Innovating On A Budget

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

Here are five tips to help you innovate on a budget:

1. Tell people that you want their ideas. Tell your staff, tell your customers and tell your suppliers that you want ideas that will help streamline the business, improve service, cut costs or delight customers. Tell everyone! If you do not have an effective suggestions scheme then set one up. Listen to all suggestions with an open mind and evaluate them constructively.
   
2. Allocate a budget for innovation. You do not get innovation for free. You must allocate time, people and money but you do not have to be extravagant. The most important thing is to give people some time and space to generate, evaluate, select and test Ideas. Google famously gives all employees one a day a week for this sort of activity. You do not have to be quite so generous - maybe one afternoon a month will work for you. However you do it you allow people to have ideas and experiment.
   
3. Move quickly. Once you have selected a promising idea move rapidly to building a model that you can show to people. This might be built in Lego, it might be a series of sketches or a role play. Once you show it to selected customers or other stakeholders you can quickly get useful feedback and of course funding.
   
4. Kill the losers. Set standards for innovations - e.g. Can we make money at this? Is there a real need? Can we make it work? Can we win with this? If the answers are negative then be prepared to cancel the project and move onto something else. Resources are limited and should only be devoted to potential winners. Be ruthless!
   
5. Pinch other people's ideas, we call this 'creative swiping'. A low cost way to innovate is to copy ideas from other industries or other places and to try them in your business. What are they doing in other countries to solve this kind of problem? What can you use that is new to you but has been proved elsewhere?

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

Innovation - Asking The Right Questions

Asking the right questions can often get us off to a good start. Below is a list of some questions that you might like to ask yourself either as a group or as an individual. The questions might provide useful answers or lead you to explore other avenues.

1. What is the biggest (avoidable) hassle that our customers have to put up with?
2. Are there any recent changes in rules or regulations that affect our customers?
3. Who does/does not use or products/services?
4. Who is prevented from using our products/services?
5. Where do our products/services perform unexpectedly well/badly?
6. Does anyone use our products/services in ways that we never intended?
7. Who does this the best/worst? What can we learn from them?
8. How could this be improved if I had all of the resources that I needed?
9. Can we improve our products our services by changing people, materials or technology?
10. What are our top 5 sources of business?
11. What facilities are least used/most used?
12. Can we make our offerings easier to understand/buy?
13. Do we know the cost structure of our offerings?
14. Who benefits the most from our products/services?
15. Do we have all of the skills that we require?
16. Do we understand the competitive landscape?
17. Are we duplicating our efforts in any way?
18. What could we do better with more training?
19. Do we have the right resources/sufficient resources?
20. Can we bend the rules? Have we tested the rules?

When is a change not a change?

This is not a trick question. Many of us have undergone change programmes over the years and many have not worked or had no effect. Why is this? The answer is quite simple, the initiatives have not been Change programmes, they have mostly been renaming exercises. The phrase ‘rearranging deckchairs on the Titanic’ springs to mind here and it is most unfortunate that such exercises have largely been carried out in the public sector in the UK since the economic downturn began to bite.

So what has actually been happening, particularly in our councils and Civil Service? Luckily for employees, the public sector currently has a policy of no compulsory redundancies, which means that only costs other than labour can be cut which in turn leads to the desire for greater efficiency. The desire for greater efficiency then leads to the reorganisation of people. Structures, responsibilities and titles change but job descriptions, behaviours and attitudes do not.

Why does this matter if the organisation has not had to shed employees other than through voluntary schemes, after all efficiency has been addressed and costs cut! Let us go back to the reasons for change, to alter the way in which the organization works (effectively and efficiency) and ensure that it is fit to face the future. To do this we have:

• Shed staff, often indiscriminately
• Adopted best practice from external sources
• Changed the organisational structure chart
• Amended job titles

What we have also done is:

• Lost valuable knowledge and experience
• Failed to communicate the reasons for change and expectations
• Addressed any necessary changes in behavior
• Failed to address insecurities regarding the future

We are likely to end up with an organisation that wants to work as it has always done (but when it has let valuable employees go) but which its masters want to go in a different direction. Think of a train running on tracks with the Chief Executive running alongside shouting ‘no, over here. Go this way’. Many will say that this is all that can be achieved in the current climate in a short space of time. My point is that the work should have been carried out properly over a longer period of time if those in power had the skill and foresight to begin the changes a couple of years ago.

This all sound very negative but is easily sorted by:

• Ensuring a transfer of knowledge when staff leave
• Employing change agents within the organisation to help with real change
• Engage the employees at the ‘coalface’ – in a hierarchical organisation you could be ignoring 80% of the workforce
• Focus on required behaviours rather than simply changing job titles
• Encourage transparency wherever possible

Innovation – the forgotten masses

Here in the UK we are weighed down by policies for Innovation and a similar picture exists in many developed countries. There are grants for business, business support, incubators as well as sector clusters defined for aerospace, engineering, bio sciences and much more. What is actually happening here? Those in charge of policy making are in effect trying to pick which areas of the economy are going to produce the next exciting technology. It is a little like gambling on a horse but the question is should our money even be bet on a horse?

Currently large companies are able to fund their own Innovation efforts and small companies, particularly those connected to Universities seem to be well catered for in terms of funding and business support. Above a certain size of business there is a large gap into which most of our businesses fall, where external help is not forthcoming and their ability to help themselves is limited. If we forget for a minute about what Innovation outputs might actually be created (iPads, electric cars etc) and make Innovation generic rather than sector specific then surely these forgotten masses are capable of contributing a great deal to the economy. All we have to do is broaden our minds and think of Innovation in terms new products, processes and services not simply shiny new technology.

If every one of our medium sized business could increase its turnover by a small amount, say 10%, and perhaps take on 1 or 2 extra people then our unemployment problems would be solved and perhaps many of the social issues that accompany high unemployment. Better still, by focusing on all businesses we have avoided the situation where we put our eggs in one basket. We really can help everyone if we choose to do so.

Innovation – forget the words Open Innovation and Crowdsourcing

Open Innovation and Crowdsourcing have become buzz words of late which is a shame as it encourages those who blindly adopt best practice to jump on the bandwagon. It is often said that to truly understand a situation you must know enough to be afraid and there are too many consultants pushing concepts on unsuspecting businesses and organisations without really understanding what they are telling organisations to do.

The thing is that Open Innovation and Crowdsourcing really are valuable tools in our quest for Innovation. When innovating we have a dilemma, do we try to keep the fruits of our labours secret for as long as possible to secure as great a competitive advantage as possible, or do we throw our net outside of our organization to gather the maximum number of ideas and encourage communications/interactions with outside (and possibly competitor) organisations?

There are many issues surrounding Open Innovation, such as how to manage it, how to select the participants/collaborators and exploiting the results. Much of this is common sense if you have your wits about you. Essentially you have a choice, keep it in house or look outside, perhaps even conducting your business in public as some educational establishments do. The aim though, is to understand, not blindly follow the ‘How To Innovate For Dummies’ guide.

The fuel for Innovation is ideas and to generate ideas we need people to interact with each other. The more debate and creative tension, the higher the quality of ideas generated and the greater their number will be also. To get to this stage we need more bodies, a crowd. Crowdsourcing is effectively outsourcing the generation of ideas and the solution of problems to a crowd. The UK government’s attempt to gather ideas for policies via their website is an example of this. Your crowd can communicate remotely or be in the same location (see the Open Space technique) and interaction fuel debate or facilitate building of ideas.

Once again there are issues such as managing your crowd and capturing ideas, but once you are aware of the principle of Innovation then everything is pretty much common sense.

So please forget the words Open Innovation and Crowdsourcing but do learn as much as possible about them, understand the concepts and employ them properly. If you really do know enough to be afraid then you understand the concepts fully enough to be able to employ them to create success for your organisation.

Social Innovation- is this the way forward?

Being an advocate of social innovation I would say ‘of course’ but it depends on your definition and what your own particular situation is. I will start by making things complicated and offering two not entirely unconnected definitions.

Forget the use of the word ‘social’ to mean outside work and think of what it could mean. When we are being social we are interacting, sharing, caring and even building. We are essentially social beings (although some do like being alone) so why not focus on a type of innovation that makes use of our social characteristics?

In simple terms, think of innovation as a ‘people thing’ rather than a ‘gadget thing’. That is not to say we cannot have shiny gadgets, but that we should focus on how they got to be there (innovating rather than the innovation). This then leads to the possibility of innovating even when the output is not an innovation (perhaps a process innovation). Such a type of innovation is thus appropriate both inside and outside of the workplace.

So what about the other kind of ‘social innovation’? This is most definitely linked to the community/region/country as a whole. You should be thinking of innovation in community projects, healthcare, employment opportunities, arts etc. A good example might be the micro finance initiatives that have sprung up in many developing countries. We need this kind of innovation too.

Many countries are in a mess (the recession) and are cutting costs (in the public sector). We need to revert to being social creatures again or there will not be any people with any money to buy the shiny gadgets that we used to think of as innovation output. Businesses producing shiny gadgets will go bust leading to more misery. The UK government’s idea of ‘The Big Society’ to counterbalance the public sector cuts will fail dismally without a modicum of social innovation.

So the answer is that YES we most definitely need social innovation however you define it.

Should The Public Sector Be Quite So Public?

Is transparency costing us dearly?

I was speaking to Dr Paul Thomas (of BBC’s Ban The Boss programme) and something that he said stuck in my mind. He stated that ‘monitoring costs’. This is so obvious but I had never heard anybody say this before. Each time that we want to monitor something we have to define a process or assign someone to keep a look out. In many cases we might have to create a job for someone to oversee this. Thus a seemingly simple act might cost say £15,000 to £20,000 per year minimum. Why do we need to do this at all?

All across the country there are groups of people who are demanding to know how much their local council is spending on paperclips and they are justifying it by saying that if waste is eliminated our council tax will go down. Similar arguments are put forward for the Health Service and other public sector bodies. Why not simply say to the nosey parkers that the records are there for them to look at if they wish to fish in the filing cabinets and let our public sector workers do the work that they should be doing?

Isn’t it about time that we began to trust each other again? So what if my local council spends an extra £100 on paperclips as long as they deliver the service that they should? On the flip side, public sector employees and managers must understand that they are required to do their jobs as efficiently and effectively as possible. £100 on paperclips or £20,000 to monitor the stationery budget? It is a no brainer.

Recently I have spoken with many public sector managers, and budgets are being cut but the demands for accountability are increasing which are pushing up costs!! Since this is a zero sum game,  something somewhere is suffering. It is, spending on actually delivering services is being reduced.

Let us trust one another a little more and reduce the bureaucracy and overheads associated with monitoring and accountability. Let us reduce the number of managers, and learn to manage our public sector in a different and more effective manner. We really could reduce costs and maintain the standard of our services for long as possible. Let us be a little less public!

Does your HR department stifle Innovation?

This is not directed at anyone in particular so there will be some readers within HR who take exception. I hope that these people realise that I am not suggesting that everyone who works in HR is a problem, just that the HR function more often than not can be a hindrance.

So what does your HR department do? I mean what does it REALLY do as opposed to the wise words on the intranet or in the employee handbook? Many HR departments have become less interested in people and more interested in compliance with employment law. This is not their fault but it still makes them part of the problem. So if I am a senior manager I know that my back is covered regarding the law, but what help will I get with changing culture, recruiting the right people, creating time and space for creative activities, and more importantly demonstrating how they affect the profitability of the business?

If you are really unlucky your HR department will be one step ahead of you and will have been renamed something like People and Organisational Development (or POD for short). POD are even worse as there is very little emphasis on people, the organisation or development. Still just payroll, employment law and Investors In People tick boxes. It is easy to kick these people when they are down but how can they really help, or if they cannot help, what help do you need to look out for? Here is a short list that might help:

Team Work – are people working as individuals or in teams, how effective are they, and are they multi/single function. Another important factor is the degree of autonomy and whether bottom up communication is effective.

Hands-on Management – how much interference is there by managers in every-day working and how prescriptive are managers?  What  actions are taken when problems occur. Do managers take immediate control or do they trust the people working for them to resolve problems?

Desire To Succeed – does everyone have a desire to succeed? Even though there may be insufficient resources to carry out a project or implement a plan there should be a 'yes and ..' culture rather than 'yes but...'. Good ideas can be kept for future use, not dismissed out of hand for lack of finances, time etc. There should also be evidence of doing everything that can be done to secure even the smallest advantage such as protecting Intellectual Property and seeking external help. Ideas should be welcomed from all sources and winning organisations are likely to be less risk averse.

Knowing How To Succeed - Organisations that know how to win will have a thorough understanding of their marketplace and all of the factors that affect it such as the economy and relevant legislation. They are willing to exploit these factors and be first movers or early adopters.

Environmental Scanning - To be successful, organisations must be able to scan their environments and be aware of new competition, changes and spot rends and patterns. This information will then be used to determine key success factors within the marketplace and drive the building of strategic capabilities.

External Relationships - In order to maximise potential, it is necessary to nurture external relationships with both customers and suppliers. Is this being carried out regularly and effectively? Do organisations rely on single points of contact or do they interact at multiple levels, cementing ties? How well is information disseminated and vision, branding etc communicated to stakeholders?

Growing The Right Culture - A truly innovative culture relies heavily on intrinsic motivation. Employees must have a clear idea of what they are expected to achieve and of the amount of support that they have. Transparency on the part of senior management and 'leading by example' will build trust and encourage buy-in to strategic objectives. Motivation and morale should generally be high with little or no evidence of stress present.

Stretching To Achieve - When stretching individuals we must ensure that the right culture exists. Such a culture includes, but is not necessarily restricted to such things as opportunities to develop skills, freedom to act on own initiative, work environment, acknowledgement of input, learning environment. This component is more concerned with the right environment for growth rather than what is actually done to/for employees.

Getting The Best From People - When maximising potential it is often necessary to take employees out of their 'comfort zone'. To do this successfully there must be an effective framework for delivering the necessary training and development. Individuals should be encouraged to use their own initiative (subject to any safety or legal constraints), be responsible for their actions and learn from their mistakes. There also needs to be appropriate reward systems.

By the time you get to this point you might be thinking ‘what has this got to do with me?’ The thing is, if you are a professional who works with, and wants to get the best out of people then it is your problem. If the big cheese and the rest of the board are taking strategic decisions and middle managers are busy managing, then as an HR professional you are in exactly the right place to create a blueprint for an innovative organisation. The question is, are you the right person, or have you got the right people?

Innovation – Avoid These Pitfalls To Ensure Success

In many organisations there can be tension between those promoting creativity, design and user centred approaches to Innovation and those who are bound entirely by procedures, plans and spreadsheets. I have often remarked that many people think of Innovation as a machine where you turn a handle after feeding in your ingredients, and a nice new Innovation will pop out. This is not the case! We should be focusing on the process of innovating (the people) rather than the end product. But what could be going wrong? Well here is a short list of things to beware of:

1. Being unrealistic Innovation takes time, often more than we allocate for it. The results can also not be what we are expecting. Unrealistic (or irrelevant) objectives and timescales will kill . Try to think of the impact of your Innovation project rather than listing the results in a table. You should be explicit though!
   
   
2. Protecting ego If you’re scared to be wrong, you won’t be able to lead innovation or lead the innovation process. Since Innovation is all about discussing new ideas you have to be prepared to be wrong or immerse yourself in completely alien concepts. If you are not doing this you are just reworking old stuff, not innovating.
   
   
3. Believing process will save you Innovation processes are not what Innovation is about. They provide a framework within which leaders and facilitators work their magic. They also provide a sort of ‘incubator’ within which anything can happen and which is allowed to flourish when it does. Beware of allowing everything to happen though! You are in business to make money.
   
   
4. Varied backgrounds and experience are not the same as cross functional teams In a bid to be innovative, many companies have put together cross functional teams. Such teams are a good idea since your project teams are liberated from the silos (departments) that may make up your business. However, what you are really looking for are different perspectives and experiences. It’s the people you must mix, not the functions.
   
   
5. Believing that we know everything We often do know most things about our markets and customers BUT what we do not seem to be able to do is get started. We believe that we have all of the motivation and inspiration that we need. We sit at our desks and pore over emails but very few answers arrive that way. Go outside for inspiration, take your camera (or mobile phone) and see what is going on in the world. Drop in on an old lady for a cup of tea and ask her opinion. Do anything but sit on your chair all day!
   
   
6. Talking rather than doing We often like to rubbish the ideas of others and try to make sure we have a complete solution before trying anything. Get prototyping (or playing) early on and get feedback and gather more ideas. We cannot learn by doing nothing, and hence we cannot innovate either.
   
   
7. Converging (executing) rather than diverging (exploring) ‘Cycle often and close late’ is one of the main precepts of creativity in business. Too often we wish to nail everything down. The CEO wishes to know who is doing what and what the timescales are before we have finished exploring all of the possibilities. Senior managers must learn to live with a little ambiguity.

Christmas - Elf and Safety Issues

No this is not a statement from a fringe group who are avoiding the frayed nerves and expense associated with Christmas Shopping, cooking, boisterous children and upset tummies. Christmas is a time where a million and one things must happen and be in place (more or less) by the time presents are unwrapped on Christmas day.

To be honest most of us manage it. We enjoy (or tolerate) the influx of friends and family and for once we seem capable of multi tasking i.e. having a drink, fixing the tree, carving the turkey. Using Christmas as a metaphor, why can’t we do all these things in the workplace? Why can’t we encourage diversity, set objectives, plan and execute strategies?

A subtle clue might be in where the focus lies. As individuals, who do we focus on at work, who do we focus on at home (especially at Christmas)? Now think about where the most dramatic results are achieved!

So far we have considered taking Christmas to work, but what if it were to be the other way around? Here are just a few of the issues that might surface:

• Tall object with pine needles – removed for health and safety reasons
• Three Wise Men – disbanded because of contravention of equal opportunities policy
• Baby in a stable – social services involved, baby now in care, animal rights protesters angry because of displaced donkeys
• Larger house needed – health and safety dictate that there is not enough floor space per human/animal/present
• Christmas dinner cancelled – no proper workstation assessment carried out on dining table and various rickety items of furniture that we use
• No presents – Santa has not been on a manual handling course
• CRB checks on family mean that our relatives must stay away
• ISO assessors are getting annoyed because we want to have Christmas without first writing a Christmas procedure and having it approved

The list could be endless. There is a serious point to be made though. Yes we do need some frameworks to work within, and for someone to look out for the less fortunate and disadvantaged, but too many rules and too many people saying NO is stifling.

So its time to decide whether in 2011 you wish to embrace a more creative and productive way of working or wither away under a pile of rules and red tape. Remember, if Christmas really was like work, it would be cancelled. Long live Christmas!