Innovation for competitive advantage

Our company is excitedly working on a new version of product X that is clearly superior to any competitor in the market. We launch it in May and watch our sales rise with glee. The month after a competitor has just invented a new process on more cost-effective process to make a key component and is reducing prices by 20% forcing us to drop prices too. The month after that another competitor offers additional services to the client concerning lead times and delivery, taking some of our business for themselves. Two months after that, yet another competitor not present in market segment Y (in which we were market leader), suddenly makes a bid for it with a new retail outlet. Come September a big company from a different industry acquires a competitor and packages both company products together, offering our clients a hitherto unprecedented package that we can’t match. As our sales team is busy defending our existing customer strongholds, a new start-up company enters the market demonstrating how their products are far more respectful to the environment and hiring Al Gore as their spokesperson. And we know that a completely new technology that may make ALL our products today completely obsolete is under the works somewhere.

Is any of happening in YOUR business? Which is the most innovative company in this context? Or has one company really reinvented a new business model to sustain it in a differentiated segment for quite some time to come?

The above scenarios are a trifle generic yet quite universal, depicting reality in any competitive business.

To innovate or not to innovate – that is is clearly NOT the question. The question is how to innovate, and how much, and how fast.

Companies in competitive environments are condemned to do new things that add value (ie innovate) all the time. When they have completed an innovative venture (product, service, process etc) they will seek to extract the most value from it and then move on to the next new thing. And the next one. And the next. The time it takes to extract value from your last great thing before you move to the next one is a crucial strategic judgment. Too fast could mean no profit, too slow could mean becoming obsolete.

Here are some more crucial issues arising from innovation in competitive environments:

• How to simultaneously deliver operational excellence today and innovation tomorrow?
• How to best choose between different types of innovation – radical/risky/disruptive vs incremental/improving?
• Who in your organization is mobilized for innovation?
• How might change the rules of your business so you can legally enjoy the fruits of monopoly for a while?
• Which is the best timing for carving out your own exclusive territory – that true, deep “blue ocean” strategy?
• How far are you ready to go in reinventing your own organization (especially if it seems to work quite well, thank you)?

And above all: How much are you prepared to reinvent yourself?

The purpose of innovation is important, very important

So, if creativity imagining new things and making them happen, is creativity good? Of course it is! Surely the history of human progress leads us to an assertive “yes”.

Can creativity be bad? Of course creativity it can!  The knife invented to cut fruit from trees can also take lives. The same nuclear force that produces energy to warm millions, can also destroy millions. The warped minds that orchestrated the attacks of 9/11 in 2001 were in some demented way creative.

Creativity can provide methods for the oppressors to oppress the oppressed and for the oppressed to revolt. It can be used for peace and it can be used for war. It can be used to provide luxury and it can be used to alleviate poverty.

As observers of the immense benefits innovation brings to mankind, our enthusiasm should not blind us to the socio-political realities of our times. Innovation does not serve everybody equally in a world where the products of innovation are traded on the open market. The latest, most innovative products/services/processes will be bought by those who can pay for the value they bring to themselves. More creative energy will be spent on where there is more money: to invent and sell latest gadgets and designer drugs rather than to confront seriously debilitating diseases afflicting millions of poor people.

There is a trickle down effect to some innovation. Poor people in developing countries, who are late adopters of mobile telephony, are putting mobile phones to very good use. But not all trickles down. Responsible action can help innovation work as a social agent for the benefit of the underprivileged. Here are some possible directions for action:

• Engage in innovation for social causes. The field is very broad, but innovating for the poor can yield great potential benefits – think of microcredit or efforts to bring energy saving appliances for cooking to low income households.
• Offer education in creativity on a large scale. This requires accepting the (proven) fact that creativity can be taught, learned and developed in each individual and organization. It also requires a conviction from leaders that innovation is a value and an important one at that.
• Change the socio-economic status quo to ensure that innovation spreads and thrives for the benefit of all. Freedom and democracy have helped entire societies become more innovative. The golden age of Athenian democracy, compared to the tyrant systems that preceded it, brought a phenomenal explosion of great new ideas in the arts and sciences. More recently, the industrial revolution which was accompanied by the evolution from monarchy to democratic institutions in the West and which culminated in the innovation explosion of the last thirty years has enabled amazing progress to happen.  Sadly, there is often as much creative energy spent in defending the status quo as there is in overturning it.

Of the above three possibilities, I would argue that the first is the most immediately practical but the second will have the highest and most enduring impact. The third is a long shot, costly, risky but with a high potential payoff.

In any case if there is no universality in the goodness of creativity, we do not have to rule that it must always be the exclusive domain of the rich and powerful. Innovation always has a purpose and the purpose of innovation is more important than the process. Let us try to figure out how we might use innovation for a purpose greater than our immediate personal interests.

Creativity gains breadth and depth

Here are some of the issues that are being discussed in the world on creative thinking and action:

Crowdsourcing. Global connectivity allows us to do such things as “crowdsourcing” – for ideas, for innovation, for financing and more. The creativity comes from the content of each individual contribution as well as from the speed of collection and the open access for a very large number of actors.

The human brain. Researchers studying the human brain are working on what physical attributes or “wiring” the creative mind may have. And “brain plasticity”, now recognized as a fact, tells us that we can shape our minds in a number of different ways.

Introversion-Extraversion. There is a debate on introversion and extraversion and which is best suited for creative performance. My friend Andre Walton, PhD wrote in an email to me “The discussion regarding introversion or extraversion is, I think, largely academic.  Even if introverts are better at ideation they are probably less well equipped to take the idea any further so it will die without seeing the light of day (and therefore probably never be the subject of any books such as this one)!  In other words, introversion is probably somewhat of a gatekeeper in the real world.”

Team creativity and individual creativity. I am convinced that both are extremely useful and to pitch one against the other is a mistake. There is also no doubt that some great individuals have produced some rare creative ideas that have helped us understand the world in new, valuable ways and have transformed existing domains of knowledge or created entirely new ones. There is also no doubt that most great innovations are the result of the work of many different people building on each other’s work. I myself have produced some of my best ideas in solitude and others in a group. In any case personal creativity is indispensable for team creativity which can in turn stimulate individual creativity. (Teams can also stifle individual creativity, but they don’t have to)

Andre Walton adds “I firmly believe that what it takes to come up with an original ‘germ’ of a creative idea is very different to what happens next.  The evolution of the idea and its subsequent morphing into an innovation are very different processes that the original idea creation.  So, ‘Yes’, I believe solitude is necessary for the original ideation, and ‘Yes’ I believe collaboration is critical to taking that idea and doing something useful with it.”

Creativity and Leadership. As our understanding of organizational and societal creativity improves leaders at all levels are grappling with a large number of creativity challenges:

• How to develop their own personal creativity
• How to develop the creativity of others in their organizations or social groups
• How to define the right targets for innovation
• How to transform creative ideas into valuable innovation
• How to create systems that foster innovation – both processes and incentives
• How to shape cultures that support innovation

The many debates on creativity, show that our subject matter is multi-dimensional and thriving, while becoming at the same time richer and more complex.

Creativity scales up

We have expanded the practice of creativity in many ways.

We respect individual creativity more and more.

We have moved from individual creativity to team creativity, recognizing the value of collaboration in making great new things happen.

We have come to appreciate organizational creativity, recognizing that entire organizations can be more or less creative depending on deliberate design and leadership as well as many other factors.

We are recognizing that entire cities and countries can develop the creativity of their communities. Oh yes, governments too can be creative. And we have innovation planning at state level and guidelines at European level.

We are now using the term “social innovation” – applied creativity for social causes. The World Bank is joining the debate at last.

Many are publishing “most innovative” (company, city, country etc) lists these days. Some are based on good refereeing, surveys, performance and other indicators. Others are a little bit of a joke. But surely the fact that many institutions are ranking organizations and countries on some scale of creativity/innovation, shows that more and more people are valuing creativity in the world?

Have a Happy New Year!

The Accelerating Pace of Change

It has been said that at the dawn of humanity there was one new invention every 30,000 years. Today, we hear of so many new things every day, even if we are not searching.

The artistic style of ancient Egypt lasted for more than two millennia with little change. Hellenic art dominated the world around Greece for one millennium, the Renaissance took over Western Europe for three hundred years, Impressionists for sixty years. Today we have a new art movement every couple of years.

To reach 50 million users it took radio 38 years, TV needed 13 years, the Internet 4 years, the ipod 3 years, Facebook 2 years.

In my father’s generation it was still possible to do a job in an office and retire forty years after while doing the same job from the same office.

Unless you choose to live an ascetic life (which is still possible), be prepared to move faster and faster.

So what’s the new role of creativity today? How about

• Creativity is your best friend in a fast changing world which forces you to constantly adapt to new things
• Creativity allows you to take more of your life into your own hands as the world accelerates
• Creativity can no longer be the province of a small elite

More thoughts on this will follow.

12^th European Conference on Creativity and Innovation – 14-17 September 2011

Over 300 people – business people, practitioners, academics, students.

Keynotes, workshops, panels, round tables, nocturnal events.

Faro, Portugal – village fetes, Museum, Loulé Castle, potatoes and cod, folk music, good music, silly music, plenty of ambiance and camaraderie. I couldn’t attend all events, here are highlights from some:

Kobus Neethling on the future of creativity, Jeffrey Baumgartner on thinking radically, Linda Caller on “Thinking different (like Dvorak and Beethoven)”, Olwen Wolfe on “Beyond collaboration”, Min Basadur on “Simplexity”, Han van der Meer, Paul Corney, Lucie Huiskens on “Art and business innovation”, Sandra Minnee on “One for all and all for one”, Cecilia Yau on “Team building in the workplace”, Gijs van Wulfen on “The Forth Innovation Method”, Simon Evans with a management game on “Innovation Eco-systems” and many, many more – impossible to attend all events.

Most interesting is what Pia Mulvad Reksten had to say, as an executive of the Trades Unions confederation in Denmark on Employee driven innovation (in a number of studies, Denmark is the most innovative country in the world and also has the highest level of happiness – people’s subjective well being)

Relevant themes – innovation process, leadership, culture, business, education, measuring creativity and innovation

Great papers – on Individuality and Teamwork (Andre Walton), Idea Management (Han Backer, Odin de Nruijn, John Ulhoy), Role of financial incentives for innovation (Malik)

My own contribution with an Art of Innovation workshop and keynote.

Finally a closing ceremony honoring Mihaly Csikszentmihalyi for a lifetime’s work on CREATIVITY of the rare kind, and for FLOW, that happy state of human engagement.

For my tribute to MC see http://bit.ly/oRKBSg

For more see http://www.eaci.net/eccixii/index.php

i7 Innovation Summit – 14-17 October 2011

Global Conference on Technology, Innovation, Entrepreneurship and Society. Second edition of a highly interactive 3 day event in which networking of entrepreneurs, investors, CIOs, NGOs and media representatives is paramount.

The themes this year are “Openness”, “Empowering SMEs and Entrepreneurs”, “Technology driving social innovation”, “Sharing values to create value”.

The conference has a unique edge – poised on the dawn of open innovation and in the aftermath of the deepest economic rethink since the Great Depression. The message of i7 is that as we stand facing today’s challenges, our capacity to innovate, share value and exceed expectations is vital.

The conference takes place at Les Fontaines, a beautiful Chateau and corporate events center north of Paris. It is a perfect place to meet and network with motivated and active people, all involved in the innovation ecosystem.

I will not be attending this year due to prior commitments but click below for a video clip of my keynote at the first i7 summit last year

http://www.youtube.com/watch?v=bwqNxPWdYuY

For more on this year’s event see http://www.i7summit.org/

What if your most creative people got together for three days to design solutions to your biggest challenges?

Sometimes ideas strike when you least expect them. Sometimes you seek them out in solitary contemplation. Sometimes you organize a team hunt.

Sometimes you go for a super event like a Corporate Innovation Camp.

What is a Corporate Innovation Camp?

Imagine a big brainstorm in which a large number of ideas addressing your key business challenges are generated and the best of these are developed into actionable business plans and presented for approval to senior executives.

Who participates?

The Corporate Innovation Camp brings together 40-200 people of one organization from diverse backgrounds and departments.

Who facilitates?

Professional facilitators, well versed in creative problem solving and creative tools and techniques, and participants themselves.

What themes do participants work on?

Key business challenges are put forward by senior executives and communicated to participants in advance.

How are ideas developed?

During the Corporate Innovation Camp participants will work through the whole idea “life-cycle” – challenge definition, solution generation, solution evaluation and draft action plan.

The challenges are first explored and defined with precision, then, using various creativity techniques, ideas are generated in large numbers. Participants make considered choices to generate a longlist of ideas for quick evaluation, then a shortlist of the best ideas that they will develop in depth. A presentation and action plan for the best ideas is presented to senior executives who decide which ideas they will take forward.

What else happens?

Corporate Innovation Camps are always customized. In addition to confronting key business challenges, participants are encouraged to present their own workshops in “open-space” forums as do facilitators. An evening talent show may complement the days’ work and…. who says no to a party night?

In our corporate innovation camps we have had magic, lateral thinking puzzles, Rubik’s cube, launching anything with a mobile phone, powerpoint karaoke, cooking madness, yoga, fashion shows with garbage bags, music jamming, painting and much more.

While being very serious about the topics and results, the experience must be unique and highly enjoyable. When people are having fun, creative ideas flow more freely and more generously and the learning is more profound and longer lasting.

Where should it be held?

Offsite, at a place with good conference facilities. An inspiring environment – indoor and outdoor is an added bonus.

How long does it last?

Typically three full days, though it is customizable.

What makes it successful?

People who are passionate about its content and outcome and willing to contribute their talent and listening skills. Participants who are ready to discover new things. Selected participants who will have pre-assigned roles to lead their team to develop solutions in depth and present them to senior executives. Facilitators with good skills in leading creative sessions. Senior executives who are serious about creativity all the way – who will carefully define challenges and then commit to taking the best solutions from idea to action.

It is also crucial that the challenges are relevant and meaningful to participants. It goes without saying that the character of the venue and a high level of excellence in preparation and organization are also indespnsable

What are the outcomes for participants?

Participants will have produced new ideas, ready to implement that they “own”. The will develop their own creative competencies and learn different creative tools and techniques that they can practice at the office or anywhere else. They will attain a new, deeper level of teamwork and alignment. And they will have a great time networking and socializing with colleagues.

What are the outcomes for the company?

New ideas of value to address key business challenges and a substantial boost to creativity and teamwork in the company.

Together with Paul Sloane of Destination-Innovation we have experience in designing and facilitating Corporate Innovation Camps.

For more information contact me by email at dimis@performa.net

A new report from IBM

In my role of Master of Ceremonies at the Creative Problem Solving Institute held in Atlanta, Georgia in June 2011, I had the pleasure of introducing Susan Thomas, Senior Managing Consultant and Steve Gray, Senior Consultant from IBM. Susan and Steve offered a preview of the latest IBM report to which they themselves were contributors. The report which has now been published, begins with a question:

Why are some organizations consistently good at innovating and adapting while others seem to be blindsided by change?

The authors argue that innovative leaders will use the necessary tension between business trade-offs (such as local vs global, zero-sum vs expand the pie, systems thinking vs design thinking) to forge new ways ahead – “leaders who embrace the dynamic tension between creative disruption and operational efficiency can create new models of extraordinary value.” The path to organizational creativity calls for action at three levels:

Uncover – find the key skills, understand how the world works, seek new opportunities, make new connections.

Unlock – develop people’s creative potential through powerful learning that is relevant to real business challenges, promote small diverse teams to work on bold ideas, create inspirational role models, and build a vision powered by trust,

Unleash – grow and multiply the competencies and the ideas, expand and share information and expertise globally, build constituencies with common goals

As its title suggests, the study is based on a conviction that we strongly share: that organizational creativity can be cultivated by inspired leadership. It is an excellent follow-up to previous IBM reports (see below) and includes quotes from thinkers, experts and practitioners. Here are some strong and memorable excerpts from the main body of the report:

“Yesterday’s market-leading “best practices” can all too often turn into tomorrow’s recipe for disaster.”

“Creative leadership requires harnessing the dynamic tensions between the dualities that define today’s complex business environment – to drive toward both creative disruption and operational efficiency at the same time.”

“Bottom-up innovation is better harnessed through influence rather than power, a challenge to the more prevalent organizational mindset that views leadership through the lens of control. An organization that fails to fully embrace these modern dualities may miss the opportunity to generate a rich and critical source of creative energy and may, ultimately, risk irrelevance.”

“Creating a culture with a bias for action requires having rewards aligned with the taking of considered risks in an environment where failure is a necessary and mutually defining opposite of success.”

The report was authored by Barbara J. Lombardo and Daniel John Roddy. It can be read at http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03418usen/GBE03418USEN.PDF

Background notes

In a study by IBM in May 2008 (before the recession) the following characteristics of the enterprise of the future were highlighted: Innovative beyond customer imagination, hungry for change and disruptive by nature.

In 2010 the IBM survey of 1540 CEO’s on Complexity concluded that Creativity is the single most important leadership competency and called on CEOs to Embody creative leadership, Reinvent customer relationships and Build operational dexterity.

This article does not refer to IBM as in the International Brotherhood of Magicians, an association of which I am a member, but to the IBM that was once known as International Business Machines. IBM today has nearly 400,000 people on its payroll and has just celebrated its 100^th birthday. IBM has successfully reinvented itself a few times over. IBM features consistently on all published lists of “most innovative” companies in the world and has deservedly earned the respect of creative people all over the world.

Opportunities.

In early 2009 a Russian-owned ship with a Cypriot flag carrying armaments was intercepted on its way to from Iran to Syria. Cyprus was obliged under UN regulations, to take ownership of the cargo of nearly 100 containers which it placed next to a naval base near the country’s main power station and kept in the open air for two and a half years. On July 11, 2011, the containers exploded killing 13 people and destroying close to 2/3 of Cyprus’ electricity generation capacity. People are living with power cuts which affect business and home life and all this is happening in the middle of a financial crisis. The President, having lost all political support other than from his own party has responded with an inquiry and a cabinet reshuffle. Amidst the demonstrations of anger, sorrow, blame and political opportunism there are also genuine expressions from concerned citizens on the fundamental flaws in the way Cypriot politics and society work.

The crisis of leadership is clear. What about the creative thinking? Can disaster also bring opportunities?

At Performa, we don’t play partisan politics but we’re pretty good at running brainstorming sessions. On July 21^st we called an open meeting of our Out of the Box Club*.

People joined from different backgrounds including business, journalism, public relations, environmental consulting, academia, government, banking, finance, legal, accounting, sales and the arts to explore

What opportunities arise from the disaster of 11.7.11?

We identified five major opportunities and some key thoughts to address these.

OPPORTUNITY 1:  Significantly improve the performance of the civil service.

Key ideas

Introduce performance indicators with efficiency and accountability metrics (surprisingly these do not exist in the Cypriot civil service). Make it possible to fire or reduce pay and grade when performance is poor. Demand that all senior civil servants increase productivity in their departments (say by 10% pa). Audit the civil service, independently and systematically using “mystery shoppers”, professional “benchmarking” consultants and a “jury” of private citizens.

OPPORTUNITY 2:  Achieve fiscal sustainability, rapidly.

Key ideas

Reduce the number of public employees either by hiring 1 for every 10 who leave or by constitutional amendment that caps the number of civil servants to 10% of the working age population. Privatise as many public organizations as possible, as fast as possible. In addition to generating cash for debt alleviation many other benefits will ensue from open competition and from politicians and parties losing the unproductive privileges and power associated with appointing “their own” to public office.

OPPORTUNITY 3: Organize as members of civil society to make our political representatives more accountable.

Time to teach social responsibility in schools, introduce processes of public scrutiny for all people appointed to senior public office and question time for president and ministers? And for all of us to mobilize in forums of our own creation?

OPPORTUNITY 4:  Develop a culture of Health & Safety.

Key ideas

Network neighbourhoods, link-up responsible people on a voluntary basis. Develop risk and crises management programs and enjoyable ways of teaching Health & Safety at schools, public and private organizations. Recognise that risk is present in everything we do and that its severity is most often measurable.

OPPORTUNITY 5:  Expedite the shift to renewable energy.

Key ideas

Use school roofs for solar energy collection and solar energy for public electrical consumption such as street lighting. Introduce tax breaks for homes/businesses investing to convert their properties to be more energy efficient. Educate on renewable energy at all levels and increase awareness on energy efficiency. Legislate so all new buildings come with part solar energy and other energy efficient specifications. Reward people for notably reducing their energy consumption with an increasing scale of costs for energy consumption of households. Introduce a “Tips & Tricks” website and offer special prizes for people inventing good new tips

We generated over two hundred ideas in less than three hours. Most are simple and straightforward, others a little more way out. We could have more such sessions to generate more ideas or we could improve the ones we already have. Of course ideas are good only if implemented, so here are two further questions:

• Are our politicians and public servants capable of implementing the above?
• How might we, citizens, ensure their implementation?

Let us connect as people on a personal, professional and political level to change our society in a meaningful way. And let us allow our own mindsets to be open to change.

A full article was published in the Sunday Mail on 31 July 2011.

* The Out of the Box Club is run by Performa Consulting in Cyprus and is dedicated to creative exploration, discovery and action. For more see our website www.performa.net

Opportunities arising from the 11.7.11 disaster in Cyprus

This blog was never intended for political commentary. However I feel obliged to make a note on the events of July 11 in Cyprus and the aftermath.

In early 2009 a Russian-owned ship with a Cypriot flag carrying armaments was intercepted by the US on its way to from Iran to Syria. Cyprus was obliged under UN regulations, to take ownership of the cargo of 90 odd containers which it placed next to a naval base and the main power station of the island and kept in the open air for two and a half years. On July 11, 2011, the containers exploded killing 13 people and destroying close to 2/3 of Cyprus’ electricity generation capacity. People are now coming to terms with regular, unplanned power cuts which are greatly detrimental to business and home life. All this is happening in the midst of a financial and budgetary crisis that had recently led to rating agencies’ “demotion” of Cyprus. An agreement for the provision of power was signed with providers from occupied Northern part of Cyprus. Following this there are daily demonstrations of anger, sorrow and blame as well as monumental acts of political opportunism. Underlying these are also expressions from concerned citizens on the fundamental flaws in the way Cypriot politics and society work.

The crisis of leadership is clear.

What about the creative thinking?

Like, what opportunities arise from the disaster?

Can we imagine and implement alternative ways of generating energy (being the EU country with the most sun)?

Can we rethink our consumption of energy in a substantial way?

Are we ready to privatize those state assets in which state presence has no value to add such as electricity, the national airline, telecoms and more?

Can we imagine significantly deeper business relations between Greek and Turkish Cypriots, between the republic of Cyprus and the occupied territories?

Are we ready to modernize the civil service with things such as measurable performance and accountability to the public?

Can we shift some privileges away from overpaid and underworked civil servants whose employment is guaranteed for life?

We have enormous opportunities to put these questions at the top of our agenda and so truly cause some deep shifts in the ways in which we operate. Are we ready to do so, or will we allow the same politicians to keep the upper hand and preserve the unhealthy status quo? How about really testing our capacity to innovate by finding opportunities in crisis?