Chapter 8

Innovation SWOT

Innovation and creativity are not items that appear on a conventional business plan. This short chapter assesses the strengths, weaknesses, opportunities and threats of making creativity an explicit part of your company’s aims. This is not an attempt at a rigorous SWOT analysis, but will provide a useful overview of the potential impact of a creative focus. It is often difficult to be clear just what is a threat or a weakness, or to distinguish between opportu- nities and strengths. The importance of SWOT is to obtain an overview, not to spend too long agonizing over the right choice.

Strengths

‘The history of business is littered with creativity. The history of business failures is not.’ julian Patterson, Editor, VNU New Media

Greatly increased capability to cope with change. Direct competitive advantage by finding solutions and new ideas the

Much wider opportunities for new products and services. Solves otherwise intractable business problems. Repeatable, effective idea generation rather than waiting for inspiration. The only sustainable competitive advantage.

competition cannot.

Weaknesses

‘Creativity can wreck a company. There are many points where it’s not required, where it’s destructive - where order, control, predictability, precision should and do rule the roost.’ Mark Adorns, Director, Text 100 plc

lntzouation SWOT 89

Creativity should be applied to business processes, but constant tinkering

Increased risk. This is valuable if risk is managed and understood, but risk

Some great ideas are so different that they cannot be sold into an organi-

Creativity often happens at a middle level and is passed to the top for

will unnerve staff and lead to inconsistent results.

has to be minimized in safety critical environments.

zation (they need to be taken somewhere else).

approval or disapproval. This can result in misunderstandings.

Opportunities

‘Good software engineering is about method and experience, but to develop excellent software requires flair and creativity. Don’t let the perspiration blind you t o the need for inspiration.’ Phil May, Director, Data Connection Ltd

To improve business processes. To improve organizational effectiveness. To solve business problems. To come up with genuinely original ideas. To improve profitability. To reduce product/service development time. To increase product/service value. To reduce costs. To transform the organization to provide small company responsiveness

To improve job satisfaction of employees. To enhance the company’s image - being known as innovative is a signif-

Staying ahead of the sigmoid curve (see ’Handy’s curve’ below)

and flexibility with large company penetration.

icant advantage.

Handy’s curve In The Empty Raincoat (Arrow, 1995), Charles Handy points t o the importance of being ahead of the sigmoid curve. Handy’s contention is that the curve portrays all of life, whether it is the life of a person, an empire or a company. There comes a point where decline sets in (see Figure 8.1).

However, this is not the end of everything. There is every opportunity t o restart on another curve. The trouble is that the natural tendency is t o wait until you are well into decline before taking action - around point B (Figure 8.1). By then, all the indicators are there; change is an obvious requirement. However, by that time it may well be too late. Those in charge have clearly been responsible for the decline, goes the argument, so they are not the right

90 Creativity and Innovation for Managers

Figure 8.1 The sigmoid curve

people t o lead us out of it. A new curve may well be established, but only after revolution and bloodshed.

If, however, it is possible t o pick up around point A on the curve, Handy points out that you are ideally placed. You will sti l l take a small dip from the initial drop in the curve, but before long the effect will be continuous improve- ment. The only problem here is a similarity with the old rule of how t o make your millions on the stock market - all you have to do is buy low and sell high. Identifying when that point is reached is a lot harder than noticing that you have slipped well over the edge. What is more, convincing people of the need for change at that point is very difficult. I t is the antithesis of ‘if it ain’t broke, don’t fix it’. To really pick up on the sigmoid curve requires action before common sense says it i s required - making the uncommon sense of creativity a real bonus.

Threats

‘Creativity in business - i.e. breaking the mould, o r going your own way, o r reinventing your medium - is a high-risk strategy. If you win, the pay off can be grand, but mostly the go-for-broke creative mavericks lose.’ Michael WoIK journalist and former Internet entrepreneur

While innovation is generally positively received (e.g. 3M, ABB) and improves a company’s image, the use of creativity techniques can be maliciously or ignorantly misinterpreted as being silly, frivolous or non- businesslike.

Innovation SWOT 91

If innovation is introduced in a half-hearted manner, without clear support from the top of the organization, it will result in nothing but confusion and irritation. The biggest threat is not taking on creativity as part of the day-to-day function of the business - without it, survival is at risk.

This SWOT is only useful as a tool if each of the inputs is acknowledged. We need to bear in mind the risks attached to being creative and take steps to minimize these, but we also need to make sure that the opportunities are taken into account in our business plans. It is all too easy to include only the negative in a business plan, as often the negative is easier to quantify. Costs are easier to handle than benefits - weaknesses and threats can sometimes be easier to consider than strengths and opportunities.

When talking about risk, venture capitalists often point out that the market risk is much more worrying than the technology risk. Of course, some technologies will fail to deliver, but we know that with the right people in the right environment a fair number of them will succeed. What is much less subject to certainty is the way the market will react - selling becomes a prime tool of risk management. There is something of a parallel in the field of creativity.

There is no doubt at all that the technology is capable of delivering. The human brain is hugely creative. The techniques that have been developed over the last forty years will deliver repeatable, beneficial results. However, the whole exercise can be destroyed if the value of creativity is not sold properly. It is not that creativity itself is denigrated; (almost) everyone accepts the value of creativity itself. Yet without appropriate selling, taking the time and money to develop creativity and to use creativity techniques can and will be regarded as frivolous, especially at cost-cutting times, which are the times when compa- nies need creativity the most. Selling the strengths and opportunities of systematic creativity at all levels of the company is essential if the market risk is to be overcome.