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1The Innovation Process
Energizing values-centered innovation from start to finish
2Outline
Introduction The Art and Discipline of Innovation
PART I Starting Your Innovation Conversations
Chapter 1 What Is Innovation?
Chapter 2 Innovation and Values
Chapter 3 Models of the Innovation Process
Chapter 4 The Creative Journey
Chapter 5 Your Creative Journey
3Outline
PART II Expanding Your Innovation Conversations
Chapter 6 Taking on a Challenge Together
Chapter 7 Focusing Together on What It Takes
Chapter 8 Finding Innovative Solutions Together
Chapter 9 Completing the Journey Together
Chapter 10 Being a SPIRITED Leader of Innovation
Epilogue Making a Difference
4Introduction
5Waves of Innovation
6Adoption dune innovation
7Area of innovation
8Introduction
Perhaps the most significant epic journey of modern times is not found in literature, but in the real-time voyage of man into space walking on the moon, seeing the earth against the backdrop of the universe, and bringing that extraordinary shift of perspective back to the planet .
Edgar Mitchell, a member of the 1971 Apollo XIV crew, is one of those rare people who had the privilege of walking on the moons surface .
He once related his adventure, including how his experience in space led to his returning to Earth as a very different person .
9Edgar Mitchell:
The idea of going to the moon was virtually an irresistible challenge.
I characterize the space flight of getting off the planet as being an event as
significant as when the first sea creatures
crawled out onto land.
10
Preparation for the Apollo flight involved many skills, plus all the academic work.
All that knowledge and skill had to be practiced to a point where it was
automatic.
To deal with unexpected events, however, is when our judgment would come into
play.
11
The problem that posed the most potential for creativity was before we went down to the lunar surface.
The automatic abort system had failed in such a way that if we tried to descend to the surface, it would automatically take us back into orbit.
This was less than two hours before we were supposed to start down to the surface.
We finally came up with a way to reprogram the computer, with just a few seconds to spare, only minutes before the engines were to be ignited.
12
This powerful experience of seeing Earth and our whole solar system against the background of the cosmos had a very profound effect an overwhelming sense of being connected to all things.
I recognized that our scientific description of the way the universe is put together was at best incomplete and perhaps in some ways inaccurate.
The universe is more of a living organism than a set of discrete things.
13
What came out of that experience was an enormous sense of responsibility that goes with the power of creativity.
We each have to accept, along with our creative potential, the responsibility that goes with it to become proactive rather than just reactive.
And that means letting go of fear. Automatically that brings this deeper sense of love and responsibility for ones self, surroundings, environment and planet.
14
He summed up his transformation, and that of many fellow space travelers, by saying, We went to the moon as technicians . We returned as humanitarians .
15
Mans journey to the moon and back was not only an extraordinary achievement of technical and engineering innovation, but an indescribable hallmark in the history of mankind .
For the first time, we, as humanity, saw ourselves floating in space .
It was, and still is, a transformative experience that illumines our continuing quest for innovation and progress .
The question is: Do we undertake that quest for innovation as technicians or as humanitarians?
16
In one way, the history of mankind can be told as the epic story of mans innovations in art, religion, science, business, technology and culture .
Yet today, as the pace of innovation spirals in the context of the global economy, we can more readily see that innovation can have both positive and negative consequences .
17
On one hand, we have rid the world of smallpox and are on the brink of eliminating polio.
On the other hand, the major causes of death today are lifestyle-related (such as cancer and heart disease), not viral or natural; and we often use our healthcare innovations, such as pharmaceuticals, to temporarily relieve physical maladies, so we can continue our unhealthy lifestyle habits with less discomfort .
18
As time progresses and we evolve as a community of species on this Spaceship Earth (as Buckminster Fuller called it), we see that we are co-creating the course of our planetary and cultural evolution through our innovations.
19
So the questions of the day have expanded from What can we innovate?and How can we be more innovative? to include Why are we innovating? and How can we focus our innovative thinking on more positive, useful purposes?
20
The call is not just for more innovation, but for innovation that contributes to the well-being of all stakeholders, including customers, suppliers, employees, shareholders, society and the environment innovation with a social conscience, innovation driven by our higher human values .
21
22
The Art and Discipline of Innovation
Innovation is both an art and a discipline . As an art, its a human endeavor that can be driven by values as we work collaboratively to create what is most meaningful to us .
As a discipline, it has processes and principles that are actually quite simple, and can be learned and practiced .
23
The field of innovation has the Total Quality movement to thank for establishing two important principles:
Innovation is an important part of every job.
Every person has the capacity to contribute to innovation.
24
When Edward Deming and Joseph Juransparked the Total Quality Management movement in Japan in the 1950s, they taught the discipline of quality improvement: techniques to identify quality issues, find and implement solutions, and follow through with continuous improvement .
25
The Japanese culture supplied the all-important social structure to implement those techniques by training everyday workers those who were closest to the work processes that needed improvement in the art of conducting Quality Circles .
As we all know, by the 1980s, the world was beating on the Japanese doors to learn how to manage quality as well as they were .
26
Two principles have emerged from this movement essential to the field of innovation . The first is that TQM demonstrated that everyone has the capacity
to generate and implement innovative ideas, if given the right tools . Thats the discipline .
The second is that TQM spread the responsibility for quality sothat innovating improved work processes became everyones job; it was no longer just the quality engineers job . Thats the art.
These principles apply not only to working on innovations in new products and work processes, but in marketing and sales, knowledge management, organization design, business models, and leadership practices .
27
The Journey of Innovation
To borrow a phrase, the art and discipline of innovation is not rocket science .
But it is powerful enough to build and launch a spacecraft .
Its something we can all participate in, given the right understanding and framework .
And when we are innovating skillfully, while practicing strong values, we will naturally contribute to others well being .
28
Innovation means much more than just coming up with creative ideas; those ideas have to be put to work to create a benefit .
Innovation can be seen as a journey that starts with setting a purpose or goal, and ends up with innovative achievement and new learning .
All along the way, innovative thinking is required. So is knowledge. So are values.
29
Starting Your Innovation Conversations
Innovation is rarely, if ever, a solitary effort . It takes people working together to develop a goal, focus on it, generate an innovative solution, and implement it .
Sometimes, thats as simple as working with one or two colleagues during a normal daily routine .
At other times, an innovation project could be large in scope, involving people from R&D, engineering, production, marketing, finance, sales, customer service, IT and human resources .
30
So, whether the scope of your innovative work is small or large, aligning and attuning your work together requires the art of good conversation .
But what should that conversation be about?
And how do we speak the same language, when we often come from so many functions and specialties?
31http://www.theinnovationprocess.com/
32
Chapter 1 What is Innovation?
When Michael Dell was a 19-year-old college student at the University of Texas, he ran a dorm-room business selling random-access memory (RAM) chips and disk drives for IBM PCs with revenues of $80,000 per month .
He left school, much to his fathers chagrin, and began assembling and selling IBM PC clones under the name PC Limited .
He sold directly to customers, rather than using retail outlets .
By eliminating the middle-man, his price was less than half of IBMs for a comparable computer .
33
When Michael started Dell Computers, and direct-to-consumer sales became the core of his business model, a revolution occurred in the industry .
Every other computer manufacturer made its best estimate of how customers wanted their computers to be configured, and sold its inventory through retail stores .
With Dell, each computer was built to the customers own specifications, and fully paid for before assembly quite a nice financial model .
And the business model needed less overhead . Not only did Michael cut out the need for an inventory of
fully-built machines, he also established a unique manufacturing system one in which the inventory of parts should have, in his words, the shelf-life of lettuce.
34
Dell Direct became not only the theme of the business model, but a cultural norm as well .
To facilitate the open sharing of information, ideas and intelligence, leaders in the company were actively encouraged to deal directly with each other, and avoid the kind of politics and turf wars so common in corporate life.
Today, Dell Inc. is the worlds largest PC manufacturer.
Would you say that the Dells direct-to-consumer business model was an innovation?
Your answer depends on how you view and define innovation .
35
36
Defining innovation
What exactly is innovation? Its an obvious question to ask, and a tricky one . Its tricky because of the word exactly .
Take for example this variety of definitions developed over the years:
37
Defining innovation
Introducing new commodities or qualitatively better versions of existing ones; finding new markets; new methods of production and distribution; or new sources of production for existing commodities; or introducing new forms of economic organization. (Schumpeter, Capitalism, Socialism and Democracy, 1942)
The act or process of innovating; something newly introduced, new method, custom, device, etc; change in the way of doing things; renew, alter. (Websters New World Dictionary, Second College Edition, 1982)
38
Defining innovation
Change that creates a new dimension of performance. (Peter Drucker, in Hesselbein, Frances, Leading for Innovation and Organizing for Results, 2002).
An idea, practice or object that is perceived as new by an individual or other unit of adoption. (Rogers, Diffusion of Innovations, 1983 and1995)
39
Defining innovation
The capability of continuously realizing a desired future state. (John Kao, The Innovation Manifesto, 2005)
The intersection of invention and insight, leading to the creation of economic value. (U .S . National Innovation Initiative, 2005)
Anything new that is actually used (enters the market place) - whether major or minor. (Eric von Hippel, Democratizing Innovation, 2005)
The staging of value and/or the conservation of value. (Daniel Montano, Innovation Strategies of the Worlds Most Innovative Companies, 2006)
40
With this multiplicity of definitions, lets bring it down to simple terms we can all use, day-to-day .
A starting point is to first make a clear distinction between creativity and innovation: Creativity is coming up with new, original ideas . Innovation is putting those ideas to work and creating a benefit .
Wayne Coyne, Senior VP for R&D at 3M, put it this way: Creativity is thinking of new and appropriate ideas; whereas
innovation is the successful implementation of those ideas within an organization. In other words, creativity is the concept and innovation is the process
Or, as John Emmerling innovation consultant and former ad-agency creative director once said: Innovation is creativity with a job to do.
41
The domains and aims of innovation
Many people think of innovation only in terms of producing new products or technologies sold to make money jobs that only a few of us might actually be working on .
But thats not all to the innovation scene . For example, the Clorox R&D group included process
innovation as equally important: We define innovation as the implementation of creative ideas to
produce new or improved processes or products. We do not limit our view of processes and products to those that are related to goods sold to consumers.
Instead, we also include better ways of doing our jobs and new tools that make us more productive. This broadened view allows us to fully engage all employees in our creativity/innovation program and to tap into the creativity that is in us all.
42
While new products and new processes are two very distinct domains where innovation can occur in an organization, so are two more equally important domains: knowledge and leadership .
Knowledge innovations relate to how we create and manage knowledge so that an organizations intellectual capital increases . Author Meg Wheatley described this domain of innovation: Innovation arises from ongoing circles of exchange, where
information is not just accumulated or stored, but created. Knowledge is generated anew from connections that werent there before.
43
Innovations can also transpire in how the leadership of an organization develops new business models, designs the organization, fosters a culture, and manages its human resources.
The aim of leadership innovation is to focus and inspire the organizational leadership and workforce.
Michael Dells business model was an innovation that focused everyone on what and how to deliver their products and services.
Innovative approaches to performance appraisal can actually inspire and encourage risk-taking and innovation, rather than squelch it.
44
Organizations focus on four innovation domains, and each domain has its own specific aim .
Chart 1 names these four domains as Top-Line, Mid-Line, Knowledge and Leadership (where Top-Line and Mid-Line refer to the intended impact on the balance sheet of the business)
45
Chart 1 Domains and Aims of Innovation
46
An important point to note is that in many rollouts of a major innovation, all four domains of innovation could be involved .
For example, when a new product is being launched, new processes may be put into place, new knowledge of customer segmentation may be created, and a new business model to make it all work together successfully .
47
Robert Reich underscored this diverse set of domains and aims for innovation when he spoke about entrepreneurs:
They innovate by creating better products at less cost; establishing more efficient techniques of manufacture,
distribution and sales; finding cheaper sources of
materials; finding new markets and consumer needs;
providing better training of employees; attention-
getting advertising; speedier consumer service and
complaint handling; more reliable warranty coverage
and repair.
48
The point is that innovation is part of everyones job including yours, and everyone can participate in innovation in at least one of these four domains .
If youre not producing the next new product or service, you might be improving productivity or quality, or sharing best practices across the organization, or improving employee relations .
49
Innovation, change, and impact
Invention is the creation of a new device or process
Innovation is the introduction of change via something new. William B . Rouse, Strategies for Innovation, 1992
Every innovation introduces change in what is being done, how it is being done, or even why it is being done .
Classically, innovation can produce two distinct degrees of change: revolutionary-breakthrough change or evolutionary-incremental change, as shown in Chart 2 .
50
Chart 2 Sustainable Innovation
51
To manage innovation over the sustainable long term, we need to foster both breakthrough and incremental change.
Focusing only on breakthrough change can lead to exhaustion, as we dont take the time to integrate the change.
And focusing only on incremental change can lead to extinction, as we dont do what it takes to keep up with the times.
Over time, both degrees of innovation are important for sustainable innovation
52
Sometimes its hard to tell whether an innovation has produced a breakthrough or incremental change; it can all depend on ones job perspective.
For example, when electronic fuel injection (EFI) replaced carburetors in automobile engines, the engineers could very well consider it a major breakthrough in providing fuel efficiently and effectively.
But from the perspective of actually selling an automobile, the salesperson might consider EFI to be an incremental improvement in the overall performance and perceived value of a car.
53
A very important distinction not often made is that the amount of change introduced by an innovation is not necessarily the same as the overall impact of that innovation.
In fact, situations can arise in all four of the quadrants in Chart 3.
54
Chart 3 Degrees of Change with Innovations
55
When most people think about breakthrough change, they typically assume that it means a change that will have high impact (the upper-right quadrant); however, that is not always the case .
56
An example of high change, low impact (upper left quadrant) is the Simplified Keyboard, patented in 1936 by Dr . August Dvorak, an educational psychologist and professor at the University of Washington .
He designed it to overcome the inefficiency and typist fatigue that was common with the standard QWERTY keyboard layout (which had been designed in 1860 for the first commercially successful typewriter).
It has seen an increase in popularity in recent years among computer programmers who do a great amount of typing, and is included with major operating systems such as Mac OS X, Microsoft Windows, and Linux .
Still, the impact of this innovation is extremely low, given the dominant preference market for the QWERTY keyboard .
57
Similarly, when most people think about incremental change, they usually assume that it means a change that will have a low impact (lower left quadrant).
Again, this assumption is not always the case.
An example of low change, high impact (lower right quadrant) is a story of Ford Motor Company in 1994 .
A worker had come up with an idea that saved the seemingly insignificant amount of only $ .10 (10 cents) on the cost of manufacturing a vehicle. However, it ultimately had the impact of contributing $500,000 to the companys pre-tax profits.
58
So, you dont have to measure the innovative contribution you make by the amount of change you instigate .
Nor do you have to shoot for the big breakthrough to realize a big impact .
The innovation cycle contains differing degrees of change as well as differing degrees of impact, to which everyone can contribute
59
How do you know when youve been innovative?
Heres an interesting question to ponder: If an intended innovation fails to achieve its aim and doesnt get utilized, is it really an innovation?
This question is a bit like the old philosophical inquiry: If a tree fell in a forest and no one heard it fall, did the tree make any sound?
Here the question is, If something new is produced and no one is affected by it, is it an innovation?
60
Twenty years ago, Sumantra Ghoshal and Christopher A . Bartlett pointed out in an HBR article (Innovation Processes in Multinational Corporations, Harvard Business Review, 1987) that some people would say that innovation occurs, whether it is used or not:
(Innovation is) the idea, practice, or material artifact that has been invented, or that is regarded as novel independent of its adoption or non-adoption.
61
On the other hand, most others in the field of innovation (as weve sampled in the quotes that began this chapter) would say that innovation occurs when there is some tangible impact: (Innovation is) a process which proceeds from the conceptualization of a new idea to a solution of the problem and then to the actual utilization of a new item of economic or social value.
62
Another question often asked is whether an innovation has to be totally new never before seen by the eyes of man or can it just be the first time within an organization .
Everett Rogers, a pioneer and expert in identifying the patterns of product innovations as they diffuse through society, had this to say: It matters little whether the idea is objectively new as measured by the lapse of time since its first use or discovery. The perceived newness of the idea for the individual determines his or her reaction to it. If the idea seems new to the individual, it is an innovation.
63
While these philosophical questions can be interesting to debate, what it all comes down to in our real, day-to-day work life is that an innovation does not have to be some invention never thought of in the history of mankind, or some other earth-shattering idea brought to life .
So long as its new for you and your organization, its an innovation for you.
It just has to be a new concept that gets implemented and creates some benefit for someone, somewhere.
Thats what it takes for you to say that youve been innovative .
64
Having an innovation conversation
Before we move on, lets focus on you for a moment . To help clarify and integrate your insights from this chapter, consider the following questions . Use them to start an innovation conversation with your colleagues at work, and see what you can learn from each other .
1. What is your own definition of innovation as it relates to your work?2. Looking over the four domains of innovation, which have you
participated in? Top-line / revenue producing innovation Mid-line / process improvement innovation Knowledge innovation Leadership and management innovation
3. How involved have you been with incremental or breakthroughchange? How does this relate to the level of impact that you produced as a result?
65
Chapter 2 Innovation and Values
As Director of HP Laboratories, and later as Executive VP and Chief Technical Officer of Philips Electronics, Frank Carrubba is one of favorite consulting clients .
At both companies, he was responsible for all corporate research and advanced development, and he once received the Inventor of the Yearaward from the U .S. Intellectual Property Owners Association for his RISC architecture work.
66
Frank shared the results of a study he sponsored at HP Labs about the difference between product-development teams that failed, those that succeeded, and those that achieved extraordinary success.
Relationship between innovation and the values held by individuals and teams .
67
The study found that teams that failed differed from those that succeeded in degrees of talent, motivation and commitment to succeed.
However, there was no difference in these factors between the successful and extraordinarily successful teams .
Instead, two other factors clearly stood out.
68
First, Frank found that Those teams that stood out had leaders and managers who treated their customers as they themselves wanted to be treated.
He said those teams not only perceived that they had customers (a techie breakthrough in itself at the time), but also truly cared for those customers .
69
Second, Frank saw that Team members found in themselves the qualities of spirit and truth
They were people who had no reason to wear a particular mask, because they were always what they were, every single hour of the day. He said they were authentic, and didnt have to pretend to be something that they werent, or know something they didnt know .
70
There you have it a remarkable finding that Frank also repeatedly observed as Executive VP at Philips: the difference between successful teams and extraordinary teams, in the ultimate high-tech world, was the presence of two sincerely-practiced values: caring and authenticity .
71
Frank made sense of this discovery by saying that a team of people with high levels of talent, motivation and commitment will naturally find a way to achieve, lets say, 75 percent of their potential .
But extraordinary success demands more, and achieving 100 percent of their potential depends on the quality of relationships that they foster .
And thats where the values of caring plus authenticity come into play
72
The role of values in the art and discipline of innovation
At this point you might be asking, Why make such a big deal about values, when there are so many other important things to cover about the innovation process?
In the Introduction, I spoke about the art and discipline of innovation .
As an art, its a collaborative human endeavor . As a discipline, it has processes and principles that can be learned and practiced .
Values play a critical role in both .
73
When innovation is values-centered at all levels individual, team and organization we are conscious of creating what is truly important to us and beneficial to others.
And since innovation is more than just dreaming up a creative idea, and sometimes we have to work hard to actualize that idea, values are what motivate us to complete the full process, from start to finish.
So values are part-and-parcel of any discussion about innovation .
74
The word value comes from the Latin verb valere, which means to be worth and to be strong.
In our daily lives, values are feelings and convictions regarding what is of strong worth (i .e ., of importance) to us in what we think, say and do . Values shape what is meaningful and motivating for us .
75
Personal values have long been under-appreciated as a driver of innovation .
People who are aware of their own values will naturally strive to find a way to express them through their work .
Having personal values as the driver of innovation raises the level of personal investment, dedication and commitment it takes to innovate
76
Research by Barry Posner and W . H . Schmidt has shown that clarity about our personal values is more important to our job commitment than clarity about our companys values .
In their research, people were asked to rate three things:
How well they understood their companys values
How well they were aware of their own personal values
How committed they were to their work
77
Chart 4 shows a surprising result: the increase in commitment came only from an increase in self-knowledge about personal values, not from more understanding of company values!
78
Chart 4 Values and Commitment
79
Of course, the ideal is an alignment between company values and personal values.
It seems like every organization today has a set of values it wants its employees to embrace and practice.
These values are part of the mission-vision-values that align and attune employees to a common direction and are intended to guide decisions at all levels and provide cohesion .
80
According to former World Bank Values Coordinator Richard Barrett, consultant and author of Liberating the Corporate Soul: Building a Visionary Organization: Research shows that when the values of employees are in alignment with the values of the organization (the leaders of the organization), the organization is more successful and more focused on customer satisfaction and community service. Organizations that dont have this alignment tend to be more inward looking, bureaucratic and stressful to work in. They may be financially successful, but find it difficult to hire and keep self-actualized individuals and talented people.
81
The alignment between organization values and personal values often comes when people come together in teams.
The Hewlett Packard Corporation once conducted an internal study to discover the best practices of their highest-performing managers.
One finding was that their best 200 managers consistently worked with their people to define a set of group values that everyone was committed to.
They then posted these group values as guiding principles for all decisions and actions.
Through these discussions, these managers fostered the linkage between personal and organizational values.
82
Whether you and your team or organization are trying to achieve realistic, practical, bold or exciting results with your innovative work, values are the key.
They help individuals to tap into their greatest sources of energy and inspiration as they more fully invest themselves in what they are doing .
They help teams to work collaboratively toward goals based on common priorities.
And they help organizations foster a positive culture.
83
Who benefits from innovation?
Its not hard to see the positive and the negative impact that the human propensity for innovation has had on our quality of life.
On one hand, we have an electronic global network.
On the other hand, we have the accelerating effects of global warming .
84
On one hand, we have innovated with job design and job enrichment, in white collar jobs as well as manufacturing, to empower people with more complex and self-affirming jobs.
On the other hand, with the allure, power and demands of these jobs, we have fostered a new breed of workaholics who choose to work rather than spend time with their families, leading to an epidemic of work-life imbalance.
85
While this list could go on and on, it is an important reminder that what we do daily in our work has an impact on the people and environment around us, for better or for worse .
Sometimes that impact is with just a few colleagues at work, sometimes its with our many customers, and sometimes its with our whole community or country, or more .
Whether we focus our innovation impacts on our own sphere of life work colleagues, customers, friends and family or a larger picture of society, what we do today co-authors the story of the future .
Marshall McLuhan coined the term Global Village to communicate that were all neighbors, and the actions of people 10,000 miles away can have a huge impact on us . And vice-versa
86
This point of view raises some provocative questions for every person and organization: Thus far, weve focused on the domains and aims of innovation from the point of view of the organization that is producing them. But what about the people outside the organization such as
customers, suppliers, society, shareholders, even the environment?
Where do they fit in to the picture?
Are our innovation activities fueled only by self-serving motives?
Or are they energized by our wish to contribute to the well-being of others?
Can we afford to do both?
87
More than most people expect, when values are the driver of innovation, both are possible at the same time .
An example of this dual choice for supporting fellow villagers while growing a successful enterprise comes from the Planters Development Bank in the Philippines .
Floy Aguenza is its President, and the story she shared demonstrates what can happen when people in an organization integrate their values with the art and discipline of innovation
88
Originally, the banks Chair wanted the bank to join the top tier of big banks in that country, but as Floy stated: Somewhere along the way, this bank found a new calling. During the times when it was starting out as a small bank in a provincial town, it had no choice but to cater to the small businessmen of the area. We worked closely with them, giving them the proper guidance, and their businesses started to flourish. We became a part of their lives, helping their business as financial advisors and even more than that; we became friends.
89
We saw the impact our bank was making within this small community, and it touched
our hearts in a special way. From then on, we
made a decision that we would continue to
serve this niche, no matter how big we would
become.
90
The bank was innovative in the way it attracted new customers and developed relationships with them, deliberately including their customersvalues in their credit approval process:
When talking to new customers, an important part of our credit process is finding out about the character
and lifestyle of the principal. We go to their place of
business to observe how they run their business and
treat their employees. We want to lend to companies
and businesses which are anchored on the right
values.
91
They even developed a unique approach and philosophy to growing the bank financially .
This bank has been set up by the shareholders and they expect a good return. However, equally clear to
us is that it is not profit at all costs. This must be
balanced with all of the other concerns of the
organization, and its role in society. In our case,
profitability and social impact are fundamentally
intertwined.
92
We are the only development bank that is partly owned by multi-laterals such as the
World Bank and the Asian Development Bank
(ADB). They invested in our bank because
they saw our developmental impact and how
we are serving as a catalyst for economic
growth by our work with the small and
medium enterprises (SMEs).
93
What is Floys message to the rest of us about the role of business in society? Businesses have a role to play in nation building and in building the character of the people. If we all do something, we can all gain. Businesses must live by the right values, not just strive to be number one while sacrificing all else.
Its clear that we can target our innovative efforts to contribute to the well-being of others customers, suppliers and employees; society as a whole; shareholders; and the environment even as our own organization thrives . Its all a question of values .
94
What is Values-Centered Innovation
A discussion about innovation would not be complete without acknowledging the link between innovation and learning .
In the form of information and knowledge, learning stimulates innovation .
And in return, innovation gives birth to new learning and knowledge .
One way to experience the relationship between learning and innovating is to tune into our own breathing rhythms .
95
Learning and innovating go together just like inhaling and exhaling:
Inhaling = learning: acquiring, creating and sharing new knowledge; converting knowledge to wisdom
Exhaling = innovating: generating, deciding upon, implementing and celebrating innovative responses to opportunities and challenges
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Values play the key role of asking, Why are we breathing in the first place? and providing the meaning and motivation for this breathing process .
In quick review, we could say that learning provides new levels of Know-what? Innovation produces new levels of Now what?
And values pose the question, So what?
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When we put our values into practice, we also strengthen our emotional intelligence (EI) our ability to perceive, use, understand and manage our emotions .
Daniel Golemans model of EI and management effectiveness emphasizes the importance of self-awareness, self-management, social awareness, and relationship management .
In Frank Carrubbas story at the beginning of this chapter, the key value of caring is part of social awareness and the value of authenticity is part of relationship management .
98
Integrating all that weve covered thus far, we can now revisit and expand our original definition of innovation to include learning and values . We can conclude that .
99
VALUES-CENTERED INNOVATION IS:
the application of learning and knowledge to develop and implement breakthrough and incremental improvements in products/services, processes, knowledge and
leadership/management practices to contribute to the well-being of stakeholders
(customers, suppliers, employees, society, shareholders and the environment)
while generating new revenues, reducing time and costs, increasing intellectual capital, inspiring the work force, and focusing the leadership
in alignment with personal, team and organizational values
100
Having an innovation conversation
To help clarify and integrate your insights from this chapter, consider the following questions .
Use them to start an innovation conversation with your colleagues at work, and see what you can all learn from each other .
Consider:1. What personal values do you hold as most important in your
own work?2. How are those personal values reflected in what and how you
innovate?3. How aligned are your personal values with your organizations
values? How does this impact how and why you innovate?4. When you add the dimension of values, how does it change
your definition of innovation from Chapter 1?
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Chapter 3 The Process of Innovation
On May 25, 1961, just 43 days after cosmonaut Yuri Gagarin of the Soviet Union became the first human in space, U.S. President John F. Kennedy spoke to a joint session of Congress to paint a vision and request the funds for the United States to take a clearly leading role in space achievement, which in many ways may hold the key to our future on earth.
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J.F. Kennedy:
I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth. No single space project in this period will be more impressive to mankind, or more important for the long-range exploration of space; and none will be so difficult or expensive to accomplish. Let if be clear that I am asking the Congress and the country to accept a firm commitment to a new course of action a course which will last for many years and carry very heavy costs. There is no sense in agreeing or desiring that the United States take an affirmative position in outer space, unless we are prepared to do the work and bear the burdens to make it successful.
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The commitment from Congress and the nation came, and Kennedys vision was achieved on July 20, 1969, when Apollo 11 commander Neil Armstrong stepped off the Apollo Lunar Modules ladder and onto the Moons surface . But what did it actually take to achieve this monumental task? President Kennedy was quite clear in his May 25, 1961 speech about what he foresaw:
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J.F. Kennedy:
In a very real sense, it will not be one man going to the moon. If we make this judgment affirmatively, it will be an entire nation, for all of us must work to put him there. This decision demands a major national commitment of scientific and technical manpower, material and facilities, and the possibility of their diversion from other important activities where they are already thinly spread. It means a degree of dedication, organization and discipline which have not always characterized our research and development efforts. It means we cannot afford undue work stoppages, inflated costs of material or talent, wasteful interagency rivalries, or a high turnover of key personnel.
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The NASA model
NASA took up the charge to foster a degree of dedication, organization and discipline that had not existed before . It adopted new ways of managing and developing all the innovations it would take to land men on the moon and bring them back safely .
One tool NASA used was what has become known as a first generation model of the product or technology innovation process, called a phase-review-process.
It was used as a management tool to systematize and control work with contractors and suppliers on space projects .
The NASA model showed development in sequential phases, as shown in Chart 5 .
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Chart 5 Phase-Review-ProcessModel
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This phase-review model drew from the 1930s pioneering of Joseph Schumpeter, the so-called father of the study of innovation, who believed that the process begins with inventions and ends up with innovations that make money a view that became the basis for a linear, technology-push or science-push model .
By the 1960s, insights about market-pull or demand-pull innovation driven by consumer demand rather then scientific discovery produced a different form of this linear model as shown in Chart 6 .
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Chart 6 Technology Push/Demand Pull Model
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Innovation Models
Since then, models of the innovation process for new products and technologies have been expanded, evolved, modified and morphed into perhaps an overabundance of possibilities to choose from.
Not limited to product innovations.
Innovation process models across every domain of innovation: revenue producing innovation, process innovation, knowledge innovation and leadership innovation.
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Innovation process models for top-line innovation
By the 1970s and early 80s, models that mapped the process for top-line, revenue producing innovations had morphed from the phase review model into stage-gate models, such as this one from Coopers in Chart 7 .
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Chart 7 Stage-Gate-ProcessModel
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But these models faced criticism because of their apparent linearity:
Models that depict innovation as a smooth, well-behaved linear process badly misspecify the nature
and direction of the causal factors at work. Innovation
is complex, uncertain, somewhat disorderly, and
subject to changes of many sorts. Innovation is also
difficult to measure and demands close coordination
of adequate technical knowledge and excellent
market judgment to satisfy economic, technological
and other types of constraints all simultaneously.
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Ulrich offered a modified stage-gate model, in which the roles of various functions are described and woven into an overall process . Such models (shown in Chart 8) brought closer attention to the process innovations needed to support product/technology innovations, such as quality control and improvement, responsive cycle times, and faster time-to-market
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Ulrich Normative Process
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The most recent network models aim at showing the complexity and uncertainty involved in the innovation process .
One such model by Trott, shown in Chart 9, identifies marketing, research and technology, and business planning as the three most influential functions involved with innovation
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Chart 9 Network Model
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As researchers continue to integrate the best of models, they give more detail to the complexity by mapping all the variables, such as this model in Chart 10 of the technology innovation process developed by Vargonen
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Chart 10 Technology Model
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There have been many other innovation process models for new product and technology development .
Study them further: the internet provides a wealth of resources .
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Innovation process models for mid-line innovation
These two historically-important process improvement processes were an inspiration for the later Total Quality processes .
The first was invented by W .A . Shewhart in 1939, and made popular through Edward Deming .
Their Plan-Do-Check-Act (PDCA) process was very useful in solving quality issues, and mapping a repeated cycle of continuous improvement, as shown in Chart 11.
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Plan-Do-Check-Act (PDCA) Model
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The second was Value Analysis, developed by Larry Miles at GE during World War II, whereby cross-functional teams from design, engineering, purchasing and quality employed a formal protocol to improve the manufacturing process and reduce costs.
That protocol had eight basic steps as shown in Chart 12 .
This model was the precursor to the Measure, Analyze, Improve process that is the basis of the Six Sigma improvement process though Six Sigma adds a Control step
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Chart 12 Values Analysis Model
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Innovation process models for knowledge innovation
Another domain of innovation is knowledge.
Nonaka conceived of a model for knowledge creation that incorporated both tacit knowledge (resident in individuals and groups as personal experience or intuitive knowing) and explicit knowledge (formulated, captured concepts), as shown in Chart 13 .
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Chart 13 Knowledge Creation Model
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The resulting knowledge creation process has five key steps, where the end result can be knowledge innovations in any field of human endeavor impactful to the degree that the concepts are employed and then integrated into day-to-day experience:1. Enlarging individual knowledge
2. Sharing tacit knowledge
3. Creating concepts
4. Justifying concepts
5. Networking knowledge
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Innovation process models for leadership innovation
The domain of leadership innovation also has identifiable processes associated with it for us to consider .
According to Gary McLean, author of Organization Development Principles, Processes, Performance in 2005, the action research model that is deeply embedded in the practice of Organization Development has a similarity to the Deming/Shewhart PDCA model, through a commitment to continuous improvement: At the Plan stage, decisions are made about what might be done to
improve the organization and its processes, using a variety of decision making tools .
At the Do stage, those plans are carried out in a pilot or trialimplementation .
At the Check stage, measurements are taken to determine whether the pilot implementation did, in fact, result in the changes desired .
At the Act stage, the process, if successful, is implemented .
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But because of the critique that models like this appear too linear and dont portray overlapping stages, he offered a modification of the PDCA model that he called the organization development process (ODP) model .
Each of the eight components or phases interacts with the other phases, as shown in Chart 14 .
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Chart 14 Organization Development Model
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Creative problem-solvingprocesses
Theres a fine line between models of innovation and those of creative problem-solving .
For example, consider the classic Osborn-Parnes Creative Problem-Solving (CPS) model invented by Alex Osborn, executive vice-president at the huge BBDO advertising agency, and researched by academician Sidney Parnes .
Their model has six steps as shown in Chart 15
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Chart 15 Creative Problem-Solving (CPS) Model
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Showing the parallels between the CPS model and models of the product innovation process is not difficult .
For example, in 1988, Donald G . Marquis described a six-step innovation process:
1. Recognition (technical feasibility and potential market demand)
2. Idea Formulation (fusion into design concept and evaluation)
3. Problem-Solving (search, experimentation and calculation; readily available information)
4. Solution (solution through invention; solution through adoption)
5. Development (work out the bugs and scale up)
6. Utilization and Diffusion (implementation and use)
A comparison of his model and CPS, in Chart 16, shows the overlap of concepts
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Chart 16 Comparison of Marquis and Osborn-Parnes Models
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Having an innovation conversation
To help clarify and integrate your insights from this chapter, consider the following questions .
Use them to start an innovation conversation with your colleagues at work, and see what you can all learn from each other .
Looking back on your past projects:1. Have you used one or more specific innovation process
models to guide your innovative efforts?2. If more than one, did they have a common set of stages or
tasks? If so, how would you describe them?3. How effective was the model, or models, in helping you
achieve your goals?4. Did the model, or models, seem to miss anything that you
felt was important? If so, what was that?
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Chapter 4 The Creative Journey
Many years ago, a VP of Engineering from the Brunswick Corporations Bowling Division one of the two leading makers of bowling equipment called for help with a challenge he faced .
They had been selling the same mechanical pinsetter for more than 25 years . At one point, while the U .S . market lagged, a big bowling craze developed in Japan, and Brunswick had sold a huge number of those pinsetters .
But when the bowling boom there went bust, all those pinsetters went onto the used market .
Brunswick sales were way down . The VP of Engineering thought he saw a solution: reinvent the pinsetter with up-to-date technologies, and have something totally new to sell
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How that project unfolded filled in a lot of the missing pieces I had seen in the
innovation process models I had studied up to that point.
The first thing we did was to look closely at the goal the VP had laid out: was the task at hand really to reinvent the pinsetter, or was it something else?
They realized his real goal was to rejuvenate the entire bowling industry to bring people back to bowling through a totally new experience of what it meant to play that sport .
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They began to select the kinds of people who could come together in a multi-day, cross-functional innovation search an idea-generation session that would focus on the entire experience of bowling, not just pinsetters .
They ended up involving specialists in robotics, software engineering, digital detection equipment, and other technologies .
They also invited a wide variety of other specialists, such as an expert from the luxury cruise industry, who knew about the entertainment experiences that people were looking for .
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They collected research on market trends in related industries and technology trends that might impact our search .
They selected specific focus areas, including topics such as new scoring systems and technology-based feedback-coaching systems .
Then, asked a few key specialists to deliver stimulating talks on those subjects to spur our idea generation .
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Over the first two days of the innovation search, they generated hundreds of ideas and clustered them in a variety of ways .
As a sampling, here are a few of the ideas that were voiced: A pinsetter that sets whatever pins a bowler wants set for
practice purposes
A smart card that remembers who a bowler is, his averages, and how he did on different pin combinations, etc.
A computer system that analyzes a bowlers performance and recommends ways to improve technique, depending on what mistakes were being made
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Feedback on speed, accuracy, and so on, as the ball travels down the bowling lane
Put bumpers into the side gullies so that the bowling ball always bounces to hit pins important for people new to bowling (including kids and adults)
Changing the normal scoring system by allowing a person to bet ones pins on the odds of an opponent picking up on a particular spare, etc. (changing scoring methods)
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Then, it came time to narrow down the ideas and select the most promising ones for technical and market feasibility studies . Certain ideas made it, such as: A pinsetter that sets whatever pins a bowler wants set for practice purposes
A computer system that analyzes a bowlers performance and recommends ways to improve technique, depending on what mistakes were being made
Feedback on speed, accuracy, and so on, as the ball travels down the bowling lane
Putting bumpers in the side gullies
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It took a couple of months to complete the feasibility studies and return to Brunswick to help make a final decision about what to take to the Board as priorities for development funding .
Even then, the final decision wouldnt come until after prototypes were tested in their labs and in actual facilities
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Finally, they began to install and do final testing of new products in company-owned bowling centers within a few hundred miles of their headquarters .
As the Engineering VP later told me, one of the early hits was putting in a ball-speed indicator using a radar gun (like highway police use) which gave bowlers feedback, so they could determine if they needed to speed up or slow down their ball delivery to hit the pins better .
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One key to the renewal of Brunswicks bowling business was the new GS pinsetter, which led the way to being able to reset a previous pin combination when pins were inadvertently knocked down after a first ball was bowled .
Today, the latest generation of pinsetter, the GS-X, is the #1 selling new pinsetter in the world, with more than 10,000 installed worldwide.
The side-gulley idea (for people new to bowling) has turned into their Pinball Wizard bumper bowling system
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The beginning of a new model
This Brunswick project occurred when I was just beginning to formulate my version
of the innovation process .
It wasnt that I needed my own process model but I had seen the potential for a robust yet simple model that could apply to projects in any domain of innovation, and my professional curiosity got the best of me .
What could I invent that might contribute to the field of innovation?
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Looking back, my initial map of the innovation process for that bowling project contained five steps, with some very fuzzy boundaries between them, indicating
overlapping and simultaneous stages:1. They set a purpose and direction (goal) .2. They gathered and analyzed data, and prioritized the issues that
needed creative ideas .3. They generated a wide array of potential ideas and concepts .4. They did the feasibility studies, development and prototyping
necessary to make a final decision of what to implement .5. They scaled up and commercialized the new products and
continued to refine, add to, and produce new generations of those product lines .
As shown in Chart 17, those stages corresponded well with the product innovation models I had been studying .
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Chart 17 Comparison of Miller Observations with Other Innovation Process Models
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Finding what was missing
Many times when conducting Innovation Searches with clients, I would bring in a person who was great at generating ideas, but who was from a field that had little relation to the topic at hand .
That person could bring an entirely new perspective to stimulate our innovative thinking .
In the same way, innovation process in a totally different field cultural mythology
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Chart 18 Comparison of Heroic Journey with the Innovation Process
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Chart 19 Creative Journey Model
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The Creative Journey is a roadmap of the innovation process that enables anyone to practice the art and discipline of innovation with greater awareness and skill, through four distinct stages:
1. The Challenge deciding what you want to accomplish and acknowledging the risks along your path
2. The Focus tapping into your source of confidence and prioritizing issues you need to resolve
3. The Creative Solutions generating ideas and then developing and deciding on the best solution
4. The Completion implementing your solution and celebrating what you accomplished and learned along the way
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Upon completing the development of the Creative Journey model, then compared it with the models studied from various domains .
Looking at Chart 20, you can see:1. The four stages can be found in all the main innovation
process models studied from the four domains (though most of the stage-gate product development models were very light on where the original concepts came from) .
2. Five of the eight tasks in the Creative Journey were mental tasks highlighted in most or all of the other models .
3. Two tasks were never highlighted in the other models: assess risksand tap into character.
4. A third task, celebrate results, was only infrequently mentioned in other models, and then only as monitoring or evaluating results
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Also noteworthy to me was seeing that each stage and task in the Creative Journey might have multiple sub-tasks to complete, involving a variety of tools and techniques .
For example, the task of implementation for a new product could include the sub-tasksfor engineering, manufacturing, IT, marketing and distribution and each of those functions might need its own Creative Journey to determine how to accomplish its responsibilities during that implementation task of the larger innovation process .
However, the three tasks mentioned in #3 and #4 above all related to the three insights I had from Bernbaumsbook kept drawing my attention, and I began to delve more deeply into their significance for the innovation process
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Confidence and energy in the innovation process
Looking again at Chart 20, I saw how none of the models highlighted anything about the character, values and sense of meaning that is required to drive the innovation process forward .
They were replete with discipline, but the art was missing . I recalled tales that many innovation teams had told me about their
emotional ups and downs during projects . Those teams often started with great confidence and enthusiasm,
but as they began to face the risks, uncertainties and obstacles of their projects, they often felt frustration, fear, overwhelm and a loss of confidence .
If they jumped from there straight to generating ideas for meeting their goal, then their ideas lacked boldness, originality and stretch they were safe, status quo kinds of ideas .
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Chart 20 Comparison of Creative Journey with Other Innovation Process Models
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Chart 21 Confidence Curve
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An immersion into a state of fear and uncertainty wasnt all bad, and that it could become an anticipated part of their process .
This new awareness allowed their character to come forth, increasing the confidence that they could move through the dark times of anxiety and uncertainty, and come out stronger and moreinnovative for it .
While most teams identify with this pattern, some teams have found the initial uncertainty to be energizing, with very little dip at all .
Together, weve seen how their sense of purpose, values and determination made them almost instantly ready to take
on the risks . And their sense of character spoke volumes: If we really believe in
the importance of this goal, and if we are going to walk our talk with our values, then were not going to let these risks stop us.
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Jumping to the last task of the Creative Journey, I named that task celebrating results to emphasize that this task had a threefold purpose: 1. To assess how well the goal was achieved
2. To identify the new knowledge that is the boonto carry forth to the future
3. To renew energy for taking on the next challenge
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This task signified much more than post mortem sessions during or after a project .
As my clients so often taught me, a true sense of completion was needed before people were mentally and emotionally ready to take on the next challenge .
Repeated experiences of ending projects without this renewal of energy often led to burnout .
With these insights and the Creative Journey in hand, I felt ready to see how it fit with the wide variety of clients I had, and the innovative challenges they faced .
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Having an innovation conversation
To help clarify and integrate your insights from this chapter, consider the following questions .
Use them to start an innovation conversation with your colleagues at work, and see what you can all learn from each other .
Looking back on innovative projects youve worked on:1. What have been the energetic or emotional ups and downs that
you and your teammates experienced during those projects?
2. How did you deal with them when they occurred?
3. How did they impact your effectiveness in generating and implementing an innovative solution?
4. How do you currently complete your innovative projects?
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Chapter 5 Your Creative Journey
Every person, from clerical worker to executive, has personal stories about taking on challenges that theyve never faced before, and then finding ways to meet them .
Every job presents such opportunities.
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Once met a woman named Mary Nelson who was President of Bethel New Life in West Side Chicago in the United States an organization dedicated to helping rejuvenate housing in run-down communities .
They were an early pioneer in what has become known as the sweat equity approach to building housing for people who cant afford down payments.
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Like any of us with a difficult challenge, Mary had to deal with the emotional downs and ups of the entire process times of uncertainty and anxiety, adrenaline rushes, self-doubt, fear of failing, excitement for new ideas, frustration over impediments to implementation, and the joy of celebration .
Interviewed her about what she had gone through in the early days of trying to actualize this innovative approach to low-income housing .
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What was your initial goal? We wanted to create a low-income housing alternative to the welfare system.
What were the risks? What was at stake? We needed to do something about housing in our community.
In ten years, we had lost 200 housing units per year in a square-mile area. Soon, there would be no community left.
Our church was a congregation of poor people, and the governors office and bureaucrats said, Its not possible.
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What was it about you your values, your experience, your character that gave you
the confidence that you could somehow do it?
People said, Weve got to do it, because this is going to be a visible symbol, a visible statement that the church cares, that this is our community.
As Martin Luther King Jr. said, We know finite disappointment but we know infinite hope. We have a sense that what we do, with Gods help, makes a difference.
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What were the most important issues that would require some creative ideas to resolve?
Financing housing was a big issue
So was getting people involved
We also needed the right skills, and a can do attitude
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Whats Your Story?
One of the easiest ways to understand how the Creative Journey works is to apply it to a real-life example of your own .
So, now its your turn Think back to a challenge youve faced at work for which
you didnt have a ready solution, and you didnt quite know where you were going to find it .
This challenge might be one of the situations you thought of back in Chapter 1, regarding any of the four domains of innovation: Top-line / revenue producing innovation Mid-line / process improvement innovation Knowledge innovation Leadership innovation
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What story can you tell? To relive your quest to find a solution, consider the following eight questions:
1. What was your initial goal?
2. What were the risks? What was at stake?
3. What about you your values, your experience, your character gave you confidence you could somehow do it?
4. What were the most important issues that would require some creative ideas to resolve?
5. What were some of the creative ideas/options you considered, even if you didnt use them?
6. What were the ideas/options you chose?
7. What did you do to implement those solutions?
8. What were the results, and what did you learn during the process?
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These are, of course, the basic questions for the Creative Journey .
They are your guide to the major tasks for innovation, and the key to having innovation conversations with your colleagues in any job or department, so you can engage in an innovation process together.
You might wish to ask your work colleagues this series of questions and have an innovation story-tellingsession .
Reaffirm for yourselves how everyone has an innovation tale and everyone has the opportunity to contribute to innovation!
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Innovation in every day work processes
Quite often, we might be engaged in an innovation process, doing innovative work, without even realizing it .
That is, whether we are a manager turning around an ailing company, or a customer service representative trying to resolve a customer complaint, our innovative endeavors share a common process.
For example, consider the typical work of strategic planning, marketing, new product development, or quality improvement .
Chart 22 documents how we might normally describe those work processes.
Note the parallels to the four stages of the Creative Journey model of the innovation process .
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Chart 22 Comparing the Creative Journey Model to Other Work Processes
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The point is simple: no matter what job you have, you are probably engaged in some way or another in an innovation process aimed at meeting some tangible work challenge or opportunity.
Recognizing that, you can begin to apply the Creative Journey as part of the art and discipline of being innovative, no matter what process you are engaged in or what your job description is.
And every time you embark on this Journey, you are going through a micro version of the character-building, transformative journey that is spoken of in all of the worlds epic literature .
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Your personal purpose
The next four chapters are dedicated to helping you develop the discipline as well as the art of innovation as you go through the Creative Journey.
Theyre filled with questions to ask, techniques to use, obstacles to side-step, and stories to inspire.
But before going there, theres a personal exercise that will help you master the art of innovation to bolster each task you undertake .
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Whats essential to the Creative Journey is that we put our minds, hearts and souls into what, how and why we innovate.
For that, it helps to periodically step back and get a perspective on what we want to do with our lives, and how that fits into our innovative work .
Lets start with what moves you: what contribution you want to make with your life, and what motivates you to make a difference
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Using Chart 23, you can state your personal purpose in six different ways .
There may be some overlap in your answers, but start from the top and work down (Ive given a sample answer to each question to help you get started on your own answers) .
The triangle symbolizes how the questions become more and more foundational to your life purpose as you move from #1 to #6.
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Chart 23 Personal PurposeExercise
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Now examine the thread of continuity the purpose that runs through your answers and gives them unity.
Honestly examine all your key intentions and activities at work, and see which statements you find most enduring across all of them .
Thats the basis of your real-time, not-just-nice-sounding personal purpose.
Notice how your values are intertwined with and illumined by your sense of purpose .
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A conversation with Fred Schwettman, when he was head of Hewlett-Packards Circuit Technology Division . He beautifully captured the importance of finding and expressing a sense of purpose through our work: We had a discussion about values and beliefs in our staff
meeting to really articulate what the personal purpose of eachof us was what each of us was doing to grow. As time goes on, my purpose turns more and more spiritual. What can I contribute to peoples lives? I also have to spend my time trying to figure out how well survive within this industry; this environment is tremendously competitive. But overall, when the time comes to check out, you better feel really good about whatyou accomplished and making a little profit here and there is probably not going to cut it.
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Your sense of personal purpose provides the meaning that will guide you in your innovative work.
It strengthens and unifies your values into a powerful energy that spurs you on and keeps you on track.
Your purpose and values are what can make you a champion of innovation whenever and wherever you choose.
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Having an innovation conversation
To help clarify and integrate your insights from this chapter, consider the following questions . Use them to start an innovation conversation with your colleagues at work, and see what you can all learn from each other:
How would you state your overall personal purpose?
Looking over your story using the eight questions What stands out as most unique, memorable even
remarkable about how it unfolded?
What have you learned from this?
How do the processes you currently use at work parallel an innovation process?
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Part II Expanding YourInnovation Conversations
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Now is the time to begin developing more knowledge and skills in each stage of the Creative Journey .Your conversations about the innovation process will now center around eight core questions:
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In the next four chapters, you will grow in the art and discipline of innovation, starting with the Challenge Stage.
As a discipline, you will gain insights, knowledge and skills to assist you in taking and leading each stage and task in the Creative Journey.
As an art, you will learn how to engage in innovation conversations as you work on collective challenges.
At the end, youll be more capable than ever to proactively initiate the innovative future you want to be part of.
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The Creative Journey provides a robust process you can apply in any job, with any challenge whether you are conducting a two-hour meeting, or managing a two-year project .
You will find that many, if not all, of the tasks have a kind ofdiverging- converging cycle.
For example, you might come up with many different statements ofyour purpose or goal before converging on one that seems just right.
You might gather lots of facts and analyze lots of issues beforeidentifying the top priority ones.
You might generate a wide array of ideas and options before forming them into concepts and selecting the most promising onesto develop and decide on.
You might try out a number of approaches to implementation before converging on the one that will work best .
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These chapters will discuss the stages and tasks one by one, since a book unfolds in a linear fashion.
But remember, this model is flexible, not linear; the stages and tasks often overlap.
You might end up jumping from one task to another and back again, or taking them out of sequence, in the organic unfolding of your Journey.
If you do jump ahead in the sequence, make sure you go back and continue where you were so that in the end, you dont miss an important task.
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As a final reminder before diving in to the art and discipline of each stage and task, innovation is rarely, if ever, a solitary effort.
Therefore, although you can use everything in these chapters when you work alone, we will speak in terms of your working in a team or group setting, with questions and examples that can stimulate your work together on a collective challenge .
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Chapter 6 Taking on a Challenge Together
In the 1970s, Charles Schwab noticed that the stock brokers in Wall Street brokerage firms faced an inherent, potential conflict of interest in their work situation.
Their job was to advise their clients on buying and selling stocks, bonds and other investments using recommendations supplied by in-house analysts, and the brokers were paid commissions on the transactions their clients made as a result .
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What was the potential conflict of interest?
On one hand, the brokers were supposed to represent their clients best interests;
on the other hand, if their clients best interests were not to buy or sell investment instruments, the brokers made no money.
The temptation could be to induce clients to buy and sell, whether it was really in their best interest, or not, to do so.
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Schwab saw another aspect of this situation as well: the firms assumed that clients themselves did not know enough about what and when to buy and sell that they needed the analystsrecommendations .
From all of this reflection, Charles Schwab saw an ethical opportunity and a business opportunity.
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He decided to establish a brokerage firm with a new basis and the following business model: Serve customers who know what they want to invest in
Do not offer advice or recommendations; just transact orders as customers
Pay brokers/traders on salary only; no commissions
Do not employ stock/bond analysts (not needed); thereby reduce overhead costs and allow for discounted prices
Be strict in upholding the values of transparency, honesty and integrity
Avoid at all costs even the appearance of conflicts of interest
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Schwabs discount brokerage firm was an innovation that revolutionized the financial industry.
The business model, and the business, was a hit in the marketplace, and Charles Schwab & Co. grew quickly.
One of the tests of the companys values occurred in the mid-1980s, when mutual funds were becoming quite popular.
A person had to go to the specific mutual fund company to buy shares in their mutual funds; that meant having many different account statements, which made it hard to manage a portfolio .
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Charles Schwab had another breakthrough idea: offer a service whereby customers could buy and sell shares in a variety of mutual funds through Schwab & Co ., at the
same cost as if they had transacted directly with the mutual fund companies.
But this meant that the customers would not have to pay Schwab an extra transaction fee, so how would Schwab make money on this service?
By having the mutual fund companies, not the investors, pay Schwab for each transaction.
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Many fund companies saw this service as reasonable: it would broaden their market exposure and they could absorb the cost under that rationale.
Others, however, wanted to create a special class of shares with a higher management fee charged to the investors, thus recouping the fees they paid to Schwab .
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Schwab would not agree to this scheme, believing that under this scenario, when customers realized they were paying a higher management fee, it would appear to them to be a hidden cost and accuse Schwab of being unethical.
So, even at the expense of not signing up a big mutual fund company to participate in their new service, Schwab and his executives held firm to their values of high ethics, transparency and integrity.
They eventually named this service OneSource, and it revolutionized the mutual fund market .
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The Challenge Stage of the Creative Journey
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Challenges are simply situations we want to change, problems we want to solve, or opportunities we want to actualize.
A challenge is defined by a purpose or goal plus the meaningful risks involved.
After all, a goal would not be a challenge if there werent something important at stake, or if there was an obvious way to meet it.
A challenge is a call to greatness. It is a time to call upon all our experiences, be bold, test
our skills, and explore the unknown. Challenges are provocative, stimulating and sometimes
risky. They summon our courage and focus our energy.
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Charles Schwab saw an opportunity to take the ethical high ground and start a new industry at the same time . He embraced that challenge.
He also felt a higher mission, one that was bigger than his business.
That mission was, and is, to inspire every person in the country to believe in and invest in their own future.
As he has told his managers time and again, when people can trust in and plan for their future and their childrens future, they prosper.
He assures them that by committing to that mission, the companys own success will grow naturally .
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TASK 1: Establish the purpose or goal
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TASK 1: Establish the purpose or goal
The first task of your Creative Journey is to identify: What is our purpose or goal?
Why does this question include both of the concepts purpose and goal?
In one way, they mean the same thing: your intention what you wish to accomplish overall.
But purpose can imply a direction to head in, while goal can imply a destination to arrive at.
Depending on your situation you may want to use one word or the other, or you may want to use both .
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A statement of purpose or goal is powerful.
It defines what is unique about what you want to accomplish, whether it is a large task or a small one.
It helps you create a picture of how the world will be a little different once you have succeeded in your Creative Journey.
It should be clear enough to provide you with a direction to follow, yet without pre-determining the solution for achieving it.
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Example
There may be times when it isnt easy to get started in defining your purpose or goal.
You may encounter an atmosphere of apathy, where no one seems to care about what is going on.
Or people might feel discouraged by the last time they tried to innovate and werent 100% successful.
Or they might be thinking narrowly about what kind of goal to aim for.
Under these conditions, encourage everyone to think about how your project has the potential to really make a difference in other peoples lives.
Focus on the value of service: How can we best serve others as well as ourselves?
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W. Miller was working with computer software salespeople in New York City a rather aggressive group.
He asked them to state a goal we could Journey on together.
Thats easy, one person said: How to make more money, more sales and more profits.
He replied, Great start and could you restate that in terms of a customer benefit?
The group paused, stunned by the question and the task.
He was asking them to focus on what they could give what they could provide rather than what they wanted to get.
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Eventually they came up with, How to provide customized solutions to individual customers at a mutually beneficial price.
For them to define their goal as how to serve, rather than what to get, it opened up so much more creativity and energy than the first statement.
It also showed the power and value of giving as well as receiving, focusing on the reciprocal nature of sustainable business growth and value-exchange.
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Asking questions to define the purpose or goal
The starting point question is simple: What is our purpose or goal? To make sure you have defined your goal in terms that are the most meaningful and motivating to everyone, some secondary questions often come in handy .
Here are a few you can use to broaden the discussion, and bring out the values and meaning that will energize
everyone in pursuing the goal: WHAT IS OUR PURPOSE OR GOAL? What values are important in defining the goal? What would make this an exciting adventure? Who do I most want to serve? What would make any hardship worthwhile?
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Including the perspectives of each persons personal purpose (from the last chapter) will also stimulate a great deal of discussion about your shared purpose or goal.
How can each of us fulfill our own purpose while working on this specific challenge together?
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At times, you may find that members of your group have competing statements, and its difficult to come to a consensus on the purpose or goal.
In that case, look for a broader statement, one at a higher level of abstraction, for which the competing statements might all be potential solutions.
Then, bring back those competing ideas later on, as the first creative options for meeting the goal.
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Also, sometimes it might be hard to pin down and craft a statement of your purpose or goal.
If you find your group getting bogged down, agree to a simple, OK for now statement of your purpose to get you going on your Journey.
Then, move on to the next task (assessing your risks) with the intention of coming back to refine your goal statement later.
Remember, the Creative Journey is a flexible, overlapping process.
You can always return to this task and clarify your purpose as your perspective gets clearer .
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One technique: The Right Scope for the Goal
As you start on your Creative Journey, realize that you are taking on the responsibility for actually changing things.
How big of a change do you want to take on? What fits with your level of empowerment to influence or make a change?
A purpose or goal becomes frustrating if it is defined in terms that are too narrow to really accomplish what people are aiming for, or if it is so broad you dont have the power or influence to actually achieve it.
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So, one technique you can use to make sure the scope of your goal is just right not too narrow and not too broad is shown in Chart 24.
Once youve taken this step, review the different statements.
Choose the scope that best matches your power to implement an innovative solution and your willingness to make a difference.
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Chart 24 Right Scope for the Goal
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A case in point
As an example, imagine that your company has gone through downsizing and a reorganization to enable it to respond faster to changes in customer needs and market demands.
Is this too hard to imagine?
Youre part of a team with representatives from all over the organization, with the goal of figuring out how to improve morale .
How do you begin tackling this challenge?
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Your first meeting may be devoted solely to defining your challenge.
Begin with any first definition of your goal from anyone.
As a group, work with expanding or narrowing the scope until everyone agrees it is both big enough to be meaningful, yet small and manageable enough to empower your group to achieve it.
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Key Question: What is our purpose or goal?
Formulate an initial goal statement:
To ensure positive morale in our new work environment after a difficult reorganization
To broaden your goal statement, ask Why do we want to do this? and restate your initial goal in broader terms: