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Monday, April 26, 2010

SCAMPER Your Way to Increased Innovation

SCAMPER Your Way to Increased Innovationby Paul Sloane

One of the most popular creativity methods in my Ideas Workshop is SCAMPER. It is a productive and versatile technique for generating innovative ideas for your product or service. It forces you to look at your offering from seven different perspectives. SCAMPER is an acronym and you ask the following types of question when you use this tool:

  • Substitute: What elements of this product or service can we substitute?

  • Combine: How can we combine this with other products or services?

  • Adapt: What idea from elsewhere can we alter or adapt?

  • Maximize or minimize: How can we greatly enlarge or greatly reduce any component?

  • Put to other use: What completely different use can we have for our product?

  • Eliminate: What elements of the product or service can be eliminated?

  • Rearrange or reverse: How can we rearrange the product or reverse the process?

Here are some examples of how the SCAMPER verbs work for innovation:
  • If you were making spectacles then you could substitute plastic lenses for glass (incremental innovation) or you could substitute contact lenses for spectacles (radical innovation).

  • A mobile phone was combined with a camera and then an MP3 player.

  • The roll-on deodorant was an idea adapted from the ballpoint pen.

  • Restaurants that offer all you can eat have maximized their proposition.

  • A low cost airline like Ryanair has minimized (or eliminated) many elements of service.

  • De Beers put industrial diamonds to other use when they launched engagement rings.

  • Dell Computers and Amazon eliminated the intermediary.

  • MacDonalds rearranged the restaurant by getting customers to pay first and then eat.

Luciano Passuello has posted a section of his blog on SCAMPER together with a SCAMPER random question generator and a SCAMPER mindmap. If you want to use this tool in your next brainstorm meeting, then these resources are highly recommended.


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

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Monday, April 19, 2010

Praise the Behaviors You Want to See

by Paul Sloane

Praise the Behaviors You Want to SeeIf you want to change the culture of the organization then one of the best ways to do it is to praise the behaviors you want to see. If you want your people to be more adventurous, more entrepreneurial and more innovative then make a point of singling out for recognition those people who are acting like that. Catch someone doing something good and make a fuss of them.

Say you have a culture which is risk averse; where people are reluctant to try new things for fear of failure. Find someone who tried something that did not work and then call them out at an all hands meeting:


"John tried an experiment. Unfortunately it did not work. But you know what? Trying things is exactly what we need around here. I want to say well done to John for having the guts to push this prototype. We have learned a valuable lesson. If we are going to be innovative we have to try more things and be ready to cope with some inevitable setbacks along the way. So let's have a big round of applause and hear it for John!"


This is much more powerful than praising those whose initiatives succeeded - though you should certainly do that too. By praising someone for failing you are sending a strong message that countervails the current culture.

At your next department meeting see if you can find someone to praise for:
  • Coming up with some great ideas.
  • Trying something new.
  • Challenging the conventional way of thinking.
  • Bringing an external idea into the company.
  • Collaborating with a different department or organisation.
  • Taking a risk.
  • Making something happen.

Praise is one of the most powerful weapons in the leader's armory. It should be used often.


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

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Monday, April 12, 2010

Think What Nobody Else Thinks

by Paul Sloane

Think What Nobody Else ThinksHow can you think of things that no-one else thinks of? The answer is by deliberately taking a different approach to the issue from everyone else. There are dominant ideas in every field. The innovative thinker purposefully challenges those dominant ideas in order to conceive new possibilities.

Albert Szent-Gyorgyi, who discovered Vitamin C, said, "Genius is seeing what everyone else sees and thinking what no-one else has thought." If you can identify the standard viewpoint then survey the situation from a different viewpoint you have an excellent chance of gaining a new insight. When Jonas Salk was asked how he invented the vaccine for polio he replied, "I imagined myself as a virus or cancer cell and tried to sense what it would be like."

Ford Motor Corporation asked Edward de Bono, who originated the concept of lateral thinking, for some advice on how they could clearly differentiate themselves from their many competitors in car manufacturing. De Bono gave them a very innovative idea. Ford had approached the problem of competing from the point of view of a car manufacturer and asked the question, "How can we make our cars more attractive to consumers?" De Bono approached the problem from another direction and asked the question, "How can we make the whole driving experience better for Ford customers?" His advice was that Ford should buy up car parks in all the major city centers and make them available for Ford cars only. His remarkable idea was too radical for Ford who saw themselves as an automobile manufacturer with no interest in the car parks business.

The spectators at the Olympic Games in Mexico City in 1968 were amazed to see a young athlete perform a high jump with his back to the bar. Until then, every high jumper 'rolled' over the bar with his or her face down. Dick Fosbury, and American, introduced an entirely new approach, the 'flop', leaping over with his back close to the bar and his face up. Fosbury was ranked 48th in the world in 1967; yet in 1968 he caused a sensation when he won the Olympic Gold Medal with his unprecedented technique and a leap of 2.24metres. What he introduced was literally a leap of the imagination - and it revolutionized high jumping. Nowadays all the top jumpers use his method. He thought what no-one else thought and conceived a new method.

How can we force ourselves to take a different view of a situation? Instead of looking at the scene from your view try looking at it from the perspective of a customer, a product, a supplier, a child, an alien, a lunatic, a comedian, a dictator, an anarchist, an architect, Salvador Dali, Leonardo da Vinci and so on. Apply the What if? technique. Challenge all the common assumptions. If everyone else is looking for the richest region, look for the wettest. If everyone else is facing the bar then turn your back on it.

If you had to study a valley, how many ways could you look at it? You could look up and down the valley; you could scan it from the riverside or stand and look across it from each hillside. You could walk it, drive along the road or take a boat down the river. You could study a satellite photo. You could peruse a map. Each gives you a different view of the valley and each adds to your understanding of the valley. Why not do the same with any problem? Why do we immediately try to frame a solution before we have approached the problem from multiple differing perspectives?

The great geniuses did not take the traditional view and develop existing ideas. They took an entirely different view and transformed society. Picasso took a different view of painting; he saw cubes, shapes and impressions instead of accurate images. Einstein imagined a new approach to physics; a world where time and space were relative. Darwin conceived a different view of the origin of species; he saw how they might have evolved rather than been created. Each of them looked at the world in a new way. In similar fashion Jeff Bezos took a different view of book retailing with Amazon.com, Stelios took a new perspective on flying with Easyjet, Swatch transformed our view of watches and IKEA changed the way we buy furniture.

If we can attack problems from entirely new directions then we can think of things that conventional thinkers miss. It gives us unlimited possibilities for innovation.


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

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Monday, April 05, 2010

Breaking Down Internal Barriers to Innovation

by Paul Sloane

Breaking Down Internal Barriers to InnovationWithin larger organizations one of the biggest obstacles to innovation is poor internal communication. A silo mentality develops so that departments guard information and ideas rather than share them. People work hard - but in isolated groups. Internal politics can compound the problem with rivalry and turf wars obstructing collaboration. It can reach the ridiculous stage where the enemy is seen as another department inside rather than the competitors outside.

The leader has to tear down the internal fences, punish internal politics and reward cooperation. This sometimes calls for drastic or innovative actions.

Nokia has an informal rule that no one should eat lunch at their desk or go out for lunch. People are encouraged to eat in the subsidized cafeterias and to mix with people from outside their department. They have found that the informal meetings across departments are beneficial in sharing ideas and understanding.

Every organization has to find ways to promote internal communication and collaboration and to fight internal division and competition. Here are some ideas for breaking down barriers to communication:
  • Publish everyone's objectives and activities on the intranet so that people know what other people are working on.
  • Organize cross-functional teams for all sorts of projects. Make them as loose or as formal as you see fit but be sure that there is good mixing and that all of the departments contribute.
  • Arrange plenty of social and extracurricular activities, such as sports, quizzes, book clubs, hobby clubs, special interest groups etc.
  • Have innovation contests where cross-functional teams compete.
  • Have people frequently take secondary assignments in other departments.
  • Deliberately rearrange the office layout from time to time so that people move desks and sit with new groups (or adopt a 'hot desk' approach).
  • Organize a cross-functional innovation incubator.
  • Encourage department managers to look for ideas, input and solutions from outside their departments. Publicly praise managers who do this.

Conclusion

It is natural for departments in organizations to become more insular. As the organization grows, good internal communication becomes more and more difficult. There was a saying in Hewlett Packard: "If only HP knew what HP knows!" Very often the knowledge and skills needed to solve your problem exist elsewhere in the company. Knowledge sharing and collaboration are essential for innovation success. A key responsibility of the innovative leader is to constantly fight the silting up of the internal communications and to force contact and sharing between departments.


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

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Tuesday, March 30, 2010

Drastic Expectations for Growth and Innovation

by Paul Sloane

Drastic Expectations for Growth and InnovationMost business leaders plan modest incremental growth each year. They set expectations that they are confident can be achieved. This way everyone can get a pat on the back when the plan is reached. Growth in revenue in line with the market at 5% and growth in profits of 6% is the sort of thing. Many directors would be delighted with this sort of result.

The trouble with this approach is that it reinforces incrementalism. The easiest way to get 5% growth is by pumping up the existing products or services. We can add some line extensions. The easiest way to wring out some extra profit is to improve the efficiency of the current model or to squeeze down on our suppliers. There is no incentive here to look for big opportunities, to find entirely new sources of revenue, to conceive new business models.

The second problem is that companies, just like children, tend to conform to the expectations that are set for them. If 5% growth is considered a good result and 7% is considered a demanding "stretch" target then few in company will believe that anything greater than 7% is possible. Just like children who are constrained by their parents' lack of belief, the people in the business match their collective norms.

Outstanding companies set outstanding expectations. Businesses that want to break out of the pack demand more of themselves. This is what GE Capital says about expectations: "It is expected that we will grow our earnings by 20% per year or more. When you have objectives that are outlandish it forces you to think differently about your opportunities. If one guy has a 10% target and another has a 20% target the second guy is going to do different things."

Drastic expectations reinforce the declaration of innovation and the innovation goals. If people realize that just doing what everyone else in the market is doing is not enough, then they will respond. Average expectations about the company encourage people to think and act averagely. Drastic expectations encourage people to think innovatively and act like entrepreneurs.


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

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Monday, March 22, 2010

Key to Successful Innovation Leadership?

Be an Arsonist and a Firefighter


by Paul Sloane

Key to Successful Innovation Leadership - Be an Arsonist and a FirefighterInnovative leaders are comfortable with ambiguity. They know that there are many ways forward. They are evangelical about the vision but agnostic about how to achieve it. They have a clear strategy but are quite prepared to change tactics. They recognise the need for different leadership styles at different times. When it comes to innovative ideas they are alternately arsonists and firefighters. They go around starting fires under people - challenging them. They ask questions that confront their teams - the kinds of questions that demand answers and actions:
  • Can you find a new route to market?

  • Can you halve our service response time?

  • How can we break into the Chinese market?

  • Can we find a better way to provide this service?

  • Can you design a lighter, cheaper, faster version?

The leader starts many initiatives and then follows up to ask how things are going. The projects that are not succeeding are cut back. If the new product prototype does not please customers, or is not technically feasible or is very costly then the fire is extinguished. Lessons are learnt and the team moves on.

The leader has a restless curiosity to try new things. Some people may find this frustrating and ask, "Why does she keep asking us to try new things and then stop them just when "they are getting interesting?" The answer is that only by trying lots of different things are we likely to find the radical new initiatives that we need. Not every interesting project can be pursued to completion. Life is too short and resources are limited. It is essential to eliminate the less promising projects so that we can devote resources to those that show the most potential.

Innovative leaders are a little schizophrenic. They strive for success but fear it. They love to win yet they applaud failure. They are coldly analytical some times and hotly passionate at others. They use left brain and right brain techniques. Their management styles are sometimes tight and sometimes loose. They start fires and they put them out.


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

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Monday, March 15, 2010

Adopt, Adapt, Improve and Innovate

by Paul Sloane

Adopt, Adapt, Improve and InnovateAdapting ideas that have worked in one environment and using them in another is one of the most successful of innovation techniques. Let's look at some examples.

In 1916, a young American scientist and inventor called Clarence Birdseye went to Canada as a fur trader. He noticed that people in Labrador kept their food frozen in the snow for extended periods in the winter. When he returned to the U.S. he developed this idea and launched a line of quick-frozen foods and persuaded retailers to stock them in freezers. He created the frozen food industry. Birdseye subsequently sold his business to General Foods Corporation and made his fortune. He saw a good idea, adapted it to his business environment and implemented it.

Alexander Graham Bell studied the workings of the human ear. He adapted the idea of the eardrum vibrating with sounds into the workings of a metal diaphragm which led to his invention of the telephone.

The motto of the Round Table is adopt, adapt, improve and it is an excellent guideline for implementing new ideas in your business. Taking ideas from other environments and adapting them for use in your situation is one of the best ways of implementing novel solutions. Amar Bhide of the Harvard Business School studied the origin and evolution of new businesses. He found that over 70% of successful start-ups were based on ideas that the founders had adopted from their previous employments. They took a promising idea in a field they understood and made it better.

The person who invented the roll-on deodorant was looking for a new way to apply a liquid. He copied an idea from another field, writing, where the same problem is solved. He adapted the concept of the ballpoint pen to create the roll-on deodorant.

Samuel Morse was the inventor of morse code. He encountered a problem sending signals over long distances on the telegraph - the signal became attenuated and weak. Then one day when he was travelling by stagecoach he noticed how the coach changed horses at relay stations. He adapted this idea to put in relay stations for telegraphs that boosted the signal.

In 1941 George de Mestral went for a walk with his dog in the Jura mountains in Switzerland. On their return he noticed that many plant burrs were attached to his trousers and to the dog's coat. They were hard to remove. He examined them under the microscope and saw that they contained tiny hooks that caught in the loops of his clothes and in the dog's hair. He developed an artificial material to mimic nature and in doing so he invented Velcro.


Putting this creativity technique to work

If you have a problem try to force fit a link with a random event or animal or institution. Then adapt some ideas from that environment. Say your problem is how to motivate a lethargic team and you choose at random the Olympic Games, a tiger and a Ballet school. What sorts of ideas would that trigger? You might offer medals as recognition for top performers. You could keep records of who has achieved the fastest qualified lead or the fastest assembly time and post them on the wall or the extranet in the form of Olympic records. The tiger might suggest face painting as a trick for raising morale or it might suggest hunting - you could have a treasure hunt in the office or organise a 'hunt for sales' competition. And so on. The ballet school students practice all their exercises each day before they perform a dance. This might suggest a high-energy group practice session each morning before work proper begins. Ballet dancers practice in front of mirrors - what if we installed systems that gave us feedback to build the team's motivation?

Alternatively, try to adapt a combination between your organization's main strength and that of other organizations or people. Say you provide high level training courses and you choose at random a hospital then you might come up with the idea of a consulting accident and emergency clinic where people turn up with their problems and you help diagnose them on the spot. Or you may ponder that many people forget what they learn on training courses. In a hospital patients have ongoing physiotherapy sessions to aid recovery. This idea could be adapted so that you send out "physio trainers" to top up the learning of participants after they have completed their courses. Alternatively, if you think of the Boy Scouts then you might imagine a summer camp for some of your top clients or a "bob a job" campaign where you offer short introductory courses for new clients.

Lateral thinking is about finding new ways to solve problems. It is very likely that the current problem you face at work today has been faced and solved by other people. Maybe they were in your line of business or maybe they confronted a similar problem but in an entirely different walk of life. Why do all the brain work yourself when you can adapt someone else's idea and make it work for you?

Tips for finding ideas you can adopt and adapt:
  • Deliberately gather inputs from unrelated settings.
  • Take time out to discuss your problem with people from entirely different backgrounds. If you are a businessman then ask a teacher or a priest or a musician.
  • Read a different magazine, visit a different environment, see a foreign movie, drive a new route home, find some new inspiration in a different source.
  • Place yourself in a different environment and it will help you see concepts and ideas you can adapt. If you visit an Eskimo in his igloo, like Clarence Birdseye, you may come back with an idea as good as the one that built the frozen food industry.
  • Identify analogous situations in other fields and ask how they would be handled.

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

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Monday, March 08, 2010

Pick Your Best People to Lead Innovation

by Paul Sloane

Pick Your Best People to Lead InnovationMany businesses make the mistake of giving innovation projects to junior executives. It seems natural to hand innovation opportunities to enthusiastic and promising upstarts. But generally it is the experienced heavyweights who can overcome all the process and political obstacles that will occur.

In September 1999 Lou Gerstner, CEO of IBM, read a line buried deep in a report which said that current quarter pressures had forced a business unit to cut costs by stopping efforts in a promising new area. Gerstner was incensed and wanted to find out how often this happened. He asked J. Bruce Harreld, IBM's senior VP in charge of Strategy to find out. Harreld found a similar pattern in at least 22 other cases. IBM had plenty of new ideas but it had a remarkably hard time turning those ideas into businesses. IBM had produced many crucial inventions, such as the relational database and the router, then watched while others, such as Oracle and Cisco built huge companies around them.

Harreld investigated the causes and found that IBM rewarded short-term results and was reluctant to devote management attention and resources to rolling the dice. IBM's leaders did not spend much time on new businesses and they did not tap their "A-team" of executives to run them. "We were relegating this to the most inexperienced people," said Herrald. "We were not putting the best and brightest talent on this." (Quotes from FastCompany magazine, March 2005 issue)

Gerstner and Harreld reversed this approach. They deliberately put their most experienced and talented executives in charge of Emerging Business Opportunities (EBOs). Their mission was to find areas that are new to IBM that can yield profitable billion-dollar-plus businesses in five to seven years. The program has been a remarkable success. Between 2000 and 2005 IBM launched 25 EBOs. Three failed and were closed down but the remaining 22 produced annual revenues of over $15 billion and growth of over 40% per year.

More importantly than their revenue impact, the EBOs helped change IBM's culture. "We've become more willing to experiment, more willing to accept failure, learn from it and move on. Now being an EBO leader is a really desirable job at IBM," says Harreld.

The lesson from IBM is clear. If you want to change the culture of an organisation so that it values innovation and new business start-ups then get your most senior and best people involved in these activities. Don't delegate it to lower level staff and hope for the best.


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

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Monday, March 01, 2010

The Solution May Be Within the Problem

by Paul Sloane

The Solution May Be Within the ProblemTwo prisoners dug a tunnel from their cell 80 feet to escape from prison. Where did they hide the dirt? This is one of the examples used by Roni Horowitz of the consultancy group SIT to show the advantages of a method called Systematic Inventive Thinking (SIT).

The answer is that they hid the dirt in the tunnel. The prisoners stole nylon sacks from the prison bakery and each day they dug the tunnel and put the dirt into the sacks. At cell inspection times they pushed all the dirt bags back into the tunnel and tidied the cell. When the prisoners escaped the guards found a cell full of bags of dirt and an empty tunnel.

It is a good example of one of the principles of SIT - look for the solution within the problem or its environment. The prisoners had very limited resources - but one of them was the tunnel itself.


Resource Constraints Engender Creativity

If we are given unlimited resources to solve a problem then we can always come up with something - and often it is expensive and over-engineered. When we have to use the limited set of resources contained in the problem and its immediate environment then we are forced to be more creative - and very often the result is a solution that is elegant, inexpensive and effective. Using the tunnel is a prime example.

At the end of the first Gulf War fires were raging out of control in the Kuwaiti oil refineries. What could be used to put them out? One answer might have been sand. But a better solution was found. The pipelines that were normally used to pump oil from the refineries were used to pump water to the refineries. By using an existing resource and reversing the flow the problem was overcome.

Engineers are accustomed to working in very constrained conditions. In the very early Volkswagen Beetle car there was a problem of how to provide the power needed for the windscreen washer. The ingenious solution that the engineers came up with was to use the air pressure from the spare wheel (which was in the front of the car) to power the water jet.

But it is not just product engineers who can use internal resources in ingenious ways. In 2005 the IRA pulled off a major robbery at the Northern Bank in Belfast - they got away with 25m gbp in banknotes. How could the authorities catch the criminals or stop them using the proceeds of their crime? They came up with a clever idea using one of the resources within the problem - the stolen banknotes. They changed the currency in Northern Ireland and reprinted all bank notes. Anyone holding old bank notes had to bring them in to be changed - and that is a big problem if you are holding millions of stolen banknotes.


How can you use this principle?

So how can you use this approach in your problem solving? One of the methods taught in Systematic Inventive Thinking is to break the problem down into a chain of unwanted effects. Now consider in turn each element in the problem or its environment and say to yourself - this element can be adapted to stop one of the unwanted effects and to break the chain. Then come up with ideas. By rigorously and imaginatively applying this technique you will often find an inventive solution.

Here is a moral dilemma that was used as a test in a job interview. You are driving along in your two-seater car on a wild, stormy night. You pass a bus stop, and you see three people waiting for the bus:
  1. An old lady who looks as if she is about to die.
  2. An old friend who once saved your life.
  3. The perfect man (or) woman you have longed to meet.

Knowing that there is room for only one passenger in your car, what would you do?


Many answers were given but only 1 candidate out of 100 gave what was judged the best answer. He made ideal use of the resources in the problem. This is what he said, "I would give the car keys to my old friend, and let him take the lady to the hospital. I would stay behind and wait for the bus with the woman of my dreams."

The next time you face a tough problem do some lateral thinking. Try looking first at how you can use the resources in and around the issue. That way you might escape from prison, put out a fire or land a top job!


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

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Monday, February 22, 2010

Empowering Innovation

by Paul Sloane

Empowering InnovationThe challenge with innovation is finding products and services that are easier to use, easier to maintain and more appealing to customers. Where can you draw the creativity and drive to make this happen? Often the best source for innovation is the team within your business. A great leader can turn them into entrepreneurs who are hungrily looking for new opportunities. The key is empowerment. By empowering people you enable them to achieve goals through their own ideas and efforts. The leader sets the destination, but the team chooses the route.


What do employees need to be empowered?

People need clear objectives so that they know what is expected of them. They need to develop the skills for the task. They need to work in cross-departmental teams so that they can create and implement solutions that will work. They need freedom to succeed. And when you give someone freedom to succeed you also give them freedom to fail. Above all, empowerment means trusting people. It is by giving them trust, support and belief that you will empower them to achieve great things.

Empowerment is more than managers setting objectives and then leaving people alone. It is about encouraging and enabling people to solve problems, meet customer needs and seize market opportunities on their own initiatives - either individually or in groups from different disciplines.

The goal is to have everyone think of themselves as an entrepreneur who has the right and the duty to solve problems and seize opportunities - not to offload them to others. In many organizations problems are passed up and down a long chain of command. They are postponed, delegated, transferred, ignored and eventually handled by some remote manager who cannot avoid the issue any longer. In the empowered organization they are handled by the first employee who encounters the problem. They have the authority to solve problems and take initiatives fast. They do not do this in isolation - they communicate. The senior team knows what is going on – but because they trust people to do the right things they find out later - after the fact in most cases. This involves risks but it pays back in a much more agile, effective, creative and dynamic mode of operation.


Encouragement Is Not Enough

The goal is to change the business from a routine group of people who are doing a job to a highly energized team of entrepreneurs who are constantly searching for new and better ways of making the vision a reality. We want to use creative techniques to drive innovative solutions to reach the goal. But just encouraging innovation is not enough. You need to initiate programs that show people how they can use creative techniques to come up with new solutions.


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

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Monday, February 15, 2010

Failure - The Mother of Innovation

by Paul Sloane

Failure - The Mother of InnovationIn the 1950s the Jacuzzi brothers invented a whirlpool bath to treat people with arthritis. Although the product worked, it was a sales flop. Very few people in the target market, sufferers from arthritis, could afford the expensive bath. So the idea languished until they tried relaunching the same product for a different market - as a luxury item for the wealthy. It became a big success.

Very often the best way to test an idea is not to analyze it but to try it. The organization that implements lots of ideas will most likely have many failures but the chances are, it will reap some mighty successes too. By trying numerous initiatives we improve our chances that one of them will be a star. As Tom Kelley of IDEO puts it:


"Fail often to succeed sooner."


Honda Motor Company entered the US market in 1959 with its range of low-powered motorcycles. It endured failure after failure as it learned the hard way that little motorcycles popular in the Tokyo suburbs were not well received on the wide open roads of the USA. They eventually brought out a range of high powered bikes that became very popular. Soichiro Honda, the founder of Honda said:


"Many people dream of success. Success can only be achieved through repeated failure and introspection. Success represents the one percent of your work that results from the 99 percent that is called failure."


What makes Silicon Valley so successful as the engine of high-tech growth? It is the Darwinian process of failure. Author Mike Malone puts it like this:


"Outsiders think of Silicon Valley as a success, but it is, in truth, a graveyard. Failure is Silicon Valley's greatest strength. Every failed product or enterprise is a lesson stored in the collective memory. We don't stigmatize failure; we admire it. Venture Capitalists like to see a little failure in the resumes of entrepreneurs."


In order to develop the concept of the benefits of failure, Penn State University has a course for engineering students called Failure 101. The students have to take risks and do experiments. The more failures they have, the sooner they can get an A grade!

Many great successes started out as failures. Columbus failed when he set out to find a new route to India. He found America instead (and because he thought it was India he called the natives Indians). Champagne was invented by a monk called Dom Perignon when a bottle of wine accidentally had a secondary fermentation. 3M invented glue that was a failure - it did not stick. But it became the basis for the Post-it note, which was a huge success.

Scientists at Pfizer tested a new drug called Viagra, to relieve high blood pressure. Men in the test group reported that it was a failure at stopping high blood pressure but it had one beneficial side effect. Pfizer, the manufacturers, investigated the side effect and found that the drug had a dramatic effect on men's sexual vigor. Viagra became one of the most successful failures of all time.


Failure as a stepping stone

Even if the failure does not lead directly to a success it can be seen as a step along the way. Edison's attitude to "failure" is salutary. When asked why so many of his experiments failed he explained that they were not failures. Each time he had discovered a method that did not work.

Tom Watson Jr. was the legendary President of IBM who led them through the high-growth years when they were the most admired company in America. He encouraged what he called 'wild ducks', people with unconventional and disruptive ideas. On one occasion a Vice President who had lost the corporation $10 million on an experiment which failed was called to Watson's office. The VP was expecting to be fired so he took his letter of resignation with him and presented it. Watson refused to accept it. "Why would we want to lose you?" he said. "We've just given you a $10 million education."

Another boss who welcomes failure is Richard Branson, founder of the Virgin Group. According to his publisher, John Brown, "The secret of (Branson's) success is his failures. He keeps opening things and a good many of them fail but he doesn't care. He keeps on going."

In 1985 Coca Cola experimented by introducing "New Coke" - a new flavor to replace "Classic Coke." It had fared well in consumer tests but it was a marketing disaster and flopped. Coca Cola had to eat humble pie and reintroduce Classic Coke. Did this great disaster do any long-term harm to Coca Cola? Probably not. Did the senior managers and marketing professionals responsible for this failure all get fired? No, they did not. It was an experiment that failed but Coca Cola survived, learned and prospered. As the great philosopher Nietzsche put it:


"That which does not kill me makes me stronger."


Bill Gates stood down as CEO of Microsoft so that he could focus more time and energy on strategic leadership of the company's development efforts. He took intense interest in Microsoft Research, the 600 person think-tank he set up in the early 1990s to push the envelope of software technology, user-interface design, speech recognition and computer graphics. As one of his colleagues put it, "Bill isn't afraid of taking long-term chances. He understands that you have to try everything, because the real secret to innovation is failing fast."


Conclusion

The innovative leader encourages a culture of experimentation. You must teach people that each failure is a step along the road to success. To be truly agile, you must give people the freedom to innovate, the freedom to experiment, the freedom to succeed. That means you must give them the freedom to fail, too.


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

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Monday, February 08, 2010

Innovators Welcome Ambiguity

by Paul Sloane

Innovators Welcome AmbiguityBrilliant thinkers and innovators are very comfortable with ambiguity - they welcome it. Routine thinkers like clarity and simplicity; they dislike ambiguity. There is a tendency in our society to reduce complex issues down to simple issues with obviously clear solutions. We see evidence of this in the tabloid press. There have been some terrible crimes committed in our cities. A violent offender received what is seen to be a lenient sentence. This shows that judges are out of touch with what is needed and that heavy punishment will stop the crime wave. The brilliant thinker is wary of simple nostrums like these. He or she knows that complex issues usually involve many causes and these may need many different and even conflicting solutions.

Routine thinkers are often dogmatic. They see a clear route forward and they want to follow it. The advantage of this is that they can make decisive and effective executives - up to a point. If the simple route happens to be a good one then they get on with the journey. The downside is that they will likely follow the most obvious idea and not consider creative, complex or controversial choices. The exceptional thinker can see many possibilities and relishes reviewing both sides of any argument. They are happy to discuss and explore multiple possibilities and are keen to challenge conventional wisdom. People around them and subordinates can sometimes consider this approach to be frustrating and indecisive.

Albert Einstein was able to conceive his theory of relativity because he thought that time and space might not be immutable. Neils Bohr made breakthroughs in physics because he was able to think of light as both a stream of particles and as a wave. Picasso could paint classical portraits and yet conceive cubist representations of people.

How can you welcome ambiguity? First by admitting that there are few absolute truths and that for most common beliefs the opposite view might also be true. If the general view is that you can either get high quality or low price the brilliant thinker will ask, 'Why can't we get both? How can we deliver great quality at really affordable prices?'

Cognitive dissonance is the concept of holding two very different ideas in your mind at the same time. This is something all the great composers do when they think of two melodic themes and how they can intertwine, adapt and combine them. We would find it very difficult to whistle one tune while thinking of an entirely different one but that is the sort of thing that Beethoven or Mozart would consider trifling.

When we mull over the interaction of two opposing ideas in our minds then the creative possibilities are legion. A wind-up clock and an electrically operated radio are two very different concepts but by imagining their combination Trevor Bayliss was able to conceive of the clockwork radio. Most of us would dismiss such an idea out of hand. It seems incongruous to have a large mechanical winding device inside a small radio. And we can immediately see the drawback that the programme we were listening to would stop when the winder ran down so that we would have to get up and wind the thing again. That appears a very tedious operation.

But Bayliss saw beyond these limitations and considered the needs of people in the developing world who did not have access to reliable mains electricity and who could not afford batteries. For them winding up a radio is a minor inconvenience. The clockwork radio has transformed their lives.

If we want creative solutions and real innovations then we should welcome ambiguity. We should explore the possibilities of two different things interacting together. We should let opposites play.


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

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Monday, February 01, 2010

Who Killed Our Business?

by Paul Sloane

Who killed our business?Most business managers go through the annual ritual of budgeting. We plan the next one or two years based on the actual results of the most recent year. We draw up a spreadsheet and plan line by line - sales revenues up 10% and costs held to a 5% increase means a modest improvement in profits.

We should have learned by now that this is a sterile process. The past is a poor guide to the future and its innovations. In 1972 the Club of Rome published "The Limits to Growth." It was a model that predicted what would happen to energy, food, population, environment, etc. It concluded that essential resources like oil would run out in the 1990s and that economic growth was unsustainable. It extrapolated the future based on the past. And it got it wrong precisely because the future is not like the past.


Blocking out innovative ideas

The planning straitjacket means that we are restricted to small incremental increases in revenues and we are squeezed on expenses. There is no scope for the radical improvements that the business so desperately needs. By thinking in terms of last year plus 10% we are blocking out big ideas. The motor car was not the horse-drawn carriage plus 10%, Amazon was not Barnes and Noble plus 10%, and the Smart Car is not your average sedan with an extra 10%. Each was a leap, an innovation, a different approach.

Nokia started as a wood pulp mill in Finland in 1865. It made paper products, rubber products and became an energy company before moving into consumer electronics and becoming the world leader in mobile phones. Virgin was founded by Richard Branson as a record label. It now offers a range of products in travel, entertainment, finance and communications. These successful companies did not get where they are today by modest incremental steps, but by combining efficiency with bold ventures into new arenas.


Who killed our business?

I use an exercise in my creative leadership workshops to shake people out of incremental thinking and planning. The team imagines that they are sitting in the room six years from now asking the question, "Who killed our business?" The premise is that some powerful force has put their company out of business. Individually and in teams they have to conceive of changes in technology, processes, fashion, competition or demographics that might completely replace their current business model.

There are many examples of how the unexpected has devastated businesses. Typewriter manufacturer Smith Corona was wiped out by word processing software on PCs. Polaroid was sideswiped by digital camera technology. MacDonalds has fallen victim to the rise of anti-corporatism and the power of the book, "No Logo." Downloading music on the Internet is hurting music companies. A loss of reputation demolished Arthur Anderson. Accounting scandals killed Enron and Parmalat. Laser eye surgery is a threat to makers of spectacles and contact lenses.

Starting with a blank piece of paper, people have to imagine a major new trend or approach which would eliminate them and at the same time meet the needs of their customers better. Once they have agreed on some possible scenarios they need to design ideal companies to exploit the new approaches. Instead of starting from today and planning forward, they start from the future and plan for the future.

You can aid the process by first discussing fashion trends, technology developments and demographic movements. The purpose is to startle people out of a complacent and comfortable view of the future and to consider instead a vortex of dangers and opportunities.

Spreadsheets are great tools for recording figures and for trying different assumptions in an existing model. But among all the many menu bars and commands in Excel there is no instruction for "use your imagination" or "conceive entirely new possibility." Try getting your team together and brainstorm some radical ideas. Develop scenarios that are imaginative but possible. Build some prototypes to test new products or business methods. Test them in the marketplace. An experiment will teach you far more than any spreadsheet. It is by systematically testing boundaries and pushing into new areas that companies like Nokia and Virgin succeed.


Conclusion

Of course every business needs a budget as a yardstick to measure against. But the budget is not a strategy for success or even for survival. Leadership means taking the business from where it is today to somewhere new and different. It means using imagination and innovation to design a better tomorrow.


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

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Monday, January 25, 2010

To Uncover Great Ideas, Generate a Large Quantity of Them

by Paul Sloane

To Uncover Ideas, Generate a Large Quantity of ThemOne of the great problems with the Western education system is that it teaches that for most questions there is one correct answer. Examinations with multiple choice questions force the student to try to select the right answer and avoid the wrong ones. So when our students leave school they are steeped in a system that says find the "right answer" and you have solved the problem.

Unfortunately, the real world is not like that. For almost every problem, there are multiple solutions that may solve the problem with varying degrees of effectiveness. In other words, in the real world, there is more than one "right" answer. We have to unlearn the school approach and instead adopt an attitude of always looking for more and better answers.

To be really creative, you need to generate a large number of ideas before you refine the process down to a few to test out. To make your organization more innovative, you have to increase the yield. Why do you need more ideas? Because when you start generating ideas you generate the obvious, easy answers. As you come up with more and more ideas so you produce more wacky, crazy, creative ideas - the kind that can lead to really radical solutions.


Real-world examples

The management guru Gary Hamel talks about "corporate sperm count" - the virility test of how many ideas your business generates. Many managers fear that too many ideas will be unmanageable but the most innovative companies revel in multitudes of ideas.

When BMW launched its Virtual Innovation Agency (VIA) to canvass suggestions from people all round the world it received 4,000 ideas in the first week. And they continue to roll in. You can even make your own contribution to BMW's idea bank.

The Toyota Corporation in-house suggestion scheme generates over 2 million ideas a year. Over 95% of the workforce contribute suggestions; that works out to over 30 suggestions per worker per year. The most remarkable statistic from Toyota is that over 90% of the suggestions are implemented. Quantity works.

Thomas Edison was prolific in his experiments. His development of the electric light took over 9,000 experiments and that of the storage cell, around 50,000. He still holds the record for the most patents - over 1,090 in his name. After his death 3,500 notebooks full of his ideas and jottings were found. It was the prodigiousness of his output that led to so many breakthroughs. Picasso painted over 20,000 works. Bach composed at least one work a week. The great geniuses produced quantity as well as quality. Sometimes it is only by producing the many that we can produce the few great works or ideas.


Putting these lessons to work for you

When you start brainstorming or using other creative techniques, the best idea might not come in the first twenty - or even in the first 100 ideas. The quality of ideas does not degrade with quantity. Often the later ideas are the more radical ones from which a truly lateral solution can be developed.

What do you do when you have a mountain of ideas and suggestions? You sort them, analyze them and try out those with the most potential. The really promising ideas are critically examined from the perspectives of technical feasibility, customer acceptance and profitability. If they pass these hurdles, they move rapidly to a prototype phase. They are then tested in the harsh reality of the marketplace, where a sort of accelerated Darwinism occurs - only the fittest survive. The interesting ideas should be kept in a database and allowed to incubate. When you revisit them later, you may well find that you now see a way to adapt or combine them into something worthwhile.


The venture capitalist's strategy for testing promising ideas

The most innovative companies have an approach to trying out promising ideas that is like the philosophy of a venture capitalist. The VC invests in a portfolio of different start-up companies, fully knowing that most will fail. A few may break even, and one or two may become successes. But one big success can pay back the costs of all the failures.

Even though he is smart, the VC does not know which ventures will succeed and which will fail, so initially he backs all of them. As time goes on, he cuts funding for the failures and gives it to the winners. It is the same with prototypes in business. The leading innovators run many different pilots and measure progress carefully. They cut funding the losers, but nurture the successful trials with additional resources. That way they are first to market with the real winners.


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

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Monday, January 18, 2010

Creating Innovation Best Practices of Tomorrow

by Paul Sloane

Creating innovation best practices of tomorrowDirectors constantly strive to increase efficiency, implement best practice and deliver increased shareholder value. They seek to improve cash flow through efficiencies of scale and cost reductions. But there are limits to cost saving. In a global economy your competitors in lower-cost countries can beat you at that game. The best way to create value is to innovate your way ahead of the competition. You need to create temporary monopolies where yours is the only show in town. You can do this by harnessing the creative power of your greatest asset, your people. The goal is to turn them into opportunistic entrepreneurs who are constantly looking for new ways of doing business.

A copy-machine operator at Kinko's, a major chain of outlets providing copying and document services, noticed that customer demand for copying dropped off in December. People were too pre-occupied with Christmas presents to do much copying for the office. So he came up with a creative idea. Why not allow customers to use Kinko's color copying and binding facilities to create their own customized calendars using their personal photos for each of the months? He prototyped the idea in the store and it proved popular - people could create personalized gifts of calendars featuring favorite family photos. The operator phoned the founder and CEO of Kinko's, Paul Orfalea, and explained the idea. Orfalea was so excited by it that he rushed it out as a service in all outlets. It was very successful and a new product - custom calendars - and a new revenue stream were created.

This kind of creative energy should be the goal for every organization. How can you make all your staff into creative entrepreneurs like the operator in Kinko's? How can you energize people to see problems not as obstacles to success but as opportunities for innovation?

To build a truly innovative organization you need to have a vision, a culture and a process of innovation.

The key elements of creating a truly innovative and entrepreneurial organization can be summarized in the following eight steps:
  1. Paint an inspiring vision.
  2. Build an open, receptive, questioning culture.
  3. Empower people at all levels.
  4. Set goals, deadlines and measurements for innovation.
  5. Use creativity techniques to generate a large number of ideas.
  6. Review, combine, filter and select ideas.
  7. Prototype the promising proposals.
  8. Analyze the results and roll-out the successful projects

Painting the vision

You start by painting a vision that is desirable, challenging and believable. If you can do this then there are three big gains for the organization:

First, people share a common goal and have a sense of embarking on a journey or adventure together. This means they are more willing to accept the changes, challenges and difficulties that any journey can entail.

Secondly, it means that more responsibility can be delegated. Staff can be empowered and given more control over their work. Because they know the goal and direction in which they are headed they can be trusted to steer their own raft and to figure out the best way of getting there.

Thirdly, people will be more creative and contribute more ideas if they know that there are unsolved challenges that lie ahead. They have bought into the adventure so they are more ready to find routes over and around the obstacles on the way.

At GE the vision is "We bring good things to life." The Ford Motor Company vision is "...to become the world's leading consumer company for automotive products and services." Vision statements should be short and inspiring. They should avoid vague and woolly clichés about outstanding customer service. The vision should not be restricted to today's type of business. It must set a goal that gives employees enormous freedom in finding ways to achieve it. The pharmaceutical giant Glaxo Smith Kline has a mission "to improve the quality of human life by enabling people to do more, feel better and live longer." They do not define their mission in mundane terms of drugs or medicines or markets but in inspirational terms of helping people do more, feel better and live longer.

Just painting the picture is not enough. It quickly fades from view if it is not constantly reinforced. Great leaders take time to meet staff. They illustrate the vision, the goals and the challenges; explain to staff how their role is crucial in fulfilling the vision and meeting the challenges. They inspire people to become crusading entrepreneurs finding innovative routes to success.


Empowering

You cannot deliver the change on your own. The best source for the idea-generation and creativity needed for innovation is the team within your organization. To turn them into entrepreneurs who are hungrily looking for new opportunities you have to first empower them. The purpose of empowering people is to enable them to achieve the change through their own efforts. They need clear objectives so that they know what is expected of them. They need to develop the skills for the task. They need to work in cross-departmental teams so that they can create and implement solutions that will work across the organization. They need freedom to succeed. And when you give someone freedom to succeed you also give them freedom to fail.

People want to understand and agree what is expected of them. The scope of their freedom and their responsibility must be agreed. They need training, coaching, reinforcement and encouragement. They need support in acquiring creative problem-solving skills and encouragement to be brave enough to come with radical innovations. Above all, empowerment means trusting people. It is by giving them trust, support and belief that you will empower them to achieve great things.


Overcoming Fear

People are anxious about change. Change is uncomfortable. Change means winners and losers. It is natural that people will prefer to stay within their comfort zones rather than risk an embarrassing or costly failure. You should spend time with people encouraging them to undertake risks and reassuring them that those risks are necessary and worth taking. Fear of failure often inhibits people from pushing themselves to new limits. You have to show that doing nothing has its risks too; that staying in the corporate comfort zone is a dangerous option. You have to reassure them that they will not be punished for taking risks, for worthwhile failures, for bold initiatives that do not succeed. Of course taking risks means taking calculated risks not wild risks. Every employee who is undertaking a risky initiative needs freedom but they need mentoring and guidance too.

Once again communication is the key. Informed people don't fear change. As Dick Brown, Chairman and CEO of EDS put it, "People are not afraid of change. They fear the unknown."


Using Innovation Techniques

Can creativity be taught or is it a rare talent possessed by a handful of gifted individuals? The answer is that every one of us can be creative if we are encouraged and shown how to do it. We were all imaginative as children but gradually most people have their creative instincts ground down by the routine of work. With proper training people can develop skills in questioning, brainstorming, adapting, combining, analyzing and selecting ideas. They can be the innovative engine your organization needs.

The process of finding creative solutions is something that can be built into the culture of the organization. This is done by techniques, methods, workshops and a pervading attitude of encouragement for crazy ideas.

The goal is to change the organization; to achieve a metamorphosis from a routine group of people who are doing a job to a highly energized team of entrepreneurs who are constantly searching for new and better ways of making the vision a reality. We want to use creative techniques to drive innovative solutions to reach the goal. But just encouraging innovation is not enough. You need to initiate programs that show people how they can use creative techniques to come up with new solutions. People need training in order to learn the skills and to develop the confidence to try new methods.

The innovation process involves the generation of many ideas in response to a given issue or challenge. The ideas are then whittled down to the most promising. The key then is to move rapidly to prototyping the best ideas. Businesses that are fast to market carry out quick pilot tests rather than spending months in "paralysis by analysis." For new products, innovation projects go through a number of evaluation "gates" that test the feasibility, attractiveness and payback. Those that pass through the gate are given more funding.

The innovative organization is constantly trying new products, new processes, new business practices and new partnerships. Its people share an open, questioning, empowered and entrepreneurial culture. They know that innovation is the only way to remain agile and ahead of the competition. After all, it is the innovation of today that becomes the best practice of tomorrow.



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

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Monday, January 11, 2010

Leading Innovation with Passion

by Paul Sloane

Leading Innovation with PassionPeople will not follow an unenthusiastic leader. They will follow someone who has a vision and is passionate about it. Winston Churchill, Martin Luther King and Nelson Mandela showed great passion for what they believed - it was what made them outstanding leaders.

The sales training expert Robin Fielder says, "Never, ever forget that people are more persuaded by your convictions than by your arguments."

Jim Collins puts it like this; the good to great companies did not say, "Okay folks, let's get passionate about what we do." Sensibly, they went about it the other way round entirely: We should only do those things that we can get passionate about. Kimberley-Clark executives made the decision to divest other businesses and focus on paper-based consumer products in large part because they could get more passionate about them.

Here is an exercise that we sometimes conduct on leadership courses. Think for a moment about a key component of your vision for what you want to achieve for the business this year. Choose a single important goal that you as a leader want to accomplish. Now imagine that you expressed that goal to your people in a dull, boring, unenthusiastic way. What would happen? Now consider how you could communicate the goal again, but this time with passion, with energy, with commitment, with enthusiasm. If you were receiving those two kinds of messages how would you react? Which message would inspire you to change your behavior, to do something extraordinary, to go the extra mile?

Focus on the things that you want to change, the most important challenges you face and be passionate about overcoming them. Your energy and drive will translate itself into direction and inspiration for your people.

It is no good filling your bus with contented, complacent passengers. You want evangelists, passionate supporters; people who believe that reaching the destination is really worthwhile; people who are on a mission to make the world a better place. This drive and enthusiasm starts with the leader. If you want to inspire people to innovate, to change the way they do things and to achieve extraordinary results then you have to be passionate about what you believe in and you have to communicate that passion every time you speak.



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

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Monday, January 04, 2010

Battlefield Innovation Lessons for Business Leaders

by Paul Sloane

Battlefield Innovation Lessons for Business LeadersLet's be clear, business is not war. But if you are operating in a fierce marketplace then it can feel like it. Many of the methods we use in our sales campaigns, marketing strategies and competitive tactics are based on military analogies. So what lessons can business leaders today learn from the history of warfare? Here are some that seem particularly relevant.

David vs. Goliath - 1000 BC?


Goliath was a giant and the Philistine's champion at man-to-man combat. David was a young shepherd boy. Goliath expected to overwhelm his opponent in a sword fight but David chose to fight on different terms. He defeated Goliath by using an unusual weapon, the sling, with pinpoint accuracy.

Lessons: It is no use going up against someone who has an 8-ft spear with a 4-ft spear. You need a different weapon. If you are smaller you have to be agile and different. If your competitor is the giant in the market, you need a radical approach so that you can strike rapidly and accurately. This is what Direct Line did when they used telephone technology to sell car insurance directly while the major players were using brokers.

Battle of Crecy - 1346


The English army of about 14,000 men under Edward III had ravaged northern France. They were finally confronted on August 26, 1346 by an army of some 40,000 Frenchmen under Philip VI. Battles were normally fought by knights on horseback and the French, with such a numerical advantage, felt confident. But the English had a new and superior technology, the longbow. Their archers were trained in rapid fire and could sustain a rate of over 10 arrows per minute. Each arrow could penetrate armor. It was the first time that such a mass volley of arrows had been used in warfare. The French attacked in waves and they were cut down relentlessly by the power, speed and range of their opponents' archers.

Lessons: One of the best ways to beat an established competitor is with a new technology. Innovation can overcome a strong opponent. Focus your firepower on the target. Amazon used internet technology to directly address the needs of book buyers and to run rings around the established high street vendors.

Battle of Trafalgar - 1805


Traditionally, naval battles were fought by lining up two fleets in parallel line so that they could deploy the maximum firepower from their canons. At the battle of Trafalgar, Villeneuve, the French admiral, formed his fleet of 33 ships into a line. But Nelson did not line up in parallel. He split his 27 ships into two squadrons and attacked at right angles to the French line. In the hectic battle that ensued Nelson died but the British were victorious and established a naval supremacy that lasted over 100 years.

Lessons: If you do not have a superior force or superior technology then try a different tactic. Surprise your opponent with a fresh approach. Virgin, Benetton and Body Shop are examples of businesses that used surprise tactics to disrupt incumbent market leaders.

First World War - 1914 to 1918


The scale of the slaughter of soldiers in World War I was appalling. Over 8 million military personnel died. The main tactic on the western front was to repeatedly attack strong defensive positions with waves of men. They were massacred. It was believed that with sufficient artillery bombardment and pure weight of numbers a breakthrough could be achieved. But the way to overcome barbed wire defenses and machine gun posts is not with lines of infantrymen. What was needed was the rapid development and effective deployment of the tank.

Lessons: Effort, courage and hard work are not enough. If you are competing with a well-entrenched opponent who has a strong defensive position then you need a new technology or approach to achieve a breakthrough. A long war of attrition debilitates both sides. Retail banking was a stodgy business until Egg, First Direct and Cahoot came along to shake it up and take millions of accounts away from the big players.

Maginot line - 1940


The British and French high commands assumed that the new war with Germany would be similar to the First World War, with huge static armies facing each other. The French built a massive defensive line along the entire border between France the Germany, the Maginot line, consisting of enormous fortifications. But when the Germans attacked in May 1940 they did some lateral thinking. They used fast-moving armored divisions and paratroops. They swept through Holland and Belgium and around the Maginot line. The British and French were outmaneuvered and France fell in five weeks.

Lessons: Assuming that new contests will be similar to previous ones is dangerous. The best way to combat an opponent who has a strong defensive position and barriers to entry in a market is to go around those barriers and find a new way to the market. This is what Direct line, Amazon, Netscape and Easyjet did.

Battle of Britain - 1940


After the fall of France, the British retreated across the Channel, leaving most of their equipment behind. The German army, having raced across Europe was rampant while the British army was demoralized and under-equipped. The Germans planned an aerial assault followed by an invasion, and many thought that Britain would fall as quickly as France, Holland or Poland. But the British had some things that the others had not - the channel, the Spitfire, radar and Winston Churchill. Churchill gave the people a vision, purpose and belief that enabled them to sustain the blitz, oppose the might of Germany and eventually triumph.

Lessons: In tough environments, winning CEOs are those who have a clear vision, can communicate it to their people and motivate them to achieve the goal. Sir Arnold Weinstock, Bill Gates and Jack Welch are recognized as this type of visionary leader.

Defeat of Hitler - 1945


After his great successes in the early part of the war, Hitler was convinced that he was a military genius and the German Wehrmacht could overcome any obstacle. When he attacked Russia in the summer of 1941, he was so confident of victory that there were no plans for a winter campaign; no winter coats for the soldiers and no winter oil for the tanks. He ignored the advice of his generals and pushed his forces down towards Stalingrad and then refused to allow them to withdraw or regroup when the communication lines became overextended. His arrogance and overconfidence built a barrier to criticism and meant that he never used the full talents of his team. Eventually Germany was overwhelmed by the weight of Russian, American and British forces.

Lessons: A narcissist CEO will lead the business to disaster. Plan a fallback scenario. Strong vision and belief are essential but a leader who blocks constructive criticism, ignores the input of his team and fails to build consensus is doomed. To mention them by name would be libelous but take your pick from the CEOs who have led mighty companies to disaster in recent times.



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

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Thursday, December 31, 2009

Innovation by Subtraction

by Paul Sloane

Innovation by Subtraction - Ryanair CEO Michael O'LearyWe tend to think that the best way to innovate is to add new features to our products or services. What can we add that increases the appeal of our offering? This route can easily lead to extra cost, feature overload and customer fatigue. Sometimes a better answer lies in subtraction.

Michael O'Leary, the founder of Ryanair, looked at the business process of passenger flights and built a new model by subtracting all the frills that meant extra cost. He subtracted:
  • Travel agents - you book direct over the Internet so the middlemen and their costs are cut out.

  • Tickets - you show your passport and quote your reference number. Subtracting tickets saves costs.

  • Allocated seating - you choose a seat when you get on the plane - just like on a train or bus.

  • Free drinks and snacks - if you want a drink you have to buy it.

  • Customer care - Ryanair has one-tenth the number of customer care attendants per passenger mile compared to BA. If you have a complaint the answer is generally - 'hard luck but what did you expect with such a cheap flight?'

(Editor's note: In the U.S., JetBlue, Virgin America and Southwest Airlines operate using a very similar model)

What can you take away from your current business process in order to save cost and simplify operations? Can you unbundle your product into separate components? Can you strip out costs or processes that not all customers want? Can you bypass a middleman on the route to your customer - as Direct Line, Amazon and Ryanair did? Egg and First Direct offered on-line banking and made it cost effective by cutting out all the branches that burden the traditional banks.

Sometimes you can get the customer to do something that you do right now. The supermarket was a remarkable innovation in the 1920s. The key new idea was to get the customer to serve themselves rather than having an assistant serve them. A modern updating of the idea is provided by IKEA. Not only do customers act as assemblers in putting the furniture together, they also act as store men in collecting the flat packs from the warehouse.

The whole do-it-yourself business was built on the back of getting individuals to do what tradesmen had done for them in the past. eBay has built a business that runs like clockwork by getting the clients to place their own advertisements, hold their own stock, sell their own goods and give each other recommendations. It is a triumph of transferring services to clients.

Next time you face the challenge of how to refresh your product don't just think about adding new features or services. Think about what you can cut out of the process or product. How can you make things simpler, less costly and more appealing to customers?



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

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