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d e f i n i t i o n
d e f i n i t i o n
Before starting on any journey, common ground needs to be established and this is no different when we want to discover or talk about innovation. The common ground that needs to be set is the definition of three words: creativity, invention and innovation. These three words have been used interchangeably and at the surface can seem to have the same definition. To top that off, if one were to ask 100 people to define these words, more likely than not, one will get 100 different definitions. Therefore a common definition is needed for us to start this journey. As you think about innovation, you can agree with the definitions below, modify them to suit your needs or even create your own definition. However, for the purpose of this booklet the following definitions will be used: 1 CREATIVITY is the ability of
individuals, teams and organizations to generate ideas that have value. Creativity can be rediscovered, enhanced and fostered.
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2 INVENTION is the action of finding or
discovering something that has not been found or discovered. 3 INNOVATION is the thoughtful and
purposeful act of transforming creative ideas and inventions into tangible forms that create value. 4 SYSTEMIC INNOVATION refers
to innovation practices that are structured, sustainable, pervasive and permanent. Systemic innovation is accomplished by the setting up of frameworks, methodologies and environments that provide structure for innovation to occur.
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Most of us are familiar with Operation. Operation refers to the process of doing things right in order for a product or service to be completed in a timely manner. Operational steps are clear and for the most part are welldefined. Innovation on the other hand, is the polar opposite of Operation, like the yin to Operation’s yang. Yet, also like yin and yang, both need to exist in order to have a harmonious system. Without Operation nothing will get done, and without Innovation nothing new will be created.
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The table below gives a brief comparison of Operating and Innovating. O P E R AT I N G
I N N O VAT I N G
DOING THINGS RIGHT
DOING RIGHT THINGS
STEPS ARE PRE-DEFINED
STEPS ARE UNDEFINED
STEPS ARE MOSTLY LINEAR
STEPS ARE MOSTLY UNCLEAR
SINGLE ROUTE AND RESULT
MULTIPLE ROUTES AND RESULTS
DRIVEN BY FUNCTIONAL TEAMS
DRIVEN BY CROSS-FUNCTIONAL TEAMS
REWORKING IS A WASTE
REWORKING IS PART OF LEARNING
CLEAR FRONT END
FUZZY FRONT END
EASY TO MEASURE
TOUGH TO MEASURE
RICH HISTORICAL DATA
POOR HISTORICAL DATA
FORECASTING POSSIBLE
FORECASTING ALMOST IMPOSSIBLE
TRADITIONAL PLAYERS AND ROLES
NEW PLAYERS AND ROLES
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We should innovate because: 1 Operational excellence alone is
no longer sufficient. Operational excellence gets something out the door but does not create the next “new” thing. 2 Cost control is not enough because
cutting cost or controlling cost only prolongs the past and does not create the future.
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4 Change is happening at a lightning
rate and the only way to cope and adapt to change is to innovate. In 1930 the average lifespan of an S&P 500 company was 50 to 70 years. In 2000 the average lifespan was down to 25 to 30 years. At this rate by 2020 75% of current S&P 500 companies will no longer exist. 5 The competition is not waiting. 6 Innovation gives you a way to
3 In 2006, the top 25 most innovative
companies in the world were found to have a median margin growth of 3.5% per year since 1995 as compared to just 0.4% for the median S&P Gbl 1200 companies.
differentiate yourself from your competitors.
8 Innovation enables the creation of
new source of value and they drive a disproportionate share of growth. This can be seen from Motorola’s RAZR to eBay online community auctions to every one of Pixar’s animated movies. 9 Increasing profit and market share
through acquisition rarely works and is complicated and messy. For example recent news has it that US Airways 2005 merger with America West might not achieve expected profit results. 10 Companies that do not innovate will
7 Customers are looking for the coolest
new stuff – mobile phones, iPods, services, clothes, etc. Customers are shopping for innovation because they know that is where the value is in this modern area. Customers love innovation.
fade away like MCI, Netscape, Napster and Peoplesoft.
innov ation
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Some of the common innovation myths are:
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3 Myth: Financial analytics is the key
criteria to approving new ideas and concepts.
1 Myth: Innovation is only about new
products or limited to technology R&D. Truth: Innovation can be about services, business models, and customer experiences. For example, Starbucks is innovating in the space of customer experience.
Truth: Trying to guess the financial elements in 5 years for something totally new wastes time and is almost always wrong. Instead start putting together quick, cheap and unrefined prototypes of your ideas or concepts to see what works and what does not. Making ideas tangible help!!!!
2 Myth: Innovation is expensive. 4 Myth: Innovation is reserved for the
Truth: Not innovating is more expensive. Not innovating has caused the downfall of many companies. Southwest Airlines innovated on their business model while all the other American airlines did not. Now Southwest is profitable and the rest are not and some have even filed for
lone creative inventor.
bankruptcy.
can play the following personas: anthropologist, experimenter, crosspollinator, hurdler, collaborator, director, experience architect, set designer, storyteller and caregiver (The Ten Faces of Innovation, Tom Kelly, 2005).
Truth: Innovation is a team sport. You will need people from various disciplines (business, engineering, social science, arts) and traits to collaborate radically to innovate. You will need a collection of people that
innov ation
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1 six sigma
Six Sigma has made business operations and processes efficient in the past and will continue to be an important part of any corporation. However, relying on Six Sigma solely is not enough and using Six Sigma to manage innovation is not going to work. Six Sigma is inward-focused and thus does not help organizations to fulfill the unmet, unarticulated and unrealized needs of customers. Six Sigma cuts down on variations and mistakes. It makes processes sterile, robotic and predictable. Innovation on the other hand has to be messy, open and full of warts. So using Six Sigma to manage innovation is going to kill innovation. 2 fear
Fear kills innovation. Being highly focused on getting things perfect the first time around, a lot of corporations instill in their employees a culture of fear - fear of taking a chance, fear of trying, fear of failing, and fear of making mistakes. Do not misunderstand, making mistakes and
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failing does not equal to innovation, but if no mistakes are made and no lessons are learned from mistakes, you can be guaranteed that there will be no innovation. What is needed is the banishment of fear and the encouragement of child-like curiosity and experimentation, a mindset of not fearing failure but having a willingness to learn from the failure and to move on.
like manner that people are not given time to think, to explore, to experiment, to play, to be human and ultimately to innovate. 5 bureaucracy and hierarchy
If every time one wants to try out a new idea one needs to fill out 10 million permission forms and ask for permission from another 10 million people before one can start on something, then the chances of that idea even starting is close to zero, let alone having it progress to something significant.
3 devil’s advocate
How many times have we seen the devil’s advocate rear its ugly head on ideas that are still in its infancy? How many times have we heard someone say “let me be the devil’s advocate” and proceed to pulverize a new idea to smithereens without really understanding the new idea? We should give the new idea a chance to breathe, live and grow a little to see where it goes before pounding it to the ground. 4 productivity
Corporations are so focused on productivity in a regimented military-
6 common phrases that not only inhibit
but kill innovation: > Yes, but ... > We’ve tried that before.
It won’t work. Don’t rock the boat. The boss will never go for it. If it ain’t broken, don’t fix it. We’ve always done it this way. That’s not what the customer said they wanted. > What’s so original about that? > > > > > >
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There are two main types of innovation: Radical/Disruptive Innovation
Incremental/Sustaining Innovation
• Revolutionary, breakthrough
• Evolutionary, expected, sustaining
• Game changing, disruptive
• Rarely challenges established leaders
• Challenges established market leaders • Addresses existing markets • Creates new markets • Exploratory: invites the elements of discovery & surprise
• Predictable: desired outcome is prescribed Both types of innovation are needed for a corporation to be successful in the long run. Radical innovation will get you to the next curve and incremental innovation will sustain you while you search for the next breakthrough.
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When people think of innovation, they tend to think only of product innovation. Unfortunately, this is a very limited view of innovation. Below are some examples on other areas of innovation: 1 business model innovation
description: How a company makes money. example: Dell revolutionized the personal computing business model by collecting money before a customer’s PC gets built or shipped. 2 process innovation
description: How a company creates and adds value to its offerings.
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3 service innovation
description: How a company provides value to customers and consumers beyond and around its products. example: An international flight on any airline will get you to your intended destination. A flight on Singapore Airlines however, nearly makes you forget that you are flying at all, with the most attentive, respectful, and pampering pre-flight, in-flight and post-flight services you can imagine. 4 platform innovation
description: How a company can provide platforms for multiple products. example: Microsoft Office bundles
example: Walmart continues to grow its profitability via core process innovation such as using a real-time inventory management system and other systems that give store managers the ability to identify changing buyer behavior and respond quickly with new pricing and merchandising configurations.
a variety of specific products (Word, Excel, PowerPoint, etc.) into a platform designed to deliver productivity in the workplace.
5 management innovation
description: How managers perform their tasks. example: DuPont first introduced the use of ROI calculation as a means to compare the performance of its product departments. Today, various variants of this index have been used to assess investment potential.
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Here are some tips on where to start: 1 getting resolve and commitment from
the top The senior management has to not only support innovation, push for innovation, mandate innovation, make innovation a priority but they also have to show it, live it and breathe it. Senior management will need to walk the talk so every layer of the organization will know that innovation is really important. Innovation strategy has to be driven from the top. 2 innovation audit
Know where you are in terms of innovation. Ask questions: > Is there a mechanism to collect people’s ideas? > Is there a mechanism to encourage idea generation? > Is there an incubation place for ideas? > Are there mechanisms for filtering ideas? > Does the reward system encourage risk taking? > Is the organization encouraging experimentation?
> Is the organization allowing time for people to think? > As an organization, do we know enough about innovation techniques or do we need to seek outside help? > As an organization do we know what an innovation culture is like and are we promoting it? Once an organization knows where it is starting, it can then begin to chart its innovation course. However, always keep in mind that the innovation course needs to be flexible and selflearning and correcting. 3 process and methodology
4 space
Yes, look at office space. If it is made up of uniform gray cubicles, do you think creativity will be promoted in such an environment? Liven things up! Make the office lively and fun, engage people’s visual senses to feel that they are in a creative environment. Also remember to evaluate if your office space is promoting collaboration because innovation is a team sport. 5 culture
• Have innovation as part of the organisation’s value system.
Once an audit is done the organization needs to start putting the right processes, methodologies, environment and culture in place.
• Adopt a suitable innovation framework, including a system to measure progress.
For example, an organization needs to evaluate whether or not they need to modify the reward system to encourage innovation, and possibly if they should develop the concept of an idea bank to capture the ideas of the people.
• Encourage and reward innovation and risk taking and even failure.
6 time
8 start small
• Give employees time to experiment and do things outside their mandated project work.
• Get innovation champions. Look for a few people in your organization that are believers of innovation to be champions. Give them the authority to promote innovation, to talk about innovation, to lead it and to champion it.
• Give time for yourself away from meetings, presentations and emails to think, to go out of the office and to observe the individuals using your product or system, to take a breath and to evaluate where your team is going and where you want them to go. Innovation definitely does not happen in meetings or through emails. 7 open innovation
All of us need to realize that innovation happens top down, down up, in out and out in. We need to realize that innovation cannot be bottled up only within one single organization. With these realizations, organizations need to put mechanisms in place to not only manage this but also to promote this.
• Set up a small multi-disciplinary team to explore innovation. This team will be your pioneers in innovation. Give them the flexibility and authority to try innovation techniques. Really let them loose and let them be an innovation brush fire for you. Let them go out to learn and explore then let them bring back their learnings into your organization and spread them. It is extremely important that senior managers be an umbrella that shields this pioneer group from the devil’s advocates, the naysayers, and corporate antibodies that are out to kill anything new that they do not understand. This will only be needed at the beginning because once the brush fire becomes a forest fire no amount of rain will stop it.
Innovation is an art won by training and habituation. We are what we repeatedly do. Innovation then is not an act but a habit. A R I S T O T L E
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