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Innovation Newsletter from OVO
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OVO Views
Conversations about Innovation
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September 2006
- Vol 1, Issue 4
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In This Issue
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Quick Links
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Greetings!
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Welcome to the OVO innovation newsletter.
In this issue of the Innovation Newsletter we'll
examine the perspectives of European firms who are
leading innovators and look at the similarities and
differences in thinking between the US and Europe.
Thanks to our partners who contributed to the article.
Also, we take a quick look at the concept of
introducing risk into your business as a function of
innovation, and announce our hosted solutions which
can help minimize risk for innovative teams.
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Let's face it - innovation is inherently risky.
However, risk tolerance is not currently high in
management thinking. In the last decade, a wave of
management thinking
has swept through most organizations. That thinking
has taken good process management techniques like
TQM, Six Sigma
and Lean and applied them to every facet of the
business. What's great about these management
paradigms is that they can be applied to almost any
business, and have relatively quick payoff from
reducing error and waste and cutting cycle times and
costs. No matter where you turn, you'll run into a
few black belts - and we're not talking about Bruce
Lee. While these management techniques are useful,
there are concerns about how they can impact your
culture and risk taking.
Six Sigma and Lean thinking has infiltrated the
corporate
culture and has shaped the way many management
teams
operate. Combined with the focus of the market,
cost cutting and risk reduction are
clearly the order of the day in most firms.
That spells real trouble for innovation, other than
very incremental and sequential innovation.
Innovation requires a firm to generate and evaluate
lots of ideas and directions. Most of those ideas
will fail even before they become products, and the
few ideas that do become new products
or services will face a significant chance of
failure after launch.
After all, the consumer goods industry creates
something on the order of 30,000 new products a
year, and less than 20% of those newly introduced
products are on the shelves a year later.
There's a classic conundrum at work in a firm
dedicated to cost cutting and reducing errors and
failure. It is simply not possible to innovate
within those parameters. The management thinking,
processes, decision criteria and compensation models
all work against anything other than very
incremental innovation.
To become more innovative, your team will need to
retain the transactional
processes which have been honed to eliminate
inefficiencies, but introduce new processes or teams
that have the freedom to experiment and fail - as
long as that experimentation and failure creates new
knowledge and a great stream of potential new
products. As we've noted previously, just launching
a new product does not grantee success.
You've heard the analogies and they hold true. A
great baseball player gets on base only 1 out of
every 3 at bats. Edison failed hundreds of
times before he perfected the light bulb. Failure
and risk are such an integral part of the innovation
process that comparing them to oxygen for humans is
probably not too much of a stretch.
What can you do? Encourage and foster risk in new
idea generation and evaluation. Examine a broad
range of possibilities and ideas. Experiment
constantly. Change the way people think about risk
and failure - and change they way they are
compensated, so that they are encouraged to try
new
things. Celebrate a failure. Most importantly,
understand that risk is an important aspect of
innovation and seek to encourage risk taking as part
of your innovation process.
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Why is the pipeline empty?
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The experience in most organizations reflects the
cartoon. There are thousands of good ideas
literally gushing from the internal teams, business
partners and customers, yet generating new products
and services is a struggle. Somewhere between the
idea gusher and the managed pipeline of ideas,
ideas are falling through the cracks.
Or, quite possibly, you don't actually have a
"managed pipeline" at all. It's interesting to note
that early settlers found the oil seeps in Pennsylvania
and Texas as real problems until they discovered
that petroleum had a purpose. I think many people
view ideas as problems, and they are probably
right to think that way. Ideas that aren't part of
a consistent management process are of no more use
than oil seeping through the ground that isn't
pumped and refined.
What do you need to establish a managed idea
pipeline? Well, you'll need ideas - but as we've
been assured by virtually every firm we've ever
talked to, that's not the problem. Then, you'll
need some method to successfully capture and
manage
the ideas, and a method to evaluate the ideas.
Then, you'll want to define a process that allows
the ideas to mature and get refinement as they move
closer and closer to a handoff to new product
development or new service development. Quite
possibly, an oil pipeline might be a great analogy
for idea management, as ideas start out as fairly
useless "crude" and move through a refinement
process to become a valuable commodity.
An oil pipeline has another useful connotation for
ideas. An oil pipeline takes crude oil through
various processes that covert the crude into
finished products that consumers can use.
Similarly an idea pipeline should move ideas through
stages to become new products and services that
customers can use. Do you have a way to capture
the
gusher of ideas and begin to successfully refine the
ideas and move them through a pipeline to your
customers?
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Perspectives on European Innovation
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This month we turn our attention to several
consulting partners in Europe, who will offer us
their perspective on innovation and the similarities
and differences between what's happening in the US
and what's happening in Europe.
Our review of Europe is timely, as the European
Union has just announced a new plan to encourage
innovation in the EU. See the recent press
release that details the focus countries in the
EU are placing on innovation.
Our partners profiled this month include: Klaus
Schug from Perlitz
Strategy Group in Germany, Tuula Antola
from InnoSpa in
Finland and David Jeggle from Avenue in
Germany. All three firms focus on
improving innovation with their customers, primarily
in Northern Europe.
What does innovation mean to you?
Klaus - Bringing something new (product or service)
to market
Tuula - I prefer to talk about innovativeness - the
organization's capability to deliver innovations,
with external and internal partners. Innovativeness
is an overall philosophy and skill to see the
possibilities around you.
David - To launch a new product or service or
implement a new process.
What do you see as important for innovation in
your country?
Klaus - People are the most critical factor. More
focus and training and encouragement for people
within the economy to become more innovative and
creative.
Tuula - We need to develop our skills for working in
an open innovation context. Finland has a great
chance to take a leading role in customer centric
innovation. Finnish businesses are still too
technology focused - we need better skills at
technology commercialization.
David - People need courage to innovate. The
German
culture reinforces perfectionism and
conventionalism.
Does your government play a role in encouraging
innovation?
Klaus - yes, through providing financial
incentives.
Tuula - The Finnish government plays an active
(perhaps too active) role in innovation. There are
several public financial instruments and research
institutes for innovation in Finland (www.tekes.fi,
www.vtt.fi).
David - There are several institutions including the
Federal Ministry for Economics and Technology, or
the Frauenhofer Institute for System and Innovation
Research. Several weeks ago the federal government
adopted the "High Tech Strategy for Germany" to
increase the rate of research and innovation in
Germany. There is also a public campaign -
Deutschland - Land der Ideen or Germany - Land of
Ideas which promotes and communicates great ideas
and inventions from Germany.
Do you see the focus in your country on
innovation increasing or decreasing?
Klaus - definitely increasing. Everyone understands
that Germany is a high cost country - we can always
be undercut from a cost perspective. We have to
innovate to remain successful.
Tuula - definitely increasing. Finland holds the
chairmanship of the EU and innovation
is a key focus. Finland has had
some innovation successes such as Nokia, Linux,
Habbo Hotels and F-Secure. As a small country we
have to be smarter and faster than larger countries
to succeed in global competition.
David - Increasing rapidly. Companies understand it
is vital to improve products, services and processes
to compete.
What role do CEOs in your country play in
innovation within their firms?
Klaus - They focus on constant innovation, and
getting everyone on board to think about growth.
The CEOs should be advocates for innovation,
consistently asking teams for their best ideas.
Tuula - The executives need to provide the inspiring
vision and mission that are big but concrete enough
that each and every employee determine their role in
the firm and how it relates to innovation.
David - people watch the CEO's and senior
management's actions. These senior leaders should
demonstrate active involvement with innovation.
They should also encourage innovation and reduce
the
risk of failure.
Which countries do you think are leading
innovation in Europe?
Klaus - there is no one country - but Europe as a
whole is focused on innovation. Look at Airbus for
example. The design and manufacturing is done
across Europe.
Tuula - We see Finland as an innovation hub, based
on its focus on innovation.
David - Most countries in Europe are focusing on
innovation - but there will be a shift from product
innovation to service innovation. On average most
firms spend over 3,000 Euros per employee on product
development but service firms spend only 70 Euros
per employee on service development.
Do you see many differences between how
innovation is done in Europe and how it is done in
the US?
Klaus - no major differences.
Tuula - There is no "serial" entrepreneur mindset in
Finland. The ability to take on risk is much lower
as well as opposed to the US - whether we are
talking about venture capitalists, entrepreneurs or
CEOs of larger organizations.
David - There's a bigger "let's do it" culture in
the US, and communication is more continuous and
informal. It seems in the US management is more
transparent and ideas can more easily get to the
top. Also, there's less fear of failure in the US
than in Germany. That's important since failure will
be part of the innovation process.
If I am in a company, have been named Chief
Innovation Officer and am now tasked with a mandate
of innovation, where should I start?
Klaus - I'd want to understand my product portfolio
and the ideas in the pipeline to understand how that
portfolio will align to the expected needs of our
customers.
Tuula - Break down the silos and roles within an
organization to get people to see the bigger
picture. Identify the real power structure and
organization. Encourage managers to set goals and
provide their teams the freedom they need to be
successful. Ensure management systems and tools
support an innovation process at every step.
David - work across the organization to get buy-in
from top management, then work your way down to
middle management and all employees. Once the
communications are complete and the people are
"bought in", educate people on the thinking and
skills they need and implement an innovation
process. Pilot and experiment early in the process.
What are the global trends you think are driving
innovation today?
Tuula - There are no country borders for innovation
in an open innovation context. Using and developing
technology is second nature to the workers just
entering the work force, but middle managers haven't
understood or adjusted to that yet. There are some
huge global challenges that we all face - like
global warming - and we could solve jointly if we
work together to solve problems.
David - The main trend that is driving innovation is
globalization. This increases competition, which
can drive prices down. With increased communication
and commercialization new products can be brought
to
market quickly.
About Perlitz
Perlitz
Strategy Group's core competency is
management
consulting, housed in our Management Consulting
division. PSG's consulting methodology comprises the
entire strategy cycle, from current state analysis
to formulation and evaluation strategic options to
strategy implementation and subsequent
accompaniment.
About InnoSpa
InnoSpa
supports
its clients in creating value by enhancing
innovativeness with a focus on leadership and
culture. InnoSpa's main focus is to help companies
understand where the bottlenecks of their idea to
innovation processes are. InnoSpa delivers the
expertise, networks and solutions to optimize our
clients' innovation capabilities.
About Avenue
Avenue is a
consulting firm helping clients improve innovation
development in terms of coaching and consulting as
well as preparing your workforce to consistently
create innovative solutions.
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The OVO web seminar series on topics related to
innovation is underway and receiving some great
kudos:
"I think there is a lot of useful information in
the webinar that could help me communicate
innovation to others in the corporation."
"The session was quite informative and well done.
Thank you for offering your groups knowledge and
expertise."
"I thought the presentation was excellent. You gave
me some ideas around a few different ways to
approach upper management."
We'll continue to offer these webinars and in late
September will also post recordings of the webinars
on our website. Here's the agenda for the webinars
currently:
Building the Business Case looks at how firms
justify innovation initiatives and provides a
framework to help build your own business case.
Getting Started looks at the issues
surrounding the
first innovation initiatives in a business and the
opportunities and challenges.
Processes and Tools reviews some of the
existing
innovation processes (like Stage Gate) and software
applications like MindMaps and OVO
Tools
that support innovation.
You can learn more about these web seminars and
sign
up for a seminar.
If there are topics you'd like to see as a web
seminar, please contact us and we'll consider
creating a new web seminar or we'll contact you
directly to discuss our insights.
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Low Cost, Low Risk idea management
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OVO has recently announced that its software -
specifically Spark
and Incubator
- are now available
as a hosted service. What this means to you is that
your team can get started very quickly and easily
generating and capturing ideas in a hosted model,
for much less cost and effort than you might expect.
Spark, a web-based application for brainstorming,
ideation and whiteboarding, is priced in the hosted
model at $20 per concurrent user per month.
Incubator, a collaborative idea management system,
is priced at $40 per concurrent user per month.
These are powerful software applications offered at
a price that
means you should act now to get your innovation
teams started generating and capturing ideas in a
consistent application framework.
There are two real innovations in this offer: the
concurrent software model and the ability to move
quickly from a hosted version to an internally
managed licensed version.
OVO offers its hosted software in a concurrent
model. This means you can license the software in
blocks of 5 concurrent users, but sign up 5 users
for each concurrent license. For example, if you
buy 5 concurrent users, your team can establish as
many as 25 registered users. Any 5 of those
accounts can be active at one time. You'll pay less
but
provide the functionality to a much broader audience.
OVO also offers the ability to quickly move from a
hosted model, where we host and manage the data
for
you, to an internally managed and licensed model,
where your team hosts and manages the software.
This means your team can get started quickly, often
within a day or two, using the hosted model, and
bring the management of the ideas and software in
house when the time is right.
With this offer there is simply no reason to wait -
your team can access powerful software and get
started using that software very quickly at an
exceptionally affordable price. Robert Tucker, in
his book "Driving Growth through Innovation"
recommends using a collaborative idea management
system as one of the first steps towards becoming
more innovative. You won't find a more powerful
application that provides you with the flexibility
and capability that OVO offers right now.
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If you'd like to discuss how OVO can work with you
to improve your innovation strategies, processes and
tools,
contact us today at our website or
(919) 844-5644 x789.
If you enjoyed this innovation newsletter, please
pass it along to your friends. If you wish to
unsubscribe, please see the link below.
Sincerely,
Jeffrey Phillips
OVO
phone:
919-844-5644 x789
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OVO | 220 Horizon Drive | Suite 117 | Raleigh | NC | 27615
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