BQF Innovation Blog » management

To boost innovation just keep the boss away!

Paul Sloane — Wed, 07 Jul 2010 16:03:21 +0000

Billions of dollars are spent on developing and launching new consumer packaged goods (CPG) products each year, and some companies see tremendous success while others – don’t. Why? One secret appears to lie in the degree of senior management involvement in the creative process, according to a study by The Nielsen Company.

Nielsen’s research of the innovation processes at 30 large CPG companies operating in the U.S. reveals that companies with less senior management involvement in the new product development process generate 80 percent more new product revenue than those with heavy senior management involvement. Companies that employ this and other best innovation practices derive on average 650 percent more revenue from new products compared to companies that do not.

Nielsen’s research shows that simply being physically near corporate headquarters can stifle new idea generation. In fact, it turns out that having no Blue Sky innovation team at all is better than having a team on-site at corporate headquarters. The best place for your breakthrough innovators? Far, far away. According to Nielsen, companies with an off-site Blue Sky innovation team report 5.7 percent of revenues coming from new products, compared to 4.8 percent from companies with no Blue Sky team at all. Companies with Blue Sky teams on site report just 2.7 percent of revenues coming from new products.

“One of the keys to successful new product innovation is to manage new ideas lightly,” said Tom Agan, Nielsen MD. “While we don’t dispute senior management’s strengths and good intentions, they are often too quick to get involved in the creative process, especially when things are not going well, and their mere presence can stifle free-thinking and boundaryless ideas – which can doom the new product development process to failure.”

Senior management needs to play a different, more important role in new product development. Nielsen’s research shows that another important key to success is for senior management to precisely manage the new product development process, not the ideas themselves. According to Nielsen, CPG companies with rigid stage gates – - decision points in the process where a new product idea must pass certain criteria to proceed forward – - average 130 percent more new product revenue than companies with loose processes.

“New product development success comes down to two important principles – - managing ideas lightly while managing the process precisely,” said Agan.

Paul Sloane

Book Review – The Future of Management

Paul Sloane — Mon, 11 Aug 2008 18:10:59 +0000

In this significant new work, Gary Hamel challenges our thinking about management. He argues that the management methods used in most organisations are relics of systems designed over 100 years ago to control and command. They are inappropriate, inadequate and obstructive for knowledge-based 21st century organisations that want to be agile and innovative. He gives detailed case studies of companies that use new and advanced management methods. In particular he describes Whole Foods, W L Gore and Google. He advises that we completely replace conventional systems of management with a much more democratic and empowered environment where people can take responsibility for their own decisions and express their creativity in a trusted community. He gives Web 2.0 as the model for the new world of management – powerful peer networks.

His writing style is excellent – intelligent, articulate and stimulating. His examples are very useful for putting the points into context. The Future of Management will challenge your thinking and ask you some uncomfortable questions. It is highly recommended.

Click here for a full list of my recommended books on Innovation, Leadership and Creativity.

Paul Sloane

Knowledge Management for Innovation

Paul Sloane — Wed, 30 Apr 2008 17:10:27 +0000

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