The last element of the innovation formula is the tools that enable you, or support you, to produce better innovation outcomes more quickly. This is often a sensitive topic for small businesses, which generally don’t have the resources to provide innovation teams with big work spaces, generous travel budgets, and fancy prototyping tools.
What you do have is a lot of ingenuity, the willingness to work hard and achieve solid results through insightful thinking and persistence, and so the focus here is on supporting and enhancing the skills and commitment you have without spending much money.
And being able to spend a lot of money isn’t always such a good thing for innovation. We recently met with some of the leaders of a big, successful biotech company, and they toured us through their state-of-the-art lab facilities. The place was certainly gorgeous, shiny and bright and very new. Scientists in lab coats scurried around and the lab equipment were humming. We expressed our admiration for the great architecture and the great reputation of the firm.
As we were wrapping up the tour, however, one of the facilities leaders who had been our tour guide, and who had been with the company for decades, mentioned that while the new labs were certainly lovely, he noticed that something had been lost over the years. He remembered the early days of the company, which was started in left over Quonset huts from World War II.¹ These old buildings were on the funky side, not fancy and really not even all that nice, but they had a great spirit to them, and he remembered the labs as crowded and joyful. The company had done great work in those days, which became the foundation of its present success; and with success had come the bright, new labs.
And with the new labs had come a change in the culture, and the sense of teamwork, joy, and making do had been lost. He was worried that with this loss there was danger ahead.
In the aerospace industry in Southern California there is a similar story often told, of ad-hoc teams that were created to solve difficult problems, to do impossible things, and these teams weren’t the ones in the shiny labs either, they were out back, in the old part of the plant, working in improvised spaces that are still to this day called “skunkworks,” because they’re often crowded, dirty, smelly, and by the way, stupendously productive.
Your organization can create a bright and powerful future for itself in a Quonset hut or a skunkworks perhaps more readily in a neat, clean, “perfect” space. Our topic here is how to make that hut really hum.
There are four different types of innovation tools that we’ll describe here, including the design of the work place itself, practices that encourage and even enable effective collaboration, open innovation approach to connect inside innovation teams with outside partners and experts, and online tools that constitute the virtual work place. Separately and especially together, these can make a tremendous enhancement in the performance and the satisfaction of individuals, teams, and your entire organization.
The qualities and characteristics that make Quonset huts and skunkworks so useful is that they’re open, flexible, and no one is inhibited about messing around in them and trying something new.
The great qualities of this space are probably in dramatic contrast with the conference room in your office, the one that you’ve spent many hours in. And it’s probably very similar to conference rooms you’ve sat in at other companies, a rectangular room with a longish table surrounded by chairs.
The physical environment has tremendous influence on our behavior, yet it’s an unspoken assumption that meeting rooms have to fit this traditional shape, size, and layout. Unfortunately, the architecture profession and office furniture manufacturers have standardized on this utterly drab and uninspiring concept of what “the physical space” ought to be.
Unfortunately, the architecture profession and office furniture manufacturers have standardized on this utterly drab and uninspiring concept of what “the physical space” ought to be.
The prevailing style is derived from the corporate board room, which was in turn derived from the king’s chambers, and the single chair for the king, boss, CEO, or chairman at the head of the table conveys its primary social purpose, reinforcing hierarchical authority. Need I mention that this isn’t a very good environment for innovation or creativity? Yet in most organizations, it’s all there is.
Consultant and author Michael J. Gelb has studied this topic, and he makes the following observation. “For many years, psychologists have known that the quality of stimulation provided by the external environment is crucial to brain development in the early years of life. Recently, however, brain scientists have discovered that the quality of environmental stimulation affects the continuing development of the adult brain.” Gelb then goes on to lament the sterile office environments where most people work, and describes a project through which a team of people redesigned their own workplace. Among the changes that they made were removing photos of machines and replacing them with reproductions of favorite paintings, replacing fluorescent lights with full spectrum lights, bring in fresh flowers, and changing the coffee room into a “creative break room.” They also instituted the practice of a ten minute “brain break” every hour, and over the course of the following year their organization studied the work effectiveness of the people in the new environment. They found that productivity had improved by 90%.²
That’s an astounding difference, and it certainly affirms our experience that the work place is a pervasive influence, although its importance is often ignored. It’s the container.
Tom Allen and Gunter Henn address this issue in their lively book about the design of offices: “Most managers will likely acknowledge the critical role played by organizational structure in the innovation process, but few understand that physical space is equally important. It has tremendous influence on how and where communication takes place, on the quality of that communication, and on the movements – and hence, all interactions – of people within an organization. In fact, some of the most prevalent design elements of buildings nearly shut down the opportunities for the organizations that work within their walls to thrive and innovate. Hence, the implications of physical space for the innovation process are profound.”³
Imagine what it would have been like to work in the coolest labs where amazing stuff was being invented – Thomas Edison’s Menlo Park lab where the light bulb was perfected, or Ford’s workshop where he created the Model T, or the Wright Brothers’ airplane workshop, or Douglas Aircraft when the first DC-3 was built, or at Xerox PARC when the PC was being invented. You’d be surrounded by lots of brilliant, creative people solving difficult problems with astonishing levels of insight and inventiveness. You’d be having rich and provocative conversations, making sketches and designing and making models, arguing, laughing, and building, testing, learning with great enthusiasm and dedication.
This is exactly what a skunkworks is, and what that biotech company stumbled onto when they rented a bunch of old huts for their first office, because that was all they could afford. If you’re going to provide today’s innovators with the sort of work environment to help them succeed in today’s challenging world, this is exactly the kind of place you’ll create.
In Silicon Valley, it’s called “a garage,” and it’s where companies like HP, Apple, and Google got started. There’s something about a not-very-nice garage that inspires people to try new things; they are tools sitting there, just begging to be used, and dirty old benches to work on and no one will care if you make a bit of a mess, or even a big mess.
A few years ago we studied some great R&D labs about the US, and we found that the designers had focused on three main qualities that were most important:
Designing for interaction, spaces intended to increase the frequency of person-to-person interaction. As Allen and Henn note, “If you maximize the potential that people in an organization can and will communicate, you will vastly increase the likelihood of knowledge transfer, inspiration, and hence innovation. Organizational structure and physical space must be configured to encourage the very communication that spurs innovation. The success of the innovation process today depends on the employment of both tools.”⁴
This is the sand box for grownups, and the best ones contain lots of large vertical white boards that make it easy to collaborate.
Designing for flexibility, layouts and arrangements that enhance the flexibility of a building so that over time it’s easy to adapt it to changing requirements. Garages and skunkworks and Quonset huts do this automatically. They’re places where people bring their ideas, where they work to understand complex systems and create innovative solutions to problems. This is the sand box for grownups, and the best ones contain lots of large vertical white boards that make it easy to collaborate. Furniture is on wheels, making it easy to reconfigure to support lots of small teams that happen to be working at the same time, or one large one.
The third common feature is designing for beauty and intrigue, making buildings beautiful to enhance the joy of work. Colors, plants, books, graphics, and light can all be designed thoughtfully and even at little to no cost to enhance the environment, promote creativity, and support innovation teams.
A lot of the important work that will be done in your innovation space is collaboration, which as we have already discussed, is essential to success at innovation.
To create innovation requires that people engage in exploring new topics, understanding, diagnosing, analyzing, modeling, creating, inventing, solving, communicating, and implementing concepts, ideas, insights, and projects. These attributes are all facets of “learning,” and any organization that thrives in a rapidly changing environment has surely encouraged its members to learn and to apply active learning results to keep up with external changes. The link between learning and innovation is a strong one that has come up repeatedly in this book, and we also know that speed definitely matters. The faster people learn, the faster they can apply that learning to create the next generation of products, services, business models, and process improvements. By developing a positive and self-reinforcing feedback loop of accelerated learning to create innovation, organizations then obtain more learning, leading to more innovation. The benefits are multi-dimensional: shorter product life cycles, which leads to quicker learning; and then yet shorter product life cycles, better profits, etc., all contributing to competitive advantage. It is that supremely desirable, virtuous cycle that I described above.
Involving more people in this process, and doing so very effectively, is one of the best ways to accelerate the pace and improve the quality at the same time. Alan Mulally, formerly a senior manager of Boeing and then CEO of Ford put it this way when he described the development of the company’s new 777 aircraft: “We can’t make a better airplane unless we can figure how to get everybody’s knowledge included in the design.”⁵
As a small business leader you may not be designing new aircraft, but we’ve already talked about the importance of engaging a wide range of people. Innovation is a collaborative process, and it’s inevitable and necessary for people to work together to create and solve the problems that always arise across a wide range of disciplines and areas of expertise on the road from idea to innovation.
Ideas almost always get better as they are shared, discussed, and reworked, and then combined and recombined with other ideas on the way to becoming innovations. And this will be true regardless of the physical location where people are working, whether they’re in the same room or thousands of miles apart.
Most of the organizations that we admire for their innovation prowess are also noted for the quality of collaboration that they carefully and continuously promote. Toyota, for example, has developed a distinct environment where employees are not just welcome to put forth ideas, but expected to do so. Year after year, literally millions of ideas build on one another to add tremendous value for the company and its customers. In contrast, Toyota’s largest global competitor, GM, was well known not for the quality of collaboration that it evokes, but rather for the confrontational nature of its labor relations. Decades of conflict between labor and management resulted in a culture of discord, which made it perhaps inevitable that the company would have to go through the trauma of bankruptcy to restore its viability.
A happier story is that of the 777. Through the early years of its history, Boeing Corporation developed a company culture that was at times very adversarial. Conflict characterized the relationships between the company and its suppliers, and the company and its unions.
With the development of its new 777 aircraft during the late 1980s and early 1990s, Boeing’s leaders consciously chose to adopt a more collaborative approach. The goal was to enhance innovation to achieve a better result, and a milestone in commercial aviation. By reducing or eliminating the conflicts and choosing a win-win approach, Boeing achieved and perhaps even exceeded its goals, as the 777 team produced the new airplane in record time.
Developing new insights, testing new ideas, and developing them into innovations of value to the market are inevitably collaborative processes that may involve tens, hundreds, or even thousands of people. The 777 development team consisted of 5000 Boeing engineers, and many thousands more who worked in Boeing’s supplier companies.
The biggest problem with communication is the illusion that it has occurred.
About their work together, Mulally commented, “The biggest problem with communication is the illusion that it has occurred. We think when we express ourselves that, because we generally understand what we think, the person that we’re expressing it to generally understands it in the same way. When you’re creating something, you have to recognize that it’s the interaction that will allow everybody to come to a fundamental understanding of what it’s supposed to do, how it’s going to be made. We should always be striving to have an environment that allows those interactions to happen.”⁶
Such interactions reveal important nuances of tone, inflection, timing, cadence, body language, attention, smell, and facial expression, all richly present in every face to face encounter, and these nuances can be critical to successful communication, design and problem solving activities when we depend on people to integrate their unique knowledge and diverse vantage points to address complex problems.
The importance of these unspoken elements is one of the reasons that face to face interaction is so important for innovation, as the subtle nuances are captured only partially – if at all – in interactions via phones and computers.
This does not mean that phones and computers don’t have important uses, but we all know that there’s something unique and irreplaceable about working together in the same room. So while we can’t always work face to face, it is often preferable. Tom Allen and architect Gunter Henn help us understand that complexity is the root cause:
“Managers communicate by telephone far more than do engineers and scientists, and hence they tend to believe that the telephone (or email) will work as well for the engineers as it does for them. ‘Why do they need to travel?” managers often ask about engineers and scientists. Managers must remember that, on average, they deal with less complex information than do the engineers and scientists reporting to them. Compared with technical information, a much greater proportion of management information can be communicated by telephone. Notably, when managers face a complex issue, they too recognize the need to meet with the other parties in the same room.”⁷
And what about the very common experience, that interaction leads to new insights? As I’ve already mentioned, physiology and cognitive science tell us that the brain and the memory work by association,⁸ and that interactions between people stimulate new associations and new connections that can lead to breakthroughs. Face to face interactions also enable people to share experiences, through which they connect as they share tacit and explicit knowledge, and in the process create new knowledge. From this process we get the title of James Burke’s engaging study of innovation called Connections, which we also call “creativity.”⁹
We can summarize the subtle dimension of collaboration with a comment from Glaxo Wellcome chemist Dan Sternbach, who noted that, “Nothing replaces two people standing at the board and drawing things, which is the way we communicate a lot. It’s an interactive situation where, when somebody’s drawing something the other guy says, ‘Well that reminds me of this thing.’ As soon as you try to do that by email it takes more time. You can do some of it that way, but the same conversation would probably happen in a day versus 20 minutes because of the give and take that goes on.”¹⁰ Face to face interaction, that is, stimulates the associative powers of the mind that are essential to innovation.
In many situations, the effectiveness of collaborative efforts can be greatly improved through active facilitation, not only for small teams but also for groups. We discussed your role as a facilitator in the Leadership chapter, and new we will visit it again.
Facilitators, who are often innovation leaders or champions, guide groups of people through the creative process using a deep understanding of the creative process itself, as well as psychology, which helps them anticipate how individuals will participate throughout the process, group psychology which helps them understand and support the needs of large groups, and business knowledge, which of course provides the context in which many problems are to be solved.
There are many different collaboration techniques, ranging from tightly scripted and facilitated design sessions that are often used to address complex technical challenges, to more loosely structured or self-organizing processes.
…the decline was due to the invention of the small coffee maker, and the change in corporate culture that it caused
Sometimes you don’t even have to be present to provide outstanding facilitation. I learned this one day not too long ago when I met with a retired former employee of HP Labs, the company’s R&D department. He lamented the sad decline in the Labs’ output, and the lack of esprit de corps he noticed there. This bothered him a great deal, and he had thought deeply about why it happened. He attributed some of the decline to the departure of Bill Hewlett, who had been a very effective leader of R&D, but he also said that the decline was due to the invention of the small coffee maker, and the change in corporate culture that it caused. I was frankly a bit skeptical about the coffee maker part, but I listened politely.
During the best days in the Labs, in the 1950s, 60s, and into the ‘70s, coffee was brewed in big pots in a basement kitchen. Twice a day the kitchen staff would bring up the pots on a cart, and everyone would fill their cups and stand around for ten or fifteen minutes to chat while enjoying their coffee.
What they’d chat about in addition to the weather, the favorite teams, or the news, was work. People often brought problems, asking for help where they were stuck, and sometimes their naturally-curious colleagues (this was an R&D group, after all) would help by brainstorming possible solutions to design and engineering problems right then and there.
And if today’s ideas didn’t work out, tomorrow’s coffee breaks were another opportunity to get creative input from some very smart people who were by now aware of what you were doing, and might even be thinking about it for you. A lot of tough problems got unstuck at the coffee break.
This is yet another version of the story we all know, the chance conversation that opens new insights that later proves to be important; HP Labs’ twice-a-day coffee break was an organizational tool that promoted this type of collaboration almost invisibly, and thus an elegant example of social design.
But when coffee makers became small and cheap (another industry’s innovations), the kitchen staff no longer brought the big pots around on a cart because all over R&D there were personal little pots that simmered all day. No more structured coffee breaks, no more spontaneous brainstorming, and as far as our friend was concerned, the beginning of the end of the great days of HP Labs.
As I mentioned, I was a bit skeptical about this, but a couple years later I happened to read Steve Wozniak’s autobiography, iWoz, and when I read the following comment about his days working at HP I found that my skepticism had been entirely misplaced:
“Every day at 10:00 am and 2:00 pm they wheeled in donuts and coffee. That was so nice. And smart, because the reason they did it was so everyone would gather in a common place and be able to talk, socialize and exchange ideas.”¹¹
So there it was, confirmation that the structured coffee break is indeed a tool to promote effective collaboration, the exchange of ideas, useful at HP and nearly everywhere else.
We subsequently applied this principle in the design of a new workplace for a team of 200 software engineers. In addition to giving them dynamic spaces for collaborative work, we included a café, and insisted that personal coffee makers be banned. This caused everyone to frequent the café, and thereby increased the frequency of the chance encounters that promote innovative thinking.
The new lab / skunkworks / hut / garage is a flexible and inspiring place, not a boring one. There is a significant productivity increase to be gained by supporting the essential activities that constitute effective innovation: thinking, creating, problem-solving, and collaborating.
And we know that the work place which best supports these activities is not a traditional conference room. In fact, conference rooms are proven creativity killers, deadly dull, inflexible, and made really just to support information exchange in a hierarchical setting. Avoid them at all costs if your goals have anything to do with innovation and creativity.
As you know, an ecosystem is an environment in which there are many organisms interacting in the course of their normal process of living. They compete and cooperate to survive in a complex web of relationships, many of which are difficult to recognize or identify even though they’re critical to every creature’s and each plant’s survival.
Similarly, innovation happens in a market ecosystem that has countless influences, as it consists of a firm and its customers, along with competitors, suppliers, and all manner of stakeholders who have something to say about what could be done, what should be done, what should not be done, and why.
As complexity increases in society and in the marketplace, an important determinant of success is the capacity to actively engage with that ecosystem, to work effectively with people and organizations who are outside of our firm and to engage them in the innovation process that’s going on inside our firm. That’s what we mean by “open innovation.”
While in the past many organizations kept the innovation process as a closely guarded domain that stayed entirely in house and was shrouded in secrecy, and some such as Apple still do, many companies have switched their viewpoint and found that openly seeking new ideas from outside, from customers and non-customers, suppliers, partners, experts, community members, and pretty much everyone else, and opening up the innovation process, significantly improves the flow and quality of new ideas. “Open innovation” is a name for this new style of working that taps into other people, perspectives, ideas, critical thoughts, and advice.
An example of open innovation that is entirely transforming the telecommunications industry is Apple’s App Stores for iPhone, iPad, and Mac, through which Apple provides a semi-open platform, and individuals and organizations then develop applications for those devices using a standardized toolkit. Apps are sold or given away through the platform’s storefront, and as of summer 2014 there were more than a million apps in the Apple store, and a million more for android, and a stunning cumulative total of more than 75 billion downloads since Apple first opened its store in July 2008. The applications themselves range from the frivolous, such as Crash Bandicoot Nitro Kart 3D, to Google Earth and Facebook, and even serious tools such as a step by step lesson in CPR that has been credited as helping save the life of a young athlete who suffered cardiac arrest during a basketball practice; his coach had downloaded the CPR app only the day before, and put it to good use…¹²
By harnessing the creativity of people around the world in an open development environment, Apple has created tremendous momentum for the iPhone, and a new source of economic growth for the ecosystem that consists of the company, app authors, and app users.
The App Store is just one example of a new creative genre that’s become common to internet companies, all utilizing the principle that a company with a sufficiently large customer network can create a business platform that promotes an entire ecosystem so that other individuals and companies can then use it to create content and transact their own business.
The term “crowdsourcing” describes this new way that many people can participate as contributors of content. The resulting breadth and depth of content is what makes many of the highly successful internet businesses so compelling. Wikipedia, eBay, YouTube, and Google are examples.
Google is now the world’s largest advertising agency, but all the web sites that Google searches and indexes are created not by Google. In 2008 Google’s indexing system was sorting more than 1 trillion different URLs, all created not by Google, but by the crowd, namely, us. By 2014 that number had grown to about 30 trillion.
In Don Tapscott’s recent book Wikinomics, he makes a persuasive argument that these companies are examples of an emerging economic model that supports knowledge aggregation and social networking, which suggests that open innovation is not only a business practice, but a new style of economic activity.¹³
And it’s not just companies that have opened up their innovation thinking to the outside. New York City is looking for great ideas, too. “Have an Idea to Save NYC Money? The city is looking for innovative ways to save New York City money. If you have ideas for finding efficiencies in government, submit them today.” You can share yours through the city’s web site, nyc.gov
There are also tools to augment and help accelerate the open innovation process including open innovation software platforms such as Innocentive, 9 Sigma and Innoget, and they’re are all defining new ways to collect knowledge and make it more useful, and also create new knowledge through open innovation collaboration.
Most small companies will have modest open innovation efforts, but of course the point is to find ways to interact efficiently to gain important insights about the market, competition, and new technology that may inform or support ongoing or new innovation efforts.
A lot of open innovation effort take places online, and as we spend more and more time working and collaborating via our computers, connecting with our colleagues and outside partners, customers, and vendors, the quality of our tools and our skill in using them can make a significant difference in the productivity of our innovation efforts, especially since the all of us are now tending now to address issues via email that are more and more complex.
The computer infrastructure needs of an organization tend to increase in complexity at a very high rate as the number of people in the organization increases, so even medium sized companies end up with dedicated IT staffs to help them keep the organization’s computing power operational. These firms will apply many different types of tools across a broad range of functions, including basic communications via email, chat, and conferencing applications, the servers that support them, plus the web services that manage the brand imaging on the internet, accounting and finance, operations and supply chain, sales, marketing, and distribution.
The innovation effort, meanwhile, can also benefit from some specific tools, including social networking, project management, idea collection, and creativity tools.
We are big advocates for the importance of visualizations, and you already know this because we started this book by talking about the importance of maps. We also think it’s important for you to visualize your innovation investments, and hence we recommend that even small organizations develop dashboards that track project selection and performance, and align the innovation portfolio with whatever is known about the driving forces that are most significant for your own organization. The innovation dashboard is an essential tool to help innovation champions, portfolio managers, and leaders to maintain a good overview of the process, the details, and the results.
For the smallest companies a lot of great modeling work can be done in Excel. So whether you’re using a general tool like Excel or a innovation management tool, it’s essential to have tools tool can support major changes in the direction of focus of innovation efforts, which we referred to in Chapter 4 as the pivot, the act of shift the focus of an entire portfolio to reflect changing external conditions which are proving to be significant for the firm. Without visibility of the portfolio, and the capacity to model it in real time, then pivots become difficult if not impossible to achieve.
These four innovation tools can work together nicely to support creative and innovative people through the many phases and iterations of their work in the innovation process. When these methods are combined effectively they can make a tremendous difference by helping individuals and teams achieve much better and much faster results.
So naturally you need to ask yourself if your organization should invest in these tools
If you have offices, you already have. Are they as good as they can be?
And if you have software tools, you also have. So given the productivity gains that can be achieved, it may be a very fruitful investment.
Innovation managers are often the ones who shepherd these tools, methods, and environments into reality, and thereby support the quest for high performance for their own organizations.
The Innovation Formula: the guidebook to innovation for small business leaders and entrepreneurs
1. Innovation in the SME and Entrepreneurial Context
2. Elements of The Innovation Formula
3. Five Forces of Complexity and Change
4. Market Mapping for Sustainable Growth
5. Risk, Great Ideas, and Your Business Model
6. Risk and Your Innovation Portfolio
7. Designing Your Innovation Portfolio
8. Build a Fast and Efficient Innovation Team
9. Speed of Innovation – How to Master Rapid Prototyping
10. Full Team Engagement in the Innovation Culture
11. To be a Good Leader, Be a Good Learner
12. Key Abilities of Effective Innovation Leaders
13. → Four Tools to Support Creativity and Innovation
14. Taking Action: Your Innovation Master Plan
15. 25 Steps to Jump-Start your Innovation Journey
Since 2001, Langdon Morris has led the innovation consulting practice of InnovationLabs LLC, where he is a senior partner and co-founder. He is also a partner of FutureLab Consulting. He is recognized as one the world’s leading thinkers and consultants on innovation, and his original and ground-breaking work has been adopted by corporations and universities on every continent to help them improve their innovation processes and the results they achieve. His recent works Agile Innovation, The Innovation Master Plan and Permanent Innovation are recognized as three of the leading innovation books of the last 5 years.
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