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Creativity & Innovation Part 2
In the second part of this article, Sean Rattigan outlines some case histories that look at the critical impact of innovation in some well-known companies
In the first part of this article we looked at some of the reasons that creativity/ innovation is of increasing importance in the “information age”. We placed the individual aspect of creativity within a wider framework of “brain function” and mentioned some of the metrics that are used to indicate creative or mental ability and attributes. Next we discussed some of the factors that influence our thinking, such as education and culture, and finished with a brief introduction to mind-maps and the benefit of allowing ourselves the freedom to generate and record ideas in a non-linear way.
In the second part of this article we’ll look at examples of the impact of new ideas in some well-known companies.
“Enjoy failure and learn from it. You can never learn from success.”
James Dyson, entrepreneur and inventor
The introduction of IT over the past two decades has meant that people and businesses have had to adapt and change. It has allowed unparalleled advances in the way we conduct business and similarly revolutionised the entire training and education system, both in subject matter and, to a lesser extent, delivery. Now we must prepare for the “next wave”- virtual organisations, knowledge networks, the power of individual and collective ideation (idea creation) and the impact of these on business, education and society.
The following are short case studies of organisations that have excelled in creative and innovative practice, to become leaders in their own markets.
Whirlpool: Creativity, Culture & Change
In 2000, Whirlpool had cut costs by hundreds of millions of dollars, yet judging by everything from stock price to profit margin to market share, they were no better off than a decade earlier. Prices of Whirlpool appliances were falling at an average rate of 3.4 percent a year. Whirlpool had to come up with exciting new products that could command premium prices.
Management had a number of issues to address. How to define innovation? How to measure success? How to teach people to be creative? Believing that brilliant ideas were buried in the corporate hierarchy, the CEO invited each of the company’s 61,000 employees to unleash their creativity: “Everybody everywhere, innovate”! In the Italian Alps, a crew of 25 handpicked workers got to work with a single purpose: to create unique products or services that would truly differentiate Whirlpool from competitors. A year later, they came back with “an internet business that would enable people to race one another over the web on stationary bikes.”
Not an encouraging start!
Net bike racing didn’t draw on any of Whirlpool’s strengths. They needed to direct the focus of the creative effort to be in line with the company goals and objectives, and utilise its strengths. Real innovation requires a lot more than simply urging thousands of employees to tap into their creativity. It requires hard work, structure, and unwavering discipline.
The company moved to a more traditional centralised model of product development. Since 2001, revenues from products that fit the company’s definition of innovative have soared from $10 million to $760 million in 2005. Whirlpool’s shares have almost doubled in value over the same period. They allocated $45 million from the capital budget for innovation in 2000 and doubled this the following year. Although employees didn’t receive anything for their ideas, they were enthused by management’s interest in their ideas. They set up a “knowledge management” intranet, to capture these ideas and received up to 300,000 hits per month in the 2001-2 period. Middle management however were peeved that their sub-ordinates were working on side projects when they had “real work” to do. Many members of senior management could shrug off the initiative, because they hadn’t been given any concrete goals nor was their performance measured against any innovation metrics.
The CEO and his team realised, in 2002, that they had to structure the innovation process. New ideas would have to enhance the company’s existing brands or products – innovators had to demonstrate that their proposals were something that real people would buy and market research would identify the validity (focus).
Ideas were then graded by innovation consultants on a scale of 1 to 10 – only ideas with a grade of at least 6.5 could proceed (evaluation). The CEO began setting annual revenue and pipeline targets (goal setting).
Employee surveys were conducted to gauge workers’ involvement in innovation (assess employee buy-in).
An assessment was made as to whether the new product would achieve supernormal profits, again through market research. Once more, ideas that scored less than a 6.5 got weeded out (assess return on investment).
Senior executives would have to hit all of these numbers or lose 30 percent of their annual bonus (ensure management buy-in). R&D focus switched to act on consumer feedback rather than just individual ideas (adding another dimension to their innovation model). Teams also re-assess ideas that previously failed. They underlined a philosophy of never killing ideas and shelving them so that they could be re-examined later (build a portfolio of ideas).
Since 2003, innovation revenue has quadrupled annually, easily surpassing goals and they are no longer caught in a price war, forcing rivals to innovate as well or fade away. With a lot of buns in the oven, they calculate that new appliances, once they’re on the market, could produce $3 billion in annual sales.
This is a clear endorsement for the value of creativity and innovation in business. Many other companies utilise the intellectual capital of their employees through the use of kaizen (continuous improvement). Often employees are awarded up to half of the savings achieved, which enhances motivation. ‘Our people are our greatest asset’ is a management cliché that is often given much lip service, but little else.
Innovation at Google
There is no concrete formula for introducing innovation in a company, but there is overwhelming evidence that harnessing the oft-overlooked intangible assets of a company (the brainpower of the workforce) is a must for the future. In recent talks, Marissa Mayer, Vice President, Search Products & User Experience at Google revealed that they have nine principles of innovation and entrepreneurship at Google.
Ideas come from everywhere! Allow people to contribute and use a filtering system to allow the best ideas to proliferate.
Share everything you can! Google is a flat organisation with a highly autonomous structure that encourages the free flow of ideas. They promote people to be “idea fountains” rather than territorial idea-trackers, (“this is my idea”) which actually stymie ideas as the employee focuses on getting credit.
‘You’re brilliant. We’re hiring’: increasing the capabilities of individuals can influence the organisation as it builds a strong knowledge culture.
‘A licence to pursue dreams’: Employees spend 20 percent of their time working on what they want to work on! The result has been that people work on their pet-projects, not only in this 20 percent of their working time but also in the evenings and at weekends. Some managers might worry that they are giving away 20 percent of our work time? When evaluated, they found that 50 percent of the new innovations came from that 20 percent. The right people with the right tools therefore produced 2.5 times the output. The trust-factor provided the impetus for the right people with the right tools to create and explore.
Innovation not instant perfection! Learn from mistakes and from the end-users, and of paramount importance – respond quickly! Improve incrementally towards total satisfaction.
Data is apolitical. Introducing change often creates tension, apprehension and conflict. Using clear and specific data in a transparent way can help to negate internal politics.
Creativity loves constraint. This is somewhat debatable in the field of creativity as many consultants expound the need to break free from constraints, however there is equally a case to give focus and direction to ideation.
Users – not money! Money follows consumers.
Don’t kill projects – morph them! The rationale is that if a project won approval there MUST be some inherent value- what can be done to make it successful?
James Dyson
James Dyson is a prime example of what a good idea can achieve. What distinguishes Dyson however is not only his ideas, but his fearless passion to achieve his goals – his tenacity and dogged determination.
Dyson is probably best known for the cyclonic vacuum cleaner. Dyson originally had the idea to create a vacuum cleaner that wouldn’t lose suction, as it picked up dirt, in 1978. Five years and 5,127 prototypes later, the world’s first bagless vacuum cleaner arrived in 1983, in the form of the “G-Force” cleaner. He was unable to find a collaborator in the UK to manufacture or distribute the product, as it would adversely impact the lucrative cleaner bag market (empires do love to protect themselves) so Dyson launched it in Japan under license. Even Hoover weren’t interested in it, so rather than throw in the towel, Dyson set up his own manufacturing company. The product now outsells those of some of the companies that rejected his idea and has become one of the most popular brands in the UK. Following his success the other major manufacturers began to market their own bagless vacuum cleaners. Dyson sued Hoover UK for patent infringement and won around $5 million in damages.
There is a clear business case for utilising the creative capital of employees, otherwise the old chestnut of ‘‘our employees are our greatest asset’ is just another management slogan. At first glance, there may be little obvious correlation between the innovation strategies pursues by Whirlpool and Google, however there are a number of deductions that may be made:
· Creativity should be focused in an appropriate direction to achieve objectives
· The organisation must support the generation and sharing of ideas
· Creative ideas need to be assessed to decide if they will become innovations (implemented)
· Positivity encourages expression of ideas, criticism kills them
· Everybody is creative- listen!
· To bring an idea from inception to fruition requires determination “Whether You Think You Can or Can’t, You’re Right.”
Henry Ford
Many of the ideals here can equally be applied to other successful companies such as 3M who allow employees time to ‘play with ideas’ this resulted in the ubiquitous ‘post-it’ which is one of their most successful products. Although the general consensus is that there is no ‘one hat fits all’, one thing is clear – creativity and innovation are one of the primary sources of sustainable competitive advantage in today’s global market!
The field of innovation is too large to even scratch the surface here, however suffice to say that there are many, many tools that can be applied in different settings, for individuals and groups, for different purposes and with different outcomes.
Applying the Knowledge to Training
Two very simple tools to ideate new and improved methods of training are the Road-Map and the Mind-Map. The Road-Map can be used to identify ‘where are we today and where do we wish to go.’
Very simply, the road map is a line with these two ideas at each end. Identify key steps that must be undertaken along this road. Where there appears to be an obstacle, look for ways around it keeping the goal in sight. Obtain input from friends, colleagues and students. Where something does not work, find out why and apply the knowledge to improve future ideas. The road-map also allows us to set goals which motivational theory suggests increases the impetus to make the journey. This can be a useful tool, therefore, in planning a course – identifying the road we lead our trainees down and what milestones we need to pass on the way. The objective (destination) should also be SMART (Specific, Measurable, Achievable, Realistic, Timed).
The mind-map (see Part 1 of this article in First Train, Volume 2, Issue 1) takes advantage of the random nature of our minds – create a map around an issue/problem and pin it to your wall – over time it will grow organically as you think of more and more linkages – and new linkages are a key component of creativity. Lyle English demonstrated this in the last issue where the link between teambuilding and cookery was identified, and found to be suitable for all ages and genders! In preparing training plans, we may find it useful to clearly show how the elements of a course are related, thereby imparting a better understanding of how the course fits together – perhaps it can be structured better? Mind-maps serve as a concise graphic representation so that we can instantly see what elements are present, and what desired components are not.
What about delivery? Lets try to think for a moment about the various communications media we have at our disposal. We often use PowerPoint, flipcharts, case studies etc. For certain lessons, could we make use of the vast library of video available on Youtube.com? What scenarios can we construct to introduce more role-play and allow greater student participation? Can we use Skype (free calls between users, conference, messaging and file-transfer facilities) to hold a discussion outside class hours? Perhaps groups working on class projects may find it useful to reduce the number of face-to-face meetings?
Allowing Ideations
“If only we could…”
“I wish that…”
“Wouldn’t it be great if…”
How often have these thoughts raced through your mind? Usually, we think no more about it! Children have an amazing ability to innovate. Why is this? Could it be because they are not afraid to be wrong? In our culture and educational system, we stigmatise and penalise mistakes. Do we avoid making mistakes by not trying new things? I am not saying that making mistakes is the same as creativity, but the by-product of educating children not to make mistakes may be that creative thought is not encouraged. We are afraid of making mistakes! Take a chance. Take a calculated chance. Get feedback. Try new things. Some will work. Some will not. Either way, we learn something.
“It is better to have enough ideas for some of them to be wrong, than to be always right
by having no ideas at all”.
Dr. Edward de Bono
Sean Rattigan
