Many companies trace their success to innovation. Whirlpool invested millions of dollars to embed creativity into their business culture and build new offerings. FedEx pioneered computer usage in delivery vehicles, designed sophisticated automation for corporate shipping, and developed package tracking. Southwest Airlines is known for its 25-minute turnaround — developed after benchmarking NASCAR pit crews — and Wal-Mart is renowned for supply chain management practices.
Creativity spawns innovation, creates value, and enhances market performance. When IBM interviewed more than 1,500 global executives in more than 30 industries for its 2010 study, “Capitalizing on Complexity,” they found that creativity is now the most important leadership quality. My recent study of 70 technology firms explored marketing practices. While the companies were successful in innovation — the success rates were 82 percent for product technology, 70 percent for management know-how, 66 percent for innovative culture, and 60 percent for R&D expertise — process technology, ideas embodied in the manufacturing and operations, was the one weak link. It was practiced successfully by only 49 percent of the companies surveyed.
Generally, creativity plummets as people age. We learn what is correct and “accepted” and become obsessed with failure. With groupthink mentality and play-it-safe business cultures dominating, is it really surprising that great ideas are limited? Incredible success stories like Apple, Amazon, and Google are rare exceptions, not the rule.
So, how can companies successfully innovate? A five-step process can be insightful:
Identify the problem or business challenge
For example, ask “How might we improve product X or customer satisfaction?”
Offer many possible ideas or use “what if?” statements as steppingstones to new ideas. Think way outside of the box, but remember that you often have to implement within the box.
Find a tentative solution
Develop decision criteria and select the best option. Consider cost savings or efficiency (doing things right), effectiveness (doing the right thing) and flexibility (how else can we solve customers’ needs?)
Try out the proposed solution on real customers and get feedback for possible improvements.
Go to market and adjust
Roll it out, make necessary changes and profit from it. Creativity is a core business activity within an organization that leads directly to entrepreneurship. One of 3M’s seven pillars of innovation success is to have a broad base of technology. This multidimensional thinking is responsible for the development of many unrelated products, such as durable abrasives, highway signs and golf gloves.
Innovation management can be studied as a process improvement technique across a spectrum of activities, from R&D to design, new product management and cycle time reduction. So if you are unsure of how to make innovation a bigger part of your business, here are four tips to help you:
1. Commit to innovate. Whether your organization is a global giant or a small or medium-sized enterprise, establishing a creative climate is the necessary starting point to generate ideas that become profitable business opportunities. Encourage risk-taking, tolerate failure, reward success, and promote open and collaborative business relationships.
2. Get the customer actively involved in the innovation process through co-creation of value or customer toolkits such as web-based tools.
3. Always be innovating. Service firms are often stretched to capacity servicing existing clients or manufacturers may be pressured, putting out daily fires. Organizations may have little time for innovation. Yet, crises make innovation even more important. For example, the Tylenol poisonings led to the introduction of tamper-proof medicine bottles which resulted in increased customer confidence in Johnson & Johnson.
4. Plan for innovation. Break out of the routine through creativity retreats to re-energize and motivate your people. Consider quarterly brainstorming sessions, occasional dinner meetings or a weekend out-of-the-office experience (get done by noon on Saturday). Also, supplement face-to-face briefings with technology initiatives to stay on track. Be open to change!
Art Weinstein, Ph.D., is a professor of marketing at Nova Southeastern University and author of “Superior Customer Value — Strategies for Winning and Retaining Customers.” Visit his website www.artweinstein.com or reach him at firstname.lastname@example.org or (954) 262-5097.