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What Does “Innovation” Mean? Many Things.

Photo of book splayed open with colorful drawings of trees, and buildings, clouds, an airplane, charts, people, star and sun.  Depicting the many types of ideas that people think of.

Originally posted August 2011.  Revised January 2018.

A colleague told me he hadn’t realized that when I talk about innovation I am often referring to improvements in processes, workflows, and efficiency, in addition to new product and service developments. So, let me set the record straight.

According to The Oxford American Dictionary, innovation is defined as: n. Change, alteration, revolution, upheaval, transformation, metamorphosis, breakthrough; new measures, new methods, modernization, creativity, ingenuity, inspiration….Green tree sprout off of branch

Therefore, "change" and "new methods" can be something as modest as altering the steps in verifying data to ensure greater accuracy, or ordering a piece of equipment so that fewer people need to be involved. Minor “tweaks,” collectively, can be world changing. Toyota became the largest and “most efficient” car manufacturing company in the world not based on revolutionary, head-turning Tesla-like designs (although it has certainly has had breakthrough designs of its own). What Toyota has mastered is a whole other realm of innovation:

"… Small incremental innovations [have] snowballed over time into huge improvements in productivity, efficiency and output."  

 

Improving Processes — Keeping it Simple in the Spirit of "Kaizen"

It is important not to conflate an openness and commitment to improving processes with adopting formal process improvement systems such as Lean and Six Sigma. A future blog post will provide a high-level overview Lean and Six Sigma, as well as Agile. In short (while there is some interrelationship between them) these are disciplined, multi-step methodologies for revealing and eliminating: a) waste in time, energy, and resources (Lean); b) inconsistencies in production quality (Six Sigma), and c) for speeding up development and leaning cycles (Agile). The latter, Agile, has been primarily used in software development, but many believe its use would improve the outcomes and efficiency of most projects.

There are times when these frameworks utilize creative thinking, and at others, the intense drive for speed and exact measurement can stifle it. In order to maximize the benefits of divergent thinking, depending on the stage of the cycle within any one of these methodologies, process leaders must hold fast to a commitment to balance, and ensure there is sufficient time for the creative ideation and reflection process.

Toyota has honed each of these systems to a high art. But they are viewed only as tools within their overarching approach called "Kaizen,” which is Japanese for “change for the better” or “continuous improvement.” Kaizen itself is not a specific tool, but rather, it is a mindset or value system, and a "journey."

Colorful drawing of several ants working together to place a twig to bridge a gap.With the belief that everything can be improved and performed more efficiently, and that continuous improvement is everyone's business, just as the stand-out leaders in the IBM CEO study did, Toyota requests every one of its employees to help "identify problems and then develop and implement ideas to solve [them]." (My most recent information estimates all Toyota employees contribute an average of ten improvement suggestions per year, from line-workers, to administrative assistants.)

In the spirit of Kaizen, in this article, we are referring to improving processes in its simplest form. On any given day at our work, most of us have ideas pop into our heads for how things could be more efficient or effective. Innovation management expert Langdon Morris writes that “seeing things as they are and things as they could be” is the creative tension that is foundational to innovation.

Many American companies that have adopted Lean and Six Sigma tools have fallen short of achieving the results that their Japanese counterparts have. Some ascribe this to a failure to fully understand the art of kaizen and the balance between:

  • Applying the rigorous systems of Six Sigma, and Lean
  • With taking adequate time for divergent thinking and stepping back
  • With drawing creative continuous improvement ideas from the ingenious rank-and-file humans who come to work for them every day.

Unless leaders put processes in place for employees to share their ideas, and then to vet them and experiment with those that may be viable, rhetoric aside, they are not creating innovative workplaces. The cost of not implementing these is a tremendous loss of brainpower, opportunities, and financial and human resources. Regardless of what great employee benefit programs are offered, their organizations' rates of dissatisfaction and turnover will be higher than had they engaged the talents of their employees in continuous improvement.

Other Forms of Innovation:

Now that we've explored the over-arching concept of process improvement, let's look at some other viewpoints. Brownell Langdrum of Draw Success (www.DrawSuccess.com) supplemented her own list of types of innovation with those generated by a group of chief innovation officers from companies such as Google, Mattel, and Hewlett-Packard. A few of these are included below; some overlap, and some "hairs might be getting split." But it's an interesting prompt for thinking through the various areas where we can take our questions and wonder if there might be better ways… (In looking at her full document, you will find that some of the descriptions are quite original themselves.)

Improvements in internal operations:A phot of a round gold-framed item that looks like a compass, but has the word "Quality" toward the top, and the word "Productivity" toward the bottom.

  1. 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.
  2. Financial 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.
  3. Process Innovation encompasses the implementation of a new or significantly improved production or delivery method.
  4. Systems Innovations includes introducing a new infrastructure or system, which could produce new sectors, and induce major change across several areas of business.

Fireworks over a bridge at nightAnd now for the Flashier forms of Innovation:

  1. Breakthrough, disruptive or radical innovation: These involve launching entirely novel products or services.  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.
  2. 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.
  3. Incremental Innovation 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, makes it more convenient, or faster.
  4. Marketing Innovation involves development of new marketing methods with improvements in product design or packaging, product promotion, communication or advertising, pricing or distribution.
  5. 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.
  6. Service Innovation: Compared to goods or product innovation or process innovation, service innovation delivers ways to improve the delivery of a service or expertise and is both interactive and information-intensive.
  7. Technological Innovation 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 hearing or using the term “innovation,” be aware that it often refers to simple improvements in workflows and processes. Creating environments that challenge all employees to help lead continuous improvement can result in organizational benefits that go far beyond what any one mind could ever have imagined.   

Two intersecting ripples in placid blue water.

 

This week, we'll take a not-so-happy look at the state of affairs in many organizations: underlying blocks to innovation.  Gotta look at what’s broke to be able to fix it!  Next week, I promise the happier view, looking at solutions and inspiring best practices being used by innovative companies. 

Ducks in a row According to Bloomberg Businessweek’s “Most Innovative Companies” article, “Most businesses operate in ways that are antithetical to innovation.  They want stability, predictability, avoidance of risk…”  But “innovation is more about managing risk” than avoiding it…” [i]  The functions of quality control and Six Sigma are about “control.”  “The cultures of most organizations are set up to resist fluctuation and purge deviants,”[ii] known to others as “the innovator’s DNA.”

“But innovation is all about novelty and the unexpected…. innovators upset the apple cart, and move the cheese!” [iv] “In almost every company there are the ‘rebel’ thinkers, people who are always looking for ways to improve things, solve problems, individuals that look to the future, not the present or the past.” [v]  Research varies, but reports that 50-90% [vi] of all new product innovations “fail” at even the most successful companies. 

Given this predominant modus operandi, most organizations have a lot of work to do so that employees will feel safe enough to openly share their ideas and take risks.  A great amount of trust must exist in an environment in order for innovation to take place.  Very hierarchical “Win-lose organizations usually are not trusting environments…” [vii] In short, a sense of trust, safety, and partnership are key to innovation which is “a collaborative endeavor… There is little innovation without collaboration, and there is no collaboration without trust.” [viii]

Parallel Organizations: “Skunk Works”:

Some believe that it may be more efficient for large organizations to start satellite entrepreneurial organizations to germinate and develop the innovative ideas, rather than undertaking the significant task of changing the ways and culture of the primary organization.  These sub-organizations are often called “skunk works” or “skunkworks”: “groups within an organization given a high degree of autonomy and unhampered by bureaucracy,” tasked with working on various projects. (Wikipedia)  The term "Skunk Works" is a registered trademark of Lockheed Martin, which by some accounts, was responsible for the creation of both the practice and term around 1943. 

This model will be explored in an upcoming post, as well.  However, I will say that I am highly skeptical about the wisdom of viewing this approach as the panacea.  It may be best for some rapid solutions or time-to-market “hits.”  However, it does not solve two significant and interrelated problems.  By simply handing over creative thinking and innovation to the parallel, more agile “David” structure versus forcing the larger "Goliath" organization to reshape its management practices leaves the same problem in place: the creative ideas and full range of talents of all of its employees continue to be blocked and wasted.  “Skunk work” organizations can only do so much.  What if the creative genius of everyone within the entire primary organization was cultivated and set to work – what would be possible then? 

As the 2010 Boston Consulting Group report recently summarized in this blog pointed out (and other studies concur) – U.S. businesses do not have time to leave the creative thinking to the few.  All hands are needed on deck.  For the first time since Bloomberg Businessweek began ranking the Most Innovative Companies in 2005, the majority of corporations in the Top 25 are outside the U.S. as new global leaders emerge from Asia.

From My Soapbox… 

I believe the primary shifts that need to occur boil down to this:  “In many organizations, the Exclusive Gate real thinking is seen as the purview of a privileged few.”[ix]  There’s the rub!  From my professional experience, from what I learned in my organizational development master's program, and based on the research I have conducted thus far, innovation and management bottle-necking cannot co-exist.  That’s what many of the IBM CEO study innovation leaders were telling their colleagues.  “Flatten thy organizations!”  Lose, or certainly lessen the hierarchy. 

 “People are dying to bring their passionate, authentic selves to their jobs.  In most cases, their jobs often won’t let them.  These people often represent the undervalued intellectual capital in a company.  Choke personal creativity, and you choke that organization’s chance to flourish.” [x]

Mannequin headsAs the saying goes, “A good mind is a terrible thing to waste.”  Sadly, most organizations, from corporations to small nonprofits to governmental agencies, are wastelands of brilliant, potentially profitable or otherwise beneficial ideas that were smothered by others before they were allowed to see the light of day.

And on a More Cheerful Note

In the next post, I’ll share specific practices being utilized by some to create a “thinking organization that encourages discovery and celebrates new ideas and the people who generate them.”  And then how they gather, vet, and prototype those ideas.  I hope you'll send in suggestions for some of the best practices you've encountered, as well!  Butterfly freedom image

 

 


[iv] Langdon Morris, “Creating the Innovative Culture: Geniuses, Champions, & Leaders,” InnovationLabs. (2007).

 

 

 

 

 

 

[vi] “50 Ways to Foster a Culture of Innovation,” Idea Champions puts it at 50-70% and Wikipedia offers the 50-90% figure.

 

 

 

 

 

 

[vii] Langdon Morris, “Creating the Innovative Culture: Geniuses, Champions, & Leaders,” InnovationLabs. (2007).

 

 

 

 

 

 

[viii] Langdon Morris, “Creating the Innovative Culture: Geniuses, Champions, & Leaders,” InnovationLabs. (2007).

 

 

 

 

 

 

[ix] “Fostering an Innovative Company Culture,” EOS Strategies White Paper (2010) attributed to Daniel D. Elash, Ph.D., “Thought Partnerships Build A Company's Thinking Skills.”  (2003). 

 

 

 

 

 

 

[x] “Fostering an Innovative Company Culture,” EOS Strategies White Paper. (2010).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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