; Palm Beach, Fla.; Wichita; Gulfport-Biloxi, Miss.; Albany, N.Y.; and Milwaukee Mitchell.  "They're a captive audience, waiting 15 minutes or so for bags to arrive," says Zack Clark of DoubleTake Marketing, which designs and installs ads. "It brings some color and revenue to the airport."  The ads are large adhesive banners placed on the moving portion of the baggage carousel. For carousels that have a series of metal plates that collapse on each other, DoubleTake applies an adhesive graphic to each plate to compose one large banner. Ads range from 20 feet wide to an entire belt.  It's the latest airport advertising initiative targeting a demographic considered wealthy, young and cosmopolitan. Non-aviation revenue makes up about half of U.S. airports' operating revenues, according to Airports Council International-North America.  Some airports have removed public art for advertising, while others have considered placing ads on land adjacent to runways. Advertising can be found on electrical outlet stations near gates, boarding passes printed at home and trays used to place jackets and laptops at security checkpoints."

Even more creative is to fuse the marketing message with the medium.  Fusion reinforces the message by connecting attributes of the medium to attributes of the message.  The trick is to fuse messages that are most salient to what people are thinking or feeling at that exact moment - the moment of highest receptivity.  

What would make for clever advertising on an airport luggage carousel as people wait for fifteen minutes for their luggage?  How about these:

• New Luggage ("Worn Out?  Visit www.luggage.com")
• Travel Services ("Next trip, save with Orbitz")
• Personal Security ("Protect Your Good Name with Lifelock")
• Transportation ("Get their faster with B.A.R.T.")
• Realty Services ("Welcome Home")
• GPS Devices ("Garmin: Follow the Leader")
• Job Placement ("Monster:  Your calling is calling.")
• Candy ("Snickers: Gonna be here for awhile?")
• Organizing: ("Franklin Covey: We enable greatness.")
• Utilities: ("iPhone App:  Airport Flight Delays")

How would you fuse a marketing message to an airport luggage carousel?

Hopeful Innovation

Are hopeful employees more innovative?  A new study by Armenio Rego and his colleagues shows how employees' sense of hope explains their creative output at work.  They asked one hundred and twenty five employees to rate their personal sense of hope and happiness while their supervisors rated the employees' creativity.  Based on the correlations, they conclude that hope predicts creativity. 

Hope is defined as a positive motivational belief in one's future; the feeling that what is wanted can be had;  that events will turn out for the best.  Hoping is an integral part of being human.  Without hope, tasks such as innovating become difficult if not impossible.  Why bother if there is no hope for a successful future?  "Hope is important for innovation at work because creativity requires challenging the status quo and a willingness to try and possibly fail.  It requires some level of internal, sustaining force that pushes individuals to persevere in the face of challenges inherent to creative work." 

I have observed this in practice.  I once facilitated employees in a division about to be sold to another company.  The employees learned about the divestiture during the workshop.  Morale was low, and participants were not responsive to systematic innovation techniques.  They lacked hope...hope about their future employment and personal achievement.  To salvage the workshop, we re-framed it.  We told the employees they needed to innovate so that they would be perceived as valuable to their new owners.  Innovating would give them an immediate jump-start on becoming competitive in the marketplace, something they struggled with under the current owner.  Once hopeful, they kicked innovation into high gear.  That workshop was one of the most successful and creative I have ever experienced.

What can leaders do to inspire hope?  Darren Webb has outlined a useful model in his paper, "Modes of Hoping."  He identifies five types of hope:

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 Dilemmas

Innovation creates dilemmas, and these dilemmas can either help or hinder your innovation effort.  Dilemmas arise when we confront natural tensions between two apparent opposite ideas or concepts.  In business we face these dilemmas all the time:  cost vs. quality, centralization vs. decentralization, stability vs. change, short term results vs. long term competitiveness.  Dilemmas are dynamic but inevitable.  They don't go away.  They must be managed over time. 

The key is to recognize the difference between dilemmas, which are not resolvable, and problems which are resolvable.  Problems differ from dilemmas in that they are decidable.  We have independent options to address problems usually through some fixed trade-off between options.  Problems can be solved, resolved, and decided – once and for all.  Natural tensions are not solved or decided.  They are ongoing.  Professors Josh Klayman and Jackie Gnepp address this in their course, "Implementing Innovation and Change" at the University of Chicago.  The course helps students recognize the difference between dilemmas and problems.  They learn strategies to help manage and balance these dilemmas over time.

Here are the innovation dilemmas (tensions) I observe in organizations:

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:

The LAB: Innovating a Computer Keyboard with Attribute Dependency (April 2009)

Zachary Campau is an MBA candidate at the Ross School of Business at the University of Michigan who I met last week while lecturing there.  He was intrigued by Systematic Inventive Thinking, and he emailed me with a proposition.  He noted that I preach a lot about the value of team innovation, but I don't practice what I preach.  He noticed in my LAB series that I innovate alone, thus not taking advantage of the power of collaboration.  He was right.  So I accepted his offer to join me in my next LAB posting...this one.

We decided to innovate a computer keyboard using the Attribute Dependency tool.  But there is more to the story.  We did this all via phone while he was in Ann Arbor and I was in Naples, Florida on holiday.  In fact, I decided to multi-task by both innovating with Zach while doing one of my favorite pastimes: fishing.  My ultimate dream was to create a BIG innovation while simultaneously catching a BIG fish.  Of course, luck would determine the ultimate outcome.  The big innovation was something I could count on happening.  Fish, on the other hand, tend to be less cooperative.

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.

The LAB: Innovating a Garage Door Opener (March 2009)

Teaching people how to innovate is rewarding.  It empowers them.  It unlocks their minds to believe that innovation can happen "on command."   People realize there is no excuse for not having enough ideas or being innovative once they have been trained.

This month's LAB features the output of one of my students, Michael Sanders, in my class, "Applied Marketing Innovation."  For the final exam, students were assigned a product at random.  They had three hours to apply all five templates in the Systematic Inventive Thinking method to come up with true new-to-the-world innovations.  They were graded on how correctly they applied each template as well as the novelty of their inventions.  Michael's assignment:  Garage Door Opener.  Here is what he did.

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.

Abraham Lincoln: A Two-Way Innovator

Abraham Lincoln was a tinkerer.  He loved all things mechanical.  "He evinced a decided bent toward machinery or mechanical appliances, a trait he doubtless inherited from his father who was himself something of a mechanic and therefore skilled in the use of tools."  Henry Whitney, a lawyer friend of Lincoln's, recalled that "While we were traveling in ante-railway days, on the circuit, and would stop at a farm-house for dinner, Lincoln would improve the leisure in hunting up some farming implement, machine or tool, and he would carefully examine it all over, first generally and then critically."  Abe was a man of considerable mechanical genius.  He had The Knack.  His patent, Patent No. 6469, a device for buoying vessels over shoals, makes him the only U.S. president to hold a patent.

What kind of innovator was Lincoln?  Was he a PROBLEM-TO-SOLUTION inventor?  Did he first observe problems and then create solutions? Or was he a SOLUTION-TO-PROBLEM inventor whereby he first envisioned hypothetical solutions and then connected them to worthy problems?  My sense is he was both.  He was "ambidextrous," a two-way innovator. 

Wikinnovation!

Visit the Applied Marketing Innovation Wiki to see a collection of inventions across a wide array of product categories as well as information about innovation consultants.  The information is from students at The University of Cincinnati taking the graduate course, Applied Marketing Innovation.  Here is what you will find:

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.

Lazy Innovation

Katie Konrath at getFreshMinds.com tackles a common mistake in innovation - packing new features into existing products as a way to innovate - a problem I call "feature creep."  Her main point: people pack products to the brim with features to be more innovative.  Many believe this is the only way to innovate.  Katie believes feature packing is a lazy way to innovate.

Why does this happen?  The major culprit is too much reliance and emphasis on the traditional PROBLEM-TO-SOLUTION approach to innovation.  We spot a problem in an existing product, service, or situation, and then we "solution seek" a way to fix it.  We usually end up adding additional features to the existing product, service, or situation. 

Here's an example.  A friend of mine occasionally needs to push his large, heavy entertainment center away from the wall to make changes to the connections.  He had a clever idea over coffee yesterday: what if you created a space under the wall unit so you could deploy retractable wheels (much like an aircraft lowers and raises its landing gear)?  This solution certainly solve his problem...at higher cost and more complexity. 

This is the traditional view of innovation.  What fuels this view is an over-reliance on voice-of-the-customer as a source of innovation insights.  It is the belief that if we can understand what customers want, we can solve their problems with innovative solutions.  The problem?  Customers don't always know what they want.

Here is an example.  When my wife picked up her new IPhone, she spent the first twenty minutes pressing all the buttons.  She seemed irritated - she was looking for the Help Function.  I told her the IPhone did not have a Help Function.  In amazement, she said, "Finally...a product that really understands my needs!"  Now imagine if Apple's market research department had called our house seeking Voice-of-the-Customer data about what it would take to build the most awesome cell phone on the planet.  My wife would have said, "Easy.  It must have the most awesome Help Function on the planet."  The Point:  Customers only know what they know.

In competitive markets, we face even more pressure to add features to keep up with competition or leap over them.  Worse than feature-creep, I call it "feature wars," the ongoing battle to win customers with ever more new things added to their product.  The problem is that over-featured products begin to outstrip the true needs of the customer.  They find it too hard to continue using and keeping up with the product.  They find themselves having to take out the user manual or find support groups to answer basic questions.  How many of you reset the time on your VCR or DVD player...without looking up how?

Innovation methods that emphasize the SOLUTION-TO-PROBLEM approach avoid feature creep and lead to elegant and more useful innovations.  These methods take an existing starting point (product, service, strategy, organization, person, etc), and manipulate it to create something very odd and seemingly useless.  This "pre-inventive form" is then matched against potential problems that it might solve or benefits that it might unlock.  My belief, based on observation, is that people can match more problems to solutions than they can match solutions to an observed problem.

There is a good type of Lazy Innovation.  George Neil from Adobe Consulting contests that laziness, usually considered a bad behavior, is a virtue that can identify opportunities for innovation in user-experience design.  He believes the "search for laziness" can create short-cuts to finding the opportunities for innovation.  Ethnography uncovers lazy "solutions" people take when doing a task.  The key is to match those solutions to the benefits and problems they address.  Robert Passarella tells a great story about this phenomena in the context of how stock exchanges innovated the way they clear stock trades more efficiently - the story of The Killarney Rose Pub.

Katie Konrath continues to be one of my favorite bloggers in the innovation space because she is the "real deal."  She is classically trained in creativity and innovation.  She knows HOW to innovate, she takes a customer-centric approach, and she sees the big picture on what organizations need to do to start innovating.  No laziness in Katie.

Sooner, Better, Bolder

Innovation is a team sport, and no one describes this better than Professor Keith Sawyer in his book, Group Genius.  Keith's blog, Creativity & Innovation, highlights one of the most significant aspects of successful innovation - that groups of people are likely to be more creative than individuals working on their own.  His latest example of Pixar and Disney Animation Studios illustrates this well.

“Creativity involves a large number of people from different disciplines working together to solve a great many problems…A movie contains literally tens of thousands of ideas.”  (Ed Catmull, Pesident of Pixar and Disney Animation Studios)

Why are groups so effective?  What is the optimal group size?  What is the best way to leverage the group dynamic?  As a practitioner and teacher of innovation, I have witnessed group innovation many times in many settings, and I observe three factors that might explain why teams outperform individuals at innovating.

First, people engage and ideate sooner when paired with teammates.  It's caused by the commitment people feel when associated with a group.  It is switched on automatically by a sense of common purpose.  When given an innovation task, people rise to the occasion to live up to their commitments.  And they do it immediately.  They feel less competition with internal rivals, and they experience a temporary camaraderie to perform.  They "power up" their creative engines knowing a teammate is waiting for ideas to come out.  They expect the same effort in return from the teammate. 

Contrast that with working alone.  When alone, people head in a different direction.  They initiate a lot of pre-thought before they get to ideating.  For example, they might frame the problem differently, they consider what they know and don't know, they consider the risks and rewards of their efforts, they consider what their rivals might be up to, they consider their status in the group and how to maintain or improve it, and they wonder how best to use their time.  Then they ideate.  Not only does this burn up a lot of cognitive capacity and energy, but it also delays the onset of ideation.  It's wasteful.

Another reason groups excel:  Two people can innovate more "cheaply" than one.  Just as two people can live together more cheaply (per person) than on their own (about 70% vs. alone according to experts), so it is with innovation.  It takes less exertion when innovating with a teammate.  People feel supported when part of a team, and they can perform with a different ratio of mental input to creative output.  This boost in ideation for the same level of effort yields better results than the lone genius.

Finally, people can think creatively with a wider variance knowing they have a partner to reel them back in if they get too crazy.  With a partner, people ideate with less anxiety about getting wild and weird.  They are less fearful of failing.  They can express ideas while counting on their partners to modify the idea to become more viable.  People become bolder when they innovate in groups.

What is the optimal group size?  It depends on the job at hand.  Pixar needs 200 to 250 to produce a movie.  But new product workshops can be as small as 12 to 14.  In all cases, it is essential group members are diverse, cross-functional, gender-balanced, and culturally split. 

A much more critical issue is the size of the ideation sub-group.  From my experience, the optimal size is two to three.  Innovation happens in small clusters, not in the larger group setting.  The Sooner, Better, Bolder Effect works best when people move in and out of these small sub-groups in a transient and random way.  Pixar, as Keith reports, tries to leverage this with design of their office space to foster "maximum inadvertent encounters."

Perhaps Professor Sawyer would forgive me if I suggest Group Genius might be better named Small Group Genius.

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 Telltale

If you want innovation in your company, hire innovative people. But how do you know if someone is innovative?  What do you look for?  What telltale evidence might suggest that a person has superior innovation skills?

Several years ago, I ran a youth hockey league for ages 6 to 18.  A laborious part of this volunteer job was managing the selection of players for the elite travel teams.  Fifty or so boys would compete for twenty slots on one of 20 teams.  A group of coaches rated players on skating speed, puck handling, passing, and shooting.  As league commissioner, I attended each evaluation…that’s right…all them.  That’s 100 hours of evaluations plus many more hours tabulating the data, selecting players, and communicating with parents. 

One year, I noticed something unusual in the data.  A bit of regression analysis of the evaluations told a remarkable story: every player selected on every team also happened to be the fastest skaters in their tryout pool.  In other words, we could have selected players with one simple variable, skating speed, instead of the tedious coaches’ ratings of multiple skills over multiple sessions. 

I was shocked.  We could have done a simple race from one end of the rink to the other, about 10 seconds in duration, for the entire group of candidates at each age group.  The first twenty to cross the finish line make the team.  Skating speed was essentially a predictor of all other hockey skills.  It was a telltale of hockey success.  Fifteen minutes of time trials could predict with perfect success the best players for twenty teams instead of 100 plus hours of evaluations.  It could have been that simple.

What is the telltale of innovation?  I think I know the answer.  But, just as with the youth hockey experience, I will need to collect data to be sure.  My hypothesis is mental searching speed, an idea that Yoni Stern at S.I.T. taught me.  This is a measure of how well you “Google” your own mind and memory for information or experiences when given a task.  The task in the case of innovation is to take a Virtual Product (a mental abstract produced through the S.I.T. method), and mentally search your mind to find many productive, innovative uses for it.  Whoever can find the most ideas for a given task is more innovative in my view.  They “make the team.”

My task now is to select a different team – a team of research collaborators to find and validate the Innovation Telltale, something the Fortune 100 will surely value.

M&A Innovation

Relying on mergers and acquisitions for growth sends a signal that you don't know how to innovate or how to manage it.  M&A has other problems, too.  Companies tend to overpay which actually destroys shareholder value.  At best, firms end up paying full value, neither better or worse off financially.  The firm grows in size, not value, and pays in the form of distraction.

What if you could use the tools and processes of innovation in mergers and acquisitions?  How could it help?  Would you select acquisition targets better?  Could it help understand the valuation better so you get a better deal?  Might it help you implement better?  I believe innovation techniques could be applied to all three. Here is one example: targeting - deciding who to buy.

Imagine you are the CEO of a bank, perhaps headquartered in Europe.  You and the other board members have decided its time to deliver more value to the shareholders by growing the business. You decide to 
acquire another bank with all the spare cash you have accumulated (rather than just give it to its rightful owners.) The question is: which bank?  Should we buy one in Europe to expand our share while eliminating a competitor?   Should we expand to the U.S. market and buy one there?  Should we buy a struggling bank, get it cheap, and restore it to profitability?

No, no, no. Too simple and obvious.  Nothing innovative here at all.  Let's instead apply the Subtraction Tool from Systematic Inventive Thinking and see how we can re-frame the question.  Start by listing the components of your bank.

1. Employees
2. Customers
3. Assets
4. Property plant and equipment
5. Brand
6. Systems
7. Management

Now, one at a time, let's remove a component, then ask ourselves which bank we should acquire.  Imagine you had no customers. You still have all the other components, just no customers.  What bank could you 
acquire that had the ideal customer base for YOUR bank given what it's all about?  Would you want customers who were more diverse, higher income, more profitable, lower cost to serve, more loyal, etc?  In other words, acquire a bank that delivers the perfect complement of customers.  Now remove employees.  You have all the other components, just no staff.  Now what bank would you buy?  Which has the ideal employee base for who you are?  Would you go after employees who are smarter, less costly, more diverse, younger, older, etc?

The same process, done for each component in succession, gives you a whole new innovative perspective on who to acquire.  It helps you understand why you are buying, what you are getting, and how you 
expect to create new value and competitiveness.  It helps you understand The Bet - what the deal is really all about.

M&A is an expensive way to grow.  By adding the gift of innovation to the process, shareholders stand a better chance of seeing more value.