Business Solutions Issue 22

D R I V I N G S U C C E S S

ISSN 1835-842X

ISSUE 22FEB/MAR 12

$9.95 inc GST

Au

st

rA

liA

n Bu

siness S

olu

tion

s - is

su

E 2

2 F

EB

/MA

r 12

ww

w.a

bs

ma

ga

zine

.co

m.a

uGetting To The Bottom Line Of

Innovation

Leadership: The arT

Of asking The righT QuesTiOns

page 40

hOw TO Manage an

experienced Manager

page 44

nitty gritty sales & marketing | law | innovation | leadership | professional development | hr | online | strategy | technology | finance

| By Dr Amantha Imber |

Another year, another buzzword. In 2010 and 2011, ‘social media’ was the phrase

on everyone’s lips and on many job titles, and in 2009, we heard all about Web 2.0.

However, over the past few years we have heard another buzzword that just does not

seem to want to go away. This buzzword is ‘innovation’. Every company wants to be

more innovative and every company website proclaims that its vision is to be the most

innovative company in its industry. And while innovation is being stuck on the wall as

one of the core values of many businesses, it must be determined that those introducing

innovation understand what it actually means.

022 AusTrAlIAn Business Solutions

Cover story

Innovation The Bottom Line OfGetting To

AusTrAlIAn Business Solutions 023


make it hard to know where on earth to start.

Furthermore, it seems as though every man and

his dog claims to be an innovation expert, and

although their advice might have worked once,

there is no evidence to suggest it will work again

in your specific organisation.

However, what we do have to draw on is a

huge body of scientific research that has been

conducted on what actually drives innovation.

According to this research, there are six key

elements that every organisation needs to have

success through innovation.

Lead The Way

While people talk about bottom-up innovation,

where innovation efforts are driven using a

grassroots approach, it is quite rare that this kind

of approach can result in real, transformational

change. Innovation requires committed and

dedicated resources such as time, money and

people, and it is critical that leaders support

innovation actively and provide the necessary

resources to introduce it into an organisation’s

culture. If you want to innovate your business, you

need to start from the top.

research has shown that there are several

key behaviours that leaders must exhibit in order

to drive innovation. One such behaviour is idea

support, which is how ideas are treated by leaders.

leaders who wish to inspire innovation must listen

to their team and receive their suggestions in a

supportive and attentive way. Possibilities should

always be explored and the atmosphere should

be constructive and positive. People are more

likely to produce creative ideas if they have licence

to do so by the situation or by explicit instructions,

and this supportive and informative evaluation of

ideas increases motivation for innovation.

Giving people autonomy is another key

behaviour that leaders must drive. When leaders

provide autonomy, people have independence

and freedom as to how to do their job, as well

In its most simple form, innovation is all about

good ideas implemented successfully. The result

of these ideas is that they are often responsible

for an incremental change or a breakthrough

transformation. There is no correct definition of

innovation and many organisations have very

different definitions of what innovation means to

them, from a simple change that adds value to

groundbreaking ideas that change the game.

An Unfair Competitive Advantage

Whatever your definition, there is one big reason

as to why innovation should be considered critical

for business: it gives you a competitive advantage.

There are five key ways it does this.

First, and most obvious, is that companies

that are serious about innovation bring to market

more profitable products and services. Apple,

for example, is serious about and focussed on

innovation and as a result, has launched a huge

range of highly profitable products. In fact, Apple

was recently found to have the highest sales-per-

square-foot than any other retailer in the usA.

second, and often less celebrated but just as

important, is that innovation gives organisations an

internal competitive advantage. By focusing your

innovation efforts internally, you can often save

your organisation millions of dollars. You might not

want to innovate your products, but rather shave

money off your manufacturing process within a

short timeframe. like the concept itself, when it

comes to innovating, it is not black and white; the

opportunities are endless.

since the launch of its innovation program

InnOV8, in 2007, Coca-Cola Amatil has

implemented hundreds of ideas that have been

focussed primarily on improving process efficiency.

Ideas implemented as a result of the program

include an iPhone application for hospitality staff

training for licensed customers called FOrMulA,

multiple equipment innovations that have

significantly improved production performance,

and environmentally friendly solutions which have

reduced the company’s carbon footprint as well

as the energy consumption of Coca-Cola Amatil’s

refrigerated equipment at customer outlets.

Third, if you focus on training people to be

better (and more creative) problem solvers, then

you will end up with employees who can out-

think the competition. Having the smartest and

most creative workforce is a huge competitive

advantage in the complex and fast-changing world

that businesses operate in today.

Fourth, many studies have found that a focus

on innovation and a commitment to innovation

programs leads to a significant increase in

employee engagement and productivity. Derek

O’Donnell, who heads up Coca-Cola Amatil’s

InnOV8 program, says “In almost every team or

function that has embraced InnOV8, we have

seen an improvement in engagement. In one

particular team, over the journey of InnOV8, the

engagement score has risen from 32 per cent

to a sustained result of low to mid-70 per cent”.

O’Donnell believes that InnOV8 has had a direct

correlation with engagement for several reasons.

Firstly, it gives all employees a sense of influencing

and contributing to CCA and its customers, no

matter what level they are in the organisation.

secondly, it provides a simple mechanism for

leaders to engage with their teams and coach

them through their innovation. And thirdly, it allows

leaders and managers to practice how they deliver

feedback as well as test their ability to inspire those

around them.

The fifth and final competitive advantage that

innovation offers to companies is a perceptual one;

it is where you become an employer of choice,

such as Google and Facebook, where people are

literally queuing up to get in.

Introducing Innovation

There is a huge amount of fluff and misinformation

that is spread about innovation and it can

Cover story

There is no correct definition of innovation and many organisations have very different definitions of what

innovation means to them, from a simple change that adds value to groundbreaking ideas that change the game.

Cover story


as a sense of ownership and control over their

work. studies have shown that people produce

more creative work when they see themselves

as having a choice in how they can go about

accomplishing the projects they have been given.

The opposite is behaviour that is rule-bound,

which encourages people to stay in established

boundaries, and where leaders tell people how to

get from A to B rather than letting them discover

it for themselves.

leaders also need to have a tolerance for

risk taking, and this comes down to how well

leaders tolerate uncertainty. When this behaviour

is high, decisions and actions are prompt.

Concrete experimentation is preferred to detailed

investigation and analysis; the latter drives a

cautious and hesitant mentality. The leadership

team at TataGroup launched an award program

that not only recognises great ideas but also

has a category of awards called the ‘Dare to Try’

awards, which reward failure where the lessons

learned were particularly pertinent.

Create A Culture Where Innovation Flies,

Not Dies

There are many different things that people

say must be present in a culture for innovation

to thrive. Meta-analytic studies of innovative

organisations have shown that there are 13 key

drivers of an innovative culture. However, not all

drivers are created equal and there were three that

have stood out as being of particular importance.

Intellectual stimulation is critical for ideas to

develop and thrive, and is one of the top three

drivers. This creates an environment in which

debate and discussion of ideas is encouraged

and supported in the organisation.

An environment where employees perceive

a sense of togetherness and cohesion in the

organisation is also important. People feel as

though they are working towards a common goal

and support each other in getting there.

Finally, people need to feel that their jobs and

projects are challenging, complex and interesting

– yet at the same time not overly taxing or unduly

overwhelming. When people feel challenged

but not overwhelmed, they produce their best

creative work.

Create A Process Where Innovation Can

Flow Through

Innovation process is about having a solid end-

to-end framework for identifying challenges

and opportunities for the business, generating

great ideas, making effective decisions about

those ideas, prototyping or piloting and, finally,

implementing them. The process for innovation is

similar to Christmas tree lights – if one light is not

working, all the others will not work.

A lot of companies start with idea generation

as the first step in their innovation process. They

tell employees that the sky is the limit and to go

far and wide with their creativity. However, asking

your team to go berserk with ideas is like playing

darts without a dart board; you simply don’t know

where to aim.

Instead, you want to make sure that idea

generation is focussed around problems

and opportunities that are in line with your

organisation’s overall strategy. That way, you

ensure that your innovation efforts are in line with

and complement where the organisation is going,

rather than drift off course.

Decision-making is another key part of the

process, and a lot of companies get this very

wrong. Many companies will ask for in-depth

business cases about things that they cannot

possibly write a business case for. The very

nature of innovation is that it is a relatively risky

activity and it is quite often impossible to write

a legitimate business case, especially if the

innovation relates to creating a new market or

category-changing product.

Peter Williams, CEO of Deloitte Digital, says

“Business cases are bad for innovation at the

first stage because it requires you to rely on

untested assumptions. They also require you to

make predictions five years out before you have

even tested the idea or really understand the

opportunity. Prototyping and testing in the areas

where the idea lives or dies allows you to rapidly

bring the idea to life and learn by doing.”

Business cases often suck the life out of

innovative ideas because the business case

process is esoteric and assumption-based rather

than based on learning. They tend to require a

lot of work and create an illusion of certainty and

progress, without advancing the idea. They also

tend to lock in your key design decisions when

you have the lowest level of knowledge.

Building Your Innovation Muscle

Many creative types believe that the ability to

come up with great ideas is something that

you are either born with or not. And if you were

By focusing your innovation efforts internally, you can often save your organisation millions of dollars. You might not want to innovate your products, but rather shave money off your manufacturing process

within a short timeframe. Like the concept itself, when it comes to innovating, it is not black and

white; the opportunities are endless.


Cover story

not lucky enough to have this gift bestowed

upon you, then there is no hope for you ever

coming up with an original idea in your life.

However, hundreds of scientific studies have

shown us that nothing could be further from

the truth. Creativity and innovation are like any

workplace competency – with the right training

and support, anyone can become capable of

generating transformational ideas.

One of the most critical things to consider is

what an organisation is doing to build up its

employees’ creative muscles. What are you doing

to train your team to be brilliant at spotting the

next big opportunity, or to come up with the next

breakthrough idea? You need to remember that

these skills are highly trainable and they are just

as – if not more – important than all the usual

suspects that appear on the training agenda,

such as presentation skills, communication skills

or generic leadership skills.

You also need to give serious thought to your

company’s recruitment and selection strategy. If

you want to have an organisation that can out-

think its competitors, you need to actively identify

top creative thinkers as part of your recruitment

process. Google is famous for this, with a ratio

of one recruiter per 14 employees, because they

take recruitment so seriously.

Know What You Are Talking About

An often forgotten element in many innovation

strategies is communication, and this begins with

internal communication.

leaders and managers often talk about

how they want innovation to become a habit –

something that people think about and do as part

of ‘business as usual’, as opposed to something

that happens sporadically. And the reason why

Creativity and innovation are like any workplace competency – with the

right training and support, anyone can become capable of generating

transformational ideas.The five key ways that innovation gives companies a competitive advantage:• External – bringing more profitable products

and services to market

• Internal – saving money throu=gh making

internal processes as efficient as possible

• Ability – having people who can genuinely

out-think their competitors

• Cultural – a focus on innovation leads to a

significant increase in employee engagement

• Perceptual – companies that live and breathe

innovation become a workplace of choice for

the best and brightest.

this often does not happen is because there

is a huge gap in what leaders want in terms of

innovation and how it is communicated.

If you want innovation to be habitual, you need

to firstly keep it top of mind and secondly make

sure that individuals are clear as to how it relates

to their day-to-day jobs. Many organisations want

their employees to be innovative, but when you

look at employees’ individual job descriptions and

key performance indicators, they have nothing to

do with innovation or breakthrough thinking.

Communication is also critical at an external

level – if you are ramping up your innovation efforts

and achieving great things, you need to promote

this externally, otherwise employee motivation

can be dampened. There is no point working for

a company that wins incredible awards when no

one outside of the organisation is aware of it. This

creates a disconnect from the pride employees

should feel for being part of such an organisation.

Communicate what you are doing to the

community and the industry to ignite a sense of

pride and motivation within your team.

You Cannot Change What You

Cannot Measure

last but certainly not least is measurement.

This is traditionally a very tricky area because

innovation often lends itself to softer, qualitative

measures. Indeed, many organisations ‘doing’

innovation do not have any formal ways of

measuring their results.

Having effective measures in place is critical

for understanding how to improve a company’s

innovation efforts. Ideally, they want to identify

three to seven key measures that show how well


Cover story

The six key elements of a successful innovation program:• Leadership – ensure that your leadership

team exhibits the key behaviours necessary for

innovation to thrive

• Culture – having a culture that supports

innovation is critical to having a company that

produces great ideas

• Process – have a clear and defined process

that starts with the business problem or

opportunity, rather than ideas

• Capability – a strategy for building skills around

creative problem solving and implementation,

and recruiting creative thinkers into the

organisation

• Communication – keep innovation top of mind

to ensure it becomes a habit, rather than a nice

thing to have

• Measurement – a set of metrics for tracking

what has worked, what has not, and what can

be changed as a result

they are tracking. If their measures are not linked

directly to driving behavioural change, then they

are probably not worth measuring. Examples of

useful measures include the number of quality

ideas submitted (as measured by how many

ideas move on to be prototyped); the quality of

decision-making (as measured by how many

ideas that are given the go-ahead make or save

money for the organisation once implemented);

the number of media hits generated for new

ideas launched; and the organisational culture

assessments that specify which key drivers

stimulate innovation and which need to be

worked on.

The absolute worst crime that can be

committed regarding innovation is inaction.

unfortunately, this crime is rife. so those who

are feeling overwhelmed about where to start,

should jump straight in and just do it.

Dr Amantha Imber is an innovation

psychologist and the founder of innovation and

creativity consultancy Inventium. Inventium

runs an annual program for leaders who

are trying to drive innovation within their

organisations. She can be contacted at

[email protected] or through

www.inventium.com.au

Business Solutions Issue 22

Documents

Transcript of Business Solutions Issue 22