GUEST POST from Paul Sloane

Evernote is a Californian company that sells a popular note-taking software package. It offers its people unmetered time off for holidays. Phil Libin, CEO, made this comment in the FT, “Getting a job at Evernote is tough and people want to be here.  If you take the attitude that being in the office isn’t a punishment then spending days outside the office is not a reward.”

Similarly the Sheffield based software company, Wandisco, gives unlimited vacations. CEO, Dave Richards, says, “People are very committed anyway so why do you need to restrict the amount of time they can take off?”

Limitless holiday time is a growing trend among high-tech companies including Netflix and UK based consultancy Inbucon. It is part of a culture where employees are highly engaged and committed. And in that atmosphere no-one seems to abuse the privilege.

LRN is a New York services firm that gives unlimited time off and pays expenses without vetting. It sounds wide open to abuse but Mike Slvarezza of the company says, “Trust is hugely important and in working relationships and allowing people to take as much holiday as they want is part of that.”

Advocates of the system claim that staff continue to take modest amounts of holiday despite its unrestricted status. People at Wandisco take about 16 days a year. But most of these companies do not even record how much is taken so hard figures are difficult to obtain.

Could this be a big new innovation in HR policies generally?

It is unlikely that it will suit larger companies and the fear of misuse will deter most HR departments. However, it does show what can be achieved when there is a high level of commitment and trust in a business. It motivates those employees who are fortunate enough to work for an employer who shows such a high level of faith.

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GUEST POST from Paul Sloane

Francisco González Bree, Academic Director for the Master of Business Innovation (MBI) course at the University of Deusto in Spain says, “The term ‘innovation’ is losing its genuine meaning because many companies are using it to convey change when the progress they are describing is no more than ordinary.” He is right.

Just as the government describes every piece of spending as an ‘investment’ so bosses talk about every change as an ‘innovation.’ We need a new word to differentiate radical innovation, finding an entirely new way to do things, from incremental innovation, which is really just improvement.

How about ‘radovation’ and ‘incrovation’? Most managers and most business are good at incrovation – making improvements in current products, services, processes and methods. Most managers and most businesses are poor at radovation – implementing a completely fresh and challenging idea. Radical innovation is risky and can often threaten existing products and vested interests. It often fails leading to blame and recriminations. Yet the successful radovations are the real game changers.

Incidentally the MBI programme at Deusto which is run in conjunction with the Judge Business School in Cambridge looks a good alternative to a traditional MBA.

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GUEST POST from Paul Sloane

What do you say when you hear a fresh idea at work? Let’s suppose it is a suggestion for a new product or service. Here are some things not to say:

1. ‘That sounds interesting but..’ This is the most common way to give the idea a polite denial. What you say before the ‘but’ does not matter because what comes after undermines and criticises the notion. Now for some of the regular comments that come after the but.

2. ‘We tried if before.’ So what lessons did we learn? In any event the market has changed since we tried it and technologies are better and simpler. Don’t dismiss it because it is similar to something that was tried and did not work. Consider it afresh.

3. ‘What is the ROI?’ Focusing on a financial return is the wrong thing to do with a brand new idea. First we have to figure out if it meets a customer need. Don’t try to build a spread sheet to forecast the sales; build a prototype and see how people react. We can do the analysis a little later.

4. ‘It’s not in the budget.’ It is not in the plan but so what? If it is a good idea we should not let the budget we put together 12 months ago stop us from considering it.

5. ‘Department X will never agree to it.’ You could blame Sales, Finance, Technical, Marketing or some other group. It saves you having to think about the idea properly. If it is a radical idea it will run into opposition inside the organization at some stage but that is not a reason to kill it right now.

6. ‘It will undercut sales of Y.’ Y is one of your leading products so its revenues must be protected at all costs. Or maybe not. You should be prepared to cannibalise your products before someone else does.

7. ‘It is too difficult.’ Once again if the there is a clear customer need then difficulties are there to be overcome. Let’s consider different ways of doing it to surmount the obstacles.

8. ‘We don’t have time.’ This is a popular excuse. We are all terribly busy working flat out. But so are our competitors and everyone else. In the words of Peter Drucker, ‘We feed Today and starve the Tomorrow.’ If it is a good idea then we must find time to explore it. We should change priorities to include innovation.

What should you say when you hear a novel suggestion. Ask a question. ‘How would it work?’ ‘Who would need it?’ ‘How could we do it?’ Listen and build on the idea. Maybe it will be rejected but give it a fair hearing first. Explore the possibilities… and don’t kill it immediately with one of the statements above.

What kinds of objections and comments have you heard when new ideas are aired?

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GUEST POST from Paul Sloane

The toy company Mattel is well known for its Barbie doll brand. They need a constant stream of internal innovations to build on this success. So Ivy Ross, Senior VP of Girls Toy Design set up something she called Project Platypus.

The idea is based on the description of a platypus as an uncommon mix of different species. The 12 members of the project team are a rotating group drawn from different functions in the company. They join the project for three months and work intensely and creatively. Operating in a dramatically different environment, they use external stimuli, study children at play and have enormous freedom to generate and test ideas. The participants enjoy the experience and take their new creative skills back to their departments. The results have been startling with many new products and reduced time to market. As Ivy Ross says, “Designers are not the only people who can create toys. If you put a bunch of creative thinkers in the right environment and drop the job titles, you’ll discover amazing creativity.”

To develop winning products, Samsung, the Korean electronics company isolates artists and techies for months on end. Because daily routines can interrupt the flow of great ideas, Samsung segregates development teams in its VIP (Value Innovation Programme Centre). Product planners, designers, programmers, and engineers are asked to outline the features and design of new products such as the company’s mainstay flat-screen TV. Department heads pledge to keep them posted there until they have completed the assignment.

The facility is a sort of boiler room where people from across the company brainstorm day after day — and often through the night. Guided by one of 50 “value innovation specialists,” they study what rivals are offering, examine endless data on suppliers, components, and costs, and argue over designs and technologies. Every step of the way, team members drew what Samsung calls “value curves.” These are graphs that rank various attributes such as picture quality and design on a scale of 1 to 5, from outright bad to excellent. The graphs compare the proposed model with those of rival products and Samsung’s existing TVs.

By deliberately forcing the mixing of project teams and removing distractions Mattel and Samsung speed up the innovation process. People in the teams are encouraged to be creative and to break the rules. They focus on getting the innovation moving. And they bring co-operation, enthusiasm and diversity to bear on the problem. An incubator can overcome the problems of corporate inertia and inter-departmental fault-lines by concentrating the resources of people, skills and time needed to make deliver new products.

Sources: Salter, C (2002), Ivy Ross is not playing around, Fast Company (Nov) pp 104 – 110 & Businessweek, July 3 2006, Camp Samsung.

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GUEST POST from Paul Sloane

The light bulb did not replace the candle. It replaced going to bed early. The motor car did not replace the horse. It replaced staying at home. Every major innovation has primary consequences and secondary consequences. The secondary consequences look obvious in hindsight but they were not obvious at inception. Who in 1985 would have anticipated that the internet would mean that music downloads would kill major record labels or that an innovation like Wikipedia would finish Encyclopedia Britannica?

So let’s spend a moment speculating on the impact of a big innovation that appears to be heading our way – driverless cars. Google and others have demonstrated prototypes that perform very well. Most of the technology needed is already in place. See this video interview from the Economist.

The primary consequence of this innovation will be that fully automated cars replace conventional cars and drivers become passengers. What will the secondary consequences be?

Once again I turn to the Economist in which Schumpeter speculates on this. He forecasts that some of the secondary effects might be:

• Hospitals will need fewer emergency rooms and orthopaedic wards as the rate of road traffic accidents is dramatically reduced.
• Hotels will lose business as tourists and businessmen sleep overnight in their travelling vehicles.
• Taxi and car-rental businesses might merge into one automated pick-up and drop-off service.
• Much less need for motor insurers and brokers.
• Bad news for lorry drivers and cabbies.
• A boon for country pubs no longer affected by drink-drive laws.
• Less demand for road signs, traffic light, signals and guard rails.
• Less need for traffic police and traffic wardens (automatic cars will be programmed to obey the law).
• A rise in house prices in more distant suburbs as greater commuting distances become easier.
• Less demand for city car parks and meters and less revenue for local authorities (the cars can be sent home or elsewhere).

Worldwide over 100,000 people are killed in road accidents every month and the figures are rising. Nearly all road accidents are caused by driver error. This is the single most compelling argument for the driverless car. You and your children will be safer. But the other consequences will be many and varied including some of those above and some that we just don’t anticipate.

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GUEST POST from Paul Sloane

At last an innovation that can improve the lot of the long-suffering British Consumer.  No more waiting to be served.  Customers at the new Thirsty Bear pub use tablets and self-serve beer to help themselves.

After struggling for years to make ends meet, London’s Stamford Arms pub was taken over by The Robot Pub Group and reopened in January as The Thirsty Bear. Designed in part to showcase the company’s Robobar system, the pub was outfitted with iPads at 15 tables, 12 of them linked to self-serve taps. Not only can customers now pour their own pints and order food using the tablets — doing so simply requires setting up an electronic tab at the bar — but they can also send text messages requesting waiter service, order songs from a connected Jukebox, and even update their Facebook profiles. A dedicated advertising channel on the tablets, meanwhile, lets the pub promote its latest special offers.

Since installing the new technology, revenue at the pub has increased by 78 percent, the Robot Pub Group says. The company is now licensing its technology for use by other pubs and restaurants or at bespoke events. Restaurateurs around the globe: time to help your patrons engage in a little self-help as well?

Report on Springwise

This is one innovation I need to check out carefully..

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GUEST POST from Paul Sloane

Within larger organisations one of the biggest obstacles to innovation is poor internal communication. A ‘silo’ mentality develops so that departments guard information and ideas rather than share them. People work hard – but in isolated groups. Internal politics can compound the problem with rivalry and turf wars obstructing collaboration. It can reach the ridiculous stage where the enemy is seen as another department inside rather than the competitors outside.

The leader has to tear down the internal fences, punish internal politics and reward co-operation. This sometimes calls for drastic or innovative actions.

Nokia has an informal rule that no-one should eat lunch at their desk or go out for lunch. People are encouraged to eat in the subsidised cafeterias and to mix with people from outside their department. They have found that the informal meetings across departments are beneficial in sharing ideas and understanding.

Every organization has to find ways to promote internal communication and collaboration and to fight internal division and competition.

Here are some ideas for breaking down barriers to communication:

1. Publish everyone’s objectives and activities on the intranet so that people know what other people are working on.

2. Organise cross-functional teams for all sorts of projects. Make them as loose or as formal as you see fit but be sure that there is good mixing and that all the departments involved contribute.

3. Arrange plenty of social and extra-curricular activities e.g. sports, quizzes, book clubs, hobby clubs, special interest groups etc.

4. Have innovation contests where cross-functional teams compete.

5. Have frequent secondments between departments.

6. Deliberately rearrange the office layout from time to time so that people move desks and sit with new groups (or adopt a hot desk approach).

7. Organise a cross-functional innovation incubator.

8. Encourage department managers to look for ideas, input and solutions from outside their departments. Publicly praise managers who do this.

It is natural for departments in organisations to become more insular. As the organisation grows, good internal communication becomes more and more difficult. There was a saying in Hewlett Packard – ‘If only HP knew what HP knows!’ Very often the knowledge and skills needed to solve your problem exist elsewhere in the company. Knowledge sharing and collaboration are essential for innovation success. A key responsibility of the innovative leader is to constantly fight the silting up of the internal communications and to force contact and sharing between departments.

business challenge image from bigstock & nokia

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GUEST POST from Paul Sloane

If you have been watching the Olympics you will have noticed that there has been an important rule change for the track athletes. They are no longer allowed a false start. Any false start means instant disqualification.

The introduction of this new rule was controversial. The previous false start warning system had been in use for many years and people were comfortable with it. But some athletes exploited it by gambling on beating the gun. Despite dire warnings the new rule has worked well and the athletes have complied. It removes the problem of false starts and speeds up the meeting.

The lesson is that every rule, no matter how long it has been in place, needs to be examined and replaced if necessary. When you propose a change to a long-standing rule there will be many objections. The leader has to have the courage to over-ride the objections and try the innovation. Every major change is opposed but progress depends on leaders overcoming opposition.

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GUEST POST from Paul Sloane

How are you going to find the means to develop the most promising innovation ideas?  One good way is to kill off the weaker projects which are currently absorbing precious resources. Many organisations find this difficult to do. Consequently the new creative ideas they generate are always short of money and manpower.

The word decide comes from the same root as the words homicide, infanticide and regicide. They are all based on the Latin verb caedere – to kill, to strike, to cut to pieces. So when we decide on one option we must kill others.

Sir Jonathan Ive, Apple’s British Design Chief believes that the company deserves credit for its willingness to reject ideas and devices. The “hallmark” of Apple products is “real care”, he said. “If we’re honest about wanting to make the best possible products that we can, that genuinely means saying no because we don’t believe it’s good enough.” He recently admitted that Apple nearly axed the iPhone because of perceived design flaws. You can imagine how many other interesting projects were killed in order to produce the select number of Apple’s real winners.

The problem is that once an interesting project starts it can be very hard to stop. People become committed to it and are reluctant to ‘waste the effort we have already put in.’ That is why a gating process is so important and realistic criteria have to be enforced.  Many companies find this difficult. They lack the processes. They do not know exactly what resources they have deployed and the project managers cling to failing or marginal projects.

Egos, empires and politics muddy the waters. Projects which are interesting and have some potential benefit keep going because of the resources that have already been invested. It is the ‘we can’t stop now’ syndrome. But the key question is this – is this the best use of these resources right now? Although the project may be beneficial, if it is blocking the implementation of a project with a significantly higher payback then it should stop. You have to be ruthless in weeding out the moderate plants so that the brilliant specimens can flourish.

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GUEST POST from Paul Sloane

Discussions about innovation are often made difficult because people are unclear about the exact meanings of some key terms. In particular there is confusion about the difference between creativity, innovation and invention. Let us start with some definitions:

Creativity is the capability or act of conceiving something original or unusual.

Innovation is the implementation of something new.

Invention is the creation of something that has never been made before and is recognized as the product of some unique insight.

If you have a brainstorm meeting and dream up dozens of new ideas then you have displayed creativity but there is no innovation until something gets implemented. Somebody has to take a risk and deliver something for a creative idea to be turned into an innovation. An invention might be a product or device or method that has never existed before. So every invention is an innovation. But every innovation is not an invention. When your company first published its website that was a major innovation for the company even though many other websites already existed.

We tend to think of an innovation as a new product but you can innovate with a new process, method, business model, partnership, route to market or marketing method. Indeed every aspect of your business operation is a candidate for innovation. Peter Drucker said, ‘Every organisation must prepare for the abandonment of everything it does.’ So do not restrict your vision of innovation to products. Some of the most powerful innovations you can make are in business methods and customer services. If we look at companies like Dell, eBay and Amazon we see that their great innovations were with their business models rather than in new products.

Innovations can be incremental or radical. Every improvement that you make in products or services can be seen as an incremental innovation. Most businesses and most managers are good at incremental innovation. They see problems in the current set-up and they fix them. Radical innovations involve finding an entirely new way to do things. As such they are often risky and difficult to implement. Most larger organisations and most managers are poor at radical innovation. If you had been making LP records then you could have introduced incremental innovations in your design and marketing. However if this was your strategy then a radical innovation, the CD, would eventually kill you. The CD manufacturer could similarly introduce various incremental improvements. Once again a radical innovation, music downloads over the internet, would make your offering obsolete. So we need to constantly look for incremental innovations and radical innovations. We need to develop creativity and turn it quickly into innovation.

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