By: Doug Collins
Last fall our columnist the innovation architect Doug Collins began the tale of how the Dirty Maple Flooring Company came to embrace the Digital Age through the practice of collaborative innovation. The latest episode appears below. Readers may navigate the full series here.
What’s the equivalent of measuring inventory turnover in innovation?
Measurement is story telling. Let those of us around the camp fire, smoke in our eyes, acknowledge that some have the gift for weaving a tale.
“I have to say, Charlie, it’s a lot easier for us in finance to keep score than your group in innovation. Granted, we’ve been at it longer. With us, it comes down to profitability, turnover, and leverage,” Frankie said.
The Wellington Arms was quiet. Charlie could hear the refrigerator condenser under the bar cycle. Ann and Casey’s patrons had decamped to points north along Lake Michigan, up to Door County, ahead of the holiday weekend.
Charlie loved this time of year. With many people at Dirty Maple on holiday and, thus, not monopolizing his calendar, he had more time to think and to plan.
“I know,” Charlie said, “and there is real art and science to which levers you pull when. I know we’ve always tried to hang our hat on profitability through differentiation, while being mindful of inventory turns.”
“Yep,” Frankie said, as she enjoyed her Leinenkugel’s Summer Shandy, a seasonal favorite of hers from when her dad and she would listen to the Brewers on the radio on their front porch.
“So,” she continued, “how have the Idea Millers and you handled the same?”
“Well, we came to a couple conclusions. First, all measurement is story telling. And, you have to get your story straight before you try measuring anything. Otherwise, it’s the equivalent of stream-of-consciousness writing. We are not James Joyce. So, here, we decided to use our collaborative innovation blueprint as the plot line for our story (figure 1).
Figure 1: the collaborative innovation blueprint
“The blueprint is like a simple, visual balance sheet and income statement for the Idea Mill Program,” Frankie observed. “Inputs and outputs.”
“That’s a good way of thinking about it,” Charlie said. “Our unit of measure is not always dollars and cents, however.”
“That’s unfortunate,” Frankie said, feigning disappointment.
“Are you done?” Charlie asked.
“For now,” Frankie said, “at least for now.” She sipped her shandy.
“Right, so with that, we next identified what we viewed as the critical factors—success factors—that tie to each phase of the blueprint, one to five (figure 2).
Figure 2: practice measurement in context of the blueprint
“Secondly, we agreed that each factor should tie to an indicator—or indicators, may be several—that would convey rates of increase or decrease in numbers. We want to measure the change in something, numerically.”
“For example, take the first factor, ‘To what extent does the practice map to intent?’”
“Here, we think we track the related indicator, ‘The number of sponsor(s) satisfied with approach to group problem-solving increases’ through a quarterly attitudinal survey we give to sponsors. You know—‘on a scale of one to five’.”
“You know, Charlie, this makes sense to me,” Frankie said. “The one observation I would make is that time seems to be an incredibly important measure, especially in the early days of the Idea Mill Program.”
“How do you mean?” Charlie asked.
“Well, so, in the early days we were mostly concerned as to whether people would make time for the practice. We say we want to encourage a culture of innovation. What that really means is that people make time for it. Time is almost like the capital investment in this example. It’s the first big investment any of us make when we decide to buy into an idea or plan or program—here, the Idea Mill Program.”
“The second reason time is an important indicator,” Frankie continued, “is because the rate of change in the world around us is increasing. We see it in our dealer interactions. They want greater immediacy and transparency into our supply chain, for example. We see it with our competitors. The survivors move faster. In finance, for us as a maker of things, we capture velocity through inventory turns, as tracked by the value of the cost of goods sold. What’s the equivalent of inventory turnover in innovation? Number of challenges executed? Number of ideas implemented?”
Charlie had his head down, taking notes. He paused and looked at Frankie.
“This is good stuff, Frankie. Good stuff,” he said. “Some of the ideas that the Idea Mill Program will surface will literally have currency. They’ll help reduce costs and thus increase profitability—they’ll translate over to the books your group keeps.”
“At the same time, there’s a similar story of time—investment and efficiency—to be told for the program, proper,” Charlie said. “I see your point.”
“One would hope so,” Frankie replied, wetting her fingers on the condensation of her beer glass, “which is what I guess makes a program a program, after all.”
Doug Collins serves as an innovation architect. He helps organizations such as The Estee Lauder Companies, Jarden Corporation, Johnson & Johnson, The Procter & Gamble Company, and Ryder System navigate the fuzzy front end of innovation. Doug develops approaches, creates forums, and structures engagements whereby people can convene to explore the critical questions facing the enterprise. He helps people assign economic value to the ideas and to the collaboration that result.
As an author, Doug explores ways in which people can apply the practice of collaborative innovation in his series Innovation Architecture: A New Blueprint for Engaging People through Collaborative Innovation. His bi-weekly column appears in the publication Innovation Management. Doug serves on the board of advisors for Frost & Sullivan’s Global community of Growth, Innovation and Leadership (GIL). Today, Doug works as senior practice leader at social innovation company Mindjet, where he consults with a range of clients. He focuses on helping them realize their potential for leadership by applying the practice of collaborative innovation.