OVO | June 2007 Newsletter

OVO Views

Conversations about Innovation

June 2007 - Vol 1, Issue 12

In This Issue
	Book Reviews Busting the myths The role of Human Resources in Innovation

Sign Up

Quick Links
	OVO Website Innovation Readiness Assessment Idea Management Software Innovate on Purpose Blog

Greetings!

Welcome to the OVO innovation newsletter. For our June issue we'll look at several new books on innovation we at OVO have been asked to review. Next, we'll consider some commonly held attitudes about innovation and explore their validity. There are a number of myths and commonly held beliefs about "who" can innovate, "where" it should happen and so forth. Most of these myths become barriers to successful innovation. For innovation to take root in your organization, it must find a culture that embraces innovation. Your Human Resources team can play an important role for innovation to succeed in your business. We'll explore the importance of HR in relation to innovation. Have a great 4th of July.

Book Reviews

I've had the pleasure of reviewing several books on innovation recently and I'd like to share those books with you. If you follow innovation closely, you'll know that a number of books have been written about innovation. A few of them are actually quite good. Our concern, however, is that most of the books are about innovation "advocacy" - is there a Fortune 500 firm out there that does not understand that it needs to innovate? We'd like to see more books about innovation tools, techniques and processes. A few of our favorite books, including Robert Tucker's Driving Growth through Innovation and Rob Shelton's Making Innovation Work do address the operational and tactical issues of innovation, but most books still attempt to provide a rationale for innovation, rather than insights into how to innovate more effectively. The Other side of the Looking Glass The first book we'll look at is Hidden in Plain Sight by Erich Joachimsthaler. Joachimsthaler is an academic and also runs a consultancy based primarily around marketing strategy. Hidden in Plain Sight is not a book about innovation per se, but more a book that points out that most firms look at their customers from the "inside out", segmenting the customer base into easily understood segments and then "innovating" based on the segments and technology. Joachimsthaler recommends the opposite - truly understanding what customers - all customers, any customers - want in a very deep and meaningful way - then using innovation as a tool to create these new products and services. He calls this demand-first innovation. The book spends a lot of time examining several innovative firms to demonstrate how those firms took the time to get under the skin of their customers and understand their needs, met and unmet. There's a lot of description of customer research that reads like Voice of the Customer research. Ultimately, this is a book about changing your strategies and how you interact with your customers. It is a good book, primarily targeted at the "C" levels in your organization. Group Genius While this sounds like an oxymoron, according to Keith Sawyer, it's not. His book, Group Genius - is a book that examines how organizations can leverage the knowledge, capabilities and insights of a group, and become even more innovative. Sawyer has extensive experience in creativity, and demonstrates that under the right conditions, collaboration and group interaction can result in tremendous creativity and innovation throughout a business. His book has three sections, one on collaboration and creativity in a team, one on corporate -wide collaboration and creativity, and one section examining individual creativity. Group Genius is packed with a lot of examples and exercises that your team can use right away, but combines that "practical" flavor with a fair amount of theory and philosophy, so the book is well-rounded and very useful for those individuals who are trying to make their organizations more creative and collaborative. Group Genius will take its well-earned place on the bookshelf of any individual interested in fostering creativity and collaboration within a firm. It is a book that combines theory with enough practical advice to be interesting to almost anyone involved in innovation. The benefit of innovation Jim Andrew, one of the leading authorities on innovation, has published a book on the rewards and benefits associated with innovation called Payback. This book is really three booklets. In the first section he challenges us as innovators to remember the reasons we innovate - for the most part its revenue and profits. Yet too often we are too optimistic about the investments and expect a very rapid adoption of our product or service, which leads to a promising cash curve. In reality, that curve is never what we expect. The authors address opportunities to impact the cost curve and make your innovations more likely to succeed. In the second section, the authors explore three prominent innovation models - the integrator, the orchestrator and the licensor. These models represent the different methods used to generate ideas and bring them to market successfully. In larger firms, of course, all three may be at play simultaneously. In the final section, on leadership and alignment, the authors address the need to align the organization behind the leadership and around the subject of innovation. This is clearly my favorite section as we find these concepts to be the main inhibitor or enabler for innovation. Payback is a bit scattered as a book but is filled with great ideas and models to help you assess your organization and improve your return on innovation. Other favorites The books reviewed above are new and worth your time. We, of course, have a few favorites on our shelves. These include: Democratizing Innovation - von Hippl Open Innovation - Chesbrough How Breakthroughs Happen - Hargadon Driving Growth Through Innovation - Tucker Making Innovation Work - Shelton A whack on the side of the head - von Oech

Busting the myths

We all know that... Let's explode a few myths right up front. Thomas Edison never worked alone, failed dramatically in several significant endeavors and didn't actually invent the light bulb. While we have all of these images in our collective conscious about Edison, the truths about innovation are often much more prosaic than the myths that are created. For the record, Edison worked with a large number of scientists, engineers and mechanics as part of an intentional process to invent new products. His first invention, an automatic voting machine for Congress, failed dramatically, as did his advocacy for direct current rather than alternating current. He invented the long lasting filament for light bulbs and, with one of his helpers, developed the screw-in bulb to make it easy to insert and remove a bulb rather than solder it in place. It has equally been said that Thomas Edison knew 1000 ways not to make a lightbulb. What's that got to do with innovation? Just as a number of myths arise around innovators and inventors, so too a number of myths have developed around innovation within companies. There is a lot of received wisdom about what can, and can't, be done as far as innovation is concerned. Here are a few myths we'll examine: Innovative people are more important than culture Brainstorming is a waste of time Large firms can't innovate successfully People or Culture Innovation myths tell us that innovators, like inventors, are slightly different from the rest of us and should be treated with kid gloves, locked away in a "skunk works". The myths would have us believe that innovative people are more important than culture. Unfortunately, this is received wisdom based on the fact that innovation succeeds in most firms in spite of the culture and because a few people take on the quixotic task of driving an idea through the business. However, research has demonstrated that firms that sponsor collaboration and risk taking create more new products and services more consistently. Why do 3M, P&G, Patagonia, Gore, Apple, Google and others innovate so successfully? Is it because of their people (possibly) or because of their culture? Isn't it interesting that all of these firms expect that each employee will spend between 5 and 10% of their time working on new ideas? Eventually this is a "chicken and egg" question. The culture of any organization is much more important than any innovative person, so a "not invented here" culture will almost always trump a really innovative person, while an open, innovative culture will attract innovative people. Innovative people in a non-innovative culture will succeed sometimes, but innovation happens more frequently and more predictably in a culture that sponsors and supports innovation. In our experience, the success of innovation is driven by the culture of the organization or hindered by the lack of acceptance of innovation within the organization. Brainstorming and time wasting There's a lot of buzz around idea generation. When we speak of idea generation, there are several approaches, but most people leap to brainstorming. In fact, brainstorming is so popular that it has become a victim of its success. Since brainstorming is a technique that is frequently used, and done poorly, many people believe brainstorming is a waste of time. And in many cases, they are correct. The problem with brainstorming isn't the technique, it's the fact that the technique is misused and misapplied. Brainstorming requires a cross-functional team with different experiences and responsibilities who are willing to open their minds and generate creative, even risky ideas to solve a specific problem or address a specific opportunity. Generally speaking in most firms, brainstorming is conducted by a small, uniform team that is not accustomed to sharing ideas, much less create unique or risky ones, for an uncertain outcome. Brainstorming is often poorly focused, with many participants unsure what the possible acceptable results are, or even why they are in attendance. Finally, brainstorming is often poorly administrated and managed. Without good facilitation, the more dominant personalities take up much of the discussion and overwhelm the more passive participants. Brainstorming is very valuable when it is managed correctly, and when the team is appropriately diverse and prepared, yet few people receive training on the proper preparation and facilitation of a brainstorming event, and too often brainstorming sessions are hijacked by individuals with motives that don't align with those who called the meeting. Large firms can't innovate As a firm grows, the organization, culture and bureaucracy can create barriers to change and to growth. While it is easier for a small firm to innovate, larger firms do face the fact that new products may impact their positioning or cannibalize an existing offering. The long cycle times, careful consideration of ideas, funding mechanisms and other barriers within many organizations lead to the conclusion that larger firms can't innovate. Small firms have two advantages from an innovation perspective. They usually have one very important idea that everyone is working on, rather than a range of ideas. Second, they often have very little "legacy" operations, so they can quickly create a new business or change a business model. Large firms, such as General Electric, IBM, Sony, Nike, Apple, 3M and Proctor&Gamble are clearly innovative, so innovation is definitely possible in a larger firm. What makes these larger firms successful is an expectation for innovation, a culture that understands the need for innovation, internal processes that support innovation and management commitment to innovation. Creating Myths of your own These are just a few myths about innovation - there are clearly many others. Rather than succumb to conventional wisdom and accept these myths, why not create some of your own? In the next article we look at the importance of culture as an enabler for innovation. Myths, stories and commonly held beliefs create and reinforce a culture. Creating your own myths about the ability of your firm to innovate, rather than the old myths about the challenges of innovation, will create a culture that expects to innovate, rather than seeking reasons why it should fail.

The role of Human Resources in Innovation

Increasingly, it's becoming apparent that innovation is successful based on the expectations and strength of the corporate culture. Innovative firms sponsor and encourage risk taking, creativity and "thinking outside the box", while less innovative firms maintain a "not invented here" culture. If corporate culture is the sum of the belief systems, knowledge and expectations within a business, then the people, their training and their reward and recognition systems impact culture significantly. Fostering innovation within any firm means changing the way people think, address failure and risk, and react to the way they are measured, motivated and compensated. That leads me to believe that quite possibly the most important team when it comes to embracing innovation in your business may be the human resources team. While not generally thought of as an important component to innovation, the HR team can impact innovation and the people involved in innovation in three significant areas: recruitment, retraining and rewards and recognition. If the culture of the organization can significantly help or hinder innovation, and if the people within the organization shape and maintain the culture, then human resources stands out as a team that can significantly impact the success or failure of an innovation initiative. Recruit For years, the focus within most organizations has been on recruiting and attracting people who have skills in operational excellence. The prevailing strategic thinking was that cutting cost and eliminating functions and tasks that weren't "core" to the business was paramount. The demand for that kind of experience and knowledge drove the recruiting teams to recruit people with those profiles. Now, however, we need to supplement those great operational folks with people who are more creative, inventive and have a higher tolerance for risk and ambiguity. This does not mean that we now have to get rid of all of the operational people - but we ought to increase the recruitment of innovative people. This may mean recruiting people with job experiences, education and profiles that do not match well with existing job categories and profiles. It can mean recruiting people from outside the industry or with skills and perspectives very different from the people currently on staff. Human resources can play a vital role in this effort. Recruiting won't be the end of the role HR can play in this regard. As you hire new people with different experiences and different perspectives, the HR team will need to help with job definitions and "on boarding" to help transition these new individuals into the organization. Retrain The training provided to many people currently employed has been focused on eliminating risk, cutting costs and enhancing the focus on the core business. Process excellence has been a primary focus within the training teams, and has been what was encouraged. To become more innovative more consistently most firms need to supplement the process excellence training with new training focused on creativity, facilitation, embracing risk and reducing the fear of failure. Many of the skills and perspectives necessary for innovation to flourish will require more than just a few training programs, but the way we educate and inform people in the training programs matter. The emphasis your firm places on training and continuing education speaks volumes about your intentions and goals for the firm. Are you training people not to fail? Human Resources can play a vital role by using training and communication as a way to begin to move the corporate culture and prepare the current employees for a shift toward a more innovative culture. Recognize and Reward The old saw states that "what gets measured gets managed". Likewise, Jack Welch once famously said, "show me a person's timecard and I'll tell you how they are compensated". Meaning, your employees and co-workers are logical, thoughtful individuals and spend their time where they think it will do the company, and their paychecks, the most good. If we say that innovation is important, but then don't change the motivation and compensation schemes to encourage work on innovation, and we don't motivate people through their compensation or recognition approaches to spend more time and effort on innovation, then the teams will understand that the true focus is still on operational excellence and will ignore innovation projects or spend as little time as possible on those projects. Human Resources can help devise the appropriate rewards, recognition and compensation to direct the appropriate commitments and attention to innovation. The Importance of Human Resources Hopefully we've given you some food for thought about the importance of Human Resources as you begin your innovation initiative. Innovation is a process driven by creative people who are engaged in a supportive culture and recognized and rewarded for what they do. Human Resources plays a significant role in the recruitment of these folks, as well as shaping the corporate culture and recognition and rewards systems. Get your HR team on board as you start your innovation initiative. It will make a significant difference in the outcome of your work.

If you'd like to discuss how OVO can work with you to improve your innovation strategies, ideation sessions, innovation processes or software, 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

email: jphillips@ovoinnovation.com

phone: 919-844-5644 x789

web: http://www.ovoinnovation.com