BQF Innovation

I thought it was an urban legend; the story of the student who mistakes a pair of ‘unsolvable’ maths problems for his homework assignment and solves them.  It has been used as an example of the power of positive thinking.  If you do not know that a problem is unsolvable then you have a better chance of solving it.

I discovered that it is based in truth.  It happened in 1939 to the American mathematician, George Dantzig (1914 - 2005) when he was a graduate student.  Here is the story in his own words:

‘It happened because during my first year at Berkeley I arrived late one day to one of Neyman’s classes.  On the blackboard were two problems which I assumed had been assigned for homework.  I copied them down.  A few days later I apologized to Neyman for taking so long to do  the homework–the problems seemed to be a little harder to do than usual.  I asked him if he still wanted the work.  He told me to throw it on his desk.  I did so reluctantly because his desk was covered with such a heap of papers that I feared my homework would be lost there forever.  About six weeks later, one Sunday morning about eight o’clock, Anne and I were awakened by someone banging on our front door.  It was Neyman.  He rushed in with papers in hand, all excited: “I’ve just written an introduction to one of your papers.  Read it so I can send it out right away for publication.”  For a minute I had no idea what he was talking about.  To make a long story short, the problems on the blackboard which I had solved thinking they were homework were in fact two famous unsolved problems in statistics.  That was the first inkling I had that there was anything special about them.’

Here is the link describing the way the myth has developed on Snopes.

Paul Sloane

We can broadly simplify innovations into two kinds – incremental and radical.  Incremental innovations are improvements to current products, methods, processes, services, partnerships and so on.  Customer complaints and suggestions are a good source of ideas for incremental improvements.  So are the people who work in the organisation.  If you ask customers how your product could be better or if you ask employees how their job could made easier they will come up with plenty of proposals.  Most organisations are good at incremental innovation – they make things better.  However, very few organisations are good at radical innovations.  As Gary Hamel puts it – businesses are good at getting better but poor at getting different.  Indeed Clayton Christenson in his book, The Innovator’s Dilemma, argues that it is very difficult for successful organisations to develop disruptive innovations that would threaten the basis of their success.  Often they are put out of business when some smaller company develops a radically new technology.  Which employee working in a booming telecoms company in the 1990s would have suggested that free voice over internet telephony would be something they should develop?  It took a start-up, Skype, to make a success of this radical idea.

How can you encourage your people to countenance drastic innovations?  One way is to run creativity sessions where the objective is to conceive them.  Ask the question, ‘Who killed our business?’  Get small teams to imagine entirely new business models that could deliver the benefits that your customers want.  Each team has to present a scenario of a force so powerful that it could completely replace you.  Starting with a blank piece of paper and none of the encumbrances that limit your organisation they design a super competitor.  They are encouraged to go to extremes and to think completely outside the current model.  The exercise is stimulating and can be very revealing.

Most organisations have natural defence mechanisms against disruptive or threatening ideas.  People immediately find reasons why they should not be considered.  It is difficult to change the culture to one where such ideas are not only heard but are actively encouraged and developed.  The ’Who killed our business?’ exercise is a good way to start.

Paul Sloane

The next meeting of the BQF Innovation special interest group will take place in Westminster on the morning of Wednesday July 30th.  The topic is competency traps and the main presentation will be given by Richard Granger, Senior Associate at Arthur D Little.  What are competency traps?  They concern the aspects of a company’s skills, experiences, competencies and successes which inhibit innovation.  In this session we will learn how to spot the traps and how to avoid them.  There will be an interactive element where delegates review the potential competency traps in their organisations.

You can see details of the event and book your place here:

http://bqf.org.uk/cgi-bin/eventdetail.cgi?Event_Code=728&ID=1688

Please book early as places are limited.  Members, guests and non-members are all welcome.

Paul Sloane

I read an interesting post on the E-myth blog about UPS.  They found that they could save time and fuel by instructing drivers not to turn left.  It sounds crazy but by planning their routes to include only right turns they saved time spent waiting to turn left.

‘In 2004, after evaluating their CO2 emissions, UPS announced that its drivers would avoid making left turns. They calculated that the amount of time spent idling waiting to make a left turn would save millions of dollars in fuel costs every year. For example, in 2006 UPS trucks drove 2.5 billion miles, and with their unique package flow technology combined with their right-turn routes, they estimate saving 28,541,472 million miles, and three million gallons of fuel. ’

How many things are you doing in your organisation that seem natural and inuitive but need to be challenged?  What are the left turns you are taking that should be replaced?  Time to start some counter-intuitive thinking.

Paul Sloane

The BQF annual leadership conference went well.   Here are some of the key messages I took away from the speakers:

Tim Cross, former army officer, gave an inspirational talk.  He argued that the key thing missing for most modern leaders was a sense of moral purpose.  We think we can solve society’s ills by exercising levers in politics and economics but without a moral imperative we will not succeed.

Susan Scott-Parker, founder of the Employer’s forum on Disability, asked whether the world was a frog or a bicycle.  Is it one organic whole or can you replace and upgrade parts?  She believes that assumptions are more powerful than facts.

Tim Peach, MD of Taylor Woodrow Construction, believed that everyone in the company could improve by 15 to 20% so he set about a programme to change behaviours.  This started with 360 feedback sessions and went on to a series of actions and activities that have affected everyone.  His message was very well received and he was bombarded with questions.

Nigel Risner, superstar speaker, gave an energetic and entertaining performance which challenged the audience in many ways.  Do leaders know the key personal priorities of their people?  What represents success for you and are you spending time on making it happen?  Are leaders handling different types of people in ways appropriate to their (animal) characters?  Each message was delivered with humour, interaction and creativity.

The was lots more excellent stuff from the speakers and it was good to network.  Make a note to come to next year’s event.

Paul Sloane

Last week I ran a session for GBPA corporate members where we discussed innovation metrics.  We reviewed the Boston Consulting Group 2007 research on the subject and the results of my innovation metrics web survey.  It was agreed that most organisations find it difficult to measure innovation in any satisfactory way.  The most common measurements are backward looking - e.g. % of revenue from products released in the last two years.  The BCG report recommends that you select a small number of metrics appropriate for your business and have some for inputs, process and outputs.  At the meeting we discussed which were the best metrics to use and here are some of our choices:

Input metrics:

• Number of ideas generated
• Resources allocated to innovation - people and budget

Process Metrics

• Average time from idea approval to implementation
• Number of ideas approved and number implemented
• Stage-gate pass rates
• Value of the innovation pipeline

Output metrics

• Number of new products or services launched
• Revenue from new products or services
• ROI on innovation spend
• Market Perception
• Number of new customers

We also found it useful to draw flow-chart diagrams of the innovation approval and pipeline processes and ask some searching questions about this.  Are we getting enough ideas coming in?  Is it taking too long for good ideas to be implemented?  Are we getting enough innovations out of the process?  Are our approval processes too complicated or too difficult?

It was agreed that everyone should have targets or objectives for innovation.  In collaborative ventures it is particularly important to agree goals, expectations and metrics for innovation at the outset.

There are no perfect measurements for innovation.  All the metrics are limited in value.  But that does not mean that you should not use them.  By choosing and applying a small number of metrics appropriate for your business you can add innovation to your balanced scorecard and give it the high level attention that it needs if you are to succeed.

Paul Sloane

So the greatest ever match between English clubs was settled by a penalty shoot out.  John Terry missed the chance to win the European Champions league for Chelsea and Manchester United went on to grab the trophy.   MU seize the title and the glory while Chelsea fans curse their luck.  Football fans everywhere enjoyed a fantastic contest but the question remains - is a penalty shoot-out the best way to resolve this kind of match?  Do we need some innovative thinking here?  If the teams are level after 120 minutes of football then what should we do?  If we brainstormed the issue then there are plenty of options we could come up with:

• The two teams could share the trophy - 6 months each
• A replay
• ???????? ????? ????????The team with fewer red and yellow cards could win
• The team with more shots on goal
• We could play on without the goalkeepers (and no offside rule) and see who scores first
• The team with more English players!

The penalty shoot-out is exciting but ultimately it is a lottery.  Someone has to miss or else we would be there all night.  I just wonder whether such an important prize should be decided in such a cruel and haphazard way? 

Paul Sloane

The BQF is hosting a leadership conference on June 11th 2008 with a terrific line-up of speakers including Nigel Risner, Tim Cross, Susan Scott-Parker and Tim Peach.  It will be held at the Latimer Conference Centre in Chesham.  There are more details here:

http://www.bqf.org.uk/sbp_studytours.htm

Paul Sloane

We know that innovation involves taking risks.  Yet it often seems that the safe option is to turn down the risk.  However, turning down a risk is also a risk - the risk of losing an opportunity.  Just to remind us of how big that risk is we have here a list of some of the worst decisions in business history.

They include Decca Records turning down the Beatles, Western Union rejecting the telephone, Mars confectionery missing out on ET, Henry Ford refusing to change the Model T and Digital Research missing the opportunity to provide the operating system for the IBM PC.  It is very easy for us with hindsight to scoff at the business leaders who made these decisions but  I am sure that the choices seemed rational at the time. 

Of course most bands are not the Beatles and many have to be rejected.  But it is easy to become too critical too soon.  How many of the ideas and proposals that we have rejected were missed opportunities?  When we look at the costs of a risky venture we need to factor in the cost of missing the opportunity too. 

Paul Sloane

We had a successful meeting of the BQF Innovation Unit today in London where the topic was Knowledge Management for Innovation. Professor Michael Kelleher gave a comprehensive explanation of KM. Some of the points he made were:

• The cost of ignorance is high. NASA and the British Nuclear Industry both lost important early knowledge.
• You should align your KPIs to achieve innovation through KM
• Corporate Yellow Pages allow you to find key skills and experiences
• Employees need to be motivated to share expertise so put it into objectives and appraisals
• ‘After-action reviews’ and ‘lessons learnt’ need to be captured
• Organisational story telling is a key part of KM
• To help with innovation we need a searchable corporate memory of past failures as well as successes

Martin Fowkes, who is responsible for KM at Taylor Woodrow then covered what they are doing in this field. When it comes to innovation the Taylor Woodrow motto is - Think, Prove, Do. (Many other companies operate - Think, Analyse, Reject.) They promote innovation through physical innovation notice boards and an innovation buddy system. Before they bid on a new tender they search their knowledge base to look for relevant experiences. They then run workshops to generate innovative approaches.

There was a discussion on related topics. Many participants use Microsoft’s Sharepoint for KM. Blogs and wikis are increasingly important tools.

If you are a member of BQF then Pat Myles can supply copies of the Powerpoint presentations from the day.

Next Meeting will be on July 30th in London with the topic - Competency Traps - presented by Arthur D Little. More details will follow.

Paul Sloane