The lifeblood of business growth is innovation — but knowing this is the easy part. It’s a whole other ballgame to actually drive innovation within your organization on a consistent basis.
Your company could suffer if you’re the only one who comes up with the next big idea. Smart leaders build organizations that think for themselves with the right people and channels to spark ideas.
In order to move your organization to the next level, here’s some tips from Pittsburgh business leaders who drew on their teams’ full potential to find new ways to enhance processes, procedures and products.
1. Use internal and external channels
Nicholas DeIuliis, president of Consol Energy Inc., looks inside and outside his industry to bring the best innovation to the forefront of the company’s operations.
Consol Energy Inc. is a more than $6 billion, publicly-owned producer of coal and natural gas and one of the leading diversified energy companies in the U.S. DeIuliis and Consol have been focused on new technologies, new energies and, above all else, staying one of the leading producers in its region.
“There are two broad groups I look to over time for help and insight,” DeIuliis says. “One is the management team that we work with and around. They’re the best and brightest in the industry. Getting that comfort level and that trust level with the exchange of ideas and thoughts as time goes on is the lifeblood of any successful organization.”
The other group DeIuliis looks at is almost the mirror image of his leadership team. He looks toward entities and individuals with insights and experiences outside the industries Consol works within.
“It’s amazing how many already established processes, technologies and concepts are out there in entirely different industries that are being viewed as innovations and ground-breakers with the coal, natural gas and fossil fuel industry that we operate in,” he says.
“Every time we tend to look outside our box and outside our industries, we always come away with an injection of innovation that keeps us going.”
2. Focus your R&D
Bill Byham, chairman and CEO of Development Dimensions International Inc., places so much energy into the company’s research and development the problem isn’t a lack of good ideas, but more ideas than he knows what to do with.
So, the DDI management team works to narrow the options for the company, which is a leader in talent management, leadership development, hiring and talent acquisition.
“We have a series of meetings to cut them out and usually it’s not hard to get it down to eight,” Byham says. “But then to get it down to two or three new projects is tougher. R&D to us is brand new, game-changing products or a big change in what we’re doing.”
He looks at R&D as a 50/50 balance between customer suggestions and being able to develop products out in front of clients before they know they want it.
“We do a lot of customer surveys. We’re out with our customers a lot and they’ll say, ‘We want a training program on this.’” Byham says. “However, I think it was Steve Jobs who said, ‘If you only give your customers what they ask for, you’ll always be behind.’
“What I’ve always noticed is you have to be out in front of the customer because sometimes it takes us several years to develop these things.”
In addition, the R&D process isn’t just about finding the next new product, but also devoting effort to keeping well-performing, existing products up-to-date.
“The more products you have, the more it costs you to keep the old products good,” Byham says. “The ratio for us is around 60 to 70 percent old products and 30 to 40 percent new. You have to look at the sales of the old product. If you’re still going up with the old product, you will want to keep investing in it.”
3. Place a well-informed bet
Early in BodyMedia Inc.’s growth, the company struggled with a lack of focus, waiting for the market to tell it where the best place was. CEO Christine Robins, however, says that with an early-to-market technology, you have to create the need — and place a bet.
“If you’re running a company, you’re making decisions every day that have risk,” Robins says. “But if you’re running a smaller company, you’ve got to place a bet and it’s got to be a focused and well-informed bet. Then you have to go with it and be willing to listen to the reactions of people and figure out how to be a continual learner.
“You have to get a product or service built that satisfies your hypothesis of the market and who you’re going after, build your messaging and get it to market to get real feedback. You can iterate in an office and give your opinions until you’re blue in the face, but if you don’t put it out in the real world and it doesn’t sell, it doesn’t matter what you think.”
But it wasn’t just a clear focus for the product that launched BodyMedia into growth mode. Once the company turned to the consumer market, it had to turn its attention toward making the product more functional and attractive in terms of design. This ultimately increased sales volumes and led to San Francisco-based Jawbone acquiring the company in 2013.
4. Watch marketplace trends
Flemming Bjøernslev, president and CEO of Lanxess Corp., has found that the company’s production and product base is extremely quick with regard to innovation, technology and the right ideas to make new products that will propel the company.
He couldn’t decide where to focus the company moving forward, however, without listening to what was happening globally.
“First, you have to listen to your customers,” he says. “Secondly, make sure that you assess the entire value chain. You want to make sure that you reach out and listen to the customers of your customers. You want to make sure that you’re integrated in the right manner in order to cost-effectively and profit-effectively cater your products to the market.
“You have to make sure that you read the signs of your time, meaning the trends in the marketplace. You have to live in a global world. Today, it would be very risky to only focus on the U.S. or North American markets.”
5. Get the right talent
Fred Potthoff, co-founder and co-owner of Kroff Inc. attributes the company’s success — more than 80 employees in eight different businesses under the Kroff name with annual revenue of more than $50 million — to finding the right talent.
In fact, each of the leading water and wastewater treatment and recycling services company’s businesses started with ideas from sales associates.
“Aside from the original company, my partner and I didn’t come up with any of the other ideas,” Potthoff says. “It was people in our organization coming to us, and us listening to them and running with that idea.”
When Potthoff interviews candidates, he is interested in trying to spark that kind of enthusiasm and interest in the company.
“It doesn’t mean that everybody who comes here is going to run their own company, but it’s part of our culture,” he says. “People who fit in well here think that way and look for opportunities.”
And one way to encourage those true difference makers is to do a good job of listening to ideas.
“It’s one thing to give lip service to somebody, but if somebody comes to you with a good, creative idea, you can’t summarily dismiss it because maybe you tried it before or it seems a little harebrained,” Potthoff says. “You have to be willing to listen and trust the people, and if you think it’s a great idea, be willing to move and invest in it. When you do that, the culture responds to it.”
6. Leverage the region’s strengths
Charles Bunch, chairman and CEO of PPG Industries Inc., says the founders of Pittsburgh Plate Glass were attracted to the Pittsburgh region because of the coal supply needed as an energy source, the sand and mineral resources, and the river transportation system that were critical for the manufacturing and sales of those first plate glass products.
Today, the region has different strengths to offer.
The Pittsburgh region has some of the best educational institutions and hospital systems in the country, and as a result, research and development is more than $3 billion of the local economy, Bunch says.
“This is clearly a home for innovation here in the Pittsburgh region,” he says. “Big business provides technology, innovation and support to many of these smaller businesses, leading to a healthier overall ecology for growth. And now we’re creating that environment here in our region.”
Organizations like the Allegheny Conference, which are dedicated to improving economic growth, are in a unique position to build on these strengths for the betterment of the region.
Bunch says they can help employers by marketing the region globally and supporting existing business with venture capital funds to support the success of entrepreneurs and startup companies.
7. Break assumptions
MARC USA, a full-service advertising firm, has a history of doing things differently and bringing innovation to the industry. Behind Michele Fabrizi, president and CEO, the company even created an off-the-wall word to describe its unique capabilities.
“We’re using breakthrough research techniques and new technologies to drive innovation every day,” Fabrizi says.
“At MARC we say what we do is a word we made up because there is no word for what we do. It’s called ‘wezog’ and it’s how we think. It’s what we expect from our people. It’s a critical component of our long-term client relationships. It means doing things the way they haven’t been done before — thinking outside the box.”
The firm builds successful brands and drives sales through its creativity, insights and technology.
“It’s really about not doing things the way they’ve been done before, being highly collaborative with clients and finding ideas to break assumptions and challenge conventions,” Fabrizi says. “This is the kind of thinking that really helps brands strive in good times and in bad times.” ●