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Innovation is a Banquet! –So Why Are So Many Leaders Starving to Death?!

I’m actually taking great liberties with the classic quote, “Life is a banquet, but most poor suckers are starving to death!" from Patrick Dennis’s book and Broadway hit, “Auntie Mame.”  

My point being that although there are countless ways to engage our creative problem-solving brains to innovate day in and out, I am not optimistic that the majority of Americans in the business, non-profit, or governmental sectors will access this cornucopia before a lot more damage is done to our economy, environment, quality of life, and future potential.

For many, the word “innovation” is just a buzzword.  They fail to understand that innovation is a state of mind and an approach, not a commodity that one can just order up, like a pizza, or flip on with a switch.  Thinking that one can just make a few minor adjustments within one’s organization to become innovative is like having an argument on the cell phone while driving 90 miles an hour to get to a retreat center, and expecting serenity or enlightenment to be waiting at the door upon one’s arrival – It just doesn't happen that way.

And this is why it is projected that by the year 2020, only one out of five S&P 500 companies will still exist (findings of a comprehensive study published in Creative Destruction by R. Foster and S. Kaplan).  The majority of companies simply will not have adapted to the changing world, and will therefore make themselves vulnerable to being taken over, sold off, broken up, or bankrupted.

I’m currently listening to the audiobook, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back, co-authored by international journalist Thomas Friedman (author of the blockbuster The World is Flat) and American foreign policy professor Michael Mandelbaum.  Like the authors, I consider myself to be a “realistic optimist.”  By which we mean that it is only by clearly taking in the “bad news” — the looming threats facing our companies, institutions, and economy — that we have any chance to do what is necessary to adapt our mindsets and correct our course.

Like Friedman and Mandelbaum, I too, still believe in “Yankee Ingenuity” and that we have the collective capacity to rise to the occasion and deal with great challenges, just as Americans did in The Great Depression, World War II, and the race to the moon.  But we can’t even begin until we pull our heads out of the sand.

When it comes to business, I am enough of a capitalist to believe in the survival of the fittest.  On one hand, I believe that companies led by short-sighted, arrogant leaders and managers should fail.  It’s best for them to get out of the way to make room for other ventures led by those who are wiser, more humble, and better attuned to both the world around them and to the intelligence and talents within their ranks.

The tragedy won't be the auctioning off of the brick and mortar and mastheads of these companies themselves over the next decade.  Rather, it will be the human costs resulting from the bad choices made by those leaders: the millions of talented people who will lose their jobs and livelihoods, as well as the loss of tax revenues that will further cripple our society.

And then “four out of five” of these US companies will fail?! – Even if it were half that (e.g. 51% of CEO's in the 2010 IBM CEO study expressed concerns regarding their companies' futures for lack of creative thinking abilities) — what part of economic catastrophe do we still not understand?!  Neither manufacturing jobs or increasingly outsourced pink and white collar services will be returning from our lower-cost overseas competitors in any significant numbers.  That leaves American creativity and inventiveness to carry our economy forward.  Yet we allow Brazil, India, and China to far outspend us in innovation (Boston Consulting Group Report, 2010) as the previously unchallenged lead we held in patent application filings now steadily shrinks. http://economix.blogs.nytimes.com/2010/10/06/china-poised-to-lead-world-in-patent-filings/ & http://www.wipo.int/pressroom/en/articles/2012/article_0001.html

Even among those in management who are talking about innovation, many don’t seem to grasp the irrefutable causal relationship between management style and innovative culture.  I don’t believe that most American managers or the consulting professionals upon whom many of them rely, understand this fundamental reality: sustained innovation cannot exist in hierarchical, siloed, watch-your-back organizations.

“Management innovations” are necessary in order for other forms of innovation to see the light of day.  It has been stated in numerous ways throughout these blog-posts that an organizational culture that fosters an innovative mindset and which produces winning results requires authentic mutual trust and respect throughout the organization.  As the stand-out CEOs in the IBM 2010 Global CEO survey (“Capitalizing on Complexity”) indicated, trust and innovation are the means and ends and involve:

  • Cross-departmental and external stakeholder collaboration
  • Efficient and open communication in which mistakes are valued as educational opportunities rather than something to be covered up or blamed on someone else
  • Comfort with ambiguity, experimentation, and trial by error
  • Encouragement to question the status quo for the sake of continuous improvement
  • Processes and reward systems for fully engaging employees in contributing ideas for continuous improvements and increasing problem-solving autonomy throughout the ranks.

All of these necessitate a collaborative, versus a command-and-control style of management.  Evidence abounds that the most successful U.S. companies (like Southwest Airlines, Google, and Apple) flatten their organizations and, far more than average companies, value and foster both the creativity and critical analysis of “whole brain” thinking at all levels.

Yet evidence and logic do not persuade many in leadership whose perceptions continue to be clouded by barriers of their own making.  I am not optimistic that most organizational leaders in the U.S. are willing to trust and develop their employees’ abilities enough to relinquish control, because, as is said in Twelve-Step programs, their pain isn’t deep enough yet.  –If only their poor choices wouldn’t inflict so much pain on the rest of us.

 

However… despite my concerns expressed above, as a dedicated realistic optimist, I will continue to focus my attention not on those who stubbornly fail to grasp the paradigm shifts that are necessary, but rather on the great innovators in all walks of life working with their creative muses and collaborating all over the world.  I will feed my spirit and mind by exploring and learning along with those equally excited by the possibilities and the array at the banquet table!

Bon appetite!

 Mangia!

The next post will further explore management innovation with a review of Gary Hammel’s great Harvard Business School article, “The Why, What, and How of Management Innovation.”

 

 

I am sad to have just learned of Steve Jobs' passing.  The news arrived via a friend's email that I received on my wonderful MacBook.

Screen shot 2011-10-05 at 9.17.38 PM

To watch this tribute:  http://www.wired.com/epicenter/2011/10/jobs/

 

He was the epitome of one who ceaselessly asked, "What if?" and "Why not?"  I find the quote of his below to be inspiring and moving.

At a 2005 commencement address at Stanford University, Jobs shared the philosophy that drove him.

“Your time is limited, so don’t waste it living someone else’s life,” Jobs said. “Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

 

Sweet dreams, Steve.  And thank you.

 

 

 

Tree bud A friend recently said he didn’t know that when I talk about innovation I am referring to improvements in processes, workflows, and efficiency, in addition to new product and service development.  So, let me set the record straight.

According to The American Heritage Dictionary (2006), “innovation” is defined as:
n. 1. The act of introducing something new. 2. Something newly introduced.

In Oxford American, it’s:
Change, alteration, revolution, upheaval, transformation, metamorphosis, breakthrough; new measures, new methods, modernization, creativity, ingenuity, inspiration….

So, as the terms "new methods" and “new measures" don’t exactly indicate radical marketing breakthroughs or revolutionary unique products, being innovative can simply mean applying ideas to doing routine procedures in somewhat more efficient or more effective ways.

Making Improvements in Processes vs. "Process Improvement":
The term "process improvement," for some, brings a system like “Six Sigma”to mind.  Although there is resounding evidence that formal programs such as Sigma have made significant contributions toward achieving greater efficiency and eliminating waste, this sort of system has been found to be detrimental to the creative process in research and development departments, such as the one at innovative 3M, as reviewed in an interesting Business Week article

Many of us would agree that it's a matter of balance, and one solution certainly does not fit all situations.  Of course, R&D programs should discipline themselves to be as efficient as possible in their planning, collaboration and communication processes, in vetting ideas, and rapid prototyping, without being hindered by some of the Six Sigma-type constraints.

KISS 2 K.I.S.S. (Keep It Simple, Silly!):  For some of us, the term “process improvement” simply means what it always has: modest improvements in how we do things.  Such as, “Let’s start writing the dates completed on the boxes that we’ve sorted through so no one wastes time going back through them.”  It can be any “new method” that’s never been done before that helps us to achieve greater efficiency in our workflows or improve quality – like the 100+ ideas that each Toyota employee is encouraged to contribute to their company every year.

Most of us have numerous process and work-flow improvement ideas pop into our heads at work all the time.  As Langdon Morris has written, part of innovation involves the creative tension of “seeing things as they are and things as they could be.”  Unfortunately, many people are not empowered by their employers to share their suggestions, let alone see them discussed or implemented.   This all too common situation is a tremendous waste of brainpower and resources, frustrates employees, and contributes to low moral and higher turnover.

 

Many Forms of Innovation:
At a conference on innovation, Brownell Langdrum of Draw Success (www.DrawSuccess.com) supplemented her own list of types of innovation with ideas generated by a group of chief innovation officers from companies such as Google, Mattel, and Hewlett-Packard.  A few of these are included below.   If you go to her full document, you will find that some of the descriptions are, fittingly, quite original.  Actually, the list itself could be a very useful tool for generating ideas!!

 

First, let’s look at some of forms which are perhaps less recognized as “innovation, but which relate to Quality & Productivity Clock
Improvements in internal operations:

Efficiency Innovation:

Efficiency innovation delivers ways to improve efficiency and the speed of effectiveness.  It can include internal systems and processes or ways to expedite the customer/client experience.

Financial Innovation:
This form of innovation conveys ways to increase sales, reduce costs, improve tracking of expenses, and reduce accounts receivable, along with other ways of managing finances to enhance profitability.  It also includes ideas to improve tax/audit compliance.

Process Innovation:
Process Innovation encompasses the implementation of a new or significantly improved production or delivery method.

Note: I’m a big fan of efficiency, so I believed that process improvements imply greater efficiency.  But, it was pointed out to me that changes that improve quality do not always result in greater “efficiency,” in that these can slow speed of operations down.  I think the argument can be made that improvements in quality are ultimately more efficient uses of time and effort, but for now, I yield to these as being two distinct forms of innovation.

Systems Innovations:
This form of innovation includes introducing a new infrastructure or system, which could produce new sectors, and induce major change across several areas of business.

 

Fireworks 2 And now for some of the more 
Flashy Definitions of Innovation:

Breakthrough, disruptive or radical innovation:
These forms of innovation involve launching entirely novel products or services rather than providing improved products and services along the same lines as currently marketed.  Breakthrough innovations are rare because of the risk and uncertainty, but they can deliver tremendous rewards.  They require large leaps of thought and a high-risk tolerance.

Business Model Innovation:
Business model innovation involves changing the way business is done, whether in terms of sales and distribution, marketing, pricing or any other core business strategy.

Incremental Innovation:
This is when one adds something extra to a product or service that the competition doesn't have or isn't doing.  Or, when one makes something last longer, more convenient or faster.

Marketing Innovation:
This involves development of new marketing methods with improvement in product design or packaging, product promotion, communication or advertising, pricing or distribution.

Product Innovation:
Product innovation is the introduction of a good or service that is new or substantially improved, which may include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.

Service Innovation:
Service Innovation, compared to goods or product innovation or process innovation, delivers ways to improve the delivery of a service or expertise and is both interactive and information-intensive.

Technological Innovation:
This may include coming up with new technologies to solve a problem or new uses for existing technologies.  Solutions may be high-tech (i.e. computer systems) or low-tech (a better mouse trap).

 

In summary, when I use the term “innovation,”  I mean a range of ways of putting good, new ideas into action within operations, workflows, and processes as well as in the marketplace and in solving social, environmental, and economic issues.  The organizations that will survive and thrive in this rapidly changing environment welcome and apply ideas on a wide range of topics – the more the merrier!

Lightbulb full of ideas

* WikipediaSix Sigma is a business mangement strategy originally developed by Motorola, USA in 1986.  As of 2010, it is widely used in many sectors of industry, although its use is not without controversy.  It seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. 

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