Friday, August 28, 2009

Ten ways to Innovate

Many people are stuck when it comes to thinking about why or where you can innovate. You do not have to limit yourself to Marketing or R&D, anyone can get involved. Here are some hints as to where you can get started.

  1. Take a look at your business model i.e. How do you go about making money? Dell attempted to turn the turn the personal computer production business model on its head by collecting money before the customer’s PC was assembled and shipped. This greatly improved the cashflow of the business by holding funds for around seven to eight days.

  2. Organise your business networks and alliances i.e. Do you join forces with other businesses for mutual benefit? Many supermarket chains have ceased to run their own logistics and concentrated on their core businesses of selling goods. Wal-Mart suppliers have also joined forces (normally competitors) to ensure that small 'just in time' deliveries are aggregated to become cost effective.

  3. Do your processes and procedures support your core processes? i.e. How do you support the company's core processes and workers? Starbucks has delivered its profitable coffee experience to customers because it offered good wages and employment benefits to workers. These were often part time, well educated individuals or students who were motivated and proactive.

  4. Take a look at your core processes i.e. How do you create and add value to your offerings. Wal-Mart continues to grow profitably through real-time inventory management systems, aggressive contracts with merchandise suppliers, and feedback systems that give store managers the ability to identify changing buyer behaviours and respond rapidly.

  5. Product performance i.e. How do you design your core offerings The VW Beetle (in both its original and its newest form) took the market by storm, as did the Apple iPod and iPhone. These have performance designed in and can be spun out into multiple offerings.

  6. Product system i.e. How do you link and provide a platform for multiple products. Microsoft Office "bundles a variety of specific products (Word, Excel, PowerPoint, etc.) into a system designed to deliver productivity in the workplace whilst the iPhone now delivers pretty much the same on the move (plus a phone and entertainment). The system serves a number basic needs and solves consumer problems.

  7. Service i.e. How do you provide value to customers and consumers that goes beyond the norm? An international flight on a low cost airline will get you to your intended destination. A flight on say Emirates or Thai International will leave you wondering whether you have been flying at all. Do your customers want to just get there or get there refreshed and ready to clinch a big business deal?

  8. Channel i.e. How do you get your offerings to market? In the US Martha Stewart has developed a deep understanding of her customers so that she knows just which channels to use (stores, TV shows, magazines, online) to obtain huge sales volumes from a relatively small set of "home living" educational and product offerings. This is prety much the same technique as that used by shopping channels such as QVC.

  9. Brand i.e. How do you communicate your offerings. In the UK, the cute Meerkats employed by told us exactly what the online insurance seller did and did not do. The spin off was of course the hugely successful viral marketing campaign that accompanied it.

  10. Customer experience i.e. How do your customers feel when they interact with your company and its offerings? Harley Davidson has created a worldwide community of millions of customers, many of whom would describe "being a Harley Davidson owner" as a part of their identity. This also extends to some quaint British sports cars such as Morgan for instance.

These are only suggestions, there are probably many more places that you can innnovate. Good luck!

Entering the Age of Unreason

If you have not read Charles Handy’s book ‘The Age of Unreason’ then I heavily recommend it. In a nutshell it turns things upside down and tries to change our perspective on situations. One situation that Handy writes about is the issue of Consultants in our National Health Service. As most people realise, these are the most skilled and highly paid professionals. They often like to have time away from work, sometimes on holiday, sometimes playing golf and sometimes in lucrative private practice. Problems arise with their ever rising salaries. Handy’s solution is to keep paying them the same salary but allow them to work less time for the NHS. Their hourly or daily rate thus rises but the cost to the taxpayer does not. This leaves our consultants free to play golf (not earning any further money) or work in private practice and earn even more money.

Now this solution may not be ideal but it is a possible solution and it comes about by turning the situation upside down i.e. by not sticking to reason, hence the idea of Unreason. In the current world economic situation many rules have been discarded and hence reason has gone or been suspended. There is a new world order (possibly devoid of bankers) where new rules apply, or possibly where no rules apply. The situation is ripe for people with a fertile imagination and brimming with confidence to make an impact.

This course of action builds upon our banana observations and tries to examine the boundaries of a problem. First of all let us ask some questions:

  • Is the aim to increase the cost of consultants to the NHS?
  • Do we actually have to pay them more?
  • How might consultants like to spend their time?
  • Are there other ways for consultants to earn more?
  • Can we still make use of consultants for teaching training purposes?

Probing of the boundaries of the problem often reveals previously hidden courses of action. Some of these may be conditional e.g we can have consultants working less time but only if we safeguard some teaching time. OK, so lets do that.

A company supplying parts to the automotive industry was having a tough time. They did not like spending money on repairing equipment but needed to do something. Faults were usually reported to the factory manager who either did something about it or not (the more likely scenario). Control was taken away from the production line workers.

Luckily Unreason prevailed and the workers were empowered (grudgingly at first). So what happened?

  • Leaks were fixed in air hoses
  • Less leaks meant not running all of the air compressors
  • Air compressor running could be alternated this decreasing service bills
  • A total annual saving in running costs of £10,000 per annum
An the improvements did not stop there. Their colleagues who worked on an electro plating line began experimenting and found ways to double the throughput of the plating process simply by reorganising the positioning of components on the hangers that immersed them in the plating baths.

This is not quite so dramatic as Handy’s NHS solution but is a practical illustration of a burst of Unreason helping. Next time you get stuck, try asking ‘why do we have to do it this way?’ or ‘can we try doing it this way?’ and see what happens. You’ll be surprised.

Which way does your banana bend?

I often ask this question (even in polite conversation) and receive a blank stare from the recipient. The inference is, of course, that bananas do not bend in any particular direction. They are neither left nor right handed, erect or droopy, they just bend. Try grabbing a banana and placing it in front of you on table. Does it bend to the left or the right? Now turn it over, you should find that it now bends in the opposite direction.

Alas you do not have magic powers of banana bend reversal, but you have just demonstrated one of the most important characteristics of solving problems. You sometimes need the ability to look at a problem from a new perspective or just turn it on its head. I recently painted the outside walls of my house and was not looking forward to balancing precariously at the top of a ladder. It would have taken a long time to paint such a large area. But why not stay on the ground and take the paint roller up to the top of the walls? After a search in my local DIY store I found a suitable extending 5m pole and attachments that fitted to the top. I reckon that it took half the time it would have taken at the top of the ladder.

So next time you are faced with an issue, avoid rushing into the task (unless it really is that simple) and think about what you really want. In my case putting paint (relatively neatly) onto the walls of my house. I could stand anywhere as long as I could control paint delivery. Turn the problem on its head or try looking at it from a different (or different person’s) point of view.

A new building in France has a steep sloping roof covered in grass. The problem? How on earth to cut it. You could imagine all sorts of elegant engineering or bio engineering solutions but the solution used was to use hover mowers suspended on ropes from above.

Then of course, we also have that wonderful story of writing in space. The American solution? Develop a hugely expensive zero gravity biro. The Russian solution? Use a pencil!

So the next time you have a problem banana, try taking a look at it from all possible angles.