Sources of Insight » Creativity

High Leverage Strategies for Innovation

JD — Fri, 27 Mar 2009 17:07:13 +0000

Photo by .A.A.

I’m a fan of learning from the best. What are the high-leverage strategies that the leaders in innovation use? In “Smart Spenders, the Global Innovation 1000,” an article in strategy+business magazine, Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia write about the successful strategies that the 94 high-leverage innovators use.

Example High-Leverage Strategies
Here’s a summary of the key strategies according to Jaruzelski, Dehoff, and Borda:

Here’s a sampling of the high leverage strategies:
Have systematic ideation processes, including involving senior management in the conception and definition of new ideas.
Have competence at all stages of your value chain.
Involve end-users in your innovation strategy. Spend a lot of time focusing on where they work, where they play, where they buy, and where they learn. This helps to increase your efficiency of your new product introductions.
Favor flatter and nimbler management structures that make the innovation process more transparent to your executive team.
Keep R&D costs down by keeping R&D focused and closely aligned with your business units. This allows you to target your R&D efforts to meet specific customer needs versus doing a great deal of early-stage, academic research.
Keep an internal innovation engine running efficiently through a core engineering team that designs and developers a variety of product lines (this helps provide common engineering and design as well as actual code reuse.)
Place greater value on economies of speed, scope and skill rather than simply economies of scale.
Look outside your organization for partners, suppliers and customers for new and innovative ideas.
Build capabilities along the innovation value chain to generate significant improvements in return on your research and development spending.
Pick the elements to generate a competitive advantage based on your industry, competition and internal capabilities.

My Related Posts

Innovation Objectives

JD — Mon, 19 May 2008 02:40:00 +0000

“Innovation distinguishes between a leader and a follower.” — Steve Jobs

Innovation objectives are how you realize the potential for your business. Innovation is how you can create game changers either in the marketplace, your product, or your processes.

From what I’ve seen, the people that do best with innovation are the ones that can effectively leverage their intuition. I think the other real key is being able to turn innovation into results, both iteratively and incrementally.

In today’s world, I think another key that might not be as obvious is that innovation needs to meet applied use. If the innovation doesn’t feel real to the stakeholders, you lose support. Along these lines, it’s important to know that sometimes the market isn’t ready.

In The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter Drucker writes about innovation objectives.

Key Take Aways
Here are my key take aways:

You can innovate in your product, process or marketplace. There’s three kinds of innovation: product, process, and marketplace.
Innovation is how you grow your business. Innovation is how you transform your business into what it should be.
The toughest part is measuring the impact. The key challenge with innovation objectives is measuring relative impact and importance.

What Our Business Should Be
The innovation objective helps transform the business into what it should be:

Drucker writes:

“The innovation objective is the objective through which a company makes operational its definition of ‘what our business should be.’”

Process, Product, and Marketplace Innovation
There’s three kinds of innovation: product innovation, social innovation, and managerial innovation..

Drucker writes:

“There are essentially three kinds of innovation in every business: innovation in products or service; innovation in the marketplace and consumer behavior and values; and innovation in the various skills and activities needed to make the products and services and to bring them to market. They might be called respectively product innovation, social innovation, and managerial innovation.”

Measuring Impact and Importance
The key challenge with innovation objectives is measuring impact and importance.

Drucker writes:

“The problem in setting innovation objectives is measuring the relative impact and importance of various innovations. But how are we to determine what weights more: a hundred minor but immediately applicable improvements in packaging a product, or one fundamental chemical discovery that after ten more years of hard work may change the character of the business altogether? A department store and a pharmaceutical company will answer this question differently; but so may two different pharmaceutical companies.”

My Related Posts

Photo by Arvind.

THINKERTOYS Book Nuggets

JD — Mon, 05 May 2008 08:20:00 +0000

This post is an index of my book nuggets from Thinkertoys: A Handbook of Creative-Thinking Techniques (2nd Edition), by Michael Michalko. In this book, the author, a former Disney Imagineer, provides expert creative-thinking techniques for approaching problems in unconventional ways. You can apply the techniques to create original ideas to improve your personal life and business life.

My Nuggets
Here’s my nuggets so far …

Orchestration

JD — Mon, 14 Apr 2008 03:26:00 +0000

How do you create predictable results in your business? Once you’ve figured out that an innovation is useful and you’ve quantified its impact, how do you implement it in your system? You orchestrate it. Orchestration is the elimination of discretion to help produce predictable results. Orchestration is about creating order, standardization, and quality in a predictable way. In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber writes about Orchestration.’

Key Take Aways
Here’s my key take aways:

Orchestration is the elimination of discretion or choice. Initially I had an averse reaction to this, but then I realized the point is to carry forward what works and avoid figuring out everything on the fly. It’s about baking your lessons learned into your system so you can free yourself up to worry about other things.
The purpose of Orchestration is to create order, standardization, and quality. The point is to make your results more systematic vs. lucking into success.
Your people and systems need to be predictable. For your business to be predictable, your people and systems need to be predictable.
When your Orchestration no longer works, change it. This sounds obvious, but in practice I often see people that don’t change their approach when it’s not working. Part of it is because they don’t know it’s not working and the other part is they don’t know what to change to. That’s why I think knowing your numbers and having a lot of reference examples and a good network to draw ideas from is key.

Orchestration is the Certainty
Gerber writes that orchestration is the key for predictability:

Orchestration is the certainty that is absent from every other human experience. It is the order and the logic behind the human craving for reason. Orchestration is as simple as doing what you do, saying what you say, looking like you look — being how and who you are — for as long as it works. For as long as it produces the results you want. And when it doesn’t work any longer, change it.

Orchestration Creates Predictable Results
Gerber provides examples how Orchestration produces predictable results:

"If a blue suit works, wear it every single time you’re in front of a customer," is the dictum of the disciples of Orchestration. "If ‘Hi, have you been in here before?’ works better than anything else you’ve tried, say it every single time you greet a customer." is the rule of the day from the disciples of Orchestration. By every disciple of Orchestration, I’m referring to anyone who has ever seriously decided to produce a consistent, predictable result in the world of business, no matter what business they are in.

If You Don’t Own It, You Can’t Depend On It
Gerber writes that Orchestration is the key to owning your business:

Because every founder of every great Business Format Franchise company, whether it is franchised or not, knows one thing to be true: if you haven’t orchestrated it, you don’t own it. And if you don’t own it, you can’t depend on it. And if you can’t depend on it, you haven’t got a franchise. And without a franchise no business can hope to succeed.

A Franchise Is Your Unique Way of Doing Business
Gerber writes that your franchise is your unique way of doing business:

If by a franchise, you understand that I’m talking about a proprietary way of doing business that differentiates your business from everyone else’s. In short, the definition of a franchise is simply your unique way of doing business. And unless your unique way of doing business can be replicated every single time, you don’t own it. You have lost it. And once you’ve lost it, you’re out of business!

Your People and System Must Be Predictable
Gerber writes that orchestration is the key for predictability:

The need for Orchestration is based on the absolutely quantifiable certainty that people will do only one thing predictably — be unpredictable. But for your business to be predictable, your people must be. Then what? Then the system must provide the vehicle to facilitate predictability. To do what? to give your customer what he wants every single time. Why? Because unless your customer gets everything he wants every single time, he’ll go someplace else to get it! Orchestration is the glue that holds you fast to your customer’s perceptions.

Discretion is the Enemy of Order, Standardization and Quality
Gerber writes how Orchestration is about eliminating choices to achieve order, standardization and quality:

Orchestration is the elimination of discretion, or choice, at the operating level of your business. Without orchestration, nothing could be planned, and nothing anticipated — by you or your customer. If you’re doing everything differently each time you do it, if everyone in your company is doing it by their own discretion, their own choice, rather than creating order, you’re creating chaos. As Theodore Levitt says in his stunning book, Marketing for Business Growth, "Discretion is the enemy of order, standardization, and quality."

My Related Posts

Quantification

JD — Mon, 14 Apr 2008 02:22:00 +0000

"The measure of choosing well, is, whether a man likes and finds good in what he has chosen." — Charles Lamb

How do you know whether your innovations are working? You need to quantify your results. This is how take a business from good to great. You experiment, you innovate, and you measure your results. You carry forward what works and you throw out what doesn’t. If you don’t have the numbers, you’re flying blind.

In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber writes about the need for quantifying your results.

Key Take Aways
Here are my key take aways:

Know your numbers. Start with what you can quantify that’s meaningful for your business. Find ways to find the numbers for things that may not be so easy to get, but may produce better results.
Your numbers are your health chart. Remind yourself that the purpose of quantification is to chart your business’s health. You need to know whether innovations are improving or decreasing your performance.
Wear your multiple hats. In a small business, you wear multiple hats. Remind yourself that your inner entrepreneur, manager, and technician are always at odds. If it helps, think of switching hats. When you go into bean-counting mode, put on your "manager" hat.
Make data-driven decisions. In the absence of data, you have to use your intuition and pattern matching. If you make your decisions purely by emotion, that’s a recipe for failure. It’s why most people lose at casinos. You need to make data-driven decisions.
Carry forward what works. This is where your numbers serve you. It can be tough to break a habit or practice that’s not working, particularly if you have an emotional attachment to it. If you have the numbers, it’s easier to convince yourself to make meaningful change and throw out what’s not working.

Innovations Need to be Quantified
If you don’t quantify your results, you don’t know whether your innovations work. You need to quantify your innovations.

Gerber writes:

“By it’s own, Innovation leads nowhere. To be effective, all innovations need to be quantified. Without Quantification, how would you know whether the Innovation worked? By Quantification, I’m talking about the numbers related to the impact an Innovation makes. The sad fact is that Quantification is not being done in most businesses. And it’s costing them a fortune!”

The Numbers Tell You the Value of Your Innovation
Numbers tell you the value of your innovations.

Gerber writes:

“For example, how would you know that by changing the words you use to greet an incoming customer you produced a 16-percent increase in sales unless you quantified it by (1) determining how many people came in the door before the Innovation was put into effect; (2) determining how many people bought products and what the dollar value of those products were before you changed the words, and what you said to produce those sales; (3) counting the number of people who purchased something; (5) determining the average unit value of a sale; and (6) determining what the improvement was as a result of your Innovation? These numbers enable you to determine the precise value of your Innovation.”

Quantify Everything Related to Your Business
Quantify everything related to your business.

Gerber writes:

“Begin by quantifying everything related to how you do business. I mean everything. How many customers do you see in person each day? How many in the morning? In the afternoon? How many people call your business each day? How many call to ask for a price? How many want to purchase something? How many of product X are sold each day? At what time of the day are they sold? How many are sold each week? Which days are busiest? How busy? And so forth. You can’t ask too many questions about the numbers.”

Without the Numbers You Can’t Know Where You Are
Without the numbers, you don’t know where you’re improving.

Gerber writes:

“Eventually, you and your people will think of your entire business in terms of the numbers. You’ll quantify everything. You’ll be able to read your business’s health chart by the flow of the numbers. You’ll know which numbers are critical and which are not. You’ll become as familiar with your business’s numbers as your doctor is with your blood pressure and pulse rates. Because without the numbers you can’t possibly know where you are, let along where you’re going. With the numbers, your business will take on a totally new meaning. It will come alive with possibilities.”

My Related Posts

Photo by aussiegall.

Innovate in Your Approach

JD — Mon, 14 Apr 2008 01:30:00 +0000

“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” — Peter F. Drucker

Which innovations can amplify your impact or save you time or create more value? Innovations in your approach. It’s one thing to try to innovate in your products. It’s another to innovate your process. Innovating in your process can unleash your capability, create more value, reduce costs, … etc. To get in the right mindset, you have to think of your business as a product. It doesn’t matter whether you’re working from home or working in a large corporation, your system of results is an opportunity for innovation.

I’ve experienced the benefits of process innovation first-hand. I’ve run multiples projects and multiple teams and I’ve experimented with various approaches over the years. Having created both product innovations and innovating in terms of approach, I think it’s approach innovations that carries me further and continue to serve me. In fact, it’s my changes to my approach that help me unblock innovation and turn insights into results. It’s my systems for results that are far more important than any particular product.

In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber writes about focusing your innovation efforts on your business habits and practices.

Key Take Aways
Here are my key take aways:

Innovation does new things. I like this distinction between creativity and innovation. I often see smart people with great ideas get stuck thinking, but not doing doing and learning. Analysis paralysis is one of the worst enemies of results.
Innovate in your approach. Your approach is your system for results. If you innovate here, you can amplify your impact, save time and create more value.
Your business is your product. Adopting this mindset helps you shift from thinking about innovation in your product, to innovation in your process.
Know your system for results. Hunt and gather your processes and procedures. Walk your processes end-to-end and you’ll quickly start to find areas for improvements.

Innovation Does New Things
Creativity is thinking, but innovation is doing:

Gerber writes:

“Innovation is often thought of as creativity. But as Harvard Professor Theodore Levitt points out, the difference between creativity and Innovation is the difference between thinking about getting things done in the world and getting things done. Says Professor Levitt, ‘Creativity thinks up new things. Innovation does new things.’”

Innovate Your Approach
Focus your innovation efforts on your process.

Gerber writes:

“The Franchise Revolution has brought with it an application of innovation that has been almost universally ignored by American business. By recognizing that it is not the commodity that demands Innovation but the process by which it is sold, the franchisor aims his innovative energies at the way in which his business does business. To the franchisor, the entire process by which the business does business is a marketing tool, a mechanism for finding and keeping customers. Each and every component of the business system is a means through which the franchisor can differentiate his business from all other businesses in the mind of his consumer.”

Your Business is the Product
Your business is your product:

Gerber writes:

“Where the business is the product, how the business interacts with its consumer is more important than what it sells. And how doesn’t have to be expensive to be effective. In fact, some of the most powerful Innovations have required little more than the change of a few words, a gesture, the color of clothing. Innovation, then, is the mechanism through which your business identifies itself in the mind of your customer and establishes its individuality. It is the result of a scientifically generated and quantifiably verified profile of your customer’s perceived needs and unconscious expectations.”

The "Best Way" Skill
Innovation is the "best way" skill:

Gerber writes:

“It is the skill developed within your business and your people that is constantly asking, "What is the best way to do this?" knowing, even as the question is asked, that we will never discover the best way, but by asking we will assuredly discover a way that’s better than the one we know now.

In that regard, I think of Innovation as the "Best Way" skill. It produces a high level of energy in every company within it’s nurtured, fed, and stimulated, energy that in turn feeds everyone the company touches — it’s employees, customers, suppliers, and lenders. In an innovative company everyone grows. There’s no doubt about it: Innovation is the signature of a bold, imaginative hand.”

My Related Posts

Photo by mckaysavage.

Personal Invention Quotas

JD — Mon, 07 Jan 2008 12:33:00 +0000

Can setting a quota, help you accomplish more? It worked for Thomas Edison. In Thinkertoys: A Handbook of Creative-Thinking Techniques (2nd Edition), Michael Michalko writes about how Edison used quotas to improve his results.

Thomas Edison’s Personal Invention Quotas
Michalko writes:

“Thomas Edison held 1,093 patents. He was a great believer in exercising his mind and the minds of his workers and felt that without a quota he probably wouldn’t have achieved very much. His personal invention quote was a minor invention every ten days and a major invention every six months. To Edison, an idea quota was the difference between eating beefstake or a plateful of Black Beauty stew.”

Key Take Aways
Quotas are a powerful tool for improvement. For example, if you want to change a particular behavior, count the number of times you perform that behavior each day.

Once you set a benchmark, you can tune it. If you first get in your quantity, you can then get in your quality. For example, I wanted to comment more in blogs. First, I decided I would comment in five blogs a day, while I ramp up. Next, once I found my rhythm, I decided to focus on efficiency. From there, I can either improve the quality of my comments, or increase my quota.

I haven’t applied quotas to creating ideas. I already have a large backlog. Instead, I’m considering quotas to implement my ideas.

Storyboarding the Disney Way

JD — Thu, 27 Dec 2007 16:19:00 +0000

Storyboarding is a brainstorming technique where you stick pictures on a wall to frame out stories. In the book, Thinkertoys: A Handbook of Creative-Thinking Techniques (2nd Edition), Michael Michalko writes about how Walt Disney originally came up with the idea of storyboarding to see at a glance how far along a project was.

What Is Storyboarding
Michalko writes:

“Storyboarding can be likened to taking your thoughts and the thoughts of others and making them visible by spreading them on a wall as you work on your problems.”

The Story of Storyboarding
Michalko writes:

“Walt Disney came up with the idea of having his artists pin their drawings on the walls of the studio in sequence so he could see at a glance how far along the project was. Each scene was then used as a point around which a complete story could be told. The story was told on a wall covered with a special kind of board, hence the term ‘storyboard.’”

How To Storyboard
Michalko outlines the following guidelines:

Topic. Tape or pin the topic card on the wall. In our example, the topic is to “create a new restaurant.”
Purpose. Each brainstormed purpose is written on a card and posted beneath the “purpose” card.
Headers. Identify and list headers, which are primarily the major issues, attributes, or solution categories of the process.
Miscellaneous. It’s a good idea to include a miscellaneous header to contain all those items that don’t fit within the other categories.
Brainstorming. Group members use each category as a stimulus for problem solutions and write these ideas, solutions, and thoughts on cards.
Hitchihiking. During a storyboard session, consider all ideas relevant, no matter how impractical they appear.
Flexibility. Keep the storyboard flexible and dynamic.
Incubating. The process continues until the group generates a sufficient number of ideas or time is called.

Key Take Aways
I use storyboarding as a software development technique for framing out user experiences. I’ve used the technique effectively over the years, but didn’t know it was originated by Disney. I think the key to the storyboards is that they help you get the big picture before spiraling down on the details. At the same time, they’re a useful backdrop to elaborate on a given area as needed. The real beauty is that everybody can talk in pictures, so it can help get over communication barriers – what you see is what you get (WYSIWYG.)

Additional Resources

Diagnosing Your Portfolio

JD — Sat, 22 Dec 2007 05:02:00 +0000

Your business situation is unlikely to be a pure example of a startup, turnaround, realignment or sustaining-success situation. At a high-level your situation may fit reasonably neatly into one of these categores. But as soon as you drill down, you will discover your managing a portfolio – of products, projects, processes, plants, or people — that represents a mix of STARS situations. In The First 90 Days: Critical Success Strategies for New Leaders at All Levels, Michael Watkins writes about systematically assessing your portfolio.

Diagnosing Your Portfolio
You use four categories to assign your products, processes, projects, and people.)

How To Diagnose Your Portfolio
Watkins suggests the following approach to diagnosing your portfolio:

Assign the pieces in your new portfolio (products, processes, projects, plants, and people) to the four categories.
Given this arrangement, how will you manage the various pieces differently? What do you need from them? What do they need from you?
Think sysemtically about challenges and opportunities in each piece.
Identify the common language with which to talk to your new team about why and how you are going to manage various pieces differently.

Key Take Aways
I think it’s great to call out the fact that different aspects of your organization (people, processes, products) can be in very different situations or maturity levels.

Start-ups. I think when you’re in a new start up, it’s a more level playing field.
Mature organization. When you’re in an organization that’s past the general startup phase, I think the “ah-ha” is that you might not pay attention to how vastly different the situations your people, processes, and projects might be. For example, your products might be very mature, while your processes are still in start-up. Some people might be in start-up or turnaround due to turnover, while some projects might be in realignment.

I like the fact that Watkins lays out a system for analyzing your portfolio based on cycles and situations.

My Related Posts

Fear of Becoming Who You Truly Are

JD — Sat, 26 May 2007 13:30:00 +0000

Is the fear of failure holding you back? Maybe not. Maybe it’s actually the fear of success. In The War of Art: Break Through the Blocks and Win Your Inner Creative Battles, Steven Pressfield writes about how we fear becoming who we truly are.

Key Take Aways
Here’s my key take aways:

That little voice inside that tells you that you’re capable of more is right.
It’s a path of self-discovery that can sometimes be lonely.
As you become who you’re really capable of, you’ll lose some friends, but find new ones.

You’re Capable of More
Pressfield writes, “We fear discovering more than we think we are. More than our parents/children/teachers think we are. We fear that we actually possess the talent that our still, small voice tells us.”

Why Fear Success?
Pressfield writes, “We fear this because, if it’s true, then we become estranged from all we know. … We will lose our friends and family who will no longer recognize us. We will wind up alone, in the cold void of starry space, with nothing and no one to hold on to.”

But is it really that bad?
Pressfield reveals a surprise, “Of course, this is exactly what happens. But here’s the trick. We wind up in space, but no alone. Instead we are tapped into an unquenchable, undepletable, inexhaustible source of wisdom, consciousness, companionship. Yeah, we lose friends. But we find friends too. And they’re better friends, truer friends. And we’re better and truer to them.”

Photo by Violator3.