Innovation Best Practices
In late May I presented as part of a panel at The Conference Board's Conference on Growth and Innovation. (link to my presentation)
In
listening to the many other presentations on how large companies
including Whirlpool, OSRAM Sylvania, IBM, Cargill, DDB, Avaya and Dow
Corning are encouraging and managing innovation, it became very clear
that there are a core set of best practices
- visible senior executive sponsorship
- diversity within teams and across the initiative
- cross-business participation
- latitude granted to the innovators – acceptance of failure
- adequate time and resources provided to innovators
- idea sharing.
Here are some quotes:
Customers are
clueless about what they don’t have so the customer should be the
sounding board, not who you ask first. You observe their workarounds. –
Whirlpool’s Director of Advanced Concepts and Technologies
Procter
and Gamble (IBM’s client) now wants innovation to come from outside the
company – a radical change. Others will follow their
leadership. – IBM’s VP of Intellectual Property and Standards
We
are changing our service business from people/time to asset based, i.e,
build something for a customer and then sell it to others – IBM’s VP of Intellectual Property and Standards
OSRAM Sylvania’s Director of Corp. Innovation Management
This
was most interesting for what I learned about OSRAM Sylvania’s efforts
in solid state lighting. Lightbulbs will be replaced with electronic
devices. LEDs are already more efficient than all incandescent and some
fluorescent lamps and by 2010 will be more efficient than all
fluorescent lamps. Sylvania has big internal problems with this since
it directly threatens their existing lighting businesses.
How to make innovation work:
- Manage the flow of ideas to evaluation to execution (especially the first step)
- Give credibility to idea solicitation
- Don’t discourage people with bad ideas
- Senior executive support
- Failure must be an option
- Beware of Christensen’s “tyranny of the customer” else you’ll improve but not innovate
Dana Anderson, President and CEO of DDB Chicago read 40 books on innovation and distilled them down to:
- Creativity is self-initiated and therefore unanticipated by management
- Hire the best people
- Give them the resources and space they need
- Create a culture that shares ideas
- Make sure people are rewarded
She also quoted from Csikszentmihalyi’s Flow, and, of course, Guy Kawasaki’s Rules for Revolutionaries (“eat like a bird, poop like an elephant”).
Frans Johansson, Author of The Medici Effect
- The
most profitable innovation comes from the intersection of fields and
unlikely combinations. People at the intersection come up with more and
better ideas. - Only 14% of new business launches were
based on this kind of innovation but they accounted for 61% of the
profit from all new business launches - The more unlikely the combination, the more likely the idea is groundbreaking.
- Richard Branson lost money on every artist signed to Virgin
records except for Mike Oldfield whose album Tubular Bells combined
rock and classical music - Implanting a gene from the Golden Orb Weaver spider into a
goat resulted in goat milk with fibers that can be used to make
extremely strong and flexible materials - MTV is now looking for a way to combine Latin and Country music
because they discovered that so many people, especially in Texas,
listen to both. - Diversity in team composition is necessary for innovation.
- Diverse teams take longer to start producing so you need to be patient.
- Evaluate ideas based on their merits, not based on who generated them
When it came to application of these innovation best practices there was conflicting advice. For example, Margot Morrell, author of Shackleton’s Way
said “A sharply clashing personality or someone who thrived in a
different corporate culture may hinder your work” but Dana Anderson,
President and CEO of DDB Chicago said “Hire an oddball.” Lots of people
said, “it’s okay to fail, you have to have lots of failures to get some
successes but it will be worth it.” But just as many said “kill
the unprofitable ideas as early as you can.”
