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.
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.
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?
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.
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.
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
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.
If you want innovation in your company, hire innovative people. But how do you know if someone is innovative? What do you look for? What telltale evidence might suggest that a person has superior innovation skills? What is the telltale of innovation? I think I know the answer. But, just as with the youth hockey experience, I will need to collect data to be sure. My hypothesis is mental searching speed, an idea that Yoni Stern at S.I.T. taught me. This is a measure of how well you "Google" your own mind and memory for information or experiences when given a task. The task in the case of innovation is to take a Virtual Product (a mental abstract produced through the S.I.T. method), and mentally search your mind to find many productive, innovative uses for it. Whoever can find the most ideas for a given task is more innovative in my view. They make the team. My task now is to select a different team - a team of research collaborators to find and validate the Innovation Telltale, something the Fortune 100 will surely value.
There is an inherent bias against innovation despite the enormous value it holds for organizations. Corporate executives know that innovation is the only true long term growth engine for their firm. Yet innovation carries with it a certain stigma, a perception in the minds of executives, that it is "soft" and frivolous compared to other hard core business activities like productivity, quality, and demand generation. This stigma deters executives from taking risk and investing in serious innovation initiatives.
The readership of this blog has steadily grown, and it's time to start demonstrating how innovation works...in real time. Once each month, I will post The LAB. This is where we will use a specified innovation tool on a product or service that is suggested by one of you, the readers of this blog.
Once I have received a suggested product or service (posted in Comments) from one of you, I will use a specified innovation tool to create a new-to-the-world innovation. I will show results in a subsequent post with a description of how I applied the tool and used each step of the process to create the innovation. In some LABS, I may be able to include a drawing or rendering of the innovation.
For those people interested in the innovation space, my firm belief is that we need to make a regular habit of innovating so we can perfect the craft and set the pace for others. It is not enough to talk about and read about innovation. It is essential that we all do it.