Innovation resource, process and culture a driver for SMEs and entrepreneurship. Mihai SVASTA Alexandra POSTOLACHE

Transcription

1 Innovation resource, process and culture a driver for SMEs and entrepreneurship Mihai SVASTA Alexandra POSTOLACHE

2 Innovation resource, process and culture a driver for SMEs and entrepreneurship Abstract Resources are scarce in Europe: natural resources are limited, demographic resources are on a descendent curve and financial resources were affected by the global financial crisis. Yet, there is one resource available: our mind. And this resource has a particularity: as long as we use it, it tends to grow, not to exhaust. We have to use this resource in order to maintain European competitiveness this should be our mind-set as European society stakeholders. The paper presents ideas which makes innovation accessible and tangible, transforming it in a resource for SMEs; it consist of processes and steps, tools and methods which can be started and sustained by any SME, regardless of their field of activity. Keywords: innovation, creativity, process, front-end innovation, idea generation, idea management, concept development Page 2 of 12

3 Are you going to help me make a better cheese? There are people who believe innovation is some crazy people work. Some strange savants, hidden in their particular world. Other people believe that innovation can be purchased; therefore you need plenty of money to access it. There are also people who thinks that innovation happens overnight, that you wake up in the morning, you shout: Eureka! and at a sudden the innovation appears right in front of your eyes, while other believe that innovation is available and accessible only for large companies, with dedicated research and development (R&D) departments, endowed with sophisticated equipment and supported by generous budgets. Yet, innovation is something different. And it is available for most of us, whether we are huge companies or small and medium organisations. Are you going to teach me how to do a better cheese? asks me the owner of a milk processing factory from Romania, which employs around 100 people and distribute its products within the large retail chains at national level. No, what I am going to teach you is far more complicated. I am going to teach you how to find in yourself and in your organisation the answer to the question how to make a better cheese using same physical premises as before is our answer. Yes, what we innovation specialists do, is that we help people and organisations use, in a commercial way, that resource which is already present in them: knowledge. Innovation makes money out of knowledge. Ok, this idea sound great, but how we transform this desiderate into reality? We believe that we have to approach innovation from three perspectives: - resource, - process and - change. Culture change. Page 3 of 12

4 Innovation as a resource Resources are scarce in Europe: natural resources are limited, demographic resources are on a descendent curve and financial resources were affected as well by the global financial crisis. Yet, there is one resource available: our mind. And this resource has a particularity: as long as we use it, it tends to grow, not to exhaust as the other resources do. We have to use this resource in order to maintain European competitiveness and this should be our mind set as European society stakeholders Same like for other resources, also for this resource we have to search, we have to dig, we have to dive to find it. But how? And where? And most important: How to use this resource in everyday business? There are opinions and opinions about creativity and its potential over life. I was strongly thinking that we are not born creative and that creativity it is a skill which can be learned, developed and trained; and not a talent, reserved only for the few lucky ones. Hearing and reading more and more about the creative potential of the children and seeing with my own eyes real examples, I have strengthen and adjusted my personal belief. Nowadays, although I do believe that we are highly creative as children, full of imagination and courage but in addition, I also do believe in our potential and power to foster our creativity at an adult age, being able to train it and to use it naturally in everyday life and, with same importance, in our everyday business. 3 important factors for creativity and innovation Frequently, I see that people associate creativity with arts and usually creative people are considered to be only painters, writers, composers but too seldom, people from business or industry. But creativity it is necessary also in the business fields and in every department of a company - how to use it and how to train people in this respect? We believe that, in order to unleash the creative potential and to be useful for the company, a person needs three ingredients: creative thinking skills, expertise and motivation. Building a similarity, from creativity to innovation, we can highlight also 3 important factors which must be taken into consideration if we want to deliver effectively innovation: we must combine the technical with the business factor while always thinking at the Expertise Motivation Creative skills Page 4 of 12

5 people we innovate with. Beyond just observing the people and clients we work with, the human aspect is about getting at peoples motivation and core beliefs. Usually companies tend to minimize the human factor, while a lot of institutes or R&D departments are focusing on the technical side and corporations all over the world are following the business aspect. So, innovation is about finding the sweet spot of feasibility (coming from technical factor), viability (from business factor) and desirability (related to people). Technical People Business From chaos to a process A big challenge for us, as organizations, is to approach an innovation process focusing on these three factors. More challenging than this is also to transform the characteristic chaos linked with creativity into a well-defined process to achieve innovation. Based on the experience gained in our ICG Integrated Consulting Group innovation cluster, we divide the innovation process into three big phases: Front-end of innovation, Product development and Product launch. If the last two stages sound quite familiar for a product cycle, the first one may sound a little bit fuzzy. But to understand better what the front-end of innovation is, think of what Albert Einstein said: If I would have 1 hour to resolve a problem which could influence my life, I would spend 45 minutes to analyse the problem, 10 minutes to develop a solution and 5 minutes to implement it. So, the front-end of innovation it is the first phase from an innovation process and it requires a lot of attention, time and energy. To go through this phase of the process, we can underline five important steps: diagnosis, opportunity identification, idea generation, idea management and concept development. First of all, enough time must be invested in the systematic analyse of the task setting, whose ideal outcome could be the boundary conditions. When the task it is enough sharpened, we can focus to idea generation phase with coordinated creativity tools. Afterwards it takes place a reduction of the created ideas to a manageable number of concrete concepts. All this happens in a sequence of events with suitable templates and instructions to bring clear results. Page 5 of 12

6 Innovation as a process As we said before, in our view, innovation is a process, floating within the corporate culture of the organisation, headed towards the strategic direction indicated by the management. Innovation process Strategy Front End of Innovation Product Develop ment Product Launch Organisational culture During this process, it is critical to pay attention to the first part: the Front-End of Innovation (some people call it: Fuzzy Front End of Innovation). The Front End is the embryonic phase of innovation. The next two phases, product development and product commercialisation, are normal NPI, new product implementation /) development phases, in which the main concern of the innovation team is to keep the innovative character of the end product/service and to overcome all process-optimisation related barriers. In our view, the Front-End of Innovation is composed of several stages, depending mainly on what we are innovating: a product, a service, a process, an organisational culture, etc. Usually, the stages which can be observed are: - Innovation system diagnose - Identification of client/market needs & trends - Ideea generation - Ideea management - Concept development Page 6 of 12

7 Front-end of Innovation Innovation System Diagnose Opportunity Identification Idea Generation Idea Management Concept Development Although all this 5 steps are rather clear, and intuitive, the challenge is to find the appropriate techniques to act in each of the stages. The present material presents a series of techniques and tools, which we used in various innovation processes. Innovation System Diagnose The diagnose aims to asses which is the current status and the potential of the company in respect to innovation. Many companies are family owned companies, based mainly on traditional values. Other companies are large procedure-based multinationals or former public companies, drowned in beaurocracy. Yet, all three categories have nowadays to face completion of the innovative entrepreneurial organisation in business climate in a continuous change. A tool we currently use to have a first look at a company status and potential in relation to innovation is ISA Innovation System Assement - this is a half-structured interview set, analysing the company on three perspectives: - Strategy and framework - Culture and people - Structures and methods The main outcome of the tool is that it provides to management an overlook of the innovation status and potential of the organisation, highlighting the organisational systems which can sustain and drive innovation, as well as the system which are not yet prepared. However, approaching innovation systemically is the key for sustainable use of innovation. Opportunity identification Innovation makes money out of knowledge. In order to make money we need some clients to be ready to pay for our innovations. Therefore starting from the client needs, conscious or unconscious needs, is another key to successful innovation. Page 7 of 12

8 In many case, from this perspective, innovation is anthropology as we try to examine the behaviour of people and of organisations, which are ultimately composed of people as well. In order to determine these opportunities, we use tools such as: o Job to be Done / Job mapping o Market studies o Interviews & client observation o Technology analysis o Competitors analysis o Interviews with experts o Focus groups o Trend-setters analysis o Stakeholders management In innovation process, we pay a specific attention to job to be done, client observation and trend-setters analysis. Idea generation Idea generation is a crucial step in innovation. Some people believe that you need just one idea (some say: a good one! ) and then you can innovate. The business reality shows that you need thousands of ideas to innovate a good product, service or process. There are hundreds of tools to generate ideas: Resource Optimisation, Functional Analysis, Trend prediction, HIT Matrix, Scamper, Brainwriting (6-3-5), Imaginary Brainstorming, Structured Abstraction, TRIZ, Brainwriting, and other. The key is to prepare in a proper way the idea generation session and to adapt the methods to the subject. Idea generation sessions need a well formulated guiding question to start with that requires some time and too often facilitators do not take care for that which makes the outcome of the session often unsatisfactory. Sufficient time should be spent to understand the task/problem at hand and to translate it into one (or more) good guiding question(s). What makes a good question? Simple, easy to understand with no or minimum terminology. Test: a 12 years young kid should understand the question immediately without asking. The question must be formulated self explaining, - no need for an additional explanation A question may very well include exaggerations that stimulates out of the box thinking The question ideally includes the core conflict of the problem. (How can I get to Paris tomorrow with no money?). Page 8 of 12

9 In some complex cases there might be one sentence explaining the context before the guiding question. Use phrase like: How can we create invent find Weak Question: which other markets could we conquer? Better Question: How can we conquer with the existing team three more markets in Europe within 2 years? Idea management We go further on our process: let s believe that we have some thousands of idea generated and we need to narrow them, to prioritise them, in order to advance towards concepts or prototypes. Same, the business can use some tools to select and prioritise the freshly generated ideas: - OPERA - Idea sorting & refinement - Other group decision techniques Concept development / Prototyping The last phase of the front end of innovation is to bring the selected ideas to more specific, tangible results. The idea is to offer to the innovation team and to the management of the organisation the possibility to get closer to the end result and to understand it from various perspectives: - Client segment - Problems solved - USP - Solution delivered - Cost structures - Value streams - Early adopters - Issues to be solved (including technical contradiction to be clarified) - Distribution channels - Key resources and key stakeholders - Key success factors - Roadmap positioning Page 9 of 12

10 Concept development canvas ICG Integrated Consulting Group GmbH A common use tool is the concept development canvas, i.e. a document which tries to comprise as many as relevant above mentioned characteristics, which are detailed and analysed, in order to offer to innovators a holistic view and also to offer to management first hints for resource allocation and investment decisions. In this step we also develop the first prototypes as we are getting closer to the production phase. Very often we are facing contradictions, either technical or organisational. A tool we are commonly using the overcome the technical contradictions is TRIZ, (теория решения изобретательских задач ) which is "a problem-solving, analysis and forecasting tool derived from the study of patterns of invention in the global patent literature", tool developed by Genrik Altshuller. Especially in the technical innovation processes, driven by engineers or technicians teams, TRIZ is proven to be very effective. Innovation is culture The only chance we have as business area to overcome the competition of US and Asian economies is to use our mind. We do not have their resources, their huge demographic potential, and their access to finance. Yet, we have high level of education and culture, and a higher valorisation the individual human mind, probably a heritage of the ancient Greek and Roman civilisations. If we want to maintain our level of living, we have to find a solution to maintain our competitiveness. We do believe that innovation could be the solution and we need a proper organisation attitude & culture for this. Page 10 of 12

11 Many times, creativity and innovation are frightening topics for companies which are used to do business as usual. But going to Albert Banduras thinking, which was considering that we can overcome our phobias through small steps (methodology named guided mastery ), we have tried to transpose these small steps into innovation process phases. The secret to innovation stands in individual and organizational attitude. Therefore, the right attitude is not to get stuck in the planning stage but to make things happen, as an organisational paraphrase of the Isaac Newton's law of motion: a body at rest tends to stay at rest, a body in motion tends to stay in motion During this, it is our role as facilitators of the innovation process to drive the company innovators between open mode, appropriate for creativity and idea generation and close mode, appropriate for idea management and prototyping/concept development. Conclusion We need innovation on a short term perspective in order to remain competitive. As the product life cycles are getting shorter and shorter, we cannot consider anymore innovation as a long term perspective; we have to innovate now. And this is possible: there exist methodologies and tools which allows small and medium companies to get use of innovation. The road to innovation is no longer so unclear, there are guides available, endowed with maps and proper tools for orientation. It is critically to start, even with small projects, and as innovation become gradually a part of the company culture, to the influence on the business performance will increase exponentialy. So stop talking, start innovating! Page 11 of 12

12 Bibliography: 1.Creative Confidence, Unleashing the creative potential within us all, Tom Kelley & David Kelley, Crown Business Innovators Toolkit, 50+ Techniques for predictable and sustainable organic growth, David Silverstein, Philip Samuel, Neil DeCarlo, Wiley The Innovator s Solution, Creating and sustaining successful growth, Clayton M. Christensen, Michael E. Raynor, Harvard Business School Innovation Management; context, strategies, systems & processes, Pervaiz K. Ahmed and Charles D. Shepherd, Prentice Hall Management 21+, Mihai Svasta, Alexandra Postolache, ICG Integrated Consulting Group 2014 Page 12 of 12