Friday, November 16, 2007
Mass Innovation
Great article in the October 11th issue of The Economist entitled "The age of mass innovation". The article talks about the real threat America faces in terms of loosing its innovative edge to countries like India and China. This is not unlike the threat American manufacturers faced in the early 1980's when Japanese companies were winning the war on cost and quality. Edward Deming warned us, but it was the Japanese who listened. Will history repeat itself when it comes to innovation? My experience has been that the creative potential and talent exists within most countries and organizations, but few are successful at harnessing this potential. I think this has allot to do with complacency that comes with prolonged success. History has taught us that there is no finish line and countries and companies must always be adapting if they don't want to become extinct. The article quotes Elon Musk whose equation for success is "talent times drive times opportunity". How we as a nation can more effectively link the people with talent and drive with the opportunities will determine our future success.
Tuesday, October 23, 2007
Five Common Mistakes in Innovation
Below is a summary of an interesting article about how companies that do not have both a clear plan for and commitment to sparking innovation can get into trouble.
“Five Common Mistakes in Innovation” by Dev Patnaik
http://www.businessweek.com/innovate/content/oct2007/id20071019_786269.htm
• Over-reliance on pilot initiatives
"We'll be more innovative if we do more brainstorming sessions."
In an attempt to have a quick win, some companies initiate projects that focus on delivering a near-term improvement. Alternatively, they latch on to a single innovation technique, such as brainstorming. However, companies that are successful innovators are taking a portfolio approach to innovation, working with multiple consultants and using multiple methods so that innovation evolves from the integration of various ideas collected from multiple ideation methods.
•Unhealthy fascination with unique charismatic examples
"Steve Jobs is so cool: We need to be more like him."
Charismatic visionaries such as Steve Jobs or Sir Richard Branson are nonexistent in most companies. So, the catalyst for innovation efforts within companies can not be dependent upon one charismatic individual.
• Misapplication of other companies' approaches
"P&G is using a 'Connect and Develop' strategy, so we should, too."
It can be dangerous to emulate the approaches of other companies. P&G implemented what they call their "Connect and Develop" strategy, whereby P&G connects with promising entrepreneurs in the hopes of commercializing the ideas they present.
"Connect and Develop" is a sound strategy for P&G, because of the categories they play in, and the DNA of the company. Just because something works for P&G doesn't mean it will work for everyone.
• Descent into a cycle of self-recrimination
"Our people just aren't creative enough."
Innovation planning teams often benchmark other companies only to come away feeling that their innovation efforts are not effective.
Companies such as 3M are instead looking internally and focusing on returning to what has made them great in the past. They are examining past moments of greatness, determining which activities spawned these moments of greatness, and then figuring out how to do more of that. In short, capitalizing on their organizations' strengths to create approaches to growth appropriate to their culture.
• Resignation to superficial changes
"Let's just paint the walls purple."
After benchmarking several Silicon Valley companies, one firm noticed that many companies it admired had yellow and purple walls. The team went back and painted the walls of their offices yellow and purple, thinking this might actually make them more innovative. While the environment can affect creativity, such initiatives alone usually aren't enough to change the DNA of the organization.
“Five Common Mistakes in Innovation” by Dev Patnaik
http://www.businessweek.com/innovate/content/oct2007/id20071019_786269.htm
• Over-reliance on pilot initiatives
"We'll be more innovative if we do more brainstorming sessions."
In an attempt to have a quick win, some companies initiate projects that focus on delivering a near-term improvement. Alternatively, they latch on to a single innovation technique, such as brainstorming. However, companies that are successful innovators are taking a portfolio approach to innovation, working with multiple consultants and using multiple methods so that innovation evolves from the integration of various ideas collected from multiple ideation methods.
•Unhealthy fascination with unique charismatic examples
"Steve Jobs is so cool: We need to be more like him."
Charismatic visionaries such as Steve Jobs or Sir Richard Branson are nonexistent in most companies. So, the catalyst for innovation efforts within companies can not be dependent upon one charismatic individual.
• Misapplication of other companies' approaches
"P&G is using a 'Connect and Develop' strategy, so we should, too."
It can be dangerous to emulate the approaches of other companies. P&G implemented what they call their "Connect and Develop" strategy, whereby P&G connects with promising entrepreneurs in the hopes of commercializing the ideas they present.
"Connect and Develop" is a sound strategy for P&G, because of the categories they play in, and the DNA of the company. Just because something works for P&G doesn't mean it will work for everyone.
• Descent into a cycle of self-recrimination
"Our people just aren't creative enough."
Innovation planning teams often benchmark other companies only to come away feeling that their innovation efforts are not effective.
Companies such as 3M are instead looking internally and focusing on returning to what has made them great in the past. They are examining past moments of greatness, determining which activities spawned these moments of greatness, and then figuring out how to do more of that. In short, capitalizing on their organizations' strengths to create approaches to growth appropriate to their culture.
• Resignation to superficial changes
"Let's just paint the walls purple."
After benchmarking several Silicon Valley companies, one firm noticed that many companies it admired had yellow and purple walls. The team went back and painted the walls of their offices yellow and purple, thinking this might actually make them more innovative. While the environment can affect creativity, such initiatives alone usually aren't enough to change the DNA of the organization.
Thursday, October 18, 2007
The Power of Observation
An article in the Autumn 2007 issue of Strategy+Business entitled “See for Yourself”
http://www.strategy-business.com/press/article/07301?pg=0 discusses the importance of managers spending time in the field. This is especially important from an operational perspective for understanding what’s working and what’s not working within your own company. However, it is also important, from an innovation perspective, to take time to observe competitors as well as the customers who currently use or potentially could use your product. Successful innovators become true students of their industry.
One example of this is when Honda engineers visited the guest parking lots at Disney World to observe guest behavior and potentially uncover problems. They noted that people were struggling to lift awkward items such as baby strollers into and out of car trunks. Inspired to solve this problem, the team lowered the trunk opening to be flush with the car bumper. The lower opening is now a common feature among sedans, but in 1989, innovations such as this helped the Honda Accord move to first place in U.S. unit sales.
http://www.strategy-business.com/press/article/07301?pg=0 discusses the importance of managers spending time in the field. This is especially important from an operational perspective for understanding what’s working and what’s not working within your own company. However, it is also important, from an innovation perspective, to take time to observe competitors as well as the customers who currently use or potentially could use your product. Successful innovators become true students of their industry.
One example of this is when Honda engineers visited the guest parking lots at Disney World to observe guest behavior and potentially uncover problems. They noted that people were struggling to lift awkward items such as baby strollers into and out of car trunks. Inspired to solve this problem, the team lowered the trunk opening to be flush with the car bumper. The lower opening is now a common feature among sedans, but in 1989, innovations such as this helped the Honda Accord move to first place in U.S. unit sales.
Wednesday, October 17, 2007
Managing Innovation
The following is a good article about managing innovation. http://online.wsj.com/article/SB119023924039732943.htm
In order for innovation to work in any company, a culture of innovation must exist. Smaller companies inherently dive innovation because that is what’s required to survive. But as the smaller companies begin to change the ecosystem, can larger companies adapt or are they destined to become extinct? Anyone with an entrepreneurial spirit who is attempting to make changes within a large established company that does not sense the urgency for change will undoubtedly feel frustrated. Changing the culture to be receptive to innovation is not easy, but the article outlines four main factors that need to change in order to help a corporate culture become more innovative:
1.Have an awareness of attitudes – You have to have a certain degree of discomfort in your business to be willing to make the changes that are necessary.
2.The ways you think – Most people are trained to think analytically, but analytical thinking isn’t very good for trying to envision a new future. Consider “design thinking” instead.
3.Processes and tools – It’s not enough to just think differently, you have to build processes and support people by providing time for them to think on their own.
4.Managing risk – You have to have a tolerance for risk if you are going to try to be innovative. A lot of companies just do not have that tolerance.
In order for innovation to work in any company, a culture of innovation must exist. Smaller companies inherently dive innovation because that is what’s required to survive. But as the smaller companies begin to change the ecosystem, can larger companies adapt or are they destined to become extinct? Anyone with an entrepreneurial spirit who is attempting to make changes within a large established company that does not sense the urgency for change will undoubtedly feel frustrated. Changing the culture to be receptive to innovation is not easy, but the article outlines four main factors that need to change in order to help a corporate culture become more innovative:
1.Have an awareness of attitudes – You have to have a certain degree of discomfort in your business to be willing to make the changes that are necessary.
2.The ways you think – Most people are trained to think analytically, but analytical thinking isn’t very good for trying to envision a new future. Consider “design thinking” instead.
3.Processes and tools – It’s not enough to just think differently, you have to build processes and support people by providing time for them to think on their own.
4.Managing risk – You have to have a tolerance for risk if you are going to try to be innovative. A lot of companies just do not have that tolerance.
Tuesday, October 16, 2007
Scenario Analysis
I came across this article about preparing for the future and think it provides a good basic framework for performing scenario analysis. This is a tool that is often underutilized as it pertains to strategy and innovation efforts.
http://www.shambhalainstitute.org/resources.html#
Step 1. Refining our sense of purpose
Scenarios provoke genuine learning when they answer genuine concerns; otherwise, they are merely an academic exercise. The concerns should be compelling, shared by the entire group and beset with uncertainty.Articulating our focus is not a trivial task, especially because the participants are, ideally, diverse people with a common interest. As with a vision exercise, it requires moving past the concerns that people think they have to the concerns that truly motivate them.
Step 2. Understanding Driving Forces
Scenarios are built upon the distinction between two types of driving forces. Predetermined forces are reasonably predictable. We all know, barring unforeseen calamity, how many 20-year-olds will exist in any country nineteen years from now. We can assume that the pace of technological growth will continue, with costs of new devices falling at a fairly predetermined rate.
But the vast majority of forces at play are uncertain. We can't know the answer, but we can become far more aware of the reasons that events might move in one direction or another, and the implications of their movement.
Step 3. Scenario Plots
Developing scenarios involves considering "classic stories" in terms of the current situation. (Indeed, a few researchers are discovering that system archetypes and this stage of scenario planning are devilishly complementary.)
As participants, you create several stories of your own, trying to make each evoke a future that pulls you past your own blinders. As you talk, you enrich the plots, developing sketches of what might plausibly happen.
You don't care how likely or unlikely each story may be. You care about whether it illuminates your understanding. In fact, if a substantial drop in the demand for your product or service is undeniably plausible - even though the chances against it are 100 to one - you owe it to yourself to create a story around that event, to spark the necessary creativity and preparation that you might or might not need, but which is worth developing in any case.
Step 4: Strategy, rehearsal, and conversation
This may be the most important step, and, regrettably, the most often ignored. Having developed two, three or four scenario plots, you now consider each of them. What strategies would be effective no matter which of those futures came to pass? What would it feel like to live in those worlds? Some groups go so far as to rehearse the scenarios, as though they were pieces of improvisational theatre, with each participant taking the part of a different key actor. It's also important to describe the scenarios to others-to get insights from the rest of the organization that may make your pictures of the world richer.
You may find that your scenarios themselves go through several iterations. That's all for the better. When you are done, you will have a language you have created, in which collective assumptions can be voiced. "How will we know this particular world is coming?"
Most importantly, you will ask: "What decisions can we make now that are robust- so that no matter how the future unfolds, we will be glad we made that decision?" Because you have anticipated several possible futures, you can ask that question of your imagination.
http://www.shambhalainstitute.org/resources.html#
Step 1. Refining our sense of purpose
Scenarios provoke genuine learning when they answer genuine concerns; otherwise, they are merely an academic exercise. The concerns should be compelling, shared by the entire group and beset with uncertainty.Articulating our focus is not a trivial task, especially because the participants are, ideally, diverse people with a common interest. As with a vision exercise, it requires moving past the concerns that people think they have to the concerns that truly motivate them.
Step 2. Understanding Driving Forces
Scenarios are built upon the distinction between two types of driving forces. Predetermined forces are reasonably predictable. We all know, barring unforeseen calamity, how many 20-year-olds will exist in any country nineteen years from now. We can assume that the pace of technological growth will continue, with costs of new devices falling at a fairly predetermined rate.
But the vast majority of forces at play are uncertain. We can't know the answer, but we can become far more aware of the reasons that events might move in one direction or another, and the implications of their movement.
Step 3. Scenario Plots
Developing scenarios involves considering "classic stories" in terms of the current situation. (Indeed, a few researchers are discovering that system archetypes and this stage of scenario planning are devilishly complementary.)
As participants, you create several stories of your own, trying to make each evoke a future that pulls you past your own blinders. As you talk, you enrich the plots, developing sketches of what might plausibly happen.
You don't care how likely or unlikely each story may be. You care about whether it illuminates your understanding. In fact, if a substantial drop in the demand for your product or service is undeniably plausible - even though the chances against it are 100 to one - you owe it to yourself to create a story around that event, to spark the necessary creativity and preparation that you might or might not need, but which is worth developing in any case.
Step 4: Strategy, rehearsal, and conversation
This may be the most important step, and, regrettably, the most often ignored. Having developed two, three or four scenario plots, you now consider each of them. What strategies would be effective no matter which of those futures came to pass? What would it feel like to live in those worlds? Some groups go so far as to rehearse the scenarios, as though they were pieces of improvisational theatre, with each participant taking the part of a different key actor. It's also important to describe the scenarios to others-to get insights from the rest of the organization that may make your pictures of the world richer.
You may find that your scenarios themselves go through several iterations. That's all for the better. When you are done, you will have a language you have created, in which collective assumptions can be voiced. "How will we know this particular world is coming?"
Most importantly, you will ask: "What decisions can we make now that are robust- so that no matter how the future unfolds, we will be glad we made that decision?" Because you have anticipated several possible futures, you can ask that question of your imagination.
Monday, October 8, 2007
Mass Customization
What’s one thing sophisticated, discerning consumers have in common? They don’t want to be perceived as being common. Mass customization is defined as the use of flexible manufacturing systems that allow customer-designed products to be produced at costs comparable to mass produced items; and companies who can execute this model can offer their customers truly unique products. Two companies that recently caught my attention are Inmod (http://www.inmod.com/modern-bedding.html) and Water Werkz (http://www.waterwerkz.co.uk/). Inmod has a service which allows customers to design their own duvet covers. Customers choose from a growing variety of embroidered patterns as well as colors and fabrics to design their duvet just the way they want it.
Water Werkz has a vending system that provides drinks that are blended on demand, thus allowing customers to create their own distinct mixes.
Water Werkz has a vending system that provides drinks that are blended on demand, thus allowing customers to create their own distinct mixes.
Friday, September 28, 2007
Innovation Archetypes
A new report from two leaders in the study of innovation argues that companies can not acehive sucessful innovation by simply replicating the approach used by other successful innovators.
http://www.innosight.com/research_papers.php#documents/InnovatingonYourOwnTerms.pdf
The reseach indicates that there are a small number of cultural and operational factors that companies use to drive innovation. The authors of the report call these combinations the "archetypes" of innovation. The four archetypes are:
1. The marketplace of ideas - a bottom-up approach in which employees generate new concepts, lobby for support, and then test a new product in the market. This is the Google approach, which works because its staff are creative and work in an encouraging environment.
2. The visionary leader - This model revolves around a senior executive who understands the future better than customers may. An example of this is someone like Apple's Steve Jobs, who spots and champions high-potential concepts, processes or products.
3. Innovation through rigor - Companies under this archetype create processes designed to produce results systematically. Samsung is one example, where organisational emphasis is on design strength, R&D spending, and cross-functional teams. The firm succeeds through a mix of senior executive proritization and tem processes. GE would be another example where the firm has a dynamic innovation portfolio review process. They actively manage their innovation pipeline with senior management and determine which ideas to continue funding and which to cancel.
4. Innovation through collaboration - This archetype is more externally-oriented, featuring companies that team with outside firms to evaluate opportunites, and quickly select the one to bring to trial. Collaboration organizations seek to gather "innovation intelligence" by building formal relationships with other firms that can help them shape the innovative concept and possible help to implement the solution as well.
http://www.innosight.com/research_papers.php#documents/InnovatingonYourOwnTerms.pdf
The reseach indicates that there are a small number of cultural and operational factors that companies use to drive innovation. The authors of the report call these combinations the "archetypes" of innovation. The four archetypes are:
1. The marketplace of ideas - a bottom-up approach in which employees generate new concepts, lobby for support, and then test a new product in the market. This is the Google approach, which works because its staff are creative and work in an encouraging environment.
2. The visionary leader - This model revolves around a senior executive who understands the future better than customers may. An example of this is someone like Apple's Steve Jobs, who spots and champions high-potential concepts, processes or products.
3. Innovation through rigor - Companies under this archetype create processes designed to produce results systematically. Samsung is one example, where organisational emphasis is on design strength, R&D spending, and cross-functional teams. The firm succeeds through a mix of senior executive proritization and tem processes. GE would be another example where the firm has a dynamic innovation portfolio review process. They actively manage their innovation pipeline with senior management and determine which ideas to continue funding and which to cancel.
4. Innovation through collaboration - This archetype is more externally-oriented, featuring companies that team with outside firms to evaluate opportunites, and quickly select the one to bring to trial. Collaboration organizations seek to gather "innovation intelligence" by building formal relationships with other firms that can help them shape the innovative concept and possible help to implement the solution as well.
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