[#innovation - 06] Do you want to innovate in an established company? Then just create short circuits.

The more I struggle to set up an innovation engine inside the company I work for, the more I get the idea that it is not just about creating a dedicated Innovation function and having an Innovation Manager.

Innovating an established environment is all about CHANGE. And, probably, there is nothing as difficult as changing an environment where few are committed to change. If you're the CEO, believe you need to invest in innovation to set up a sustainable future for your company and think that by creating an Innovation function you've done your best ... well, probably no, that's not gonna be enough.
Such change is a cultural one, more than anything else.

The main mission of an Innovation function should be that of nurturing such cultural change and spread a new strategic vision among all of your colleagues. That's gonna be a long term investment. Your contribution as CEO is to promote such function with strong commitment and lead it by your concrete commitment and example. Change needs awareness and courage.

In an established company lots of good but also bad habits have settled along the way. The need for efficiency and dominating the complexity related to a growing company usually lead to a deep, structured hierarchy. The main consequence is that the distance between any individual contributor and the managers having the accountability to decide (e.g. to allocate the budget) has extended a lot. And the company has meanwhile lost its original agility.
Since the company still needs to support the usual, mainstream business (that which is financing innovation, as well), you cannot just "rape" the hierarchy you've already set up. That's where the innovation function might come to some help. Indeed, another mission is to shorten the hierarchical distance between individual contributors (or idea champions) and the high managerial layers, those in charge to decide about the deployment of any new valuable proposal. Doing so actually means that you've to become able to gather, classify, select and turn any simple idea to a project proposal in a very short time (no more than a few weeks, that's your differentiating value proposition). It takes agility and common sense.

Another short circuit to create, another distance to shorten, is about communication. Your function needs to become very effective at reducing the language distance between the problem solvers and internal investors. That means any new idea needs to be "translated", from the language in the feasibility domain to that of the customer/market's. An easy pain-solution-cost-benefits approach is gonna be effective: no more than 4 slides, which means a 5 minutes presentation.

Synthesis and communication will be keys.

DP

[#innovation - 05] No need to rush, but don't let the ideas you collect quickly become obsolete.

After you've tested your brand new innovation process through a pilot test and got some new ideas, little time is left to evaluate them and give proper feedback to contributors.

FEEDBACK
The feedback is a psychological contract between you and anybody who has provided you with some new idea. It's very important, especially when the idea cannot be deployed (and the feedback is actually negative), because too complex and/or expensive, give a feedback being as less generic as possible. This is to actually give back proper recognition of the value related to the fact that the provider has spent his time, effort, creative and professional talent to give you his idea. The contract must always be respected: any idea has a value, which is the commitment of the provider! Otherwise you'll prematurely dry your innovation, internal spring.

IDEA TEMPLATE
The best way to be welcoming for idea providers is to ask them fill up very basic idea templates. Complexity may be the worst entry barrier and, ideally, the best template should be a plain, white sheet.
But having a basic template including the most essential data (such as: a pain, the solution, potential benefits and reflections on feasibility) will be of some important help for the providers, to make some order in the possible disorder of any original proposition.

EVALUATION CRITERIA
Asking the providers to self-evaluate their idea propositions is a good way to:
- anticipate the feedback you'll provide them;
- help the provider to anticipate some cost/opportunity analysis;
- help yourself for the evaluation phase.
A very basic, still helpful self-evaluation criterion might be:
1) complexity (feasibility)
    - low: the provider can develop the idea by itself;
    - medium: he needs cross-competence coming from other functions;
    - high: extra competence is needed; I mean competence which takes to be bought from outside the company.
2) benefits:
    - low: the deployment will give value (efficiency/effectiveness) focused to the function the provider comes from;
    - medium: a cross-functional benefit will come from the deployment of the idea;
    - high: the idea will provide the company with new revenues (new business).

You can make a first classification of the ideas you'll receive on a two dimensional matrix, based on this starting evaluation criteria. This will help you understand which are the ideas you can spend some extra analysis effort on and identify those for which a "negative" feedback must be provided.

[#innovation - 04] Manage the innovation team like a startup.

OK, you've spent the first couple of months working on a brand new innovation process to be set up inside of your established company. Together with the team you're part of, you've thought of an entire set of initiatives to collect and process ideas. You've worked hard to think of an internal communication model to effectively spend your value proposition to the final target, which is the entire working people.
Now what?
You (wisely) still hesitate to publish your communication through the intranet channels because you're aware you're gonna benefit from only one chance, just one token. If it'll be credible to prejudiced people, those being disappointed after years of feeling little consideration upon their potential and competence, then they will provide you with some valuable contribution, in terms of incremental ideas. Otherwise they're not taking your implicit request for some extra contribution into consideration and you're not gonna have any further possibility to involve them.
It is all about credibility.
You cannot demand for such extra, contribution, which is complementary to what they usually do at work, for free. In such tough times, when your company needs to compete to survive and make up a future for itself and their working people, still there are so many colleagues acting as if the company has much debt to pay them for their former contribution. In these times innovation is not an option and anybody should feel the responsibility to contribute, to set up the basis for their company's future and for their future in the company. But you cannot act as if everyone must be aware of that.
In this context, setting up some rewarding policy and instruments is not only a duty, but a crucial task, if you want your new innovation process not to fail. Rewarding can involve: extra income awards, visibility, integrating innovation contributions to already existing career drivers and extra corporate education possibilities. Configuring any of these possibilities will take interacting with and asking help from several company functions (such as HR, Legal, Internal Communication). For this to work, concrete commitment and sponsorship by the top management will be needed.

Another main point to consider, not to waste your only, precious, single chance to involve the working people an get them to contribute, is that you cannot assume your innovation process and communication is mature enough and ready. The best thing to do is to test the market ahead, to anticipate the potential feedback which might come from the target in terms of new ideas contribution. What you can do is to ask some of the organizational functions inside of your company to select some of their people and ask them to help you test your idea template. This will help to refine it and get it to a more "saleable" model.

It is also important to give the needed consideration to all those colleagues actually contributing with their preliminary ideas and suggestions. One way could be to give them some visibility through your intranet website.

[#leadership - 02] Effective communication on a delicate subject.

I recently had the chance to see the speech of Senator Diane Savino on the Marriage Equality bill [1], that considers the possibility for gays to get married and have the same rights of hetero in case, for example, of illness or death of a partner.

Is it a delicate subject?
It definitely is, because it considers the possibility to differently consider the "traditional" concept of marriage, with several implications arising, among which religious ones.
What I want to do here is to just express my thought on her communication approach, which I consider a great example of effectiveness and leadership.

Generally, approaching the subject of unfair inequality between hetero and gay rights could expose the speaker to the risk of expressing a recrimination on a subject which has already been discussed for long. Probably it wouldn't be effective to get the highest consensus on the position in favour of gay marriage, because it would raise an easy defensive position favourable to the opposite position by the counterpart.

The approach of Senator Savino is based on pointing out the inconsistency of the current law, which easily allows hetero couples to get married not based on the quality of their relationship but just because they are a man and a woman. Probably there is no way to estimate the quality of a relationship (hetero or gay) but the flaw of the current law is that it a priori forbids gays to get married independently from the quality, the social balance of their being a couple. And this leaves room to the case for a perfect, long lasting gay couple not to have the same rights of an unbalanced, ruinous relationship between two hetero. I find that expressing this point avoiding rhetoric but, indeed, through the story of herself arguing with a guy fortuitously met while driving her way home is very effective, because detaches anyone from their theoretical positions and focus them on the point, making it clear.

I also find very effective the clearly expressed will for depoliticizing the subject (neither democrat nor republican), making it a matter of balance and fairness. Which is also an attempt to focus the audience on the point (the incongruity of the current law).

The use of Irony always works, elegant and never overstated, is useful to defocus on the seriousness of the subject, contemporarily helping the speaker to get the sympathy of the audience.

Her communication is coherent. Her verbal communication is quick and not easy (at least to me, 'cause English is not my natural language) but it's always coherent with her non-verbal. Her pace goes steady and makes a good use of pauses. Her para-verbal expresses a real commitment to the cause and is coherent, as well, with her verbal. For example, she starts saying she's nervous (not apologizing for that) for the importance of the subject she's about to talk about and starts nervously playing with her pen and teasing her ear.

In the end, I think this mix of coherence, focus and irony are what make her speech so believable and effective.

DP

[#innovation - 03] Innovation in lean times.

In his article "How Open Innovation can help you cope in lean times", Henry Chesbrough says:

“Companies that continue to invest in their innovative capabilities during tough economic times are those that fare best when growth returns”

In challenging business climate, focus is crucial but it is short/mid-term tactic. How to maintain focus and manage costs tightly while keeping growth options alive for the future?

Short-term, cost cutting tactics require rigorous prioritization. The risk is high for a halt of potentially promising projects. Company’s ability to grow beyond its core business is threatened.

Strictly/rigidly just maintaining the focus for too long can become the enemy of growth: when the market recovers, the company lacks a foundation from which to rebound.

The approach Chesbrough suggests to reduce risk is Open Innovation [1]. It is based on the consideration that since information is easy and pervading, the old, closed model of developing innovation strictly inside the company makes little sense, because the risk is too high, time-to-market effectiveness is reduced, the potential for creating value is lower than it might be.

Chesbrough suggests that making the borders of the company permeable to information flowing will increase the possibilities of success of its internal innovation processes, taking bigger value.
The choice of information to be exchanged will certainly need to be pondered, not to put on risk any differentiating competitive advantage related to the strategies being set up.

The information flow should involve Intellectual Property, People and Ideas and should be bidirectional:

•         OUTSIDE-IN: it’s the most easy to be appreciated flow. It’s about spending effort and attention on valuable innovation paths outside of the company (technological incubators, research centers, start-ups, to name a few) to catch any remarkable business opportunity which might be considered complementary to the main stream and feasible (!).
•         INSIDE-OUT: this is less easy to accept. It’s about accepting the possibility that certain assets of the company might cross the borders and be managed outside, just because a third party, external actor can be more focused and effective on it. It’s also about considering the possibility to participate in the implementation of innovation projects with a secondary role, sharing risks, costs, competence. Which very well entails a reduction in benefit in case of success, but also raises the possibilities of success thanks to a different and more effective focus and to minor burden.

Chesbrough’s proposal is very prescriptive, suggesting a few moves:

1. Become a customer or supplier of your former internal projects
2. Let others develop your nonstrategic initiatives
3. Make your Intellectual Property work harder for you and others
4. Grow your Ecosystem, even when you are not growing
5. Create open domains to reduce costs and expand participation

The objective is to focus on company core operations today, while preserving growth options for tomorrow’s growth.

In my view the main challenge is internal. Since my first goal is to set up an innovation process in an established company from scratch, with the aim to get the biggest value from internal competence, I’m reasoning on how to get permeable to internal people’s contribution to innovation. I do believe fairness and democracy in will be key to set up a process, with a value proposition able to involve tho whole company's people.

Once you set up an innovation machine able to value any possible internal contribution from the inside (quickly and effectively), I think the management will be more willing to support the possibility to open to the outside world.

DP

[#leadership - 01] Pope next door

I always pay attention to leadership styles. The recent proclamation of Jorge Mario Bergoglio [1] as new Pope made me think a lot.
He comes after a Pope, Benedetto XVI [2],  generally perceived as politically "strong" but formal, little effective in terms of communication.
When the offer, that of Catholic Church, has such a spiritual feature, the personal brand of its leader is pretty much connected to his ability to inspire people (the demand). This goes further from just being an example to people. I think it's about being able to talk to people's soul.
And this is not just a managerial skill you can train. If you want this feature to work in the long term, it must be credible. How can you have that with such a demand of change and modernization?
It sounds like the Church had needed some radical innovation. The first sample of it was former Pope's resignation: a clear sign of change and a very effective communication (his worth).
And there it comes Pope Francesco, a Jesuit, a soldier.
He looks like the less rhetorical leader ever seen. Even if he says very serious things (such as: the "Lord never gets tired of forgiving, people get tired of asking for forgiveness"), he sounds credible because talks as if he were really and simply taking care of you, greeting with a "have a nice Sunday and a good lunch".
He doesn't wait for souls to look for him, he goes among people, breaking any protocol [3], and gathers people'souls by himself (a Jesuit!).
No ostentation (no golden cross, no throne, no flagship car, etc) but simplicity.
It looks like he wants to shorten the distance between the institution and the people they want to represent and inspire. Even his choice of "Francesco", as his name, is a strong "political" one. Who's closer to people than Saint  Francis?
When he gives his silent benediction in respect of atheistic people and when he asks people to pray for him he gives a message of respect and tolerance.
When he was announced as the new Pope he silently prayed for many seconds [4]. And, silently, the huge crowd in front of him followed. Words are useful to express feelings. But silence expresses emotions.

In conclusion, if this new Pope is not a genius of marketing, he's the most effective communicator I've ever seen and the perfect answer to a Demand (that of credibility, spirituality, simplicity, respect, tolerance, sensitivity, inspiration, trust) craving for change and a real, strong leadership. He also is the confirm of the potential of communication. And he's creating huge expectations.

I think any responsible manager should reflect on his leadership by example, based on credible and evocative communication.

DP

PS: thanks Monica!

[#innovation - 02] What's the target market of an internal, structured innovation process?

Let's try to extend the analysis using microeconomics.
DEMAND
If you ask each business unit director, he will tell every day some effort is already spent on (incremental) innovation. And that's true.
So, who's the need for such process?
Further, if your process is really able to gather and properly recommend some valuable business idea (incremental and/or disruptive), the day will come when you have to meet such directors and ask for their help to turn it to feasibility.
So, even if you have the top level commitment to set up such process, what's the use if the potential customers are not really interested in it?
I think we can say the Demand is uncertain.

SUPPLY
If we keep on considering the internal work force as both, the most potential and economical, source of innovation, how are you gonna convince them to invest their time and talent to provide you with their valuable ideas? What will be in it for them?
Supply is uncertain as well.

But there's more.

BUDGET
Apart from Demand and Supply, do you just have commitment but low budget?
Uncertainty on funds.


This is why I keep thinking that managing such project as a start up is a proper way.
And that's why I think I will base my analysis upon teaching coming from Taiichi Ohno [1] and Eric Ries [2].

DP

[#innovation - 01] how to inject some innovation into an elephant

It’s a sort of history repeating. In times of economic malaise, many corporations finally decide to think of their future and invest in strategic experiments on innovation [1]. And this is even truer for companies competing in ‘red ocean’ markets.

The challenge, as usual, is on how to install an effective innovation process into a company which has established mechanisms set up since long to support a main stream business, spending as few resources as possible of course.

How to rapidly overcome the cultural opposition of sceptical managers and colleagues upon the opportunity, better, the need to provide the company with a process which is able to structurally gather valuable ideas and transform them into competitive value?

How to rapidly design and deploy a process able to provide concrete results in short time?

What type of competence needs to be involved?

Relying on external consultancy might give you the tricky confidence that will facilitate quick results in a field where you still have not gained enough experience. But completely relying on external consultancy will also expose your company to awkwardly adapt to theoretical and very elegant academic models that very little have in common with your company’s culture and mechanisms or with its realistic investments capacity. This might turn very expensive and actually frustrate the fulfilment of your honest, managerial evolutionary vision.

So, apart from the usual prescriptions having been suggested by modern literature and industrial experience on innovation during the past ten years (such as. strong commitment by the top management, opening [2] to external contributions, creating dedicated cross-competence groups, etc), what can really make it work?

Well, just think about it, what kind of venture is pretty similar to the one I’m talking about?

• Little money to invest, many constraints, few resources
• Uncertain targets, uncertain results
• Strong inertia to change in the target market
• Little time available to provide results, possibly with short life cycles
• High possibility to fail
• Need for quickly learning
• Effectively communicate assumptions on possible return to gain credibility and the possibility to get funds for growth
• The main asset you can count on is people and their competence

Well, I’m talking about start-ups. The main difference between the start-up challenge and setting up an innovation function inside of an established company is about CHANGE. Professor James Belasco talks about “teaching the elephant to dance” [3]. Many recipes are available on the market. But, how can we make it in time of global crisis and resources shortage?

My idea is that, before starting to look for your source of change outside of your company (consultancy, openness, …), even if interesting and important in terms of opportunities, a more sustainable resource is your company itself. And I’m not talking about your R&D office. Your main asset is the people working for your company, mainly if yours is a service company. I think it’s the case to go through some progressive steps:

• Make a “Darwininan” selection of the people more motivated to make innovation experiments (creativity, enterpreunership, sensitiveness to customers’ needs, feasibility attitude, some awareness on economics).

You can do this by instituting an internal contest on innovation, a simple one (just ask to describe a value proposition and the target), meant to gather ideas (no restrictions on this: incremental and radical) and let them be considered by top management. Select the most valuable ones using FEASIBILITY as main criterion. Don’t forget to reward the people proposing the best projects; forgetting it would turn a boomerang in terms of engagement.

• Create a hub [4] involving the people Darwinianly (I mean those having demonstrated attitude to effectively experience change) selected on former step and honestly ask them to design the innovation process. Ask them to do it as if they were projecting the business model of a start-up, ask them to fill up a business model canvas. Then merge their visions and make a ‘manifesto’ out of it, to be shared with the whole company.

The mission of the hub will be to acknowledge the strategy of the company and, according to it, scan the company to identify the pain points.

The hub needs to become the listening point that might have birth inside of your company. The real innovation, for people, will be having other people available to listen to their ideas and give them help to communicate them effectively. The hub will be the team in charge of gathering any valuable idea through the internal communication channels that need to be properly set up.

• The hub will have to associate any draft idea in a proper pain-basket and then make a selection to promote those ideas being considered more feasible and coherent with strategy. The hub will also have to translate the drafts into a form more compatible with a more mature business analysis.

• After that, the selected business models will be proposed by the original submitter, supported by the hub, to a management steering committee that will make a second selection and will give the responsibility on feasibility and implementation to an internal manager, the one closest to the identified target. The original submitter has to be rewarded and possibly involved in the development.

This is a short and simple summary of a more general idea that would give the company many advantages (people engagement, capitalization of internal competence, creating a basket of ideas which might lead the company’s next growth strategy, for example). 

The goal of this short article is to start discussing about this vision, which is about injecting some entrepreneurial spirit in the elephant and just count on its latent, sometimes hidden, strengths.

DP 

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[1] For example, have a look at ‘Strategic Innovation and the Science of Learning’ (Vijay Govindarajan, Chris Trimble), MIT SLOAN Management Review, 2004.

[2] http://en.wikipedia.org/wiki/Open_innovation

[3] http://www.belasco.com/elephant.htm

[4] Implementing radical innovation in mature firms: the role of hubs (Richard Leifer, Gina Colarelli O’Connor, Mark Rice), Academy of Management Executive, 2001.

manifesto - mission statement

I create this blog because I feel the need to share some of my thoughts about the many interests I have.

To me, writing is not only about expressing myself. It's about giving more value to my existence as individual through the value others can add.
I want to share because I need feedbacks.

Anytime I will decide to share something, my main goal will be to enjoy. I hope you will, as well, in case you decided to give me your thoughts.

Thanks.