Media

Creating a culture of innovation

February 23, 2009 by Jaap Linssen | No Comments

Since reading Gary Hamel’s latest book The Future of Management, I have been intrigued and inspired by the way W.L. Gore has innovation running through its veins, where the key word is collaboration.

In short, if you have an idea at W.L. Gore you are free to pursue it, although with such discipline that results from normal work are not jeopardized. There are no formal processes to guide these innovations. ‘All’ you need to do is to convince your colleagues about the potential value of your idea and get their help.

The mechanism is quite simple. Ideas with high perceived value will get a lot of support and bad ideas will not get support and vanish.

Working in this way W.L. Gore is able to scan great numbers of ideas and many are killed in an early stage and in a natural way.

The result is that W.L Gore is a very healthy company, is viewed as one of the most innovative companies in the world, and has been consistently ranked high in the lists of best places to work.

We use parts of the Gore vision at our clients a lot to improve the way they innovate.

I came across a presentation of W.L. Gore’s CEO, Terri Kelly, for MIT Sloan School of management. They summarized her talk as follows:

“A lot of companies ask about ’How do you innovate ? What do you invest in R&D?’ They’re not really the right questions to ask. We would flip that and talk more around ‘How do we create the right environment where collaboration happens naturally — that people actually want to work together, that they actually like to be part of something greater than just the individual contribution?’ And if you get that part right, all the other pieces fall in place that allow us to creat this great innovation cycle within Gore.”

Here is the entire 55 minute presentation. It is absolutely worthwhile to watch!

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Communities an alternative for CRM?

February 18, 2009 by Jaap Linssen | No Comments

We see a lot of corporates showing interest in communities these days. Many focus on building their own communities or playing a role in large generalistic communities like Youtube, Facebook, or Dutch case Hyves.

Successfully starting and maintaining a consumer community is difficult and takes a long time to do so. I would estimate chances of success around 1%-2%.

Using large generalistic communities for your communication in a way is quite similar to the traditional mass marketing. Even though companies are utilizing new methods, like virals, the audience is quite broad and communication remains expensive, just like in the days of push marketing on radio, TV, and print.

Why is so much budget flowing to projects with such low chances of success? I would like to share another perspective to working with communities.

I remember the late 90′s where CRM and data mining were big buzz words. And with some companies they still are. The point is to analyse data to find homogeneous groups to better fine-tune our proposition and communication. The interesting thing is that specialised communities are such homogeneous and focused groups.

The Harley Davidson Community in the picture below is a great example. This group consists of people that cherish their machine, the ‘Harley life’, and other Harley people. I think that a lot of marketeers could easily decide if this group is interesting to them, and if yes, make them a good proposition with a relatively limited investment.

Therefore, with specialised communities your CRM or data mining has been done for you and you can skip right to making the community a crisp proposition that suits them. To my mind this is low hanging fruit that can be harvested with small investments and quick returns. I have yet to speak to a marketeer from a large corporation who has realised this and acted upon it.

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Innovation Empowerment

February 16, 2009 by Innovation Factory | 1 Comment

Aberdeen Group just released a new research report that examines the differences between leaders and laggards in innovation. The study shows that leaders meet targets for new product revenues 46 percent more often than their average industry peers and that they meet launch dates 47 percent more often.The report gives an overview of the actions that innovation leaders employ to become more innovative. It is good to see that it aligns with our vision on innovation empowerment. Aberdeen calls it the Pace Model, see below. 
Aberdeen Group Pace model 

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Innovate the Google way

February 9, 2009 by Jurjan Huisman | 3 Comments

The Google StoryRecently I read the inspiring book “The Google Story“. Google is seen as one of the big examples of an innovative company and a lot of people state the 20% rule as a reason for that high level of innovation. The 20% rule refers to the percentage of time that software engineers get to work on whatever interests them. Personally I think that the 20% rule is not the main reason that Google excels at innovation. What is more important to my opinion is the culture and work philosophy at the company. Let me elaborate on that…

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I am what I create

February 6, 2009 by Jaap Linssen | No Comments

I came across this talk by John Seely Brown at the Carnegie Foundation for the Advancement of Teaching on reforming the way we educate kids. He proposes to change the way kids are taught to allow for more tinkering and creating. Kids learn to find information themselves and build upon the information they find by sharing and collaborating with each other. John Seely Brown ends his talk by saying the current technology greatly supports such tinkering, collaborating, and sharing.

Why is this talk relevant to innovation? If you look at truly innovative companies, they have achieved a state where a broad base of their employees are innovating in such a way. If employees come up with an idea, they start the preliminary research themselves. They collaborate with other colleagues or people outside the company to enrich their idea. They share what they are doing so the work is useful for the other employees and can be built upon.

Working in this manner does not require large innovation budgets, which is a big plus in the current state of the economy.

We are currently working with a large Dutch company to achieve such a state of ‘continuous innovation.’ They are using our innovation portal to share and collaborate and for all employees it is possible to be coached on how to engage in this process.

Watch the talk and imagine your employees or colleagues working in such a way…..

httpv://www.youtube.com/watch?v=9u-MczVpkUA&eurl=http://www.businessinnovationfactory.com/weblog/&feature=player_embedded

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UPC Fiber Power Idea Challenge

February 3, 2009 by Innovation Factory | No Comments

With the launch of 120Mbps internet, UPC wanted to involve employees and customers. Innovation Factory proposed to start an Idea Challenge amongst employees from ten European countries to come up with new products and services for using this super fast internet connection. Now UPC has decided to open up the challenge for customers in the Netherlands.

Ideablob

January 14, 2009 by Innovation Factory | No Comments

Advanta, a credit card firm for small business, is running a big idea challenge at http://www.ideablob.com. Entrepreneurs and small business owners can submit ideas and win $10k. The first three weeks of the month each have a sprint that will deliver two sprint winners based on popular vote. In the last week of the month, these six sprint winners are joined by the two ideas that have gained most votes overall. In this last week, the winner is chosen and gets the prize. Apart from the prize to win, the ideas get reviewed and receive helpful comments that the entrepreneurs can use to improve their ideas. So even entrepreneurs that don’t win, get value from participating. Looks like a great way to get entrepreneurs starting their business, something that’s vary valuable in these economic times.

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Community size: The bigger the better?

December 23, 2008 by Rob Bertens | No Comments

In my literature research during my graduation on the topic of internal business communities, community size seems to be a subject that remains relatively unclear. Therefore, in this blogpost I try to summarize what’s known and I will try to give some recommendations on building a satisfying community size and critical mass.

The size is an important factor in the ongoing community survival simply because this is related to the total number of postings and viewers (Koh et al., 2007). Consequently, it seems important to attract many community members, because more members generate more discussion. Especially in the start-up development period high activity in a community is important in order to lead to a successful community. Moreover, a large community entails a greater diversity in opinions and ideas and also creates a larger knowledge base. Building a large community seems to be beneficial, however, members seem to have difficulty gathering valuable information when a community is very large (McLure-Wasko & Faraj, 2000). Small communities build an intimacy that leads to fuller disclosure and richer insights.  The optimal size of a virtual community regarding effective communication is rather difficult to estimate and seems to be related to the needs and the effort involved, to perceived rewards, as well as the community’s role in the wider social network of the individual (Yeoman et al., 2003). A blogpost by Jeffrey Henning argues that the optimal community size is highly dependent on the purposes attached to the community. To ensure an ongoing community survival and encourage members to continue to interact, the optimal community size should be maintained. This means that new members should be attracted and current members will be leaving constantly.

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How innovation is stimulated by the economic downturn

December 17, 2008 by Innovation Factory | 1 Comment

In this interview Harvard’s famous innovation professor Clayton Christensen argues that the economic downturn will drive innovation. His insight is that in good times, innovators get too much funding and have the chance to continue too long with innovations that eventually fail. The innovators have too much budget and time to spend before confronting the market with the innovation. In bad times, they get less funding and have to be more picky in deciding which innovations to pursue. Evenmore, the lack of resources sparks creativity and pushes the innovators to really challenge assumptions and current ways of working, thus delivering more breakthrough innovations.

Being able to stop innovation projects is one of the characteristics of successful innovative companies, and I guess Christensen is right when he argues that in hard times, companies will be more focused on selecting the right innovations. I also ran across this in my research. One research project was focused on a company that had delivered some very successful products to the market, but also experienced some big failures. The failures were costly as they were products that were introduced in many countries, incurring all marketing and sales costs, but taken out of the stores within a few months. As the successes delivered a lot of profits, they could afford do have these failures, so they didn’t have to be very selective in the innovation funnel. Our research found out that the failed innovations should have been stopped earlier in the innovation funnel, as they didn’t meet many of the selection criteria. They were not stopped however, because they were pet projects of managers and nobody dared to tell them to stop the projects.

Some companies understand that stopping innovation projects is not a shame, but is something that stimulates innovation. These companies don’t need bad times to become more innovative. Take Google’s CEO Eric Schmidt for example. In an interview with the Economist he stated his view on failures: “Please fail very quickly – so that you can try again”.

Will the economic downturn help companies to become as innovative as Google?

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Leaders Open Up!

December 10, 2008 by Ebbe Nieuweboer | No Comments

Politics is on everybody’s minds lately. Even in Europe the media is full of articles on the new president-elect of the United States, Barack Obama and vice president-elect Joe Biden. It is therefore the perfect time to ask what leaders of organisations striving to become more innovative can learn from politics.

Le Roi Soleil
Louis XIVLet’s start off with a short history lesson. The record for the longest documented rule for any European monarch to date is held by Louis XIV who reigned as King of France from 1642 until 1715. He celebrated great military success in the Franco-Dutch war, was a patron of the arts and spent abundantly on artists who, as a result, produced work that remains influential to this very day. He commissioned the Palace of Versailles; a splendrous court spanning 800 acres, which is one of the largest castles in the world, and is on the UNESCO World Heritage list. He was also responsible for creating a centralised French state, governed from the capital, and thus eradicating the remnants of feudalism. For much of Louis’s reign, Versailles was the centre of power in Europe. He was popularly known as The Sun King, referring to the notion that, similar to the planets revolving around the Sun, so too should France and the court revolve around him. All in all, he could be considered one of the greatest rulers in history.

The extravagant riches he and his court lavished in, however, are a stark contrast with the relative poverty of the people of France. His numerous wars and excessive spending effectively bankrupted the state. Due to his meddling in foreign politics, an increasing number of coalitions seeking to overthrow the snobbish king were formed throughout Europe. When he finally died in 1715, four days before his 77th birthday, he allegedly instilled the following onto his young successor Louis XV:

“Do not follow the bad example which I have set you; I have often undertaken war too lightly and have sustained it for vanity. Do not imitate me, but be a peaceful prince, and may you apply yourself principally to the alleviation of the burdens of your subjects”. 

Under foreign and domestic pressure, his successors were not able to sustain Louis XIV’s government. 74 years after his death, the ancient regime was overthrown, ringing in the start of the French Revolution.

Barack ObamaOpen Government
Fast-forward three centuries. In the Open Government initiative, American citizens are invited to tell their story, the issues that matter to them, and share their concerns, hopes and policies they want to see carried out. While there is no guarantee that anything will be done with these contributions, at the very least Barack Obama sends out a very important message. In his own words:

“I ask you to believe – not just in my ability to bring about change, but in yours.”

Unlike other presidential candidates, Barack Obama did not solely rely on the social elite for backing. He turned to everyday people. Besides an unprecedented sum of over $650M in campaign funds, this resulted in a thing of far greater value: the support of the public!

Two types of executives
How do these examples of Louis XIV and Barack Obama relate to companies striving to become more innovative? While there are many similarities between company politics and country politics, I would like to focus on leadership. In organisations, both large and small, we can distinguish between the same two types of people:

Rulers: I know everything better then you do. I tell other people what to do, how, and when to do it, because I’m the boss. I will get rid of you if you don’t agree with me. I respect people in more powerful positions then me. I doubt other people’s opinions and ideas. I keep juniors, subordinates, and ‘crazy people’ down. I deserve praise and reward for my accomplishments. I am never to blame for failure. I am afraid for my reputation and position of power, which I attained by bragging and bluffing. I start all my sentences with the same letter.

Leaders: All the people in the world together know far more then I do. Everyone deserves respect, regardless of their position. People that have a fresh and unusual view can provide valuable insights. Sharing with, and learning from others is not scary. Investing in a durably successful organisation is most important. Failure is a chance to learn. Doing a good job and making sure others can do a good job as well is most important.

As you might have noticed, the above is somewhat polarised for the sake of argument. Additionally, it is important to note that ‘rulers’ are not necessarily obnoxious or conservative people. Several of them are actually highly innovative and successful individuals. Their personal successes are, however, quite irrelevant. Real innovation leaders bring an entire organisation, including the people in it, to a higher level of  innovativeness. An entire organisation being innovative is always more valuable and more sustainable then one person directing innovation from the throne. And, although plain old fashioned good luck is quite important, there is much evidence that truly innovative organisations continuously outperform their less innovative competitors.

Just as any company needs to be innovative and open to achieve a sustainable growth, so should the leaders of these companies. After all, when even the new president of the United States is not afraid to listen, why should the leader of any organisation be? My next blog article will give some tips on how to be an innovative leader.

So do you know any examples of either type? And which type are you?

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