Heads-Up! on Organizational Innovation

I-Competency: Choose, pt 3 of 13

Primary Thinking Objective:  Choose

(Continuing series on the innovative thinking competencies necessary for innovation.)

Once you’ve learned to generate a lot of great possibilities, it’s time to make a decision about which to implement.  This skill is about more than crunching numbers ... it requires bringing many perspectives together in a way that can weed out the losers without squelching the possible breakthroughs that look a little strange.

Making sound group decisions is often a matter of deliberately exploring reasons something might not work.  Sometimes that can lead to creative ways around potential roadblocks ... and,  sometimes, it reveals fatal flaws early before making major investments in something that does not have a chance.

"Business 2.0" recently ran an article on "25 Best-Kept Secrets of the World’s Best Companies" (April, 2006) and one of the secrets shared was about forming "contra teams" to deliberately take the position of devil’s advocates on major commitments.  We’ve spent so much time and effort recently encouraging people to "think outside the box" and to not judge ideas too soon that there is sometimes a reluctance to appear judgmental or "non-creative."  Contra teams offer a safe and appropriate place for hard-nosed, analytical evaluation of a new possibility without casting people into a fixed role as a nay-sayer.

Here’s Toro’s "contra team" secret write up from "Business 2.0":

The appetite for mergers only gets bigger: U.S. companies consummated an estimated $1 trillion worth of M&A deals last year, up from $781 billion in 2004. All this despite the grim reality: Two-thirds of all acquisitions fail to meet their goals, according to a study by Booz Allen Hamilton.

Toro, the $1.8 billion lawn-mower giant, knows how to curb the urge to merge. Anytime an M&A pitch reaches the desk of CEO Mike Hoffman, he asks a due-diligence group to make the case to the company's board. But he also turns to the "contra team"--half a dozen vice presidents and directors--to deliver the voice of dissent. According to chairman Ken Melrose, who got the idea from reading about a similar practice at Japanese firms, a few years ago the contras killed an eight-figure acquisition of a manufacturer that had pitched itself as a turnaround success. The contras' number crunching showed that its sector was facing a slump. The prospect's revenues have since tanked, while Toro has nearly doubled its sales. "Nay-saying in corporate America isn't popular," Melrose says. "The contra team is a way to create negative views that are in the shareholders' best interest and the company's best interest."

****************************************************************************************************************

** Choose: Evaluate and select a new path with a high probability of creating significant new value. Being able to make sound group decisions.  Choose is the second of the "primary" thinking objectives of the new Innovation Igniter Thinking Wheel series of 13 innovative thinking competencies.

The 15-minute learning module for this competency is presented by Ruth Ann Hattori, author, Innovation Training, co-founder of InnovationNetwork. These thinking skills are critical for innovation and for the creative work required for today’s world. A 15-minute video module on "Engage Energy" is available at http://innovationigniter.com.

I-Competency: Aspire, Pt 2 of 13

(Continuing the series on thinking competencies required for innovation.)

Imagine being an architect challenged to build an attractive, functioning office building that uses no air conditioning in the steamy climate of Zimbabwe. Mick Pearce accepted the challenge and designed his most seminal project: Eastgate, a mixed office complex and shopping mall covering half a city block in the business center of Harare, Zimbabwe. In 2003 Pearce was presented with the Prince Claus Award, which stated in part:

"What makes it unique is that it is not only ventilated, cooled and heated entirely through natural means, but it works. Its ventilation costs one-tenth that of a comparable air-conditioned building and it uses 35 percent less energy than six conventional buildings in Harare combined.  In the first five years alone, the building saved its owner $3.5 million in energy costs.

"One needs a considerable leap of design imagination to model a building on a termite mound, or more precisely, on the termite mounds that dot the Zimbabwean savannah.  In a rare case of architectural bionics ... bionics being the field in which principles from living organisms are transferred into engineering ... this is what Mick Pearce has done at Eastgate.  Small wonder he became so fascinated with termites ... they , too, happen to be ingenious because they have to be.  They can only survive if their environment has a constant temperature of exactly 30 to 31 degrees. As temperatures in Zimbabwe fluctuate from 35 degrees at night to 104 degrees during the day, termites dig a kind of breeze-catcher at the base of their mound which cools the air by means of chambers carved out of the wet mud below, and sends hot air out through a flue to the top.  They constantly vary this construction by alternatively opening up new tunnels and blocking others to regulate the heat and humidity within the mound.

"Based on the termite mound analogy, Mick Pearce’s Eastgate building uses the mass of the building as insulation and the diurnal temperature swings outside to keep its interior uniformly cool.  With Ove Arup & Partners, he devised an air-change schedule that is significantly more efficient than other climate-controlled buildings in the area.  Fans suck fresh air from the atrium, blow it upstairs through  hollow spaces under the floors and from there into each office through baseboard vents.  As it rises and warms, it is drawn out through 48 round brick funnels.  During cool summer nights, big fans send air through the building seven times an hour to chill the hollow floors.  By day, smaller fans blow two changes of air an hour through the building.  As a result, the air is fresh, much more so than from an air conditioner which recycles 30 percent of the air that passes through it."  (more at http://www.architectsforpeace.org/mickprofile.html)

Pearce’s Eastgate is a perfect example of what happens when we Aspire to a dramatically different level of performance.  It opens us up to looking at things like termites in order to build better buildings.

*********************************************************************

Aspire: Imagine a bright future, possibly even an impossible one, and generate the winning concepts that make it a reality. Aspire is one of the "primary" thinking objectives of the new Innovation Igniter Thinking Wheel series of 13 innovative thinking competencies.

The 15-minute learning module for this competency is presented by Michael Bungay Stanier, Principal of Box of Crayons, creator of Get Unstuck & Get Going on the stuff that matters and The Eight Irresistible Principles of Fun.  These thinking skills are critical for innovation and for the creative work required for today’s world.  A 15-minute video module on "Engage Energy" is available at http://innovationigniter.com.

Engage Energy, Pt 1 of 13

Less than a year after the first man walked on the moon, space flight had become so routine it wasn’t covered by American television.   Then a space accident on the thirteenth Apollo mission sparked the words, “ Houston, we have a problem.”

Captured in the 1995 movie, “Apollo 13,” the story of the ground crew’s race to bring the astronauts home provides one of the best innovation scenes available today.  At one point, the crew is challenged to literally put a square peg in a round hole using only the materials available onboard the module.  The impossible needed to be done … and quickly.  The flight director (played by Ed Harris) captures the moment when he states, “Failure is not an option.”

One of the problems organizations face in trying to do innovation is that they seldom have a life-and-death, failure-is-not-an-option challenge that energizes creative thinking and action.  Too often, we offer people a tepid “improve sales by 12.3%” kind of challenge and expect them to create heroic results.

One organization that has created challenges that truly motivate and sustain creative energy is Cirque du Soleil, the unique combination of theater and circus that produces 500 shows per year.  A new book out by Lyn Heward, former president of Creative Content for Cirque du Soleil and John U. Bacon,  The Spark: Igniting the Creative Fire That Lives Within Us All, offers some thoughts about how to engage energy.  In a USAToday article, she is quoted as saying:

Sharing of ideas: " We argue about anything - what costumes to use, what athlete to hire. Our first idea is almost never our last."

Surrendering to your senses and living an experience: "The journey inward begins with technique but it can only progress if you allow yourself to move beyond the mechanics and into the moment."

The nurturing Environment: "The ideal office is a fantastical playground a place where an employee can see the world through the eyes of a child."

Challenges becoming creative catalysts: "Constraints - budgets, deadlines and limited resources - can be a fantastic motivator. Without them, your mind is not focused."

Keeping the job fresh: "Comes from the top. In all businesses, your people will rarely work harder than the boss.

But even Heward concedes that bringing creative energy to the workplace is easier said than done: A survey conducted by Harris Interactive last year shows that 55% of all Americans are unhappy with their jobs, only 20% feel passionate about their work, and a mere 15% feel energized by what they do.

********************************************************************

Engage Energy is the central module of the new Innovation Igniter Thinking Wheel series of 13 innovative thinking competencies.  These thinking skills are critical for innovation and for the creative work required for today’s world.  A 15-minute video module on “Engage Energy” is available at http://innovationigniter.com.

Conversations with Jerry – on Artifacts

Buckminster Fuller called his inventions tangible artifacts. Fuller was interested in changing the world and said that rather than trying to confront an attitude, you should create an artifact that would instantly neutralize previous behavior.  In a recent conversation with senior leader effectiveness, Jerry McNellis, he defined an artifact as something that contains embedded intelligence and values and great artifacts instantly change perspectives and behavior. This conversation provides more information and examples about artifacts an how to use them.

Innovation's New Performance Standard

By David Neely and Kevin Dehoff

A 50-company survey conducted by Booz Allen Hamilton shows that senior executives across a variety of industries -- including aerospace, automotive products, pharmaceuticals, and telecommunications -- want their innovation programs to deliver 20 to 30 percent improvements in product cost, quality, and time-to-market within the next two years. But there is a vast disconnect between hope and reality: By a two-to-one margin, executives said they are only minimally satisfied that their current innovation organizations are delivering their full potential. The survey also suggested that four factors make or break innovation programs.

Interesting statistic -- 55 percent of the companies surveyed said they had reorganized their innovation organizations during the prior two years.

To read the full article from Strategy+Business:

Service Innovation

We are delighted to have this column from Tim Ogilvie, Co-Founder of Peer Insight, Inc.
Service innovation is a critical but largely unstudied segment of innovation. We believe that the Consortium that Peer Insight is launching will provide a critical foundation for understanding how to more effectively innovate in this arena and are delighted to partner with them on this venture. We look forward to providing information from this study to IN members. For more information on how to become a member of the Innovation Network, please click here. Joyce Wycoff

Innovators Know Services Are Different

By Tim Ogilvie

A funny thing happened to Xerox in 2001. For the first time in its 95-year history, service revenues accounted for more than half (53%, to be precise) of all corporate revenues. On top of that, the service business accounted for 61% of gross profits, and it was growing at almost double the rate of the product side of the business. NCR, the 124-year-old cash register and ATM giant, has a similar story. Last year, service revenues represented 49.3% of their total revenues. The company is almost certain to reach the tipping point this year.

What must it be like within these traditional product companies to witness the coronation of services as their present and future king?

Gaining Customer Insights – the Creative Way

Finding out what customers want is a fundamental aspect of innovation. However, it’s one of those things that is easier said than done. Customer surveys and focus groups have proven ineffective in most cases and bad data can be worse than no data.

Gerald Zaltman in his book, How Customers Think states, “The correlation between stated intent and actual behavior is usually low and often negative.” He tells a chilling tale of a household appliance manufacturer whose market research showed that 60% of customers were likely to purchase the new appliance. A year later the actual results were that 12% had actually purchased and the customers were unable to explain their reasons for not buying. Imagine gearing up sales, marketing, manufacturing, distribution and service for a new product and being off by a factor of 5!

Click here to buy the book.

So how do you gain true customer insights? We thought this would be an interesting question to explore to see what you’ve done and seen done. One example we’ve seen recently is Staples’ InnovationQuest. The nationwide quest for simple new office products was launched in 2003 and prospective inventors had until November to submit their ideas. To enhance participation, Staples offered a $25,000 prize to the top winner and $5,000 for the other eleven finalists. Additionally, the winner would receive royalties if the product was produced and sold by Staples.

The very process of launching the InnovationQuest created positives… in addition to engaging people (and most likely, customers) with Staples, the inventions submitted would highlight perceived problems. This week Staples announced the twelve finalists out of 8,000 entries and invited the world to judge them. The voting process invites other customers into the mix and their votes are another way to get feedback. I’m not sure that the inventions include any blockbusters such as the Post-It Note, but the value is in the customer feedback rather than the actual new products ideas submitted.

So, tell us what you’ve seen in the way of gaining customer insights. Please add your experiences and insights to the comments section.

100 Best Companies to Work For

Fortune magazine just released its 2004 Report on the 100 Best Companies to work for. This is always one of my favorite reads -- it is very reassuring to know that some companies are finding ways to "walk the talk" that employees are their most important assets.

Here are just a few tidbits: