Making room for innovation

Innovation is ‘new’. Innovation cannot be managed. Innovation is only about technology. These were just three myths that were destroyed at last month’s Innovation Conference. According to Keith Goffin, professor of innovation and new product development at Cranfield School of Management, companies that are determined to innovate often fall foul of the same pitfalls. “Many companies know they want to get better at innovation,” he said. “The real issue is how they go about it. Most try to introduce innovation in the same way – and experience the same problems.” For example, it is a common belief that innovation and creativity cannot be managed – and any attempt to do so will stifle them. For Goffin, this is far from the truth. “All the theory on creativity says that guidelines are crucial: it helps people to be more effective innovators.” This can be seen in the ideas process: companies that urge employees to ‘give us your ideas’ or ‘think outside the box’ do themselves few favours. “Having lots of ideas is not the same as being innovative,” said Goffin. “Many organisations ask for ideas but do not set any guidelines.” He cited Kodak as an example. When it set up its ‘Worldwide Innovation Network’ the company simply asked for ideas – and found that 96% of them were not useful. “When employees were told that most of their ideas were no good, this led to a wave of resentment and demotivation,” said Goffin. Kodak later re-ran the exercise, this time giving clear guidelines – such as specifying which sectors it wanted ideas for, and asking employees to check whether there was a market need for their idea. “It’s also useful to have advocates,” he added. “If you have an idea, swapping it with other people can help to refine it.” Large companies are most likely to innovate by introducing new technology to their latest products. But the structure of a parent organisation can prevent this. Goffin pointed to the example of Lockheed Martin, which in 1943 was challenged to develop a new type of fighter aircraft. Thirty employees were taken outside the normal organisation to create a ‘skunk works' – which set its own rules. The team defined its own processes to solve the problem, rather than following accepted practice – and designed the ‘Shooting Star’ jet fighter in just 43 days. This would have been impossible under the company’s normal working conditions. “This approach is useful if you are developing a totally new product,” he said. The problem can be overcome in other ways: electronics giant Texas Instrument, famed for its ‘culture of invention’, addressed the ‘not invented here’ syndrome with an annual award to recognise employees who took ideas from elsewhere and used them to take process or product innovation forward. Within manufacturing, innovation is often about exploiting the latest engineering advances. However, older technology can also provide scope for innovation. Goffin pointed to the VW Golf, which was under pressure from competing models. Instead of introducing lots of expensive new features, it made two key changes: it introduced three-piece bumpers and bolt-on panels – neither of which might be expected to appeal to typical Golf drivers. “In this case, the changes would lead to lower repair bills,” he said. “VW took this proactively to insurance companies – who moved the Golf two insurance categories below similarly priced models. “It used an old idea to innovate.” (BLOB) The Innovation Conference, held in Daventry last month, was organised by Cranfield School of Management, Eureka and New Electronics. The awards associated with the conference – the Innovation & Design Excellence Awards – are still accepting entries for this year. Visit www.ideawards.co.uk/enter for details. Risky business Inability to measure and manage risk prevents many companies from innovating. The risk associated with innovation – and a widespread ignorance of how to measure risk – means that many companies are scared away from trying to create a true innovation culture. Matthew White, head of design at Sagentia, told delegates: “Approaches to measure the risk of innovation are often applied at limited points of the organization – such as a steering group,” he said. He suggested that the model used by venture capitalists – in being realistic about the likelihood of failure – led to more accurate risk assessment. “VCs are not better at picking winners,” he said. “They just have more sensible targets.”