Archive | innovation RSS feed for this section

What’s the point of creativity?

10 Sep

Dan Pallotta asks this question on Harvard’s blog today (http://bit.ly/1fUVlo4).  And he’s right to ask it.

DPA describes innovation as “the marriage of creativity and pragmatism.” While a recent IBM study showed that creativity is the No.1 CEO desired trait in corporate talent, the reality is that most boardrooms are stocked with pragmatists who are incentivised to defend the status quo, and so find it hard to embrace creativity.

Or do they?

Our experience is that executives actually love creativity. But only if the context is right.

Ask a team to find a great new way to cut costs around an initiative that supports today’s business model (often in response to a crisis), and you’ll see a degree of creativity emerging and solutions that get an enthusiastic thumbs up in the boardroom.

Ask a team to find a great new way to reinvent the way we make most of our money (because the competition will anyway, eventually), and the boardroom radio station soon gets re-tuned.

Creativity will always be valued according the context in which it’s applied. When it’s set inside a robust innovation strategy – http://bit.ly/16ZFhQP – and backed by an executive team that is genuinely intentional about creating new value, it stands most chance of success.

Advertisements

The focus that turns innovation from gurgle to Google

20 Aug

“Just How Valuable Is Google’s 20% Time?” asks Michael Schrage on the Harvard Business Review blog.

Whether 20% time is right or wrong, the core issue around disruptive innovation is to actually give it attention.  Most companies don’t.  Day-to-day survival mode usually elbows aside time for strategic thinking about the future, and yet many executives either assume or hope that big ideas will just emerge regardless.

Innovation needs intentional focus – whether that’s a set of strategic questions that every employee is continually trying to solve; or a workplace that is strategically designed to encourage serendipitous innovation collisions; or a chunk of time that you get to play with as you wish…whatever approaches you want to take, you need to do something deliberate to pull more of tomorrow into today.

How much does your innovation weigh?

5 Aug

Scales

Four quotes from an innovation powerhouse reveal a lot about why so many companies find innovation difficult.

“We do pay-as-you-go innovation around here.” Not what I expected to hear from a senior executive inside one of Forbes Magazine’s most innovative organisations.  “We innovate when one of two things happen: either there’s a crisis or we need to launch a product,” he added, to emphasise the point.

What he meant was that the company lacked a strategic, holistic approach to innovation.  Not exactly making it up as they went along, but not far from it.

An hour later I’m with some managers in the company’s IT department.  “Most of our innovation is creating workarounds to make someone else’s half-baked idea actually work,” they tell me.

The day ends with a group of sales managers and we finally get to the core issue: “Thinking about the future is a luxury here,” I’m told with a regretful tone.

Innovation Groundhog Day?

Maybe I chose a bad day to start this particular innovation assessment; but in reality, the same underlying attitudes about innovation prevail in most companies. The short-term focused “pay-as-you-go” approach creates temporary spikes in performance for some parts of the company, but they are often accompanied by costs elsewhere, notably:

  • Short-lived returns – Reactive innovation tends to yield only short-term, tactical advantages that are easily copied by competitors.  There’s always a place for this approach as part of a broader innovation strategy, but if all of your innovation falls into this category you risk being terminally locked into industry dogfights or eventually answering the door to the corporate grim reaper.
  • Blander, slower innovation – Left to its own devices, innovation inevitably happens at the point of greatest immediate need.  Usually, that means it emerges at a team or divisional level, and often without adequately including the stakeholders who will help implement and improve the idea.  As the weary IT managers told me, the outcome is often a series of workarounds that ultimately slow down execution.

What’s happening is an innovation disconnect on a huge scale: innovation driven by the short-term needs of individual functions, but disconnected from the wider stakeholders and long-term strategy of the rest of the organisation.

 Innovating Innovation

So what’s the alternative? “Get joined up and get strategic”, is the clear message from two recent reports by Accenture and Cap Gemini.  Performance sky-rockets when organisations think holistically about innovation, they conclude.

That’s all very well but where do you start?  We encourage organisations to be intentional about four essential parts of an effective innovation ecosystem:

  1. Creating strategic focus: Great innovators make great questions the focus of their corporate innovation.  The creative freedom to explore a constrained question is the nitro and glycerin of the front-end of the innovation process.  In the last 12-18 months, designing what we call “brilliant questions” has become one of DPA’s most sought after services.
  2. Discovery-led innovation tools: 90% of product launches fail, often because they are based on faulty initial assumptions about the customer.  Giving employees tools that help them discover deep customer insights, develop ideas with strong competitive advantage and then run low-cost experiments to test underlying assumptions, are essential ingredients to high-performing innovation.  The tools at the heart of Lean Start Up, Blue Ocean Strategy and Business Model Generation are transforming performance inside many of the organisations that we work with.
  3.  Culture and Climate: Peter Drucker famously said that culture eats strategy for breakfast, a perspective ultimately proven to be true by a great deal of research.  A culture that supports innovation needs leaders who value things that have been gagged and bound in the basement of most companies: embracing uncertainty and ambiguity; making decisions with much less than 100% of information; encouraging risk-taking; making space for great ideas that have no natural home in the current structure; and learning from failure.  Business model issues aside, leadership development programmes must start to devote more than a one-hour slot to these crucial innovation performance drivers.
  4.  Fuel: Beyond ideas and processes, innovation needs fuel.  It comes in many forms not least dedicated time, employee motivation, cross functional collaboration, engineered serendipity (80% of ideas happen outside meetings) and leadership sponsors. Oh, and budgets.  They’re all essential in oiling the wheels of innovation from the initial creative spark through to pushing past the final bits of red tape that are still trying to kill the idea before it launches.

 Expedient vs Heavy Innovation

Sometimes ‘fixing innovation’ can seem too complex and difficult to contemplate.  The good news is that any leader or manager who chooses to become more intentional about innovation can pursue a long-term strategy of incremental improvements in these four areas that ultimately deliver compelling competitive advantage.

If that’s you, Amazon CEO Jeff Bezos has a mantra that’s worth pinning up in your office.  Quoting economist Benjamin Graham in a recent interview with Harvard Business Review, Bezos said, “In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine. And we try to build a company that wants to be weighed and not voted upon.”

How heavy is the innovation strategy in your organisation?

This article is also published on the DPA blog: http://bit.ly/16ZFhQP

De-risking Innovation the Smart Way

4 Jan

Taking Smart Risks book coverIf there’s one thing guaranteed to lighten the pallor of an executive’s face, it’s the suggestion of taking more risk.

Need more breakthrough innovation? Sure. What’s the catch? The clue is in the adjective: breakthrough innovation requires a degree of breakage en-route. That means taking risks that don’t always pay off.

It stands to reason: in a turbulent, uncertain and complex economic climate there are few ‘knowns’. New product development in particular has become a voyage into the unknown with companies using intelligent trial and error techniques such as Lean Start Up.

But in most cases, the perceived negative implications of a risk-gone-wrong stifles the very innovation that organisations so desperately need.

That makes Doug Sundheim’s Taking Smart Risks: How Sharp Leaders Win When Stakes Are High a timely and welcome guide for organisations that want to do just what the title says.

Five steps to smarter risk-taking

Doug gave me a sneak preview of the book before Christmas and I found it to be a rare and accessible blend of research, insight, wisdom and practical tools that deserves a place in every executive briefcase.

Taking Smart Risks offers readers five smooth stones to slay the ‘fear-giants’ that crush smart risk-taking in their organisations:

1. Find Something Worth Fighting For

  • Something Worth Fighting For (SWFF) is what all smart risks have in common.
  • It must be simple, stir emotion, lend itself to a story or narrative and inspire action.

2. See the Future Now

  • Ask questions, understand concerns, test the concept behind your ideas, and predict as many fail points in advance as you can.
  • Have an open, honest conversation with trusted people around you to determine what is the worst that could really happen.

    Doug Sundheim

    Doug Sundheim

3. Act Fast, Learn Fast

  • Start before you know where to start, fail early, often, and smart – build learning into everything and stay humble.
  • Accept that you have to live with failure – since it is an inevitable by-product of taking risks, even smart risks. Failing smart is the best way to learn.

4. Communicate Powerfully

  • Expect communication to breakdown and plan accordingly.
  • Share thought processes, meet regularly, and don’t avoid difficult conversations.

5. Create a Smart Risk Culture

  • Define a smart failure – the acceptable boundaries within which it is okay to fail.
  • Reward both the successes and these smart failures.

Every chapter ends with a clutch of useful tools to help readers de-risk risk-taking. If you’re short on time, just read the handy chapter summaries and start playing with the techniques that Sundheim suggests.

If you’re serious about innovation, growth or even plain survival, risk-taking is non-negotiable. Sundheim’s book doesn’t guarantee a failure-free future (what a relief as so much crucial learning happens when we fail!), but it will help leaders and managers in every organisation improve the quality of their risk taking.

The hardcover and Kindle versions of Taking Smart Risks: How Sharp Leaders Win When Stakes Are High are out now.

How to Build Innovation Super Teams

13 Jun

“How can we become more like Apple? Or Google?”

I get asked that question a lot. Five years of economic turmoil have created a huge appetite among CEOs for creativity and innovation.

Yet that appetite often comes with the indigestion of previous, failed attempts to increase innovation. Despite the thousands of how-to books and seminars, and armies of consultants, few organisations make the leap to innovation rock stardom.

So what are the secrets of the world’s greatest innovators? And why do I believe that the learning and development function holds the keys to innovation performance inside most organisations?

Read more in the latest issue of Training Journal…http://bit.ly/KTUGdb

Innovation Culture’s 101 Question

8 Dec

One of the most powerful questions that I often ask emerging leaders is:  What is the culture that you need to inherit five years from now? The next question is: So what can you do now to start shaping it?

As a recent Booz & Company survey showed, cultural factors are the biggest inhibitors to successful and sustainable innovation.  And because the incumbent executives are often the authors of the current culture it can be hard for them to make meaningful changes to it.

Emerging leaders, on the other hand, are hungry, ambitious, fired-up initiators who are much more comfortable with change than their superiors.

Leadership teams that truly value innovation as a source of strategic advantage need to swallow hard and allow emerging talent to challenge ways of working that will inhibit tomorrow’s sources of value creation.

So what is the culture that your organization needs to inherit in five years, and what can you do now to shape it?

7 Steps to Unlocking Innovation in a Conservative Culture (Case Study)

23 Nov

What does it take to spark and sustain innovation at the heart of one of the world’s most conservative industries?

That’s the question I recently asked Harvey Wade, who has helped pioneer strategic innovation initiatives inside global finance giant Allianz.

During our interview he shared seven insights that have helped Allianz UK make innovation part of the day job for its 4,500 employees.   Michael Diekmann, Chairman of Allianz recently, described the company as the most innovative in the global organisation that spans over 80 countries.

But first, a 30-second rewind.  I met Harvey three years ago when Allianz was putting in place an ideas system.  The vision was simple but bold: to create a practical, team meeting format that would encourage all employees to suggest and implement ideas that would positively impact team performance.

“We wanted to demystify innovation for people,” says Wade. “We knew that our people were capable of bringing a lot of creativity to the issues facing their teams, just so long as we got the format right.”

The team-based ideas system took off and in parallel, the Allianz UK innovation team launched other initiatives designed to address some of the more strategic, company-wide challenges.

But an ideas system on its own is never enough to engage an entire workforce with innovation.  So what lies behind Allianz’s success in stimulating an appetite for ongoing innovation?

Tip #1 – Boardroom or bust

Harvey: “Innovation lives or dies in the boardroom.  If there isn’t a real belief in the strategic value of innovation at that level you will never get the support and resources that are needed to make it succeed in a sustainable way. ”

Elvin: “So how do you test whether leaders are simply paying lip service to the value of innovation?”

Harvey: “Money talks the loudest in terms of real commitment.  Our senior team showed its belief in the importance of innovation by committing to a certain level of investment that was ring-fenced, regardless of what was going on in the economy.  That’s pretty rare in my experience.”

Elvin: “What else do leaders need to do?”

Harvey: “Let go of the perception of needing to have all of the answers to all of the organisation’s questions.  At best it’s naïve and at worst it’s arrogance.  When leaders and managers start to ask their people to help solve the biggest challenges facing the company or team it really starts to drive employee engagement around innovation.

Tip #2 – Focus, focus, focus

Harvey: “When you’re starting out with innovation it’s really important to know where to focus your efforts.  For maximum return on investment, innovation needs to focus on the key sources of value that the organisation creates.  That ensures that innovation is always strategically aligned and is contributing to the bottom line.”

Elvin: “So avoid the temptation to have too broad a focus and to spread your innovation resources too thinly?”

Harvey: “That’s right – and also give yourself the best chance of generating some ‘quick wins’. Because the inherent nature of innovation is change, there will be plenty of people in the organisation who want initiatives to fail.  That makes it crucial to get some early successes to build positive momentum behind innovation initiatives.”

Tip #3 – Disruption not eruption

Elvin: “What’s your take on how to stimulate disruptive innovation?”

Harvey: “The big lesson that we’ve learned is about speed of ambition.  When you’re trying to develop a culture in which people are more comfortable with creativity, change and new ways of working you need to avoid the temptation to try too much too soon. “

Elvin: “But without squashing people’s creativity?”

Harvey: “Yes, actually it’s more around what you do with great new ideas that emerge.   Being very focused on ideas that are aligned to strategy and launching small scale pilots made sense for us – both in terms of efficiency but also as a message to the rest of the organisation:  when people became familiar with pilot projects happening all around them it helped normalize the idea that innovation is just part of everyday life around here.”

Tip #4 – Follow the energy

Elvin: “In really practical terms, how did you get people involved in innovation initiatives around Allianz?”

Harvey: “To begin with we decided to follow a path of least resistance:  we took innovation to where the people were and the places where their conversations were already happening.  We made use of team meetings, existing forums and the communications platforms that worked most effectively.  That helped remove the idea that innovation was something extra that people had to do on top of their day jobs.”

Elvin: “What about subject matter?  Did you find that everyone was equally motivated by all of the initiatives that you wanted to engage them with?”

Harvey: “We quickly learned that people responded better to initiatives that had most relevance to them personally.  In many cases that meant that tangible, local issues drove much higher levels of innovation engagement amongst employees.

Tip #5 – Metrics that matter

Elvin: “So how are you tracking innovation inside the organisation?”

Harvey: “We’re a financial services company so unsurprisingly metrics, data and figures drive most of our conversations.  From Day One we decided to measure three key metrics:

1)   Number of ideas generated

2)   Number of ideas implemented

3)   Financial value of ideas implemented

“This data was very powerful for us as it meant that at any point we could quickly and easily demonstrate to the board the current return on investment.”

Elvin: “Can you share any of those figures with us?”

Harvey: “Sure.  Since launching, over 25,000 ideas have been implemented and have delivered an annualised financial value that exceeds £12.5m ($19m).  We aim to keep increasing these figures but we’re pretty happy with the curve that we’re on, based on 4,500 employees.”

Elvin: “And are you able to track those metrics down to a team level?”

Harvey: “Yes, and that’s been helpful to engage our senior managers. We publish an innovation league table on a regular basis that shows the relative performance of each division.  No-one wants to be seen at the lower end of the scale so it tends to have a positive side-effect in terms of motivating leaders.”

Tip #6 – Fuelling the innovation tank

Elvin: “So how do you reward people for their innovation efforts?”

Harvey: “We have two main approaches.  The first is simple.  We say ‘thank you’.  We’ve found that the mere act of recognizing innovative behaviour is usually enough for people to feel that their contribution is valued and for them to continue to be engaged in future innovation initiatives.

“The second approach is to run an annual innovation awards ceremony.  It’s an ‘Oscars-style’ event during which the people behind the best ideas of the year get recognized by the senior team.   We have found this to be hugely motivating for people – not only because of the company-wide profile that individuals and teams receive but also because we treat the winners like stars for a day and it’s huge buzz for them.

Tip #7 – Engage tomorrow’s leaders

Elvin: “Most people will be familiar with the idea of having a network of ‘innovation champions’ on the ground to help give momentum to initiatives across the company – and I know that’s and approach that you use.  What other groups can help embed the culture of innovation?”

Harvey: “We’ve found that the ‘talent group’ – the potential leaders in 5 years’ time – is a very important community.  They have the energy, desire and ability to kickstart innovation amongst the people around them.”

Elvin: “Absolutely.  These are the guys who are usually motivated to shape the culture that they are going to inherit in a few years’ time so they are usually a key audience to engage in strategic innovation initiatives.”

————————————————————————————————————-

What experience and ideas do you have of stimulating innovation in conservative organisations?

%d bloggers like this: