Innovation in Practice Blog
June 20, 2008
Relying on mergers and acquisitions for growth sends a signal that you don't know how to innovate or how to manage it. M&A has other problems, too. Companies tend to overpay which actually destroys shareholder value. At best, firms end up paying full value, neither better or worse off financially. The firm grows in size, not value, and pays in the form of distraction. What if you could use the tools and processes of innovation in mergers and acquisitions? How could it help? Would you select acquisition targets better? Could it help understand the valuation better so you get a better deal? Might it help you implement better? I believe innovation techniques could be applied to all three. Here is one example: targeting - deciding who to buy.
June 7, 2008
Web 2.0 social tools are swelling all around us, and the Fortune 100 are embracing them for two purposes - managing and engaging the internal employee base and managing and engaging the external customer base. Wikis, blogs, mashups, and social networks will improve productivity, connectivity, knowledge transfer, and ultimately profitability if deployed correctly. What about innovation? Can the Web 2.0 environment increase, enable, accelerate, and deepen innovation within companies? I am impressed with the emergence of tools such as Wridea and others that have taken on the challenge. But I have yet to see one that works effectively. I am trying to figure out why. Are these applications using the wrong innovation tool or process? Do they have an effective innovation process, but deploy it incorrectly? Or, are people not using the application in an optimal way?
May 18, 2008
The best Fortune 100 companies see innovation as an ongoing capabilty, not a one time event. These companies work hard to build muscle around this capability so they can deploy it when they need it, where they need it, tackling their hardest problems. Companies do this to keep up with the ever changing landscape both inside and outside the firm. What does it mean to build innovation muscle? I think of it as the number of people trained, the frequency of using an innovation method, and the percentage of internal departments that have an innovation capabilty. Call it an Innovation Muscle Index: N (number of trained employees) x F (number of formal ideation events per year using a method) x P (percent of company departments with at least one employee trained in an effective innovation method. IMI = N x F x P
May 4, 2008
Professor Keith Sawyer makes a useful connection between innovation and learning when he writes, "What both innovation and learning have in common is adaptability and improvisationality." He connects this idea with authors Joaquín Alegre and Ricardo Chiva from the Sloan Management Review. They identified five core features of high organizational learning capability (OLC) companies: experimentation, risk taking, interaction with the external environment, dialogue, and participative decision making. Keith has found that these five characteristics also hold true of organizations that use the power of collaboration to generate innovation. He believes that organizations high in learning ability are more likely to be innovative organizations.
April 20, 2008
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.
April 6, 2008
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?
March 30, 2008
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 just the next business cycle. It is far enough out into the future 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.
March 24, 2008
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.
March 16, 2008
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.
March 9, 2008
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.