11 Mar Fusion 2008: Take off the shackles to develop a culture of innovation
Madison, Wis. – As a child of the Space Age generation of the 1960s, Tom Koulopoulos is a member of the self-described “Apollo” generation. One of the defining characteristics of “Apollos,” he says, is to get stuck in traditional thinking and resist change or new ideas.
For someone who claims to get stuck easily, the founder and CEO of Delphi Group has plenty of insight into the process of innovation.
While a new religion seems to be forming around innovation, don’t believe it when someone claims to have come up with a definitive formula for innovating, Koulopoulos advised a group of IT professionals last week at Fusion 2008.
Innovation happens in a myriad of ways, and it comes when a business aligns itself with a business function or customer need.
Unfortunately, businesses get so caught up in performing day-to-day tasks and meeting deadlines that people tend to spend very little time on trying to come up with new ideas that could transform the business, he said.
“If you put limits or boxes on people, they can’t be creative or innovative,” said Koulopoulos, the author of seven books who serves as a lecturer at the Boston College Graduate School of Management. “Imagine if you gave people 15 percent of their time to be creative and innovate. We spend so little time actually doing it.”
Innovation is about looking at a new way of how we run our businesses, he said. Typically, it is not a bolt from the blue, but a discipline or a process that yields results. It’s a matter of failing, of challenging commonly held beliefs, and about failing fast. This way, you learn what’s right and what’s wrong, and then you apply it to your environment.
“Don’t be afraid to fail,” Koulopolous said. “The faster you fail the faster you will learn. Innovators feed on rejection. We give up on our ideas too fast. Innovation is dangerous. Embrace risk. Innovators look for risk as an indicator of where others fear to go, and then they go there themselves.”
Inside out innovation
Don’t be afraid to turn the innovation process inside out, he adds, providing several examples of how several failures turned into huge successes.
The Edsel is synonymous with failure. However, some of the components used in building the car in the 1950s were revolutionary and had a profound impact on the auto industry for years to come, including the development of the Ford Mustang.
3M was a sandpaper company in the 1920s when Dick Drew came up with an idea to develop an adhesive to help solve the problem of extra labor required to finish two-tone paint jobs for automobiles. While Drew was told not to pursue the innovation by his boss, William McKnight, and get back to work on improving sandpaper, he did anyway, and several years later his discovery of adhesive tape transformed 3M’s business.
“Within organizations, we become so infatuated with the product that we tend to forget the process,” Koulopoulos said. “It becomes a matter of process over product – the process has to be in place. Your core competency is the license to innovate.”
Know what constitutes a good idea by separating the “seeds from the weeds,” he advised, pointing to the example of adhesive that was used by 3M to develop Post-It notes as a solution waiting for a problem.
It is impossible to try and predict the future impact of an innovation, Koulopoulos noted. Embrace the unknowable, and don’t be afraid to fail. There is no “it” to solve for, he adds, so build for the unknown.
Velocity of innovation
Companies have established metrics to measure the velocity of innovation. Most innovation is not in the product, but in the business model. The metrics measure what percent of revenues come from a new product or service or new business that was created in the last three, five, or 10 years.
“The big thing is there is no budget for innovation,” he said. “My counsel is to create a channel by which innovations that don’t make it into the current path can find the light of day. It’s how we create new ways to service.”
Develop a method that establishes a way to evaluate new ideas, then use the velocity of innovation formula and measure the impact of innovations over time, he advises.
Creating a culture of innovation
How do you generate the culture of innovation in your company?
By creating ideas, then collaborating on those ideas and prototyping them and taking the innovation to the market, according to Mark Hennessy, chief information officer for IBM, which places an emphasis on innovating across its global enterprise.
This process is not a one-time event, but a process and a culture that is encouraged within IBM by setting up ongoing dialogue through blogs and other information-sharing tools.
“When I started as CIO eight months ago, someone said, `You gotta have a blog, dude,’” Hennessy told the Fusion audience. “So, I started posting my thoughts and ideas. I was amazed at the wonderful feedback from all over the world. The enterprise was shrinking right before my eyes.”
IBM has established a mechanism called Innovation Jam, which involves soliciting continual feedback from clients and business partners and employees. Over 100,000 different people from 60 different countries around the world constantly discuss and collaborate on the question: How might new technologies be used to solve problems?
“I think these (wiki pages and blogs) are the tools that Gen X or Gen Y people use to communicate,” Hennessy said. “If you have skills and capabilities that can help solve a problem, they are on it. It doesn’t matter where you are in the world.
“This is a great way to unlock creative thoughts, regardless of where people are. So it allows real-time innovation for large numbers of people, and the communities that develop these innovation tools are a lot more efficient than senior execs think.”
Within IBM, ThinkPlace is an open forum where anyone in the company can suggest new ideas, comment on them, refine them, express support, or even explain why the idea might not work. Communities form around different ideas or concepts, such as alternative energy, and inventive ideas mature into innovative solutions that can be rapidly developed and deployed.
Hennessy describes it as a “sandbox” that can be used to test these programs. People can sign up to be early adopters, and they are required to provide feedback. With more than 80,000 people signed up, the early adopters score each other based on the feedback they provide.
Great Rivers project
Establishing new business models and developing new ways to collaborate are going to be critically important going forward, Hennessy said. In the future, collaborating outside your enterprise will have more value than doing so inside your organization, he adds, citing as an example a project IBM is involved in to help preserve the world’s freshwater resources.
IBM is working closely with the Nature Conservancy, as well as researchers at the University of Wisconsin-Madison, to bring scientists from around the world together to model where these rivers are today. They analyze tributaries, indigenous species, climate, and other factors and develop a simulation of what these rivers will look like 10, 20, or even 30 years after various impacts from increased man-made development are considered.
“We have built a model in a virtual world to illustrate the impact so that public policy makers can visualize and make better decisions,” Hennessey said. “We’ve got some tools and some technologies, and we are linking them to solve environmental problems.”
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