Keys to Growth for 2010

by Mike Myatt

While today's post is short, it truly merits the attention of anyone still grappling with 2010 budget concerns. I'm going to share something with you that you might not want to hear, and quite frankly, something that will likely send your CFO straight into apoplexy. You don't grow a business by shrinking it. The key to corporate growth is not to fall into decline; hopefully not by default, but certainly not by design. If your 2010 plan is one that involves constriction, contraction, shrinkage or retraction, you should note that this is not what your clients and prospects are looking for.

Do you think your clients will be impressed that you're cutting staff, shrinking marketing budgets, eliminating service lines or any other item that they perceive as a limiting factor in your ability to help or add value? Know this: your clients and prospects will never see any form of bunker mentality as being beneficial to them. One of the great business myths is the theory of "remaining flat" - it simply is not possible. A business grows or shrinks - it gains ground on competitors, or loses ground to them. So my question to you is this: What are you specifically going to do in 2010 to better serve your clients, to continue acquiring and developing talent, to build your brand, and to grow your business? General George C. Patton said it best: "Never defend, always attack."

---

Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

Innovating on the Cheap

by Paul Sloane

The problem is the recession. It is hurting businesses large and small. The answer is innovation. Innovation can help you to cut costs, improve margins, retain customers, acquire new customers, gain market share and ultimately to survive. But when you are cutting costs and squeezing resources in all areas how can you find the people, time and money for innovation? Experiments are not guaranteed to succeed so it can look wasteful to fund large innovation projects.

Here are five tips to help you innovate on slender means:

1. Tell people that you want their ideas. Tell your staff, tell your customers and tell your suppliers that you want ideas that will help streamline the business, improve service, cut costs or delight customers. If you do not have an effective suggestions scheme then set one up. Listen to all suggestions with an open mind and evaluate them constructively.

2. Allocate a budget for innovation. You do not get innovation for free. You have to allocate time, people and money but you do not have to be extravagant. The most important thing is to give people some time to generate, evaluate, select and test ideas. Google famously gives all employees one a day a week for this sort of activity. You do not have to be so generous - maybe one afternoon a month will suffice. However you do it you have to create some slack for people to brainstorm and to experiment.

3. Move rapidly to prototypes. Once you have selected a promising idea move rapidly to building a model that you can show to people and review. This might be built in play dough, it might be a software mock-up, it might be a role play of a new service. Once you show it to selected customers or other stakeholders you can quickly get useful feedback.

4. Kill the losers. Set standards for innovations - e.g. Can we make money at this? Is there a real need? Can we make it work? Can we win with this? If the answers are negative then be prepared to cancel the project and move onto something else. Resources are limited and should only be devoted to potential winners.

5. Pinch other people's ideas. A cheap way to innovate is to copy ideas from other industries or other places and to try them in your business. What are they doing in Singapore or Holland or California to solve this kind of problem? What can you copy that is new for you but tested elsewhere?

Make innovation a priority, put it onto people's objectives, add it to your balanced scorecard. You have to make the current model work better and at the same time find ways to replace it with something better. Continuous innovation is very demanding - but it is the best way to survive.

---

Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Innovating with Constraints

Our October Innovation Contest winners won a signed copy of "7 Lessons for Leading in Crisis" by Bill George and the right to have their article re-published here on Blogging Innovation. Here is the first of the three winning entries:

by Tim Kastelle

I've been giving further thought to the issue of public sector innovation which I discussed briefly last week. John and I do a lot of work with people in the public sector as that makes up a fairly big part of Brisbane's economy, and I know that people often find it difficult to be innovative in that area. However, it is essential that we have good public sector innovation because large parts of our economies are in the public sector, and these parts are often very important. We just can't afford to have industries like health and education stagnate - innovation is critical in these fields, as it is in the other areas that fall within the public sector.

So what's the problem? There are a few. One is that overall, the public sector is not viewed as being very dynamic. Consequently, it does not attract a lot of attention from those of us that are interested in innovation. The Australian government is currently undertaking a review to try to devise strategies to improve public sector innovation. The website for this project includes a list of links to resources on public sector innovation (at the bottom of the page) - and you can see that there are not a lot of resources available (the project has a twitter feed too which updates new resources as they find them). This reflects a lack of interest at the levels of both research and policy.

The second issue is that government departments are often fairly risk averse - which makes innovation challenging. This issue is consistently raised by people in our innovation classes that come from the public sector, but it is a common issue for many people in other sectors as well - particularly middle managers that don't have much scope for action. When I talk to people in this situation they often say that the only way they can be more innovative is if they get more support from top management. It is true that top level support generally helps improve innovation. However, if you are waiting for increased upper management support before you start trying to innovate, in most cases, you're likely to be waiting for a long time.

There are a few things you can do to get out of the straightjacket. The main thing is to figure out how to try things. Experimenting is the key to innovating.


"The secret of fast progress is inefficiency, fast and furious and numerous failures." - Kevin Kelly


Now, obviously, failure is not a very popular idea within most government departments. The key to the whole idea though is to figure out ways to generate ideas and discard the ones that don't work as quickly and cheaply as possible. There are three steps here.

The first is to generate ideas.


"The secret to having good ideas is to have a lot of ideas, then throw the bad ones away." - Linus Pauling


Usually, this isn't the problem. People are naturally creative, and the number of untapped ideas that are in your organisation will probably surprise you. One way or another, you need to figure out how to tap into these. If you want some place to start, go to the Tom Peters site and download the Innovation Tactics paper that he has there.

The second step is the tricky one in public sector organisations - you have to select which ideas to try out. The central idea here is to look at how much authority you have. This might be as simple as signing authority - if you can authorise items worth up to $100, then what new ideas can you try to implement for $100 or less? What if you can't authorise any expenditures? The two jobs in which I've been the most innovative have actually both been in the public sector. In the first, I worked out at the start 47 ideas that I thought might make my section run better. Over 18 months, I tried out 45, at a total implementation cost of $0. At the end of that time, my section was just under 20% more effective in turning enquiries into new students, in part as a result of some of those 45 ideas that we tried. Not all of them worked, but a lot of them did - and some of the simplest had the biggest impacts. My bosses weren't too enthusiastic about new ideas when I started, but they were very enthusiastic about results. Most bosses are. So the second step is to figure out what you can get away with, and start trying things that fall within your scope of power. That's how select the ideas to try - you may have to wait on the big ones that will change the world, but if you succeed with some small ones, you may eventually get to try those out too.

The final step is getting the ideas that work to spread.


"Some people look for things that went wrong and try to fix them. I look for things that went right, and try to build off them." - Bob Stone


You need a strategy for amplifying the good ideas. Part of this is selling them to the people around you. To do this, you need to figure out which of the ideas are working. An important activity here is measurement - if you're able to measure the outcomes of your ideas, it is easier to gain support for trying more things.

Innovating is always hard. It's especially hard if you don't feel supported. But the key to innovating when you have constraints is to try things. Try as many as you can, figure out what works, and do more of that. It's a formula that you can follow in nearly every work setting. Instead of telling me why it won't work in yours, why don't you spend the time figuring out a new idea to try yourself instead?


"We have a 'strategic plan'. It's called doing things." - Herb Kelleher (Southwest Airlines)


(photo from flickr/djwudi - creative commons licensed)

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Innovating on a Tighter Budget

by Andrea Meyer


Point: Innovation doesn't have to be expensive


Story:

Current surveys indicate that more companies are reducing innovation budgets this year, but the good news is that innovation doesn't have to be expensive. Here are two stories that show how to innovate inexpensively:

J.B. Hunt was just a truck driver in the 1940s when he saw that rice mills in Arkansas were disposing of rice hulls by burning them. Rice hulls are the fluffy tough fibrous shells removed to create white rice. The waste hulls gave Hunt an idea: he contracted with the mills to haul away their rice hulls, and then he sold the hulls to poultry farmers as chicken-house litter. After Hunt's revelation of the potential value of rice hulls, others found additional innovative uses for the material: pillow stuffing, high-fiber additives for pet food, natural building insulation, filler for injection-molded plastics, and using rice hulls to improve apple juice extraction.

Similarly, old rubber tires are being ground up and made into roads and shoes. And clothing & outdoor gear maker Patagonia asks customers to bring in their worn-out Capiline® clothing (a polyester fabric) rather than throwing it away. Patagonia has devised a way to break down the discarded fabric into plastic chips and then re-spin them into new synthetic yarn. Given the increasing concerns about proper waste disposal, waste products provide attractive opportunities as no-cost or low-cost sources of innovative raw materials.

In addition to innovating with waste products, companies can leverage fallow innovations. During the early 1980s, IBM Corp was spending at least a hundred times more on R&D than Apple Inc. But upstart Apple found a way to leverage some new underutilized technologies (the computer mouse, high-resolution display monitors, the power of the 32-bit microprocessor and the graphical user interface) to create the Lisa and then the Macintosh. What existing technologies could you put to use in new ways?

Action:

• Survey existing supplies of materials and streams of byproducts


• Look for materials that are underutilized or are discarded


• Consider how those materials might be recombined, repurposed, or refurbished for other, valuable applications

For More Information:

Patagonia's Common Threads Garment Recycling Program

"Innovation to the Core" by Peter Skarzynski and Rowan Gibson

---

Author of more than 450 company case studies and contributor to 28 books, Andrea Meyer writes & ghostwrites about innovation, IT and strategy for clients like MIT, Harvard Business School, McKinsey & Co., and Forrester Research. Follow her at www.workingknowledge.com/blog and twitter.com/AndreaMeyer.

Is Your Organization Anorexic?

by Stephen Shapiro

The President of a $1 billion company once asked me to describe his organization in one word. My response?

"Anorexic."

The Vice Presidents who sat around the table nodded in agreement. They assumed that I meant there was no fat left to cut. That is not what I meant.

Anorexics often have relatively "high" body fat percentages because their lean body mass erodes along with the fat.

This is what many organizations have done. An an effort to cut costs, in addition to cutting fat, they also cut large amounts of lean body mass.

Are you thinking of further cost cutting? If so, what are you eliminating? Fat? Bone? Muscle? Vital organs? No company in history has ever "cut" its way to long-term success.

Exercise grows muscle while burning fat.

Innovation is exercise for businesses. It helps grows the organization while also enabling cost efficiencies.

During the depression, Henry Ford said, "A man who stops advertising to save money is like a man who stops a clock to save time."

The same is true for innovation. Although cost cutting may be a necessary short-term tactic, it is NEVER a strategy. If you are in cost-cutting mode, make sure that your cuts target fat and not lean body mass. In addition, be sure to exercise your organization. Invest in innovation now and you will be prepared for long-term growth and success.

P.S. I like this photo. It nicely depicts the obsession that many companies have with measuring everything in sight, yet in the end not measuring anything of value.

---

Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

Book Review - "The Silver Lining" by Scott Anthony

A couple of weeks ago I received "The Silver Lining" by Scott Anthony in the mail. "The Silver Lining" is a relatively short, easy, and pleasant read. Scott introduces several different concepts in the book in addition to the main thesis - which seems to be that companies must prune their innovation portfolios, refeature their products to meet ever-changing customer requirements, and re-tool their organizations to better deal with the constant change that is becoming the norm in the world today.

The first concept that Scott introduces is a term to refer to the current economic dis-equilibrium - 'The Great Disruption' - and the rapid change that organizations face. Here is a great quote from the first chapter:

• "The biggest silver lining for innovation is that the scarcity that is sure to result from the current economic climate is actually a good thing for innovation. Abundance is actually the root cause of many corporate struggles with innovation."

Another key focus of the book is detailing the importance of pruning your innovation portfolio. This a great analogy for re-evaluating your innovation investments, as often in cutting back selected branches you make the overall plant or tree healthier and allow it to grow stronger upwards. With innovation portfolios it is the same. Often many organizations allow too many projects to continue consuming resources that should really be 'pruned' so that those project resources can be re-deployed to help the remaining projects become more successful and complete faster.

At the same time, Scott Anthony makes the point that opportunities may exist for organizations to refeature products in ways that both reduces costs and increases sales. Pursuing this strategy can also reduce options available to potential disruptive competitors seeking to enter the market.

Smart companies will also use 'The Great Disruption' as an opportunity to re-tool their innovation capabilities and processes while also utilizing their potentially reduced innovation budget to conduct smart strategic experiments that could include exploring open innovation or low end opportunities ('learning to love the low end').

After describing how to love the low end (which is very similar to how companies should approach any disruptive innovation), Scott Anthony concludes the book with his thoughts on personal reinvention and his views on what's next for innovation.

Another favorite quote from the book (which I've heard elsewhere) suggests that you should staff up a disruptive innovation project or a strategic experiment with the best people you can find for each element (not the people that have been successful in the mainline business):

• "Good entrepreneurs don't take risk, they manage risk."

Overall, Scott makes some good points about pruning the innovation portfolio, retooling the organization for better innovation success, and addressing the low end of the market that make the book a worthwhile read.


My interview with "The Silver Lining" author Scott Anthony can be found here.

---

Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.