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Embedding innovation capability in businesses to change their culture |
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Score
60%
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2 votes,
Feasibility
80%
Originality
60%
Humour
10% |
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The Problem:
Difficulties in ensuring innovation remains at the heart of a business
The Social Invention:
Innovation is a term bandied around in the business world to give the aura of ‘cutting-edge’ practices, or to allude to the importance a company places on new ideas. Rarely does it seem that this actually means anything in practice, rather that it has been added to the standard marketing spiel to give a veneer of dynamism to a staid global corporation. There is also the underlying feeling in many cases that the CEO of a company is only referring to ideas or innovation because they feel they should, that it is a buzzword they should be using; in reality, the status quo suits them only too well. They may also hold to several myths that Tim Jones refer to as the ‘ten innovation myths’: these include ‘innovation does not impact the bottom line’, ‘innovation requires high investment in new technology’, ‘innovation is only relevant to some industries’ and ‘only small companies can innovate’. It is these myths that Tim Jones, head of a consulting firm focused on innovation, aims to puncture in Innovating at the Edge. His intention is also to combat the first premise outlined above: that innovation is just a word added to a business’ annual report for show; on the contrary, this book demonstrates how innovation can be embedded in an organisation to radically change the way it works, and the levels of success to which it aspires.
The why and how of incremental and ‘real’ innovation
Before setting off on outlining the way innovation has evolved in businesses and how it can be used today, Jones has a section simply titled ‘Why innovate?’ In this section, he draws an interesting distinction between ‘incremental innovation’ and ‘real innovation’. Incremental innovation, he writes, is about “small changes to existing products or services”, which updates them to be in tune with consumer wishes. It is his assertion that such next step advances are rarely enough to guarantee success, and that ‘real’ innovation involves big leaps forward: the Post-It, the Walkman, or music file-sharing. Yet this assertion is followed by five areas for the successful exploitation of new ideas, and one of these is “Copying what others have done before”. Surely this implies incremental innovation, then, a building on what others have done? Many of the most successful ideas have been a tweak or turn of someone else’s, rather than such a giant leap forward.
'The Walkman was commissioned so the Sony co-founder could listen to classical music on flights'This caveat aside, Jones makes a convincing case for why innovation is important in today’s business world, both in times of economic boom and of downturn. He goes on to detail several different cases of companies in the 1980s and ‘90s who helped evolve the very nature of innovation in business. One of the most interesting of these is Sony, whose primary innovation of the era was the Walkman. The Walkman was originally commissioned, as legend has it, by the Sony boss Akio Morita for his friend Masura Ibuka to have a means of listening to classic music on long-haul flights. It was the first product to give consumers a portable music experience, and was a massive success; indeed, it still is today, in its Discman and MiniDisc forms. Interestingly, the Walkman could not be easily protected from innovation because it was essentially a repackaging of existing components (the great leap forward here was envisioning what the combination of those could achieve). Therefore, Sony added many incremental improvements to the Walkman to keep ahead of their competitors. It was these incremental improvements, such as adding a radio, adding remote control, adding enhanced bass and so on, which enabled Sony to stay ahead in the market, and cement their position as the leader in the personal music system industry. It was their ability as an organisation to both have the vision to make the leap and the capability to constantly add new ideas to the original that ensured success.
Jones also writes of an interesting model for introducing innovations, which would serve any sector equally well. The ‘stage-gate process’ basically consists of five stages, each punctuated by a review, allowing a yes/no decision after that stage before moving on to the next. The five stages, which follow the original idea, are investigation and research, building a business case, developing the idea, testing and validation, and production and launch. The process, developed by Robert Cooper of McMaster University in the early 1990s, means that no key elements of developing the idea effectively are missed out, and incorporates evaluation at regular intervals to ensure continuing the process is viable and valuable. The stage-gate approach could clearly be applied to sectors outside business as well: one can imagine a social entrepreneur who has a new idea following the same structured process, or even a charity introducing a new service into its particular field.
The importance of collaboration
One interesting facet of innovation which the book draws particular attention to is the need for collaboration. As Jones puts it, “Innovation is, by consequence of its cross-functional nature, an activity dependent on collaboration”, and “some would argue that the most innovative organisations are also the most collaborative”. These can be intra-business or inter-business collaborations, but the process relies on people working effectively together. Again, one feels that this is not something always grasped by businesses which often seem to think of innovation as a creative unit, an isolated individual genius, or a research and development team, rather than something which the whole company, or at least many parts of it, can be involved in. Similarly, organisations which are prepared to work with each other on projects may ultimately reap the reward of such trust-driven sharing.
'Ford’s innovation was to sell the same car made from the same parts in different countries'
One such example, and another of Jones’ excellent case studies, is Ford. Ford provides an example of both forms of collaborative innovation, through its construction strategy, and its partnerships with other car manufacturers. Ford decided in the 1980s that it needed to reconfigure its manufacturing strategy, as it continued to lose out to Japanese and European car-makers at home and abroad. So it decided to “share product platforms across regions to allow multiple vehicles to be provided into global marketplace using the same core elements”. Or, in other words, sold the same car made from the same parts with different names for different countries. This simple, but effective intra-organisational innovation not only allowed them to cut costs across the board, but also gave a greater unity to the business as a whole. This was extended to their acquisitions of Jaguar and Land Rover, which now also share Ford manufacturing platforms, or have been rebranded for different countries.
Meanwhile, Ford was also one of the founders of Covisint (www.covisint.com), which is a virtual collaboration between major automotive companies. Covisint is a global marketplace that shares tools for product development between car manufacturers. With Ford, General Motors, Daimler and Renault-Nissan sharing one virtual marketplace, their costs have been decimated and the progress being made in areas such as online selling, productdevelopment and electronic quotations is that much faster and more coherent. Taking the leap of faith in innovation, by collaborating with competitors, has proved worthwhile for all concerned.
Embedding innovation capability in organisations
The latter third of the book is not the most interesting, but perhaps the most useful. Having detailed many examples of business innovation (from eBay to Dyson, from Google to Egg), Jones moves on to practical steps that businesses can take to give themselves the capability to innovate effectively. His five-stage process for embedding innovation is a simple one:
Evaluation – understanding the current performance of the business, identifying opportunities and benefits
Focus – defining the desired improvements, and criteria for judging success
Design – defining, and refining, the changes that need to be made
Implementation – launching the changes, piloting them across the organisation
Review – evaluating the success and failure of the changes
Unlike the stage-gate process discussed earlier, Jones envisions this process as an ongoing cycle, in which the review stage than filters back to further evaluation, and so on ad infinitum. Organisations need to continuously innovate to achieve their goals, and each round of this cycle should, as the book says, “raise performance and also improve awareness of what else can be done”. As the innovation occurs, so the outcomes feed back in to the cycle, and new ideas emerge. But such a system requires a close analysis of the skills, structure, and culture of an organisation before changes can be made.
The efficacy of applying business practices in the social and voluntary sectors
The book goes into significantly more detail about each of the stages, detailing methods and examples, and businesses will find them useful tools and tips for introducing a culture of innovation to their organisation. One particular example in the ‘implementation’ chapter stood out as being close to what the Global Ideas Bank aims to achieve. The example was of a package company trying to generate ideas, and it detailed a process in which idea generation led to idea collation which led, via filtering, to idea evaluation and idea ranking, with an archive to the side of what had been rejected. While this model was for finding packaging solutions, the Global Ideas Bank goes throughthe same process: people generate and submit ideas, which are filtered and collated before being evaluated and ranked (by the website’s audience). The ideas which do not feature highly then form part of an online archive. Again, this demonstrates the efficacy of applying business practices in the social entrepreneurship and voluntary sectors. The jargon may be off-putting, but the ideas and tools could be of great use.
Conclusion
Innovating at the Edge is aimed squarely at the business and corporate sector, and makes no bones about the fact that it proposes innovation as a way for businesses to make more money, to develop new products and services that will extend a company’s lifespan, and to get ahead of their competitors. In its analysis of innovation techniques and practices, though, it also shows how innovation can play a key part in improving things. Tim Jones focus is on improving businesses and their bottom line, but it is a process of improving nonetheless, and the tools, tips and examples he provides are often applicable in organisations hoping to enact social change. Challenging the myths of innovation he outlines at the start can also lead in this direction. Take the truth (which his myths have become by the end) that ‘Innovation does not require high investment’: many a non-profit sector organisation should take that on board. Similarly, the truth that ‘Innovation can occur in all areas of the organisation’: innovation is not just about the ‘big idea’, but about ideas for improving the methods of doing things, the ways we work together and collaborate, on changing small things in our society and workplaces. It is about the incremental solutions which can be made now, as well as the ‘real’ leap-forward innovations which may take many years to come to fruition.
Innovating at the Edge by Tim Jones (Butterworth Heinemann, 2002; 350 pages, £21.99; ISBN 0-7506-5519-4). Reviewed by Nick Temple.
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