Brought to you by Jeff Thoren, DVM  

Imagine this: Radical innovation resulting from generating a collective sense of destiny, from unleashing the imagination of people across the organization and teaching them how to see unconventional opportunities. 

A new sense of direction will come from dramatically increasing the strategic variety inherent amongst employees or team members and from encouraging people to generate thousands of new ideas out of which new themes and directions can be discovered.  The role of the organization’s leaders, then, becomes playing that of an editor.  That is, leaders will move from being the sole creators of strategy to searching for the patterns in the streams of ideas that -- in the most innovative companies -- constantly emerge from all levels of the organization.

Here’s this month’s feature ...

Innovation Now! -- by Gary Hamel

From Fast Company -- Issue 65, December 2002

Highlights from the article:

• Every company has to grow revenue, raise prices (if it can), and cut costs.  That simple arithmetic never changes.  But here’s the dilemma: most companies can’t grow revenue by flogging the same old stuff to the same old customers through the same old channels in the same old ways; raising prices isn’t a sustainable strategy over the long run; and most companies are reaching a point of diminishing returns with traditional cost-reduction strategies.  The answer: radical innovation.
    

• So, exactly what does “radical” mean?: 

1. A radical idea has the power to change customer expectations.  Customers will always make room for something new, useful, and value packed.  Example: Apple keeps raising the bar on what people expect to see in a PC.  

2. A radical idea changes the basis for competition.  Example: Kohl’s created department stores that are laid out in an attractive way and are arranged to help customers get in and out quickly. 

3. A radical idea is one that has the power to change industry economics.  Example: Because of it’s point-to-point routing system, Southwest Airlines keeps its jets in the air longer than most other carriers, thereby using its capital more efficiently.

• Most organizations are built for perpetuation rather than innovation.  Perpetuation encompasses things like control, hierarchy, diligence, efficiency, replication, and quality -- many of which have their place.  However, in too many companies, real business innovation is an exception.  The most important business issue of our time is finding a way to build companies where innovation is both radical and systemic!
    

• The first step toward making innovation systemic is to realize that many organizations are systemically hostile to innovation.  They’re captive to a set of beliefs that make organizations unwittingly antagonistic toward innovation: 

1. Innovation requires experimentation, trial and error, doing new things, and breaking old rules.  An unhealthy adherence to conformity and alignment will drive out innovation -- and innovative people.

2. An organization that is accustomed to look to the top for clues about where it’s going next is an organization where the vast majority of people have ceded responsibility for business innovation.  When power to set strategy and direction is narrowly held, corporate renewal inevitably falters.  New voices are essential for new thinking.

3. Orthodoxy is the enemy of renewal.  The future gets created by heretics.  And every organization must continuously work to redefine itself in ways that ensure that it does not get held hostage to its own moribund business model.

• Innovation typically comes from looking at the world through a slightly different lens.  For example:

1. Radical innovators challenge the dogmas and the orthodoxies of the incumbents.  Companies must think creatively and look beyond the conventional wisdom and current orthodoxy of their industry. 

2. Radical innovators spot the trends that are already changing but have gone unnoticed.  They look for new trends in new places that their competitors haven’t yet discovered.

3. Radical innovators learn to live inside the customer’s skin.  Radical innovators have a boundless empathy with human frustration that allows them to see beyond articulated needs to the deeper, unexpressed need.

• The challenge of systemic, radical innovation leads to one additional question: How do you manage the innovation process once you begin to generate breakthrough ideas?  Royal Dutch/Shell discovered a successful process where new ideas are validated by peers -- not by the hierarchy.

For the full text article, go to ...
http://www.fastcompany.com/magazine/65/innovation.html

How Many Acorns Does It Take?

If you want to build an organization that’s capable of systemic, radical innovation, you have to start by realizing that almost every company today is built for optimization and short-term efficiency.  But, by definition, innovation is viewed as wasteful in the short term.

Here’s an analogy: It takes a lot of acorns to grow an oak tree.  So, regardless of where you’re trying to create innovation, you need 1,000 crazy ideas to find 100 things to experiment with so that you can then identify 10 projects that are worth pursuing seriously in hopes of coming up with one or two strategies that have true transformative power.

Every leader would love to be able to walk through the forest and know which acorn will germinate.  A nice thought, but, unfortunately, it can’t be done.  Leaders can be fearful that provoking a whole bunch of unconventional ideas will incite their people to waste time going off in thousands of crazy directions.  That’s not the problem.  People have been boxed in and limited by “the system” for so long that the challenge is not to rein in their far-fetched and absurd fantasies.  The challenge is to get them to expand their thinking so creativity can bring about the rebirth of the organization.

Next Month

The only constant is change, right?  The leader’s role is to coach others through the transition process associated with change.  We’ll look at a model for doing just that.

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