Innovation Value and key Drivers to Success


Innovation to Success

The ability to increase business value through innovation is a critical success driver for most organizations. The markets that we operate in provide both opportunity and risk from an innovation perspective as they are rapidly changing.

Markets provide opportunities if we get it right and threats if we do not, particularly given the intense competitive nature of most industries. Our quest to realize innovation results is further complicated by the complexities involved for most firms – the sheer number of players to potentially coordinate with in the value chain; rising costs; margin erosion; increasing regulatory, customer and consumer demands; evolving business models; shorter cycle times; and new sources of competition, just to name a few.

The good news is that if you can get it right, you stand to gain a competitive advantage and will reap the benefits of increased revenue and profits. Hence, the lure of identifying new growth opportunities, increasing volumes and market share, securing a competitive advantage, improving margins and strengthening brand loyalty, provides a powerful incentive to be successful at product innovation. However, the challenges that organizations face do not make this easy. Developing new products and technologies is consequently one of the more complicated initiatives an organization can undertake.

Take for example the telecom market wars occurring over the past year. Samsung and Apple have emerged as two clear winners that have been able to leverage powerful innovation machines. The competition (Nokia and Research in Motion) have stumbled badly in their respective innovation capabilities and ultimately paid the price in the marketplace.

Creating Innovation Value: Four Key Drivers to Success
Figure 1: The Innovation Performance Framework

The Innovation Performance Framework  (Figure 1) is a useful framework that examines the complexity and addresses some of the challenges in product innovation by separating them into four key themes: product innovation strategy; portfolio management; new product development process; and climate and culture (see Figure 1 for illustration). Interestingly, past studies suggest that organizations that excel or master these four key themes do, in fact, achieve better results from their product innovation efforts.

Let’s examine some of the challenges innovators have in each part of The Innovation Performance Framework:

Product Innovation Strategy: It all starts at the top. If there is not a clear and crisp product innovation strategy that supports the business strategy, problems begin. Some key challenges are: Do we have one? Is it clear? Is it the right strategy? Is everyone aligned? Are people walking the talk? Are there realistic expectations on new product revenues?

Lack of a product innovation strategy tailored to support the strategy of the business is often cited as a most common problem.

Portfolio Management: This is the strategic allocation of resources that ensures innovation efforts advance the product innovation strategy. This is also the prioritization of projects in the pipeline to ensure that resources are being tactically deployed on the right projects for the right reasons. Some key challenges are: too many projects and not enough resources to get everything done, difficulty in deciding which projects to select (when evaluating multiple projects that are competing for the same resources), difficulty in optimizing the portfolio of projects (i.e. short-term versus long-term, high-risk versus low-risk), poor alignment on priorities, and resources that are simply stretched too thinly.

Idea-to-Launch Process: This is the roadmap or playbook that takes each project from idea to launch including all of the activities and decisions that must occur in order to be successful. Some key challenges are: not enough high quality ideas; not having a standard playbook that can be used repeatedly for projects; leadership that cannot articulate the importance of their idea-to-launch process; employees who have not received training or have not developed a knowledge foundational base on and around innovation best practices; not tailoring the development process to support the business strategy and project needs; being unable to say no to projects and/or the need to be realistic with actual time and resource expectations that otherwise lead to unrealistic speed-to-market pressures; expectations for resource commitments to work on projects that are not in the official process; too many minor projects that negatively impact the resources available for innovation projects; and the inability to yield effective decisions in a timely manner (i.e. everything is a high priority thus creating ‘gridlock’ which in turn results in significant delays). It is no wonder given the above why achieving and then sustaining success is so difficult for many companies.

Climate and Culture: This is ‘the way the organization works’: the typical behavior, norms, values and leadership style that enables or hinders product innovation performance. Some key challenges are: difficulty in striking a healthy balance between ‘discipline and focus’ and ‘flexibility and judgment’, driving projects to successful completion while managing cross-functional teams (i.e. shortage of trained project leaders, staff turnover, gaps in necessary skills, lack of training and/or experience), management of failure, and poor support from other parts of the organization. In other words, creating and supporting a climate and culture that supports innovation company-wide.

How is your organization performing at product innovation and how does it compare to other companies? Without clear metrics and a way to compare them it can be difficult to know whether you are doing good or bad at product innovation; whether your investment in R&D is producing the desired results, and what areas of your performance in and around the Innovation Performance Framework might need to be improved or strengthened. The good news is you can change, the question is do you want to?

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Why Is Creativity More Important Than Capitalism?


Haydn Shaughnessy, ForbesContributor

Creativity
Creativity (Photo credit: Mediocre2010)

Do you know your creativity quotient?  Creativity sounds a little weak, a touchy-feely topic, but it turns to be one of the most important memes of the past 100 years, and very definitely ranks alongside concepts (or ideologies) like capitalism in the pantheon of big ideas.

I admit to being a creativity sceptic. When it came into vogue thirty years ago I cringed. Creative? What’s wrong with busy? Or dedicated. Or hard working. But creativity’s rise – measured by the use of terms “creative” and “creativity” in Google‘s nGram database – has been relentless for over a century. It is NO fad.

For those that don’t know it the nGram database contains roughly 4% of all books ever published, in the case of this data in the USA and Britain.

The problem of creativity – how to manifest it in disciplined environments – hasn’t changed much during that period.

But if you look at the chart below you can get a sense of its importance.  The use of “creative” dwarfs terms like technological progress and scientific progress.

In fact digging a little deeper I found out:

The use of the language of creativity is increasing when people write about scientific progress. Progress itself is a term in declining use, seemingly replaced by the idea of creativity, at least in the sciences. You can’s see that from the chart – to get to that data I examined the use of a variety of terms over the period 1960 – 2010.

The best Google nGram data goes up to 2000 but I checked search interest in these terms, post 2000, and the patterns continue.

The use of creativity is increasing in business and management literature, declining where people write about religion and education, and of course rising when people write about cities.

Jonah Leher’s book Imagine underlines the slacker nature of creativity but also it’s importance. Let’s face it the quest to be more creative as a society is as old as (modern) business.

Creativity is big in entertainment too, naturally, if entertainment is taken to include art and music but surprise, surprise the use of the term in entertainment declined in the period 1981 – 2000, while it increased in association with business and management.

Is all this just a reflection of publishers pumping more books out? No, all data is normalised.

Is there anything to conclude from the data?  The themes of creativity have been pretty consistent down the years – how organizations stifle it, how necessary it is, and how it creates risk.

The one lacking ingredient seems to be a creative answer to those problems, though I think we may be on the cusp of one (more of that later in the week).

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Creativity – the key to NEM’s success


WHAT ARE WE TO DO BY TAN SRI LIN SEE-YAN

It is not good enough to have policies to attract and retain talent. Weaknesses have to be dissected and addressed

THE New Economic Model (NEM) was unveiled in March and the 10th Malaysia Plan (2011-15) in June. These aim to transform Malaysian life and fortunes. At the heart is innovation.The Prime Minister takes every opportunity to drive this home – to succeed, innovation must be pushed harder and harder until it becomes an integral part of the nation’s culture.

As a concept, innovation simply means the nurturing of talent for creativity. Here, creativity can be likened to producing something original and useful.

Viewed differently, to be creative means to deal with the classic creativity challenge of getting divergent thinking (producing unique ideas) and convergent thinking (putting ideas together to improve life) to work in tandem.

According to Prof Paul Torrance (who created the gold standard in creativity assessment), a creative person has an “unusual visual perspective”, matched with an “ability to synthesise diverse elements into meaningful products.”

It’s essentially about getting the left and right brains to operate as one. A recent IBM CEOs poll identified creativity as the No. 1 “leadership competency” of the future. Unfortunately, we don’t have such a culture.

A culture thing

Since Tun Mahathir Mohamad’s Look East policy, we have yet to succeed in emulating Japan’s innovation culture. Three main elements of this culture remain alien to us: its mentor system of management; acceptance of starting at the bottom to understand a firm’s workings at every level; and the Japanese function in unison as a workforce and the future of the firm. Whatever we have since achieved is still very much work in progress.

As a matter of public policy, we did try to create a Malaysian way of developing our own brand of creativity culture by: making Malaysia an attractive place to live, with security, good infrastructure and communications, within a unique and relaxed way of life that is multi-racial, multi-religious and multi-cultural, which foreigners can easily adapt to; and trying to position the nation as a base for foreign direct investments (FDIs) to come, expand and prosper, with widespread use of English.

We tried these to make up for what is special to the Japanese, but there was only limited success. We just don’t have the culture, and we can’t (and won’t) change readily enough to develop such a culture.

Earlier this year, in a column titled “On productivity and talent management”, I wrote: “Human capital lies at the core of innovation. Raising productivity requires a labour force of high calibre – committed, motivated and skilled enough to drive transformational change based on excellence over the long term. It’s about trapping potential through acquisition of new skill sets in designing new products and services, and devising new processes and systems to do things smarter and more efficiently. This requires ready access to a talent pool of critical skills and expertise.”

Frankly, we don’t as yet have such a pool. Therefore, we need to go back to basics. This means transforming our education system to emphasise meritocracy and lay the foundation for creative thinking and analysis from day one.

For a start, teaching curriculum, pedagogy and management of education have to be reformed. US President Barack Obama is right: “If we want success for our country, we can’t accept failure in our schools.” Fortunately, as evident from a recent supplement in The Economist magazine, creativity can be taught.

It starts with recognising the new view that creativity is part of normal brain function. The trick is to get the classic divergent-convergent creativity challenge working as a matter of habit.

First, we need to discard the emphasis on IQ in favour of CQ (creativity quotient). It is already proven that Torrance’s creativity index is a good predictor of kids’ creative accomplishments as adults.

According to Prof J. Plunker of Indiana University, the correlation to lifetime creative accomplishment was more than three times stronger for childhood CQ than childhood IQ. However, unlike IQ scores (which rise 10 points every generation because presumably, enriched environments produce smarter kids), CQ scores in the US and many other rich nations have fallen, of late.

This no doubt reflects that kids now spend more and more time in front of TVs and playing video games, rather than engaging in creative activities. Also, there’s the growing lack of creativity development in schools and at home.

The same decline is happening in Malaysia. Reform must adopt a problem-based learning approach – where education is revamped to emphasise ideas generation, curricula is driven by real-world enquiry, and pedagogy acquaints teachers with neuroscience of creativity.

Critics argue our kids already have too much to learn. This is a false trade-off. Creativity thrives on fact-finding and deep research.

High global curriculum standards can still be met – but it needs to be taught differently. Creativity is prized in Malaysia, but, we don’t seem to be committed politically to unlock it.

Continuing denial

We have not produced (and are unlikely to produce) talent in sufficient numbers to take us to the next level of becoming a high-income nation. For sure, what got us to where we are today will not get us to where we want to go. To begin with, we have to broaden the human capital base. For this, we need to transform our education system to secure at least a quality supply flow in the next generation.

Over the medium term, we will have to make do with a real commitment and practical flexibility to turn our 18- to 30-somethings, on the margin at least, into a productive workforce, given past damage – and retain them. By necessity, this will be sub-optimal. Better late than never.

In the end, it’s not just about sustaining economic growth. We are surrounded with matters of national and international importance crying for creative solutions – from striving for excellence to raising productivity to delivering quality healthcare.

Such solutions emerge from an open marketplace of ideas. These can be sustained by a workforce constantly contributing original ideas and being receptive to ideas of others. What is required is real leadership to effectively harness the vast energies engendered.

The Prime Minister is right in highlighting government as a key component of the creative ecosystem, in what he calls “bringing innovation into government and government into innovation.”

This is to enable the formulation of framework, regulation and policies that support and not hinder innovation. It’s a great policy move but in reality, the Government at large has yet to buy into this transformational change.

If you ask around – as far as talent development and retention goes – much of the Government remains in denial. President Ronald Reagan once said jokingly the nine most feared words in the English language are “I am from government and I am here to help.” This rings all too true!

Come on, get real

Studies by an old friend Prof Rajah Rasiah identified three underlying causes for Malaysia’s poor showing in last year’s FDI inflows, according to the 2010 World Investment Report – its narrow human capital base, absence of synergy between research and development labs and industry, and inadequate technological absorption, in the face of intensifying competition in Asia especially for talent.

Like it or not, the talent game is dynamic as it is intense. It is not good enough to have a set of policy responses to attract and retain talent. Weaknesses have to be dissected and addressed, and practical solutions neatly designed for effective implementation in a well coordinated fashion.

Most policy pronouncements reflect incentives offered by the Government which it considers attractive. Nobody bothers to ask the targeted talent what they want and what it takes to make them want to move.

The tendency is to assume that, given the right incentives, Malaysian talent overseas would move back and foreign talent is readily attracted to come to Malaysia. Hence, the dismal failure of the “brain-gain” programme. The approach is all wrong. Get real!

The bar on talent has since been raised. Fuelling the war for talent, enterprises in Asia are providing higher salaries and perks.

A sea change is taking place in the way businesses organise themselves, create wealth and market their brands and wares worldwide.

The rise of the Web and tech-based professions in logistics, biotech, life sciences and information technology put a premium on scientists, engineers, financial analysts and computer geeks.

In Asia, soft skills which were previously sidelined (such as adaptability, English and Chinese skills, ease in fitting into other cultures, negotiation and political savvy), are now in demand.

It’s no longer enough to be talented in Oracle and Java. Global experience, an ability to lead multicultural teams, and diplomatic know-how to move seamlessly across borders, are among the skills in short supply.

The globalised economy has changed everything. Indeed, businesses will ultimately have to rethink the way they recruit and steward talent.

Today, China and India are becoming sources of innovation. Already, these nations are benefiting from “brain-circulation”, with capital and talent returning after value-adding in skills and experience abroad.

This is occurring without government incentives. National ecosystems are evolving nicely for them. It’s happening simply because it makes good business sense. There is much Malaysia can learn from the new reality.

As wealth and power change hands, talent is no longer a buyer’s market for the traditional rich. By 2015, the International Monetary Fund projects that Asia-Pacific will make-up 45% of global gross domectic product as against 20% by the US and 17% by Euro-zone.

The talent drain can only get more intense. We now have a world where talent can be found anywhere. The problem is particularly acute in Asia and Latin America, where breakneck growth is pushing management to the limit.

The talent crunch is real. Throwing money and incentives at talent won’t necessarily solve the problem. We need to think long-term and re-think old ways.

To do that, corporations are already investing to create the talent they lack, going so far as to establish their own universities to shape raw recruits into corporate leaders. In the end, nations need to have a workable process to recognise talent, fast-track careers, and provide fresh opportunities; essentially, to understand what makes them tick.

It needs high-potential programmes to attract and retain key talent within an ecosystem that provides for high living standards, where security and rule of law are taken for granted.

But, risks remain in the global economy. Concerns of citizens must be addressed by developing and investing in them. The quality of tertiary and vocational education has to be raised as a matter of priority. Imported talent will reinforce local talent; only bring in people who can contribute. Striking the right balance is vital.

>Former banker Dr Lin is a Harvard-educated economist and a British Chartered Scientist who now spends time writing, teaching and promoting the public interest. Feedback is most welcome at
starbiz@thestar.com.my.

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Ideas that help you get ideas of your own


AUTHOR and speaker Fredrik Haren was recently in Kuala Lumpur to give a series of talks on creativity and to launch his book The Idea Book, which has been translated into various languages.

Haren, a Swede, was Speaker of the Year in 2007 and was selected as one of “Sweden’s 100 most inspiring persons” by the magazine “Leva” in 2008. CHOO LI-HSIAN caught up with him during his trip here.

Author and speaker Fredrik Haren was in Kuala Lumpur recently to launch The Idea Book

BizBooks: What motivated you to write The Idea Book?

Haren: We started interesting.org to inspire people to be more creative. I wrote The Idea Book because I had read a lot of creativity books (hundreds of them!) and yet most of them did not inspire me to be more creative. I basically wrote the creativity book that I myself wanted to read.

Many of us have had a good idea at some time or another. However, creativity is more than just creating. It is about taking a good idea and transforming it into a successful and sustainable concept. I don’t just write about creativity but I apply my own creativity techniques.

The success of The Idea Book is a good example of how you can use innovative ways to create, produce, promote, market and sell an idea. I share this experience with people at my talks.

How did you go about writing the book?

I have written seven books. It takes me about one year to write a book. About 99% of that time is usually spent collecting stories, examples and other material that I can use. Just in the last six months, I have been to more than 14 countries and have interviewed people from all kinds of fields about creativity. The actual writing is something I do in a two- to three-week stretch at a beach somewhere, where I write from 7am to 11pm.

What is the main message that you want to convey through the book?

That everyone can and should get more creative. The book will inspire the really creative to try harder and help the less creative to start becoming more creative.

What is so different about the book?

First of all, the book is 50% book and 50% notebook – 150 pages about ideas and 150 pages for your own ideas. It is a creativity book that is creatively done.

The book pages contain insights, case studies and anecdotes on creativity, innovation and inspiration from various fields.

Leonardo Da Vinci and Thomas Edison understood the importance of writing down their ideas and observations in notebooks. Da Vinci produced a large number of sketches, notes and scribbling. After Edison’s death in 1931, an amazing 3,500 notebooks were found in his home.

So, the idea with the 150 white pages is to inspire you to start developing your own ideas and personalising your own copies with these ideas and thoughts, making each copy unique. This makes the book something interactive – a dialogue, not a monologue.

It is a book about ideas that help you get ideas of your own.

Who has bought the book? Where has the book been sold around the world?

Usually you are not supposed to answer that your product is for “everyone” because that means it is for “no one”; but The Idea Book has really been bought by everyone! From 10-year olds to 78-year olds. From really, really creative people to people who did not think they were creative.

Hundreds of organisations have also bought The Idea Book including HP (which bought 400 copies as corporate gifts to clients), Hyper Island (the top multimedia school in Sweden bought it as training material for their students) and Deutsche Bank in Germany (which bought 600 copies for internal creativity training). I have also sold 700 copies to the Singapore government.

It has been sold to more than 40 countries and has been translated into 14 languages (including Mandarin and Japanese).

Aside from the book, what else do you do to promote creativity?

I do keynote speeches, talks, seminars, training sessions and workshops. I have done more than 1,000 such speaking events on creativity and idea generation in over 30 countries.

Who have you worked with? Who do you normally work with?

I have worked virtually in all fields with literally hundreds of different organisations, from the Supreme Court of Singapore to Oracle, the software company.

I have also worked with nurses, hotels like the Ritz Carlton, prime schools like Insead and Hyper Island as well as companies like IBM, Microsoft, Nokia, Ericsson, Sony Ericsson, China Mobile, HP, GE, IKEA, Volvo, Pfizer, Ogilvy, Saab, Absolut Vodka, the Swedish National Bank and the Finance Ministry of Singapore.

What are the most interesting projects and assignments that you have worked on?

There are just so many! Just last month, for example, I was invited to Iran (!) and did, among other things, a speech for 200 women at an all-women university where everyone was dressed the same. And the theme of my speech was “The value of doing things differently”.

I was also invited to speak to the Police Coast Guard of Singapore, which is working actively to become more creative. I talked to employees of the Swedish Ministry of Commerce – including the minister himself – about why Sweden has to become more innovative. A few weeks before that, I spoke to an audience in Norway that included the Prime Minister, the Prince of Norway and the richest man in Norway.

However, I find it just as interesting to be invited to be part of a programme at a school that is trying to change the way they teach.

Why is creativity important?

To improve our quality of life, we need to find more creative and innovative ways of doing existing things and then making those necessary changes happen. How we do things today is just not sustainable in the long run.

At interesting.org, we focus on getting people to understand that each and every one of us in a country, community or organisation needs to more creative, not just a choice few.

How can we each promote creativity?

Short answer, by buying The Idea Book for everyone you know! Longer answer, there is not just one thing that needs to be done; it is many things.

Like changing how we teach our children, how we approach things in our personal life to how we do our work and train our staff in companies. We should focus on teaching people how to think differently instead of just to absorb information.

Almost everyone I have ever interviewed – and I have interviewed thousands – say that they would like the people around them (e.g. their children, colleagues, staff) to be more creative or innovative.

We should not only talk about the value and importance of creativity but to also do something concrete to personally develop our own creativity, apply it in our own lives and in the communities or organisations we belong to.

·Haren is finalising his second book (and accompanying website) entitled The Developing World on why the developing world has an advantage over the west in the area of innovation and creativity.

For more information on The Developing World, go to www.theideabook.org/video/, where the last three videos deal with this book.

Haren and other experts talk about why creativity will become more important on BFM radio station’s current affairs programme, The Incident Room, on May 22.

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