Best Management Feature 2008

It is clear that some businesses are innovative and others have characteristics of truly creative organisations. There are certain attributes that set a business apart in its ability to generate truly creative ideas. From Gore-Tex to Apple, Sony to Virgin they have certain attributes in common including one: the ability to be totally different. This is the 'business idea paradox', that to be consistently creative you need certain universal qualities including uniqueness and the spark of genius. Fortunately, several techniques can help ignite the spark and fan the flames of creativity.

Understand how innovation works

Two important but separate processes are needed for innovation. These are 'idea building', where people propose and develop ideas, and 'idea analysis' where these ideas are subject to further refinement and implementation.
Companies that struggle to innovate often stifle good ideas in their infancy with an excessive rush to judgement and analysis. So, while the right processes for idea generation and innovation is important, processes are not enough. Ideas factories also have a culture that values and fosters innovation.

Develop the five catalysts for innovation

Research by the Talent Foundation identified five catalysts for successful innovation. These are:

• consciousness, where each person knows the business goals and their part in achieving them
• multiplicity with teams containing a diverse and creative mix of skills, experiences and ideas
• connectivity emphasising strong, trusting relationships resulting in active encouragement and support within and across teams
• accessibility is also vital with doors (and minds) open and everyone having access to resources, time and decision-makers
• consistency, where commitment to innovation runs throughout the organisation

Defy convention – pursue value innovation

When firms compete they tend to become locked in a cycle of incrementally improving costs, products and service. Value innovators succeed by breaking free from the pack, they stake out a new market and develop products or services for which there are no direct competitors.

Pioneered by W. Chan Kim and Renée Mauborgne, value innovation challenges conventional logic to redefine or create a market. For example, for years US television networks used the same format for news programmes: they aired at the same time and competed on the popularity of their presenters. This changed in 1980 when CNN launched real-time 24-hour news from around the world for 20% of the cost of the networks. Similarly, in 1984 Virgin defied convention when it eliminated its first-class service. Prevailing logic suggested that growth relied on more, not fewer, market segments but Virgin focused on business-class passengers. It used the money saved from first-class to provide popular innovations, from better and different lounges to improved in-flight amenities.

Value innovation is based on the ability to redefine a business based on an understanding of customers. Several techniques can help:

• Challenge industry assumptions. Understand the prevailing assumptions and how the situation can be improved for customers
• Adopt a questioning approach. For example, why do customers buy? What would they really value and why?
• Be ambitious. Monitoring competitors is fine but avoid the trap of competing on their terms. Concentrate on doing something different. Aim high
• Avoid segmentation. While people believe that segmentation provides understanding of customers, value innovators build scale by focusing on features that unite customers
• Don't be constrained by existing resources. The question is not what you can do with current assets but what future resources are required
• Think laterally by cutting across industries and finding ways to improve the offer to the customer

Recognise that good ideas can come from anywhere

Many people assume that senior people in an organisation are more likely to have the best ideas. In truth, ideas are no respecters of status or salary. Excellent ideas abound in unexpected places (e.g. with employees, competitors, other industries, historical legend) and it is best to stay open to ideas.

Identify and overcome barriers to innovation

Barriers to innovation may come from your organisation (bureaucracy) or may be a reflection of your own attitudes. These need to be recognised and removed, for people to feel able to innovate.

Use deep-dive prototyping

A deep-dive is a combination of brainstorming and prototyping, where an idea is developed. A deep-dive can be completed in an hour, a day or a week and it uses the ideas of everyone in a team in a focused, energetic and enjoyable way. Several stages are valuable when deep-dive prototyping:

• Understand the main business issues (e.g. customers, technology and constraints)
• Observe customers: how they approach issues and how they buy
• Discuss and synthesize the main themes from the first two phases
• Visualise using intensive brainstorming and discussion. Imagine new ideas around the main themes of the design
• Prototyping is next – this involves building ideas and physical brainstorming
• Refine and streamline your ideas. Again, brainstorm ways to improve the prototype and overcome obstacles. Evaluate and prioritise ideas and decide how they will be implemented

Develop your skills as an innovator

Innovators tend to place a high value on personal responsibility and experience suggests that several other qualities are also significant. First, they are relentless with energy and enthusiasm vital. This helps them build on ideas from a variety of sources. Creative people also have a high degree of empathy, understanding people and situations and use this to stimulate their thinking. Clearly, they also let their imagination roam free and this means being positive, challenging and questioning. Other qualities include the ability to handle paradox and ambiguity – for example, balancing rationality with intuition – and a tendency to implement ideas by sweating the details and providing leadership and guidance.

Perhaps the defining characteristics of both an ideas factory and an innovator are self-awareness and an emphasis on learning and development. Innovative people play to their strengths, but they also expand their strengths. If you can achieve that then you will certainly be part of an ideas factory.

Jeremy Kourdi's new book '100 Great Business Ideas' is published by Marshall Cavendish and Cyan Books priced £8.99.