Innovation Resolutions

Paul Sloane

It is time to make your New Year’s resolutions.  Here is what I suggest for your innovation in 2013.

 

1.  Make a plan for innovation.  Set goals and milestones for new products, services, methods etc.

2.  Allocate resources for innovation – time, people ,money.

3.  Measure progress against your plan. Take corrective actions.

4.  Challenge every assumption in your business.

5. Run regular brainstorm sessions on key business issues.  (Get a good facilitator to help).

6.  Implement, implement, implement.  Great ideas and great plans are no good without implementation so get on with it!

 

Best wishes for an innovative 2013.

 

Paul Sloane

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The Cardboard Bicycle

They said it was impossible – so he built it.  Israeli inventor Izhar Gafni has constructed a bicycle out of cardboard.  It is cheap, strong and waterproof.

It illustrates two enduring principles of innovation.

1.  Ignore the experts who tell you why things can’t be done

2.  Weird combinations often make the best innovations.

Video on Youtube

Article in the Telegraph

I have added it to my Christmas wish list.

Paul Sloane

 

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Develop New Products Fast with an Innovation Incubator

The toy company Mattel is well known for its Barbie doll brand.  They need a constant stream of internal innovations to build on this success.  So Ivy Ross, Senior VP of Girls Toy Design set up something she called Project Platypus.  The idea is based on the description of a platypus as an uncommon mix of different species.  The 12 members of the project team are a rotating group drawn from different functions in the company.  They join the project for three months and work intensely and creatively.  Operating in a dramatically different environment, they use external stimuli, study children at play and have enormous freedom to generate and test ideas.  The participants enjoy the experience and take their new creative skills back to their departments.   The results have been startling with many new products and reduced time to market.  As Ivy Ross says, ‘Designers are not the only people who can create toys.  If you put a bunch of creative thinkers in the right environment and drop the job titles, you’ll discover amazing creativity.’[i]

 

To develop winning products, Samsung, the Korean electronics company isolates artists and techies for months on end.  Because daily routines can interrupt the flow of great ideas, Samsung segregates development teams in its VIP (Value Innovation Programme Centre).  Product planners, designers, programmers, and engineers are asked to outline the features and design of new products such as the company’s mainstay flat-screen TV. Department heads pledge to keep them posted there until they have completed the assignment.

 

The facility is a sort of boiler room where people from across the company brainstorm day after day — and often through the night. Guided by one of 50 “value innovation specialists,” they study what rivals are offering, examine endless data on suppliers, components, and costs, and argue over designs and technologies.  Every step of the way, team members drew what Samsung calls “value curves.” These are graphs that rank various attributes such as picture quality and design on a scale of 1 to 5, from outright bad to excellent. The graphs compare the proposed model with those of rival products and Samsung’s existing TVs.[ii]

 

By deliberately forcing the mixing of project teams and removing distractions Mattel and Samsung speed up the innovation process.  People in the teams are encouraged to be creative and to break the rules.  They focus on getting the innovation moving.  And they bring co-operation, enthusiasm and diversity to bear on the problem.   An incubator can overcome the problems of corporate inertia and inter-departmental fault-lines by concentrating the resources of people, skills and time needed to make deliver new products.

 

Paul Sloane



[i] Salter, C (2002), Ivy Ross is not playing around, Fast Company (Nov) pp 104 – 110

 

[ii] Businessweek, July 3 2006, Camp Samsung.

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How can you personally profit from Innovation? Invest in Innovation Champions

Tim Jones, formerly of Shell Ventures has written a book called Growth Champions in which he explores the question, ‘Do the share prices of innovative companies out-perform the market?’  His answer is a resounding yes as explained in this article from the ISPIM magazine.

‘The Innovation Leaders analysis has been monitoring analysis of the most effective innovators across 25 sectors for the last decade. Initial assessments showed that, as a group of companies, average growth in share prices since 2002 was over 15% per annum. This compares very favorably to average annual returns for the FTSE 100, NASDAQ and S&P500 indexes that, respectively, saw average growth over the same period of 2%, 6% and 3%. This presents a significant opportunity not only for supporting the internal business case of innovation professionals within their organizations but also for the global investment community – from individual investors to multi-billion dollar hedge funds.’

It makes sense that the companies which are fastest and best at introducing new products and services should show faster growth, improved profits and better share price performance.  The big problem is spotting them in advance.  If we can do that then our portfolios will soar.  Which are your favourite innovative companies?  Don’t just buy their products, buy their shares.

Paul Sloane

 

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Turbocharge your Suggestions Scheme

I recently spoke at the annual conference of the membership association Ideas UK.  It was a meeting of people who run ideas schemes and employee engagement programs.  Delegates came from many countries including the USA, Germany and the Middle East.  There was a wealth of stories, experiences, suggestions and shared best practices.  If you run a suggestion scheme of any kind then there is much to learn from this kind of conference.  Let me share some of the best ideas I heard.  Some of the organizations at the conference were doing the following:

 

1.  Organising

Including training in the suggestions scheme in their new employee induction day.

Setting an expectation that everyone has two jobs – the one they were hired for and suggesting improvements anywhere in the business.

Having campaigns where there is a different theme each month.

Turning winners (people who had had their ideas approved) into evangelists who spoke about the scheme at department meetings.

Telling people exactly what kinds of ideas were needed and in what areas.

Encouraging submitters to add photos (e.g. of prototypes) to their suggestions.

Publicising success in all sorts of ways.

Encouraging team submissions (they prove better thought out and more likely to be approved)

Allowing anyone to comment on or add a star rating to an idea (just like tripadvisor or amazon).

Refreshing the scheme with new promotions, posters or ideas in order to keep it in people’s attention.

Allowing anonymous suggestions

Allowing suggestions to bypass the line manager.

 

2. Incentivising

Giving a small reward (e.g. $2!) for any suggestion made.

Giving a larger reward for ideas implemented – sometimes a proportion of the savings up to a limit.  It was generally agreed that big rewards were not needed and that recognition was more important than money.

Setting a target (e.g. 4 suggestions per year) for all employees and including the results in the annual appraisal.

Publishing competitive league tables for running totals of suggestions for different regions.

Establishing an annual ‘Club of Thinkers’ for the people who made the most suggestions.  The members of this club received extra training in creativity and met the senior executive team for lunch.

Incentivising submissions with prize draws.

In December rewarding recently implemented ideas with Christmas trees.

Rewarding heads of department for any approved ideas that originated in their department.

 

3.  Evaluating

Incentivising idea evaluators with points (and rewards) for ideas reviewed on time and ideas implemented.

Encouraging evaluators to contact suggestors to discuss the suggestion.

Setting targets for evaluators to evaluate ideas (e.g. 10 days or less)

Allowing evaluators to store an idea in an ‘icebox’ if there are reasons why it is not a good idea now but might be later.

 

It is clear that there are many different approaches to ideas schemes and you need to find one that suits your corporate culture and objectives.  There are also many different software packages available to run the schemes.  If you are thinking of implementing or improving your suggestions system then it is wise to speak to a number of other organisations and to borrow their best ideas.

 

Paul Sloane

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Innovation’s Secondary Consequences

The light bulb did not replace the candle.  It replaced going to bed early.  The motor car did not replace the horse.  It replaced staying at home.  Every major innovation has primary consequences and secondary consequences.  The secondary consequences look obvious in hindsight but they were not obvious at inception.   Who in 1985 would have anticipated that the internet would mean that music downloads would kill major record labels or that an innovation like Wikipedia would finish Encyclopaedia Britannia?

So let’s spend a moment speculating on the impact of a big innovation that appears to be heading our way – driverless cars.   Google and others have demonstrated prototypes that perform very well.   Most of the technology needed is already in place.  See this video interview from the Economist.

The primary consequence of this innovation will be that fully automated cars replace conventional cars and drivers become passengers.  What will the secondary consequences be?

Once again I turn to the Economist in which Schumpeter speculates on this.  He forecasts that some of the secondary effects might be:

  • Hospitals will need fewer emergency rooms and orthopaedic wards as the rate of road traffic accidents is dramatically reduced.
  • Hotels will lose business as tourists and businessmen sleep overnight in their travelling vehicles.
  • Taxi and car-rental businesses might merge into one automated pick-up and drop-off service.
  • Much less need for motor insurers and brokers.
  • Bad news for lorry drivers and cabbies.
  • A boon for country pubs no longer affected by drink-drive laws.
  • Less demand for road signs, traffic light, signals and guard rails.
  • Less need for traffic police and traffic wardens (automatic cars will be programmed to obey the law).
  • A rise in house prices in more distant suburbs as greater commuting distances become easier.
  • Less demand for city car parks and meters and less revenue for local authorities (the cars can be sent home or elsewhere).

Worldwide over 100,000 people are killed in road accidents every month and the figures are rising.  Nearly all road accidents are caused by driver error.  This is the single most compelling argument for the driverless car.  You and your children will be safer.  But the other consequences will be many and varied including some of those above and some that we just don’t anticipate.

 

Paul Sloane

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How do you get Employees Engaged with Innovation? Start with a Suggestions Scheme.

How do you get your people engaged with innovation?  There are many things to consider here including your corporate culture and the overall vision and direction of the business.  However, one practical step that you can implement is to start an effective suggestions scheme and to encourage all employees to participate.  I believe that every organization with more than 100 employees should have a formal suggestions scheme.

When I ask people whether they have an effective suggestions scheme in their business I often this kind of reply, ‘We started one years ago but it has fallen into disuse.’  Like many corporate initiatives the scheme started with a blaze of enthusiasm and a torrent ideas but then nothing much happened and people have lost faith and interest in the project.  It is no good starting the scheme unless you are prepared to resource it.  That means that all ideas have to be evaluated promptly and the best ones have to implemented.  People believe what they see not what they hear.  When they see suggestions being actioned then they start to believe in the scheme and are prepared to contribute their time and suggestions.

How do you maintain the initial enthusiasm?  By having a rolling series of campaigns.  Don’t just ask for ideas.  Have a campaign each month where you ask for ideas on specific topics.  E.g. ask for ideas on how we can….

  • Surprise and delight customers
  • Reduce costs
  • Recruit the best people
  • Streamline administration and paperwork
  • Better meet customer needs
  • Increase brand awareness

and so on…..

I have written more about suggestions schemes and especially how Siemens Drives use them.

Ideas UK is a not for profit association that promotes employee engagement and suggestions schemes.  They can recommend on different software packages and approaches based on their members’ experiences.

I am speaking at their annual conference in Bristol on Nov 7th.

I am sure that I will hear some interesting tales of corporate innovation initiatives and learn some great ideas.

 

Paul Sloane

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A suitcase that follows you……

When talking about how to innovate I have often used the example of putting wheels on a suitcase and how that simple idea made life easier for travelers.  It is a low-tech innovation that was new in its day but now we all take it for granted.  Now I see that there is a high-tech innovation that could make an even bigger impact on the humble suitcase.

Designer Rodrigo Garcia Gonzalez, has created a suitcase with a caterpillar system at its base which enables it to move and turn.  Bluetooth receivers connect to the owner’s smartphone, allowing the case to triangulate the signal and determine where the user is in relation to the suitcase. When the phone moves the suitcase follows.  It also means that you can always find your suitcase.

More details on Springwise.

I will put this on my Christmas wishlist.

Paul Sloane

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The Virgin Atlantic Ice Cream Story

Chris Moss

I recently spoke at the Like Minds conference in London.  One of the other speakers was Chris Moss.   He was Chief Marketing Officer at Virgin Atlantic, CEO of 118118 and the creator of the Orange Brand.  He told an interesting story about innovation at Virgin.  In the early days of Virgin Atlantic they were seeking ways of improving the passenger experience.  The question he asked was, ‘We show movies but how can we make flying more like going to the cinema?’  One of the ideas that resulted was to serve ice creams.  They asked the engineers how they could do this and were turned down flat – there were no freezers on aeroplanes.  However, Moss persisted and they undertook a trial using frozen ice creams packed in dry ice.  The trial was a disaster.  The ice creams were rock hard and inedible.  Undaunted they kept experimenting until they got the temperature right.  Ice creams proved very popular and were an inexpensive but appealing differentiator.

It seems to me that there are some important lessons in this little story.  Let’s break it down into innovation steps:

1. Ask a different question (how can we make flying more like the cinema?)

2. Select your best idea

3. The experts tell you all the reasons why it won’t work.

4. You find a way to try it anyway.

5. The trial fails

6. You learn from the failure and try again.

He also told about another innovative idea.  They gave children little rucksacks with enough sweets to last the flight.  Another disaster!  Most children opened the rucksacks, scoffed all the candies immediately and then were sick.

Innovation involves trying an idea – and most really creative ideas don’t work first time.  Keep trying – like Virgin.

 

Paul Sloane

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Which are Europe’s Most Innovative Companies?

Forbes magazine has recently published a list of the most innovative companies in the world.   They construct an ‘Innovation Premium’ to compile the list. It is calculated first by projecting a company’s income (cash flows, in this case) from existing businesses, plus anticipated growth from those businesses, and look at the net present value (NPV) of those cash flows.  They then compare the NPV of cash flows from existing businesses with a current market capitalization: Companies with a current market cap above the NPV of cash flows have an innovation premium built into their stock.

The top 5 companies on their list are:

  1. Salesforce.com
  2. Alexion Pharmaceuticals
  3. Amazon
  4. Red Hat
  5. Baidu (China)

On this basis they rate the most innovative companies in Europe as:

  1. ARM Holdings – UK
  2. Pernod Ricard – France
  3. Danone – France
  4. Essilor – France
  5. Reckitt Benckiser – UK
  6. Diageo – UK
  7. L’Oreal – France
  8. Beiersdorf – Germany
  9. Dassault Systems – France
  10. Technip – France

The full list and article is here.

The methodology is too financial and mechanical for my liking and the list omits recognised European innovators such as Virgin Group, BMW, Lego. Zara and Vodafone.  Who do you think should be on the list?

The accompanying article on How Innovative Leaders Maintain Their Edge is informative. It shows that innovative leaders focus on people, processes and philosophies to differentiate them from the pack.  The authors list 5 behaviours of these leaders as follows; Innovators ask provocative questions that challenge the status quo.  They observe the world like anthropologists to detect new ways of doing things.  They network with people who don’t look or think like them to gain radically different perspectives.  They experiment relentlessly to test new ideas and try out new experiences.  Finally, these behaviors trigger new associations which let them to connect the unconnected, thereby producing disruptive ideas.

Paul Sloane

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