Most companies are so involved in meeting deadlines and fire fighting that there is rarely time to discuss and explore work related issues. Providing a structure, space and time to discuss ideas and toy with possibilities, can greatly increase the chances of creative ideas emerging. The tolerance required to generate a multitude of alternative solutions is the climate required when talking about work.
Although recent empirical research shows that most firms have implemented cross-functional teams for the majority of the new product development projects, they are still finding it hard to ensure that these teams are successful in completing the new product development task. In looking at how to create successful teams, many factors have been suggested, particularly cooperation between team members.
Turf protection has always been a major barrier to innovation. The capacity to break down barriers and conflict between departments can release massive energy for innovative contributions. Inter-departmental rivalry, the tendency to compete rather than collaborate, acts as an obstacle in the way of team creativity. There are many ways to deal with this, including cross-functional teams.
In the past, Indian management maintained a shroud of secrecy regarding the company’s achievements, particularly its financial performance. Today it is well established that informed participants are better than unwilling victims sacrificed for the company’s profits. Sharing knowledge and profits have gone a long way in achieving better performance. The mightiest of modern organizations have been built through the power of information and the human mind.
The Industrial Revolution made thinking, feeling, human beings, cogs in the wheel. Fortunately, competition has forced us to bring back humanity into the workplace, because it could increase profits. Instituting co-operation and commitment is key to innovation and better performance. The study of some large Indian companies showed that Stars have actively fostered a culture that stimulates innovation and view it as their source of life.
Wal-Mart’s Sam Walton, became the second richest man in the world by using innovative methods, particularly in supply chain management.
Mindwaves are the cultural shifts that sweep across the organization, creating transformational change. Involvement at all levels in developing strategy ensures organizational commitment. Breakthroughs need the support of top management. Budgets have to be set apart and human resources deployed, to achieve breakthrough ideas.
A key innovation characteristic is doing things not done by others. The first mover advantage in innovation is the key to high profits. Two companies, which introduced creativity programs, United Technology and Federal Express, realized a high return on investment (ROI) from their creativity programs. Federal Express achieved a factor of two ROI, or 200%. The ROI for United Technology was even higher, a factor of six.
Copying the best practices from other players in the field can improve efficiency. Replicating the ideas that work across the organization, can save time and other resources. Paying attention to the mishaps of other players and avoiding what does not work for them, is also usable information.
In order to be innovative, one needs to ensure that all existing tasks are done in the most optimal way. Routine matters are often dealt with automatically and inefficiency often creeps in, eating into the profitability of the organization. The techniques of innovation see existing tasks as a vast area, with great potential for improvement. The Japanese are always looking for better ways of doing anything. They say in effect, “This is being done very well. Let us study how to do it better.” This is what drives them to amaze the world, incessantly, with their miraculous creations. While it allows the status quo to remain, they are constantly looking for ways to do existing things more efficiently.
A well-known manufacturer of travel luggage in India was deeply concerned about the high cost of transporting bags. During a brainstorming session, one of the members asked “Why do you transport air? All the bags are just full of air.” In effect, a nesting system was created, where one bag sat snugly inside a larger bag. The reduction in logistics costs led to the company buying up its nearest rival and enjoying a virtual monopoly for many years.
A great deal of organizational energy is wasted by duplication of activities that are being done by others and duplication of activities that can be done by suppliers or other stakeholders. This is a result of overlapping responsibilities. Once unnecessary tasks are eliminated, there will be a focus on relevant activities and with it will come relevant innovation.
This concerns choosing the right way to do things by benchmarking with the best organizations in the world. The internet provides us with direct access to best practices from around the world. Once good and better ways of doing things right are discovered, they must be shared across the organization on a consistent and relevant basis.
Unilever has Innovation Centers in every region that are dedicated to studying the best way of doing everything. These processes are then replicated across the globe
Mistakes can be expensive. The cost of rejection is a major source of concern in manufacturing. Doing things right is essential before companies can think of doing new things.
Doing things right happens through:
• Building-in quality consciousness
• Reward and feedback systems
• Process improvement
• Communicating and affirming a culture of excellence
• Building teams that co-operate rather than compete
Organizational Culture has the great Emphasis on Innovation. Without the oxygen of support and applause, ideas often die in infancy. The creativity improvement program can be the foundation that enables all other company programs to be effective. There are a number of steps to ensure that the program encourages innovation.
A small bank, which did not have the funds to pay for expensive real estate, came up with the idea of using other people’s premises: schools, petrol pumps and super-markets. Then they moved seamlessly into a growth path, starting thousands of ATMs and mobile banks. Today, they are one of the largest banks in India.
More recently, many banks have introduced the concept of 24-hour direct banking with business being carried out by anonymous people at the end of a telephone. This is neutralizing the competitive advantage, which established banks enjoyed by virtue of functioning from prime sites in Mumbai.
Leadership and consumer relevance are the top drivers of innovation. There are two essential ingredients for successful innovation: Leadership and Consumer Relevance. Innovative processes do not begin in the R&D laboratory. They are initiated with a mandate from the highest level of the corporation. Identifying the consumer’s needs is an equally integral part of the innovation process. Ensuring employee participation in planning and a complete buy-in into innovative strategy is critical.
At Unilever, top management strongly believes that innovation has to be closely linked to the business strategy.
Dr. Rekha Shetty is Managing Director of Farstar Distribution Network, a unique consultancy company devoted exclusively to innovation and creativity under the brand name Mindspower.She is an author, an entrepreneur and an original thinker. Her long term Innovation Initiative, using 47 thinking tools helps in a steep increase in profits, reduction in costs, while improving customer satisfaction levels and employee participation levels. She is a consultant to ICICI Bank, Ashok Leyland Ltd., Hyundai Motors Ltd., TVS Group, TI Group, Durgapur Steel Plant, Indian Oil Corporation Ltd. and other blue chip companies.
In her very first assignment in United India Insurance, she developed a nationally acclaimed advertising campaign. During the last seventeen years, she has specialized in the field of Creativity in Management and developed her own management brand, Mindspower. She was one of Asia’s first women District Governors for Rotary International and was awarded Rotary’s highest Award – Service above Self.
Her fourth book “Innovate! 90 Days to Transform your Business” is under print and will be released by Penguin during May 2010.