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What an Innovative Culture Looks Like

Published date: February 20, 2012 в 3:00 am

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An innovative corporate culture is one that supports the creation of new ideas and the implementation of those ideas.  Leaders need to help employees see innovation in the right light.  The most innovative companies do the following:

1.  See innovation as a competency:  Innovation is a skill, not a gift.  It can be learned by anyone and applied systematic.  Innovative companies treat it as just another core skill by:

  • Creating a well-defined set of innovation competencies and embedding them into every employee’s competency model along with other required behaviors such as ethics and leadership.
  • Conducting regular training courses in creativity methods and innovation management.
  • Staffing internal innovation experts and coaches who work with teams to help guide their innovation efforts and facilitate their success.
  • Not rewarding employees for innovation, but rather expecting it as part of the value system

2.  See innovation as a competitive weapon: Innovative companies use innovation to differentiate themselves by:

  • Conducting regular idea generation workshops within business units
  • Deploying innovation methods within planning and strategy initiatives
  • Innovating from the core competencies of the firm as the starting point
  • Using innovation methods as part of mergers and acquisitions to explore and analyze growth potential of the target

3.  See innovation as a process:  Innovative companies don’t treat innovation as special, unique activity. They see it instead as an ongoing “stream of effort” along with quality, leadership, productivity, and other imperatives.  They do this by:

  • Developing an idea management and tracking capability
  • Conducting “clearinghouse” workshops to leverage innovation across business units
  • Sourcing innovation consultants that are well matched to the specific task (eg: ideation).
  • Linking innovation to other key processes including financial, commercial, and technical.

4.  See innovation as both systematic and opportunistic:  The most innovative companies flex between different styles of creating opportunity by:

  • Sponsoring internal innovation “subversives” who work around the system to champion new ideas and drive them through execution
  • Being “open” to ideas from outside sources to make non-obvious connections to internal projects.
  • Experimenting with new concepts – “making a little, selling a little, and learning a lot” – like P&G.
  • Collaborating with like-minded companies in non-competing industries to source new ideas and trends.

To read more about both sides of this issue, I recommend two articles just released.  Teresa Amabile and Steven Kramer write about “How leaders kill meaning at work.”  You can find this in McKinsey Quarterly, January 2012.  Ken Kahn and his colleagues write about “An Examination of New Product Development Best Practices,” in the March 2012 edition of Journal of Product Innovation Management.

The Hidden Cost of Poor Innovation Execution

Published date: February 13, 2012 в 3:00 am

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Executing and launching new products takes financial and human resources.  When poor execution delays a product launch, companies are hit with another cost, one which often goes unnoticed.  Poor execution delays the revenue stream that a new innovation will earn.  Given the time value of money, that financial loss can be staggering. Consider one of the most famous innovative product – the Post-it® Note.

3M scientist, Spencer Silver, invented a note size paper with a weak glue backing. The company saw no market application for it.  One day, Art Fry, another 3M scientist, was singing in the church choir.  Paper bookmarks kept falling out of his hymnal, so he began using the sticky notes instead.  With the weak adhesive, the notes stayed in place, yet lifted off without damaging the pages.  3M began distributing Post-it® Notes in 1980 — ten years after Silver developed the super weak adhesive.  Today, it’s one of the most popular office products available.

What if 3M cut that execution time from 10 years to 5 years?  What is the value of better/faster execution?  Let’s make some simplifying assumptions.  Assume the Post-it® Note franchise turns out $1 billion in annual revenue and nets a profit of $100 million in perpetuity. (3M’s consumer products and office division, which includes Post-it®, posted revenue of $3.47 billion in 2009 according to public financial filings.)  Using a discount rate of 5%, that yields a net present value of $2 billion.  Now what if that cash flow is delayed just five years due to poor execution.  Using the same discount rate of 5%, the new NPV is $1.6 billion, a whopping $400 million in lost cash!

Could 3M have spent money on ways to speed up the launch of the Post-it® Note?  It is certainly plausible.  Investing in market research and other experimentation might have led 3M managers to see the potential of the product sooner.  It certainly would have cost less than the $400 million lost due to slow execution.

Some might argue that execution is more important than creation, but both are necessary to succeed.  Applying systematic methods to create great ideas increases your odds of success.  Great execution is what helps your company realize the full financial value of those inventions.

 

The Patterns in Super Bowl Commercials

Published date: February 6, 2012 в 3:00 am

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Super Bowl commercials capture our attention because they tend to be highly creative and well-produced.  At $3.5 million dollars for a thirty second spot, Super Bowl advertisers need to create the best, most innovative commercials possible. To do that, they use patterns.  Professor Jacob Goldenberg and his colleagues discovered that 89% of 200 award winning ads fall into a few simple, well-defined design structures.  Their book, “Cracking the Ad Code,” defines eight of these structures and provides a step-by-step approach to use them.

Here are the eight tools:
1. Unification
2. Activation
3. Metaphor
4. Subtraction
5. Extreme Consequence
6. Extreme Effort
7. Absurd Alternative
8. Inversion

Let’s see how yesterday’s 2012 Super Bowl ads fit these patterns.
The Unification Tool uses components of the medium or within the environment of the advertisement to convey the message.  This Bridgestone commercial does a nice job of taking sports objects like balls and pucks and “unifying” them to the theme of rubber tires:

Academic Focus: Virginia Commonwealth University

Published date: January 30, 2012 в 2:00 am

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For universities wanting a more collaborative and coordinated approach to innovation, here is an example worth benchmarking.

Virginia Commonwealth University is offering the first of its kind graduate program in product innovation.  The Master of Product Innovation program is a blend of innovation, business, design, and technology courses. “We are very excited to offer this unique program,” says Dr. Kenneth Kahn who leads the initiative.  “Students enrolling in this program will receive a very enthralling educational experience that when completed will provide graduates with clearer purpose and ability to deliver on product innovation.”

The masters program is part of VCU’s da Vinci Center.  The center is a collaboration of VCU’s School of the Arts, Business and Engineering.  Its objectives are: (1) prepare students to enter a product innovation career; (2) catalyze innovation through collaboration among the disciplines of the Arts, Business, and Engineering; and (3) serve as a resource for advancing interdisciplinary innovation and technology-based entrepreneurship.

The Master of Product Innovation program develops students so they can make an immediate impact on an organization.  During their training, students tackle a comprehensive project for a corporate sponsor so they learn how to plan and launch product innovation initiatives.

The full time curriculum spans four semesters.

First Semester (12 hours)

  • INNO 501: Arts Principles for Product Innovation
  • INNO 502: Business Principles for Product Innovation
  • INNO 503: Technology Principles for Product Innovation
  • INNO 600: Integrative Design Studio

Second Semester (9 hours)

  • INNO 590: da Vinci Project Course
  • Two Technical Electives

Third Semester (6 hours of Master Project + 3 hours optional)

  • INNO 651: Masters Project in Product Innovation I
  • Optional Elective

Fourth Semester (6 hours of Master Project + 3 hours optional)

  • INNO 652: Master Project in Product Innovation II
  • Optional Election

Dr. Kahn is a nationally recognized scholar and consultant in the field of product development.  Kahn previously was at Purdue University, where he was a professor and director of Purdue’s Burton D. Morgan Center for Entrepreneurship. Kahn authored the books, “Product Planning: Essentials” and “New Product Forecasting: An Applied Approach.”

The LAB: Innovating the GPS with Attribute Dependency (January 2012)

Published date: January 23, 2012 в 3:00 am

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GPS technology is great at getting you from Point A to Point B.   What if you had a system that alerted you to risk of crime, weather, points of interest, and cost savings tips along the way?  Microsoft seems headed this way in light of its newly-awarded patent that ties GPS location to useful information for pedestrians.  Here is a description:

“As a pedestrian travels, various difficulties can be encountered, such as traveling through an unsafe neighborhood or being in an open area that is subject to harsh temperatures. A route can be developed for a person taking into account factors that specifically affect a pedestrian. Moreover, the route can alter as a situation of a user changes; for instance, if a user wants to add a stop along a route.”

This is a classic example of the Attribute Dependency Technique, one of five in Systematic Inventive Thinking.  It creates a correlation (dependency) between a person’s location and the type of information that is sent to the device.  Microsoft’s new concept gathers data, analyzes the data and user requirements, then generates suggested routes.  It considers the user’s preferences such as avoiding neighborhoods that exceed a certain threshold of violent crime statistics. The system might direct you to “take the subway” rather than walk if bad weather looms. It even considers cost factors such as parking, extra traffic, and other situations that might make you vary your path.

For this month’s LAB, let’s see if we can extend Microsoft’s concept by a systematic use of the Attribute Dependency Technique.   Attribute Dependency differs from the other templates in that it uses attributes (variables) of the situation rather than components.  Start with an attribute list, then construct a matrix of these, pairing each against the others.  Each cell represents a potential dependency (or potential break in an existing dependency) that forms a Virtual Product.  Using Function Follows Form, we work backwards and envision a potential benefit or problem that this hypothetical solution solves.

Here are new ideas in the same vein as the Microsoft patent using Attribute Dependency:

Leader-Dogs-GPS-device-full1.  Type of Insurance vs. Route:  The GPS unit recommends a travel route based on the type of insurance the person has.  Perhaps the insurance company stores preferred routes based on risk of loss.  Taking this further, perhaps the person using the GPS and complying with these recommended routes earns a “safe pedestrian” discount.

2.  Health Status vs. Route:  The GPS unit calculates a forecast of calories to be burned along a route.  Depending on the person’s health status and exercise habits, the unit makes recommendations based on difficulty and degree of exercise (light, medium, and hard exertion).

3.  Social Status vs. Route:  The GPS unit pulls in information from the person’s social networks (Facebook, Twitter, LinkedIn, and so on) and makes route recommendations based on various factors.  Such factors could include location of friends, recommended restaurants by friends, places of work, etc.  Any information conveyed by a member of your social networks is integrated to your route of travel to give you richer context about it.  A site called Dopplr is approaching this now.

 4.  Time of Day vs. Type of Output:  When using Attribute Dependency, it is almost always a good idea to include “time” as an external variable.  Many aspects of our lives are time-dependent, and the tool can yield valuable innovations to account for time.  In this example, imagine the output of the GPS unit varies by time of day.  Perhaps it switches between the LCD on the unit and other display options such as a smartphone or TV.  Perhaps it tracks the users calendar and relays time of arrival via SMS text.  The essence of this idea is to match the way information is delivered to the user in context of what else is happening.

The Innovation Tools Graduate Course

Published date: January 16, 2012 в 3:00 am

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I’m looking forward to teaching “Innovation Tools,” the graduate marketing course at the University of Cincinnati.   The course teaches how to use Systematic Inventive Thinking, a method based on three ideas.  First, most successful innovations over time followed one of five patterns, and these patterns are like the DNA of products that can be re-applied to innovate any product or service.  Second, innovation happens when we start with a configuration (the “solution”) and work backwards to the “problem” that it solves.  It turns out that humans are better at this than the traditional “problem-to-solution” approach to innovating.  Finally, better innovation happens when we start within the world of the problem (the Closed World).  Innovations that use elements of the problem or surrounding environment are more novel and surprising.  We innovate “inside the box,” not outside.

Students learn not only how to innovate, but they also learn how to link it to marketing strategy.  We teach the Big Picture marketing framework so that students know how to tie innovation and strategy and create an innovation roadmap.

We have 50 graduate students, mostly from our master of science of marketing program plus candidates from other colleges.  Student teams are working on the following projects:

  1. Retail Shelf Display:  Two teams are working for a consumer packaged goods company to innovate new ways to display products in retail stores like Walmart and Target.  Companies develop detailed “planograms” that try to optimize the amount of product and information packed into the assigned shelf space.  These teams will create new-to-the-world ways to improve business results at the point-of-sale.
  2. Pharmaceutical Sales:  This team is innovating the selling process for a large pharmaceutical company.  Companies deploy thousands of sales representatives worldwide to “detail” products at doctor’s offices.  The goal of this project is to find innovative ways to use this massive resource differently.
  3. Publishing:  Two teams team are trying to innovate how books are written, published and ultimately consumed by the end user.  The publishing industry is going through dramatic change as digital publishing continues to grow.  Ideas from this team will be reviewed by one of the largest publishing companies in the world.
  4. Online Experience:  This team is tackling how to innovate the online customer experience – what happens when people visit a website.  Websites continue to evolve with familiar patterns and standards embedded in them, especially with activities such as search and navigation.  Ideas from this team will attempt to break that mold and bring new value for the end user.
  5. Logistics Packaging:  This team has the challenging assignment of applying SIT to traditional logistics packaging systems – boxes, tape, packing material and so on.  Most would consider this a commodity industry, so it is ripe for new, innovative products and services.
  6. Industrial Tubing:  This team is working for a client in the energy sector to create new products and services for high quality steel tubing.  This industry (like most) has a lot of “fixedness,” and I am expecting the team to develop completely new innovations in this space.

The output from each team is a “Dream Catalog,” a hypothetical portrayal of the best of the ideas in graphic form.  This is a technique we teach so that students know how to bring innovations to life and align an organization to gain support.

As in past courses, the final exam is a complete and comprehensive demonstration of “innovating on demand.”  Students are given a product that they do not know ahead of time.  They have three hours to use each of the five SIT patterns correctly to create completely new-to-the-world innovations in that category.   You can see the output of these final exams and the dream catalogs at our innovation wiki.

Redeploying Your Core Competencies

Published date: January 9, 2012 в 3:00 am

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Read this partial list of core competencies for a particular firm and try to guess what industry it is in:

  1. Consumer insights:  understanding what consumer want
  2. Design: making things easy to use
  3. Innovation: coming up with new ideas routinely
  4. Systems integration: making things work together
  5. Customer relationships: forming and maintaining customer loyalty

From this list alone, you could imagine this firm being part of virtually any industry.  In fact, the firm with these core competencies would likely be the leader of that industry.  Which company owns these skills?

In 2008, managers at Kodak cited these skills as their core competencies. Less than four years later, Kodak is on the verge of bankruptcy, ending the reign of a once proud and legendary 120 year old brand. It is now forced to sell its massive patent estate to raise operating cash.

What happened?  Many will cite the familiar reasons:  failure to innovate, slow to move into digital photography, poor execution of digital photography, and so on.  These reasons are wrong.  Kodak was a highly innovative firm.  It invented digital photography long before it wiped out its paper film business.  Kodak was a marketing powerhouse.  It could execute promotional and brand campaigns with the best of them.

Kodak faded because it failed to unpack its core competencies and redeploy a subset of them into growing markets.  When the Kodak managers listed their core competencies, the full list looked like this:

  1. Consumer insights: understanding what consumer want
  2. Design: making things easy to use
  3. Innovation: coming up with new ideas routinely
  4. Systems integration: making things work together
  5. Customer relationships: forming and maintaining customer loyalty
  6. KodakImaging science: color management, sharping, and calibration
  7. Fluid management: delivering ink and chemicals on paper
  8. Organic chemistry: deep knowledge of silver and its uses
  9. Industry reputation: strong relationships with movie studios and cinematographers
  10. Photography: “It’s in our DNA.”

With all of these skills, it is not hard to see why Kodak led the industry.  But compare the last five skills with the first five.  The last five are strictly photography oriented.  Therein lies the seeds of its demise.  Taken all together, these competencies create a strong mental framework that is hard to escape.  “It’s in our DNA!” was a direct quote from a Kodak manager.  Because of this mindset, they could not step away from those core skills deeply rooted in its business model:  using technology to create images that instill memories.  Kodak fused its core competencies too tightly to its core business of photography.

Kodak is not the only company to get stuck in its own self image.  Some other notable brands are teetering on the edge including Blackberry (RIM) and Netflix, both unable to re-position core skills to greener fields.

Kodak’s best chance of survival is to take the first five competencies on the list and enter a growth industry.  It  must leave the memories of photography behind.  Ironically, selling its patent estate to raise cash could be what Kodak needs to dissolve its photographic legacy and move on.

Master the Method: Innovation Suite 2012

Published date: January 2, 2012 в 3:00 am

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I invite you to join me at Innovation Suite 2012 in New York City February 27 to 29.  Innovation Suite is a 3-day premium training course that teaches:

  • How to apply SIT innovation tools on your specific business issues
  • How to facilitate innovation sessions
  • How to develop an innovation culture in your business

My favorite part about this course: every participant gets a personal SIT facilitator to coach them before and after the course!  Whether you are an experienced SIT practitioner or completely new to the SIT method, this course helps you develop critical new skills on your road to innovation mastery.  
Innovation Suite is an intensive learning experience with other corporate practitioners from around the world.  Here is what one of them said about it:

I am presenting on a range of innovation topics on Day Two including:

  • The Johnson & Johnson Experience: how we managed innovation teams using the SIT method over the last ten years
  • The I.D.E.A. Model: how to select and manage innovation consultants
  • The Innovation Coach:  how to become an essential innovation resource within your company
  • Your Five Innovation Challenges: how to avoid being your own worst enemy

Register here.

The LAB: Innovation for Couch Potatoes (December 2011)

Published date: December 26, 2011 в 3:00 am

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This month’s LAB features a former student of mine, Ryan Rosensweig.  Ryan is the first business-design hybrid from the University of Cincinnati’s College of Design, Architecture, Art, and Planning. He earned his master’s degree in design after completing his bachelor’s degree in marketing, sustainable urban engineering, and interdisciplinary design innovation. As the graduate assistant for Associate Dean Craig M. Vogel, of DAAP’s Center for Design Research and Innovation, Ryan researched educational models for interdisciplinary innovation, the interaction between design methodologies and business strategy.

Take a look at his portfolio here.

I had the pleasure of teaching Ryan how to use Systematic Inventive Thinking when he attended my Innovation Tools graduate course.  The final exam required students to correctly apply all five techniques of S.I.T. to an item assigned to them randomly.

Let’s look at Ryan’s final exam – innovating a couch!

Couch 11.  SUBTRACTION: Removing an essential component

  • Virtual Product:  The frame of the hide-away couch is subtracted.
  • Concept:  The hide-away mattress supported by the arm rests that swing down as the mattress is pulled out (see sketch).
  • Potential Benefits:  Easier to convert to a bed for busy people on the go or people with disabilities.

2.  MULTIPLICATION: Making a copy of a component but changing it in some way

  • Virtual Product:  A couch with two sets of legs; the second set is located on the back of the couch.
  • Concept:  The Lazy Sofa – a couch that rotates forward and backward. As it rotates backward, the legs on the back of the couch support it.
  • Potential Benefits:  Now the couch can face two directions easily.  It does not have to be anchored against a wall.  It is a simple solution that allows more flexibility in large rooms.

Couch 23.  TASK UNIFICATION:  Assigning an additional task to an existing resource

  • Virtual Product:  The family pet has the additional task of pulling out the hide-away mattress.
  • Concept:  A pet-friendly couch that has a small mat underneath that the dog can pull out and lay on.
  • Potential Benefits:  Avoids having the dog sit on the main part of the couch, eliminating dog hair and odor.

4.  DIVISION:  Dividing a product or component either physically, functionally, or preserving (maintaining characteristics of the whole)

  • Virtual Product:  The arm rests physically split in two
  • Concept:  Armrests that automatically open up when the hideaway mattress is pulled out to reveal amenities like a reading light, alarm clock, and so on.
  • Potential Benefits:  Space-saving, convenient, guest-friendly

5.  ATTRIBUTE DEPENDENCY:  Creating (or breaking) dependencies between two internal attributes or an internal and external attribute.

  • Virtual Product:  The older the person sitting, the softer the couch becomes.
  • Concept:  Smart Couch – a sofa that adjusts automatically to the preferences of the person sitting on it.
  • Potential Benefits:  Comfort.

Innovation Sighting: Multiplication in Photography

Published date: December 19, 2011 в 3:00 am

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Pick up a camera and see how many innovations you can find in it.  That shouldn’t be hard.  There are lots of them.  The camera, like all inventions, started with a core idea.  From there, it continued to evolve and improve though time.  It might surprise you that a single innovation pattern, Multiplication, formed the premise of all photography.  The cameras you use today evolved from multiplication.  The entire photography industry continues to benefit thanks to this powerful pattern.

Multiplication is one of five simple patterns innovators have used for thousands of years.  These patterns are the basis of Systematic Inventive Thinking, a method that channels your thinking and regulates the ideation process.  The method works by taking a product, service, or process and applying a pattern to it.  This changes the starting point.  It morphs the product into something weird, perhaps unrecognizable.  With this altered configuration (we call the Virtual Product), you work backwards to link it to a problem that it addresses or new benefit it delivers.  The process is called Function Follows Form.

Photography, in essence, is multiplying the subject onto a piece of paper.  Something unique happens when light from an object passes through a pinhole. A small image of that object will be projected on any surface on the other side of the pinhole – only upside down. This “pinhole effect” was discovered thousands of years ago. Aristotle noted in 4 BC that “sunlight travelling through small openings between the leaves of a tree, the holes of a sieve, the openings wickerwork, and even interlaced fingers will create circular patches of light on the ground.”  From that humble beginning, we have photography.  Hardly a day goes without looking at an image of something: a framed family photo, a magazine cover, an outdoor billboard.  Images are all around us.

Let’s get back to cameras.  Were you able to find these innovations?

  • Red Eye Reduction:  In 1993, the Vivitar Corporation patented a novel way to beat red eye. The solution: a camera with a dual flash.  The first flash constricts the subjects’ pupils. Then the camera shoots off a second, “multiplied,” flash that provides sufficient light for the actual photograph. Since the subjects’ pupils are slightly closed from the initial flash, no red eye appears in the final image.
  • View Finders:  Modern cameras have not only the traditional viewfinder to line up a shot, but also an LCD  version.  This allows you to compose your image while seeing more of what’s going on around you.
  • Aperture: Pull out your smart phone and you will see one camera aperture on the back and another on the front of the phone facing you.  Why?  It’s seems obvious in hindsight.  The second aperture allows you to photograph your favorite subject…you!
  • Stereoscopy:  Oliver Wendell Holmes invented the stereoscope viewer in 1861. It creates the illusion of depth in an image by presenting two offset images separately to the viewer’s left and right eyes.  Think about that next time you see a 3D movie.
  • Panorama: Thomas Sutton patented the first panoramic camera in 1859. By taking multiple photos of the same scene, he was able to merge them together to create a wide screen, panoramic view.
  • Film Negatives: Developing paper film creates a negative of the image – the colors are reversed.  When the negative film is developed again using the same process, images come out as “positives.”  The two-step process allow photographers to create multiple copies of the positive film.
  • Color Film: Taking three photos of an image but each with a different colored filter –  red,  green, and blue – allows them to be combined to yield a color image.
  • Lenses: Photographers use a variety of lenses depending on the particular effect they want to achieve: close up, far away, wide angle, and so on.
  • Movies:  In 1878, Eadweard Muybridge used 24 cameras to photograph a galloping horse.  Each camera captured the horse in a different state of motion. When he combined the images, the horse appeared to be galloping. Muybridge created the first “moving picture.” Multiplication launched not one, but two global industries.

 

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