The Innovation Paradox

by Mitch Ditkoff

My big insight about innovation these days would make Nobel Prize winner, Niels Bohr, proud.

"Now that we have met with paradox," explained Dr. Bohr, "we have some hope of making progress."

Innovation is full of it - paradox, that is.

On one hand, organizations want structures, maps, models, guidelines, and systems. On the other hand, that's all too often the stuff that squelches innovation, driving it underground or out the door.

The noble search for a so-called "innovation process" can easily become a seduction, addiction, or distraction whereby innovation is marginalized, deferred, over-engineered, and worn like a badge.

True innovation is about allowing room enough for paradox to be a teacher and guide - and to accept, at least for a little longer than usual, ambiguity, dissonance, and discomfort - the age-old precursors to breakthrough.

Remember, there's a big difference between Six Sigma and Innovation.

Six Sigma is about reducing variability. Innovation is about increasing it - and that often means allowing the kind of "messiness" that process-mavens interpret as a problem needing to be fixed, rather than a pre-condition to breakthrough and the resulting commercialization of that breakthrough that most people refer to as "innovation."

Yes, process, structures, systems are necessary, but they don't have to become overly pre-emptive. If you stay in an innovative mindset and can adapt to emerging needs, they will eventually become self-organizing when the soul of innovation is allowed to flourish.

Can we help the "innovation process" along with the right application of strategy, infrastructure, and planning?

Of course we can.

But beware! "Helping" the process too much often becomes counterproductive - much in the same way that attempting to catch a milkweed floating through the air with a bold reach of your hand actually repels the object of your desire.

Innovation Physics 101.


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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of "Awake at the Wheel", as well as the very popular Heart of Innovation blog.

Six Sigma and Innovation

The Gotta Have a Process Blues

by Mitch Ditkoff

One of my favorite clients of all time was a key manager in a very prominent Fortune 500 company. She was smart. She was funny. She was creative. And she was kind. Then her company adopted Six Sigma.

I couldn't help but notice that soon after this she started becoming uncharacteristically cranky, not unlike the way an artist gets upon filling out a tax form. When I asked her how the Six Sigma initiative was going, she rolled her eyes and mumbled something about "going through the motions."

In a recent online Business Week posting, Brian Hindo lucidly deconstructs some of the flawed assumptions of the Six Sigma approach...

"The very factors that make Six Sigma effective in one context," explains Hindo, "can make it ineffective in another. Traditionally, it uses rigorous statistical analysis to produce unambiguous data that help produce better quality, lower costs, and more efficiency. That all sounds great when you know what outcomes you'd like to control. But what about when there are few facts to go on - or you don't even know the nature of the problem you're trying to define?

"New things look very bad on this scale," says MIT Sloan School of Management professor Eric von Hippel, who has worked with 3M on innovation projects that he says 'took a backseat' once Six Sigma settled in. "The more you hardwire a company on total quality management, the more it is going to hurt breakthrough innovation," adds Vijay Govindarajan, a management professor at Dartmouth's Tuck School of Business. "The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different."

And so, dear Blogging Innovation readers... in honor of all people who have ever questioned the long-term value of Six Sigma... in honor of all the people who have understood that increasing - not decreasing - variability is often the key to success, it is my utmost pleasure to make my graceful exit from this latest blog posting with the immortal, finger-snapping, toe-tapping, knee-slapping, put-on-your-blues-hat-and-sunglasses lyrics to....


THE GOTTA HAVE A PROCESS BLUES

I woke up this morning,
put both feet on the floor,
but I didn't have a process
to find the bathroom door,
so all I did was shuffle,
first the left foot, then the right,
forgot to count the tiles,
(hey boss, I ain't too bright.)

We got green belts, black belts,
corporate karate,
and soon we'll need a process
for going to the potty.
Lord, I need a chart and graph to help me choose
just what to name this song about the Six Sigma blues.

Back when we were kids
the only processed thing was cheese,
now we need a process
every single time we sneeze,
I say "achoo," I blow my nose,
I try to get it right,
my Black Belt says my charts don't flow,
not once a gesundheit.

I make no mistakes,
I do everything right -
to make sure nothing breaks,
I stay up all night,
I'm a Six Sigma cowboy
cutting cycle time in half,
I measure every joke
and the way it makes me laugh.

We got green belts, black belts,
corporate karate,
and soon we'll need a process
for going to the potty,
a fishbone diagram would be so cool to help me choose
just what to name this song about the Six Sigma blues.

I barely make a boo boo, I rarely blow a deal,
you might call it voo doo, but that's just how I feel,
I'm one in a million
though my defects number three,
I log on while I'm sleeping
and I've changed my name to "E."

We got green belts, black belts,
corporate karate,
and soon we'll need a process
for going to the potty.

by Blind Willy Nilly AKA Mitch Ditkoff


Editors Note: The first person to post a blog comment here identifying both the musician in the photo AND the city he's in, will win a tweet from @innovate (sorry I don't have any extra books to offer right now).


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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of "Awake at the Wheel", as well as the very popular Heart of Innovation blog.

Innovation Perspectives - Who's Your Innovation Czar?

This is the third of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on "Where should innovation reside?" Here is the next perspective in the series:

by Rowan Gibson

It never ceases to amaze me. I'm meeting with the executive committee of a major global company. I've just asked if innovation is one of their top strategic priorities. Their unanimous answer is "yes". I then ask about their individual responsibilities. "Which one of you is the CFO?" "Who is head of HR?" "Where's the CIO?" One by one their hands go up. Yet when I ask to see their global director of innovation, nobody raises a hand. Everyone just looks at me with a blank expression. So, sure, this company understands the innovation imperative. But nobody in its leadership team is directly responsible - or accountable - for making innovation happen across the organization. And they don't even seem to be aware of the paradox.

Consulting firm Booz Allen Hamilton made an astute observation after interviewing thousands of senior executives about corporate innovation. Their conclusion was this: 'Of all the core functions of most companies, innovation may be managed with the least consistency and discipline.' Some of course would argue that this makes sense. That innovation is, by definition, a creative process - a mysterious mix of happenstance, individual brilliance, and the occasional bolt of lightning. How could it possibly be managed? Business guru Tom Peters appears to share this view. Tom announced not so long ago that "'Innovation process' is an oxymoronic phrase, believed only by morons with ox-like brains."

I'd rather side with Peter Drucker, who wrote - already back in the 1980s - about "the systematic practice of innovation", and argued masterfully that innovation is a discipline that can and should be managed just like any other corporate function. What worries me is that, today, over two decades later, organizations still assign responsible people to every other core function of a company except innovation. And then they wonder why they just can't seem to make innovation happen in a profitable and sustainable way.

Ask yourself: how many innovation managers do we currently have in our own organization? Perhaps your immediate reaction is to point to a department like R&D or New Product Development. The executives running those departments are innovation managers, aren't they? And what about the people in charge of other innovation units like incubators, new venture divisions, or Skunk Works? Surely these are innovation managers, you might reason. And, at some level, you would be right. But confining innovation to these traditional structures is usually counter-productive.

Putting innovation out on the periphery reinforces several erroneous and persistent views. One is that innovation is something that happens at the margins, not in the core business. Another is that innovation is the responsibility of a small cadre of experts, not something that should involve everyone else at the company - and even people on the outside. Still another is that innovation is mostly about new products and technologies, not about breakthroughs in cost structures, processes, services, customer experiences, management systems, competitive strategies, and business models.

Instead of trying to manage innovation by forcing it to reside in a disconnected silo or enclave, where it neither involves nor infects the rest of the organization, companies should be trying to embed innovation as an 'all-the-time, everywhere' capability that permeates the entire firm.

To make innovation a pervasive and corporate-wide capability, the responsibility for innovation needs to be broadened beyond conventional structures and spread throughout a company's businesses and functions. This is exactly what happened to quality in the 1970s and 1980s when it ceased to be the exclusive responsibility of a specific department, and instead, became distributed to every corner of the company. What is required today is a similarly systemic infrastructure for innovation that starts at the corporate level and infiltrates every part of the organization chart. An infrastructure that makes managers accountable at all levels for driving, facilitating, and embedding the innovation process into every nook and cranny of the culture.

Let's go back to the executive committee meeting. When I ask which of the leaders is globally responsible for innovation - in all its forms - I expect the CEO to say, "That's me." Building a deep, self-sustaining enterprise capability for innovation is something so vital to the destiny of the firm that it absolutely has to be spearheaded by the CEO. We see this happening right now in several of the world's biggest and best-known companies, where innovation is being driven directly from the top. Steve Jobs at Apple, Jeff Immelt at GE, Sam Palmisano at IBM, and Alan Lafley at P&G are just a few examples. These leaders have clearly taken on the role of Chief Innovation Officer at their respective firms.

What I'd next like to see is another hand being raised - this time the COO. I'd like that executive to tell me that he or she has been appointed as the chief architect of innovation embedment at the firm - responsible for making innovation happen from an operational perspective, just as the company succeeded in making quality happen. And I'd like him or her to proudly hold up an organization chart that shows me the company's innovation infrastructure. I want to see a global vice president of innovation - an 'Innovation Czar'- someone who reports directly to the CEO as the firm's leading innovation practitioner. I want to see an innovation council, made up of the company's top business unit leaders, that manages innovation embedment and new growth activities across the organization.

Beyond that, I want to see regional vice presidents of innovation, who work with the respective regional heads in a visible and senior position. In addition, there should be 'Innovation Boards' - in the regions as well as in the business units - comprised of senior leaders who manage and advance the innovation process at the local level. And the firm should also have hundreds of part-time 'Innovation Mentors', along with dozens of full-time 'Innovation Consultants', who have been intensely trained to coach and support would-be innovators, helping them push their ideas forward, and who work closely with the company's divisions to stoke the fires of innovation by actively monitoring and managing the pipeline process.

Sound like a daydream? Not to me. I've actually seen innovation infrastructures similar to this one in more companies than you might think. So when I ask you how many innovation managers you have in your own organization, this is the kind of innovation management I'm talking about. Take a good look around your firm. Who exactly is in charge of managing innovation as a core corporate function? Does your firm have an 'Innovation Czar'? If not, isn't it time your top leadership team appointed one?


You can check out all of the 'Innovation Perspectives' articles published so far from the different contributing authors on "Where should innovation reside?" by clicking the link in this sentence.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.

Innovation and Quality - Allies or Enemies?

by Paul Sloane

Can quality and creativity cohabit in the same house or are they natural enemies? Can a quality process be applied to innovation?

Let's start with the first question. Quality involves the removal of unwanted variations, the enforcement of strict standards and controls, the application of best practice and the elimination of waste and errors. Creativity and innovation involve exploring many radical and unorthodox ideas, deliberately deviating from existing standards and controls, experimenting with prototypes and devoting resources to projects which are likely to fail.

So at first glance quality and creativity look to be at odds. One is striving for the elimination of variation and error while the other is crying out for both. They are surely two opposing philosophies requiring very different mindsets and attitudes. Can they co-exist? The answer is that they can and they must. Every successful organisation has to solve the paradox of how to achieve at the same time great quality and great creativity leading to successful innovations.

Why Quality is Not Enough

The natural tendency for business managers is to focus on improving efficiency and refining the current processes because it is clear that "we can do things better." Improving quality and efficiency is important but it is not enough. If you were making horse drawn carriages then it did not matter how much you improved quality because automobiles were going to put you out of business. If you were making gas lamps and you focused on better production, it did not help because electric lights were going to make your lamps obsolete.

If you were making LP records then it did not matter how much time you spent in quality improvement programs because CDs were going to wipe you out. And if you were making typewriters then it did not help however much you improved the mechanical operations because electronic word processors were going to destroy your business. The message is that the right innovation can always beat efficiency. You have to improve what you are doing but you also have to find entirely new and better ways to do it.

Doing what we do now only better is not enough. If you do what you always did then you will get what you always got. You have to do something different to get different results. You have to do something significantly smarter to get significantly better results.

Successful businesses combine brilliant innovation with constant improvement and focus on quality. Think of a great rock group where one member composes a terrific new song. They then need perfect co-ordination, timing, rhythm and production to turn the creative idea into a hit. It is no good innovating if you cannot deliver a quality product or service to your client.

Organizing for Innovation

Successful organizations plan for innovation and allocate resources to it. They have innovation panels that hold reviews of all their products, services, processes, methods and routes to market. These reviews fulfill the following purposes:

1. They identify outmoded and aging products and processes and schedule them for replacement. These organizations recognize that everything in business has a life cycle and the end of a life cycle has to be anticipated so that replacements can be planned. Even systems that are running successfully and profitably today must be examined to see if it is time to supersede them with something better. It is much better to obsolete your own products with superior versions than to find that the competition have beaten you to it.


2. They set targets and deadlines in each area and department for the generation of new initiatives in order to replace the items selected as outworn. The general rule is that three new initiatives should be started for each new process needed. A one in three success rate for trials of new products is a good batting average so it is best to generate a large list of ideas and then whittle down to at least three to be prototyped. Each innovation project should have a project plan with a deadline for customer feedback and a planned date for a go/no go decision.


3. They measure progress against targets for individual projects and for the organization as a whole. They monitor key metrics including how many new products or processes have been implemented in the last year, what proportion of revenues are coming from new products or services, how many new launches are scheduled for the coming period and so on. They also try to assess more subjective parameters such as who is seen as the innovative leader in the industry and how do we compare to our competitors in innovation in the marketplace.


4. They systematically search for sources of new ideas from trends in the technology and the industry, from unexpected successes in the marketplace, from customer feedback and from input from employees at all levels.


5. They apply gating processes to projects and prototypes to check that they meet their milestones. They ensure that projects pass marketing, technology and financial hurdles in order to progress and have additional financial and development resources released to them.

Integration or Separation?

Should innovation prototypes for new businesses, products or services be given to existing departments to manage and develop or should they put into special incubator units? It is generally much more effective to put them into special units which are focused on innovation. Peter Drucker explains why as follows:


"Innovative efforts should never report to line managers charged with responsibility for ongoing operations. The new project is an infant and will remain one for the foreseeable future, and infants belong in the nursery. Executives in charge of existing businesses or products will have neither the time nor understanding for the infant project."


When in 1995 General Motors wanted to create a new business based on in-car voice activated communication, OnStar, they appointed Chet Huber, a maverick within GM. He put together his own multi-disciplinary team with over half his staff coming from outside GM. Huber showed it was possible to innovate inside a large company like GM. By 2002, OnStar had over 2 million subscribers and was standard inside Acura, Audi, Lexus and Subaru as well as GM cars. Huber believes that radical innovation can happen inside big companies if you build a team that respects insiders and listens to outsiders.

IBM did the same when they had small "skunkworks" teams compete to develop the Personal Computer. Don Estridge and a team of 12 engineers in Boca Raton in Florida in just 18 months built a prototype, gained approval and launched the project which redefined the market and set the new standard for PCs.

The Innovation Process

How can you establish an innovation process in your business? Here is a simple checklist.

1. Diagnose the Current Situation

• First you need to find out what is impeding innovation today. Could it be a lack of vision or a complacent culture, or perhaps a difficult approval processes for new ideas?

2. Set Goals

• Set suitable goals, objectives and measures so that you can calibrate progress. The sorts of goals you choose will depend on your circumstances. They should be quantifiable and have timescales. Examples might be: five major new products launched within the next year, 20 prototypes tested with customers, two new routes to market or a new logistics methods implemented to reduce inventories by 30%.

3. Design and Train

• Design an innovation program to involve staff at all levels. It will address the issues raised in the Innovation Audit and it will set in place the activities to achieve the goals. Train leaders and innovation champions throughout the company in the tools and techniques needed to make innovation a natural part of the organization's activities.

4. Run Innovation Programs

• Implement innovation programs designed to achieve the goals. These might typically include: building a company intranet site to support all innovation activities, running ideas campaigns for individuals and teams, identifying internal and external sources of ideas, and establishing idea evaluation and implementation systems

5. Evaluate and Implement

• As the ideas flow in from the Innovation Programs they need to be promptly evaluated against clear criteria. An innovation funnel is established. The most promising ideas enter the funnel and receive detailed analysis and support. Some then go through to be prototyped. Soon innovative products, methods, processes and partnerships are moving from trials to full implementation.

6. Measure, Communicate, Adapt

• Progress against the goals is measured. Successes are trumpeted. Everyone is kept in the picture regarding developments. The program is adapted and enhanced to make it even more effective and to keep it fresh in people's minds.

Evaluating Ideas: The Gating Process

Most organizations find that generating ideas is easier than evaluating or implementing them. Once you have a lot of promising ideas you need to evaluate them. In larger organizations with a rich flow of promising ideas a formalized and disciplined approach is called for. According to the Product Development & Management Association (PDMA) best-practices study, 68% of leading U.S. product developers now use some type of gating process to progress and evaluate innovations from conception of the idea through to full launch of a new product. The general principle is shown above in the form of a funnel.


Ideas from all sources flow in at the top of the funnel. They then go through a series of gates. The gating process determines which ideas carry on to the next round and which do not. Typically around two-thirds of the projects fail at each gate. It is sometimes described as a kill or go decision, but the ideas which do not proceed are not killed. They return to the database together with the reasons for the suspension of the idea in case they can be resurrected or recombined with another idea later.

The number of gates will be determined by the complexity of the product and the cost of its development. For a small company there may be one or two go/no go decisions. A company like Glaxo Smith Kline in pharmaceuticals has around 35 gates in its new product development process. New drugs can take seven years to bring to market - the costs, risks and paybacks are enormous. Sony, on the other hand, launches over 1,000 new products a year. The number of ideas entering the funnel must be truly enormous if over 1,000 make it all the way to launch.

The leading process is Stage-Gate, which is a trademark of Bob Cooper and Scott Edgett. Their methodology is well developed and deployed. Promising new product ideas go through a series of stages and gates. The flow is shown below.

Here is how Cooper describes the five key stages of the process following the discovery or idea generation phase:

Stage 1 - Scoping

• A quick and inexpensive assessment of the technical merits of the project and its market prospects.

Stage 2 - Building the Business Case

• This is the critical homework stage - the one that makes or breaks the project. The business case has three main components: product and project definition; project justification; and project plan.

Stage 3 - Development

• Business case plans are translated into concrete deliverables. The manufacturing or operations plan is mapped out, the marketing launch and operating plans are developed, and the test plans for the next stage are defined.

Stage 4 - Testing and Validation

• The purpose of this stage is to provide final and total validation of the entire project: the product itself, the production process, customer acceptance, and the economics of the project.

Stage 5 - Launch

• Full commercialization of the product - the beginning of full production and commercial launch.

Each stage involves team activity. A cross-functional team examines the project using key parameters and gathers information in order to make the decision as to whether the project advances to the next stage or not. The team looks at operational, technical, marketing and financial aspects of the proposal to assess potential risk and reward. The proposal has to clear the hurdles in the gate before proceeding to the next stage. Each stage involves more financial commitment and development than the previous stage so at each gate the hurdles are raised. The idea is to kill off those projects that do meet the gating criteria. As projects pass through the gates they are better understood, there is consequently less risk and more financial and marketing resources can be devoted to them. For a fuller explanation of the process the books and website of Cooper and Edgett are recommended.

Conclusion

The successful organization will focus on quality and innovation; it will juggle efficiency and creativity. Creativity does not mean chaos nor does it mean leaving things to chance. You can put in place processes for idea generation, idea evaluation and proposal implementation. The whole process can be managed on a formal basis while accepting many informal inputs.

What is needed is a total quality approach to the process of innovation.

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

Creating High Performance Customers

by Mike Brown

The past few weeks, I've been schlepping around fabric stores since Cyndi wants to recover several pieces of furniture. This is unfamiliar territory for me, which usually means an opportunity to hunt for different takes on Brainzooming-related ideas.

One can imagine the most asked question in a fabric store is, "How much material is it going to take to reupholster __________?" With many ways to fill in the blank, store staff must spend a lot of time answering the question, especially since customers could likely struggle to accurately describe (from memory) items they're looking to recover.

That's where this photo shows such an innovative services marketing idea: a poster depicting 60 pieces of furniture with the approximate square yardage needed to recover them.

With the poster in place, the exchange on "How much material is it going to take to reupholster __________?" becomes a smile and a finger point to the nearest poster where a customer can find the item and the answer with much greater speed and certainty.

The poster creates higher performing customers which turns into time savings for customers and staff, which leads to better service and lower staffing costs. That's a strategic idea put into practice.

So what stumbling blocks to efficient customer-employee interaction exist in your business? What simple ideas might be lurking to address these issues as effectively as this poster does?

Spend a few minutes thinking about it and see what you can do to improve how you cover the situations you face.

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Mike Brown is an award-winning marketer and strategist with extensive experience in research, strategy, branding, and sponsorship marketing. He's a frequent keynote presenter on innovation and authors Brainzooming!

Is Operational Excellence the Enemy?

OK I admit it. I've grown frustrated by the fact that a capability or insight that proves valuable to an organization - operational excellence - is also such a big impediment to innovation. It's strange that something that in some regards is so good for an organization can also be so detrimental as well.

How, you might ask, is a focus on operational excellence a detriment to innovation? Well, individuals measured on operational excellence want consistency, a clearly defined process that people follow closely, the elimination of failures and mistakes, the elimination of variance. These are GOOD things for an organization once it has determined the appropriate mix of products and services customers want. To be able to deliver the products and services at the highest quality and lowest cost is valuable.

However, all that focus on eliminating waste and variation and risk creates mental barriers for innovation that are very difficult to overcome. If a person or team has been evaluated and compensated for making the machine run efficiently and effectively, can they really stop in mid-stream and now work in a very different model - the model that innovation requires?

So, for years operational excellence has been my nemesis. But I've decided to use innovative thinking to turn the problem on its head. Perhaps what we should be asking is how to create an operationally excellent innovation process.

Those of you who follow this blog understand that firms that are successful at innovating have intentional innovation processes that are sustainable over time. It makes sense that if we want people in an organization to accomplish a complex set of tasks, we'd implement a defined process and method within which they can work. This is where the worm turns - if innovation is a defined process, then perhaps our friends who are interested in operational excellence can help us make those processes more effective and efficient.

Imagine changing the mindset of the organization - changing the cultural attitudes of the organization - by reinforcing the "operational excellence" concepts within a innovation oriented mindset. Let's find the best new ideas, and implement them in the best way possible. Suddenly these two concepts, which have been inimical, can now work in support of each other. This attitudinal change is not a simple one, but it is one that could happen. What's required is leadership from the senior executives to explain why innovation is so important, and how the concepts and methods of operational excellence can enable and support the organization to become more innovative.

It's at least worth a try.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.