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Innovation Behavior

Published date: April 20, 2008 в 1:05 pm

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Innovation is a skill, not a gift.  Top organizations drive growth by nurturing and investing in innovation as a competency.  One way organizations make it real is by including innovation within formal competency models.
Professor Rodney Rogers of Portland State University defines a competency as a persistent pattern of behavior resulting from a cluster of knowledge, skills, abilities, and motivations.  It is the persistence of those behaviors that matter most and help your organization succeed.
Competency models are a useful way to formalize that behavior and make it persistent.  They help describe the ideal patterns needed for exceptional performance.  They are a blueprint for the type of person needed for a specific job. And they help diagnose and evaluate employee performance.  It takes a lot of work to develop one, but it’s worth it.
My approach is to see innovation competencies at two distinct levels: The Innovator, and The Innovation Leader. Here is how to think about it.
The Innovator Competencies:

  • Generating Innovative Solutions – Systematically innovates using a model with proven efficacy; routinely innovates products, services, processes, and strategies; values and harnesses team diversity; reframes problems in a different light to find fresh approaches; entertains wide-ranging possibilities others may miss; takes advantage of difficult or unusual situations to develop unique approaches and useful solutions.
  • Seeing the Big Picture – Has broad knowledge and perspective; pieces together seemingly unrelated data to identify patterns and trends and to see a bigger picture; understands the pieces of a system as a whole and appreciates the consequences of actions on other parts of the system; possesses a big-picture view of the situation.

The Innovation Leader competencies are different.  It is not necessarily the innovation leader who must generate new ideas; rather, they must understand how to instill innovation according to Penn State researcher, Dr. David G. Gliddon.  “Commitment to innovation as a culture is prevalent in organizations as it is commonly woven directly into mission statements. However, leaders still lack the ability to plan, measure and implement innovative programs, products and services.  These challenges are enhanced by the pressure to juggle several different and often conflicting roles.” said Gliddon.  In a three-year study, Gliddon identified the competencies that underpinned these roles and developed a competency model of innovation leaders.  The competency model can be tailored to any organization as part of a competency-based human resource development initiative.
An innovation leader collaboratively interacts with their employees and supports high levels of teamwork, providing opportunities to share innovations.  Once an innovation has been shared, employees should be empowered to then adopt the innovation if it is useful.  Employees can then support the innovation leader by initially adopting the innovation, and encourage the diffusion of the innovation throughout organization’s social system, Gliddon says.  Innovation leaders must also take personal responsibility for and be dedicated to projects that require innovations.  Therefore, innovation leaders must establish a trust culture and maintain relationships based on trust.  They must display initiative, set challenging project goals, and link those goals to the needs of the customer, department, and enterprise, according to his study.
Persistent innovation behavior by the leader and innovator is a recipe for growth.

Innovation through Co-opetition

Published date: April 6, 2008 в 8:35 pm

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How do you innovate a business model?   You can create new products and services within the current business model to drive growth.  Or you can create a new business model and open up a whole new world of possibilities for the firm.  Either innovate within the current game, or change the game.  But how?
Several books address this, from Clayton Christensen’s “The Innovator’s Dilemma,” to a more recent offering, “Innovation to the Core: A Blueprint for Transforming How Your Company Innovates”  by Peter Skarczynski and Rowan Gibson.  When Professor Christensen presented his disruptive innovation model to our company several years ago, I remarked that what is needed is NOT so much a disruptive product, but rather a disruptive business model.  His book is a good historical account of a few industries that suggest disrupting (innovating) the business model is what really counts.  While these books and others do a good job of exposing the issue, neither give a prescriptive “how to.”  The most recent book suggests a holistic approach.  “To build a breakthrough business model that rivals cannot easily emulate, you’ll need to integrate a whole series of complementary, value creating components so the effect is cumulative,” the authors note.  Fine, but there are no step-by-step processes how to do it once you have unpacked the original business model.
My answer comes from combining two existing concepts (a Medici Effect as described by Frans Johansson).  Those two existing concepts are Systematic Inventive Thinking (S.I.T.) and Co-opetiton.  S.I.T. is a proven process for generating innovation on demand.  Co-opetition is an idea described by Barry Nalebuff and Adam Brandenburger in their book called, “Co-opetition.”  It means cooperative competition, and it is a way to see your industry not as a zero sum game, but rather as a group of participants that can behave in a certain way that benefits all.  They coopetate rather than compete (legally, of course).  I met with Professor Nalebuff and had him “school” me on the concept.
The trick is to apply S.I.T. templates to the Value Net model of co-opetition.  Here’s how.  List the activities of each Value Net participant (Company, Supplier, Customer, Complementors, Competitor).  Rotate each specific company in the Value Net model so that each takes a new role (competitors become suppliers, suppliers become complementors, etc).  Use each S.I.T. template on the new list of activities, starting with Task Unification.  Using Function Follows Form, envision how the new role and role player can benefit YOUR company.  Here is an example, using Nintendo as the company of focus:

Now imagine each player rotates clockwise one position.  Applying S.I.T. Task Unification, we ask what roles could Atari perform as a customer to Nintendo that would be beneficial to both.  (For example, could Atari and Nintendo cross license software code to each other, perhaps making some features of their games work on the other’s game box?)  Apply all five templates systematically to each role and each player within the context of their new role.  This will generate many new, innovative business model components and themes.
Disruption doesn’t have to be uncooperative.

The Dream Catalog

Published date: March 30, 2008 в 3:31 pm

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For many companies, the catalog of products is the strongest statement of brand positioning a company can make.  It is your arsenal of commercialization.  So imagine you could peek into the future and see a copy of your company’s product catalog five years from now.  What would it look like?  What if you could design it now?  What would you put into it?  These are the questions that confront you when you use a clever innovation tool called the Dream Catalog.
The Dream Catalog is a hypothetical company catalog from the future…well into the future, beyond the next business cycle.  It is far into the future so that it captures the innovative thinking and imagination of today’s managers.  It stretches a company’s thinking about its future, and it provokes a healthy discussion about possible company direction.  A good Dream Catalog causes tension.
A Dream Catalog helps a company in several ways.  It sets direction.  It suggests how the company is going to add and remove products from the line over time.  It forces the marketing team to reconcile product line strategy.  It provides placeholders for new discoveries, inventions, and even acquisitions.  It provides a sense of prioritization of what should be developed and in what order.  It can even help forecast revenues.
Best of all – it rewards and encourages innovation.  The Dream Catalog serves as the focal point for company-wide innovation efforts.  Employees strive to come up with product and service ideas that “make it” into the Dream Catalog.  As the catalog takes shape, employees see how their future is taking shape.  It guides their innovation efforts even more.  Leaders can use the catalog as a motivational tool.  “Let’s turn this dream into reality…for our customers and our future.”  A good Dream Catalog creates excitement and a sense of purpose.
I teach MBA students how to create a Dream Catalog in a full credit course called “Applied Marketing Innovation.” Here is a quick snapshot of how to do it.  Create a slew of new product embodiments over your current product line as well as products in your industry you wish you had.  Do this using an efficient method such as Systematic Inventive Thinking.  Mix the ideas together with your current product line.  Put yourself five or ten years out and envision what product offering would make your company the most amazing market leader in your industry.  Using your “palette” of ideas, pull in those that, taken together, create that kind of company.  Strive for product line coherence.  Strive for differentiation.  Strive for a customer centric solution.  Then, make an actual catalog with product photos, prices, features, and benefits.  Make it seem real.
Stanley_tools_newHere is a neat trick.  Take all of your company’s catalogs as far back as you can and lay them side-by-side chronologically.  Study the product offerings each year and note the changes over time.  Note the new products, deleted products, and changed products.  Do you see an evolutionary theme?  Revolutionary?  Stagnant?  Now place your Dream Catalog five or ten spots ahead of the most recent catalog.  Where will your Dream Catalog take you?  How far, how fast, how cool?
Think about Fortune 100 companies that might have a Dream Catalog of sorts.  Think about former Fortune 100 companies that have since perished.  Did they have a Dream Catalog?  Would you buy stock in a company if it did not have a Dream Catalog?
Dream on.

People Innovation

Published date: March 24, 2008 в 3:49 pm

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Human Resource departments often find themselves tasked with creating a more innovative climate for their firms.  That can make sense given that innovation is a people activity.  It’s a skill, not a gift, and it can be taught and learned like any other business skill.  And it is usually team-based.
My advice to HR leaders?  Experience innovation close to home first.  Use innovation tools on actual people or HR systems before venturing out to the broader organization.  This has the effect of making true believers out of the HR team, it gives them a handy reference point for other departments to benchmark, and it yields creative new approaches to traditional HR processes.  How?
Using the five templates of Systematic Inventive Thinking, here are examples of pre-inventive forms within the HR realm.  The key is to envision the pre-inventive form, then find a useful role or benefit for it.

  • SUBTRACTION: Your training programs have no faculty.  Why?  What would be beneficial about it?
  • TASK UNIFICATION:  Offer letters to new hires have an important additional role during the first year of employment?  What is that role, and how could it help the organization?
  • MULTIPLICATION:  Employees receive two paychecks each payday, but they are different in some way.  How are they different?  What would be the benefit?
  • ATTRIBUTE DEPENDENCY:  Year-end bonuses do NOT change based on performance or other factors.  Why?  How could it motivate employees?
  • DIVISION:  New employees are hired first, THEN recruited into the organization?  How would this work and why would it be useful?

The real trick in using this method correctly is to envision a pre-inventive form that doesn’t seem to make sense at first.  Then, using a cross-functional team, you outline specific benefits that could be derived for the HR department, the company at large, or some other entity.  Ask yourself: is it feasible?  How could the idea be modified to make it even more beneficial or feasible?
Another approach is to use innovation templates on specific employees – create ideas that innovate their life or career.  Here are five more examples of pre-inventive forms at the individual level:

  • SUBTRACTION: The employee no longer has a budget but still has to accomplish their goals.  Why?  What would be beneficial about it?
  • TASK UNIFICATION:  The employee’s office space now performs an additional role.  What is that role, and how could it help the organization?
  • MULTIPLICATION:  The employee has two bosses, but they are different in some way.  How are they different?  What would be the benefit?
  • ATTRIBUTE DEPENDENCY:  The employee works fewer hours the more she produces?  How would this work?  What would be the benefit?
  • DIVISION:  The employee no longer works from 8 to 5, but has to work at different times.  Why?   How could this be useful?

Re-invent others by re-inventing yourself first.

Choosing Innovation Consultants

Published date: March 16, 2008 в 2:18 pm

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Choosing an innovation consultant is challenging for two reasons: the client is not always clear what type of innovation they want, or they are not sure what type of innovation a consultant offers.  Here are three factors to consider when choosing an innovation consultant:  1.  TYPE of consultant, 2.  METHOD used, and 3.  ROLE of the consultant.

The innovation space has become so crowded that I group them into four types (I-D-E-A):

INVENTION:  These are consultants that help you create new-to-the-world ideas.  They have a particular expertise in creativity methods or idea generation tools.  Their main focus is generation of many new product or service ideas.

DESIGN:  These are consultants that take an existing product, service, or idea and put some new, innovative form to it.  They have a particular expertise in industrial design or human factors design.  Their main focus is transforming the way a product is used or experienced.

ENGINEERING:  These are consultants that help you make the new idea work in practice.  They have a particular expertise in technology, science, research, and problem solving.  Their main focus is building it.

ACTUALIZATION:  These are consultants that help you get the innovation into the marketplace.  They have a particular expertise in marketing processes, brand, or commercial launch of a product or service.  Their main focus is selling it.

The challenge is many consultants claim to be all of these.  While true for some, my sense is that all firms started off as one type and then expanded to cover the others.  The question to ask yourself is: would you be better off matching your need to their original core expertise, or would you be better off going to a one-stop shop…a firm that can do it all even though their core expertise is, say, design.  How do you know what type the firm really is?  Study the biography of their founder.  What was the founder’s education, experience, work background, interests, etc.  The founder is where the core orientation of the firm begins.  The other practice types get bolted on later.

Step Two is understanding their method.  The first question I ask consultants is, “Do you know how to innovate?”  The second question is, “How?”  I want to understand their method of innovation, and I want to be able to explain it to other people.  I want to know the efficacy.  Has it worked in the past and will it work on my project?  Show me the data.

Step Three is understanding the role of the innovation consultant.  Is this a DIY (do-it-yourself) approach where you are given some software or other resource to create innovation on your own?  Is this a DIWY (do-it-with-you) approach where the consultant leads and facilitates groups of your employees to innovate together?  Is this a DIFY (do-it-for-you) approach where the consultant takes your problem specification and comes back with their recommended solutions?  Or, is this training?  All of these roles are valid depending your need.

I am impressed with the talent and variety of the consultants in the innovation space today.  It becomes even more impressive when you select the right one for the job.

Gender Role in Innovation

Published date: March 9, 2008 в 2:05 pm

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Optimal innovation occurs when there is an equal mix of men and women using a systematic process.  I have always believed this through my observation of many innovation exercises.  When a predominately male group tries to innovate, results are less impressive.  When a predominately female group tries to innovate, results are less impressive.  Put them together and the results are amazing.
Research in this area may have some suggestions why.  Lynne Millward and Helen Freeman tested several hypothesis and reported the results in their article, “Role Expectations as Constraints to Innovation:  The Case of Female Managers.”  The essence of the research is that, while men and women are equally innovative, their gender role within the context of an organization can affect how they are perceived and how they behave when innovating and sharing ideas.  Men are perceived as more innovative and risk-taking, and women are perceived as more adaptive and risk-adverse.  “Thus, gender roles may interact with the role of the manager to inhibit (in the case of women) or facilitate (in the case of men) the likelihood of innovative behavior.”
They tested several hypothesis.  People perceive innovative solutions to be more likely to come from a male manager, and they perceive adaptive solutions to be more likely to come from a female manager.  They also found that innovative solutions were perceived to be more likely to be implemented if they were suggested by a male manager.
Innovation carries with it different levels of risk for men than for women.  Men are expected to take more risks when innovating and sharing ideas.  Failure is less damaging to men because that’s what’s expected of them.  Women are expected to be less risky, and this appears to limit or constrain both their degree of innovation and their willingness to share it.  Failure is more damaging for women so they behave more adaptively in innovation exercises.
As a practitioner, I believe there is both a negative and a positive side to this.  On the one hand, innovation workshops need a process to assure that women feel they can innovate “bigger” and share those ideas with the group.  If, as the research suggests, women are more likely to hold back, then the facilitation approach has to break through it.  Otherwise, you lose the inherent value of the (equal) innovation talent they bring to the table.
On the positive side, these differences can be beneficial.  I believe this more adaptive behavior in women and more risk-taking behavior in men provides a certain balance or harmony during innovation.  What I observe is a complementary effect that seems to yield better results.  Why?  I’m not sure, but my sense is that each partner holds the other accountable for ideas that are, at the same time, novel but adoptable.  Working in pairs, men and women also do a better job of expressing jointly-developed new ideas that may help overcome risks that women may be feeling.  Workshop processes that pair men and women up to take advantage of this are going to be more fruitful.

Innovation Competency

Published date: March 4, 2008 в 12:12 pm

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Tug_2Jeffrey Phillips outlines a sound approach to the age-old question, who owns innovation?  Where does it sit on the organizational chart:

There’s not a wrong way to organize, but there are benefits to developing a central team to ensure consistent methodology, language and culture and the use of consistent tools and frameworks. Eventually, most ideas if adopted will be implemented in a specific business unit or product team, so the central team acts as a facilitator, coach and sponsor, usually without implementing the ideas.

There is support for this view.  IBM asked 765 CEO’s this question in their 2006 Global CEO Survey, and reported the following on the question of who has responsibility for innovation leadership:  the CEO – 27%, No Owner – 27%, Functional Managers – 24%, and Division Managers – 14%.

The wide range of responses tells me there is no consensus.  But the question still makes me a little nervous.  Why does someone have to “own” innovation?  Do we think about leadership the same way?  Does someone own leadership in a company?  No one asks that question.

I get hopeful when I see that 27% of CEO’s ascribe no owner to innovation.  My sense is that creating an innovation champion or assigning it to one department could shut down others from innovating.  With strong, central ownership of innovation, others might be reluctant to initiate anything that looks like a competing approach.  When I see a company with an innovation champion (think “owner”), I expect to find innovation subversives, too.

The question is not who owns innovation, but rather who owns innovation competency development.  I see more companies moving in this direction.  Some place this within a process excellence group while others move it right into a functional department such as marketing or R&D.  Still others have dedicated resources such as GE and Diageo, two members of the MSI Innovation Roundtable.

Build innovation competency and the question of who owns innovation becomes moot.

Divide and Conquer

Published date: February 24, 2008 в 10:46 am

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“Divide and Conquer” is:  a. classic military strategy, b. a computer algorithm design paradigm, c. a collaborative problem solving approach, d. an innovation tool, or e. ALL THE ABOVE
The answer, of course, is all the above.  Division is one of the five templates of innovation in the Systematic Inventive Thinking method.  The others are Subtraction, Task Unification, Multiplication, and Attribute Dependency.  Templates were developed by recognizing the same consistent pattern over many products so that the pattern could be applied to create innovative new products.  The method works by taking a product, concept, situation, service, process, or other seed construct, and breaking it into its basic component parts or attributes. The templates manipulate the components, one at a time, to create new-to-the-world constructs for which the innovator finds a valuable use. The notion of taking the solution and finding a problem that it can solve is called “function follows form” and is at the heart of the systematic inventive thinking process.  It is innovation by working backwards.
The Division Template works by taking a product or a component of it and dividing it physically, functionally, or what is called preserving where each part preserves the characteristics of the whole.  Rearrange the parts, then work backwards to find a use or benefit for this new form.
Here is an example from my workshop last week at Duke’s Fuqua School of Business.  The product is dryer sheets (gauze-like tissues about the size of a Kleenex, put into clothes dryers to eliminate static cling, soften clothes and add artificial fragrance.)  Now divide these into much smaller parts, perhaps after the whole sheet is thrown into the dryer.  Imagine these smaller parts get all over the clothes and cling to them.  Why would this be useful?  What could be the benefit?  Here’s an idea.  Perhaps the smaller pieces stay on the clothes to continue softening, brightening, or adding a design element, waterproofing, smell-proofing, allergy free, anti-itch, etc.  Perhaps the clothes are pre-treated with something that interacts with the small dryer pieces to extend the performance of the clothes, reducing cleaning, wear and tear, or wrinkles.  Perhaps the small bits are transparent (thanks, Yoni!) so they are invisible on the clothing.  This simple Division takes a seemingly dull product and re-frames how we think of it to discover new innovative uses and benefits.
Division is also a collaboration approach.  One of the Duke MBA’s, Tom Powell, emailed me about crowdspirit.com, kluster.com, and ideabahn.com.  These new sites form communities that take an idea and iteratively improve it with suggestions from members.  These sites are also examples of Division (preserving) – taking the larger problem and dividing it among many people.  Idea collaboration is an old idea, but what could be a more innovative approach is to divide a problem using the other two methods: physically or functionally…focus members on the problem in a different way.  As these beta sites evolve, we will watch to see how innovative they can become at dividing and conquering.

Measuring the Immeasurable

Published date: February 17, 2008 в 10:27 am

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Innovation, like most other things in business, gets caught in the trap of “how do we measure results.”  Innovation managers at Fortune 100 companies find themselves confronted with this question in their efforts to raise innovation capabilities.  In the end, measuring innovation doesn’t matter.  Measuring innovation methods is where the focus needs to be.
The typical approach to measuring innovation is revenue from new products.  The usual question is: “Show me a product generated from an innovation workshop and its first year revenues.  My response to this might be: “And let’s compare that to the revenue NOT produced from ideas NOT generated because of a lack of innovation.”
Some aspects of innovation are immeasurable.  During an innovation workshop several years ago, an engineer in the group had a depressed look on his face.  It struck me as odd particularly because we had just completed a vibrant round of ideation with many new possibilities.  The entire group was energized except this one individual.  Out of concern, I asked him if he was feeling sick or in pain.  What he told me struck me hard.  He said, “No, I’m feeling fine.  It’s just that I NOW realize, after this round of ideation, that an idea that I have been holding onto for a long time…won’t work.”
I remember thinking, “Wow!  What is the value of giving UP a failed idea so that you can now direct your full focus and energy to new pathways?”  This ideation session freed this individual’s mind AND motivation to move in new directions.  He would no longer waste his productive time pursuing a pet idea in favor of better possibilities.  He would begin creating value not from an idea generated, but rather from an idea given up.
How do you measure THAT?
The question is not: “Let’s measure innovation to decide whether we should do it.”  Rather the question should be: “Which innovation method gives us the most results to improve our business?”  Companies should compare methods using simple metrics like: total ideas generated.  From this tally, break it down further to: new ideas versus ideas we already had; ideas actually pursued; ideas likely to be pursued; ideas never to be pursued.  The key is to compare apples to apples.  I once asked a colleague how she liked using a particular method by an innovation consultant in the local area.  She said that she loved it.  I asked, “Compared to what?”  No response.
The best practice from Fortune 100 companies is to build and measure innovation competency…the inputs of growth, not the outputs.

Innovation Follows Strategy

Published date: February 10, 2008 в 11:45 am

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Innovation that is done in the context of business strategy tends to be more focused, efficient, and business-model relevant.  Innovation should not be viewed as a way to take the organization off its strategic track and in new directions.  Rather, innovation should be applied in a way that makes the current strategic track more successful and profitable…true growth.
Yet the tendency is to view this approach as incrementalism and not disruptive enough in the Christensen sense.  Some would say that starting with your current situation is not bold and is risk adverse.  “We’re not thinking outside the box” is the usual incantation at this point.  Instead, there is a preference to chasing “white space” and “open source” innovation as a source of growth.  Some executives prefer the lure of white space and opportunity spotting, and they readily acknowledge that it is “low yield by design.”  The Scarcity Principle tends to make these opportunities seem more valuable than they really are.  White space chasers position themselves as fighting the heroic fight.  Resources come pouring in.
The best Fortune 100 companies pursue high yield, organic innovation efforts… not “low-yield-by-design” efforts.  High yield innovation comes from tying innovation directly to the strategic marketing context of the firm.  Ideas generated this way help the organization stretch its model in a way that is achievable and internally-sellable.
How do you tie innovation to strategy?  Professor Christie Nordhielm from the University of Michigan has developed what I consider the best single contribution to marketing thought since the 4P’s.  Her Big Picture framework of the marketing management process provides the context for innovating across the entire business model.  Applying systematic innovation tools to each aspect of her Big Picture model can yield amazing insights at both the strategic and tactical levels of the business.  It is the intersection of these two ideas…Big Picture Strategy and Systematic Inventive Thinking…that will yield consistent, profitable results.  Innovation follows strategy…not the other way around.

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