Innovation

What is Innovation?

Inventions
Improvements
New way to use existing things

Different Types of Innovation

Research & Development
Problem Solving
Breakthroughs
Product/service/improvements
Continuous Improvement
Application of technology to new area

Problem Solving Content Issues

Description of Problem
Factors: Constructive vs Limiting
Ownership
Scope of Problem
Consequence of Problem
Alternative Solutions
Rank Ordered Solutions

Process Issues in Problem Solving

Staff members as problem solvers
Motivation of the problem solvers
Decision making involved in selecting solution
Execution of the solution decided upon

Problem Solving Model

Components of Problem
Visceral Components of the Problem
Size of Problem - costs, risks, losses
Sensory Input
- How’s it look?
- How’s it sound?
- How’s it taste?
- How’s its smell?
- How’s it feel?

Personal Components of the Problem

Inside perspective of team members of the problem
Team members as problem solvers

What is Needed to Improve Team Problem Solving Process

Unconditional acceptance & non-judgmental attitude of participants
Respect for each participant’s input
Freedom to openly express emotional response to the problem & solutions
Defined limits and boundaries on problem solving process

Use Brainstorming to Get to New Ideas-

Rules for Brainstorming

Set a time frame to be completed
Be clear what problem you are trying to solve
All ideas should be heard.
No idea is too wild to be expressed.
Quantity is wanted; each idea coming to mind should be expressed.
Combining ideas for improvement is highly desirable.
Criticism or negative discussion regarding ideas is absolutely forbidden.

Reality Testing of Possible Solutions to Problem

Critical Path Analysis
Decision Trees
Force Field Analysis
PMI Plus – Minus – Interesting
SWOT Analysis – Strengths, Weaknesses, Opportunities, Threats

Critical Path Analysis

Calculate length of time to complete project
List all activities in plan by: start date, duration, if parallel or sequential
If dependent on what do they depend
Graph it out, Plot tasks on graph
Schedule Activities
Critical path-longest sequence of dependent activities that lead to completion of plan

Decision Trees

Start with the decision which needs to be made draw a box
Draw to right possible solutions on lines
At End of each line if result is uncertain draw circle if other decision draw box
From the other decisions draw lines for options which can be taken
Calculate decision which has greatest worth to you and give it a value
Estimate probability of each uncertainty

Force Field Analysis

List all forces for change in one column
List all forces against change in other
Assign a score to each force 1(weak)-5(strong)
Draw diagram showing forces for & against and size of forces
Helps weigh importance of factors as to if pursue or not the plan

PMI- Plus/Minus/Interesting

Plus Column: all positive points of taking the action
Negative Column: all negative effects
Interesting Column: extended implications of taking action, whether positive or negative
Assign positive or negative scores

SWOT Analysis

Strengths: advantages, what you do well
Weaknesses: could be improved, done badly, should be avoided
Opportunities: good chances, interesting trends
Threats: obstacles, competition, are required specifications changing

Innovation in Different Functional Areas in Businesses

Product Development
Service Development
Operations
Management
Marketing
Sales
Accounting
Human Resources

Why the Need for Innovation?

Rapid pace of technological development
Continuous technological development
Competitiveness of Marketplace
Instant Communications
Global Communications
Internet & e-business
Need for innovation throughout an organization

Paradigm Shifting

Adapted from Joel Arthur Baker's Paradigms-The Business of Discovering the Future, 1992, Harper Business, NY

Three Keys to the Future of Businesses

Excellence: statistic process control, continuous improvement, benchmarking & constant pursuit of excellence
Innovation: necessary to stay on top
Anticipation: information allows you to be at right place in right time with innovative product

What is a Paradigm?

Set of written or unwritten rules:
•Establishes or defines boundaries
•Tells you how to behave inside the boundaries in order to be successful

What is a Paradigm Shift?

Change to a new game, a new set of rules

Characteristics of Paradigms

Paradigms are common
Paradigms are functional
Paradigm effect reverses the commonsense relationship between seeing & believing
There is almost always more than one right answer
Paradigms too strongly held can lead to paradigm paralysis, terminal disease of certainty
Paradigm pliancy (seeking new ways to do things) is the best strategy in turbulent times
Human Being can choose to change their paradigms

Results of Paradigms

Perceptions of world are strongly influenced by paradigms
Since we feel good using our present paradigms we resist changing them
Outsiders usually create the new paradigms
To change to a new paradigm early takes act of faith since not result of factual proof since never enough proof to be convincing
Those who change to new paradigms have new way of seeing the world and new approaches to solving problems as a result of shift to new rules
New paradigms put everyone back to zero, so practitioners of the old paradigm lose much or all leverage

When do Paradigm Shifts Occur

Every paradigm will, in the process of finding new problems, uncover problems it cannot solve. These unsolvable problems provide catalyst for triggering a paradigm shift

Paradigm Shifts can be Small

Kaizen – Japanese term for continuous improvement through ability to make small improvements in process & products every day. Every day find way to get .01% improvement in what you do or make

Some Paradigms Which can be Harmful to Success:

Management by Objectives
Total Quality Management (TQM) Everywhere
Measurements
Full Absorption Costing
Efficiency - We Must Use Our Resources Efficiently

Types of Paradigm Shifters

Young person fresh out of training
An older person shifting fields
The Maverick
Tinkerers

Role of Managers & Paradigms

Managers must demonstrate paradigm pliancy if they are going to expect others to practice it
Managers must facilitate an encourage cross talk across disciplines
By listening to screwy ideas, managers gain leverage for innovation
Being leaders who are persons you will follow to a place you wouldn't go yourself

Final Word on Paradigms

If you have paradigm paralysis you will be hearing nothing but threats
If you have paradigm pliancy, you will be hearing nothing but opportunity!

Thinking that Encourages Innovation

Adapted from: Innovation Strategy by Alan West, 1992, Simon & Shuster, Needham Heights, MA

Think Strategic

How to deal with changing markets
How to deal with changing resource environments
Fit the resources of the organization to the conditions of the market
Control the environment and competition rather than be controlled by it

Remember to control your own destiny or someone else will!

Think Different

Maintain a questioning attitude-Insistence on novel approaches
Continue to ask the “why” questions

Three Phases of Creative Thinking

A broad search for understanding-why phase
Attempt to apply knowledge in problem solving-why not phase
Reach wisdom of problem-limits entire set of possible solutions-because phase

Remember that surprise is the essence of most successful attacks

Think Customer Benefit

What is it that the customer wants? Give the customer what he wants-listen to him
Change in color, design, image, or components rather than additional performance might be what they want
Customer benefit-by above changes-added real value to products for customers

Remember that it is only the customer who pays your wages

Think Detail

Detailed planning cornerstone of innovation
Limit uncertainty of process-create specific & detailed protocol, comprehensive engineering analysis, & integrated test program to identify potential problems

Remember a fast journey will only come from knowing the route in great detail!

Think Internal

Appreciate the work requirements in each type of task
Build on existing strengths in organization
Make logical & objective assessment of where investment most appropriate
Look for real growth in added value per employee rather than total return on capital employed

Remember that if you don’t have a competitive advantage, don’t compete!

Think Knowledge

Survival depends on how clever you are
Emphasize development of knowledge in company for new product evolution
Create internal environment for maximizing acquisition & retention of knowledge
Use information technology, appropriate recruitment, training & motivational system

Remember, knowledge itself is power.

Think People

See employees as key resource for future development
Get the right people & ensure their work is efficient, effective & enthusiastic
“Can do”organizations develop people
Change the organization to suit employees

Remember that most struggles are won first in the mind, and only then in the market.

Think Thin Organizationally

To be a winner companies need to be more knowledgeable, more responsive, & quicker than their competitors
Getting change implemented, understanding the customer, & producing more added value-central to leadership of innovation
Get closer to the market, share knowledge & information & concentrate on action rather than on reflection-hallmark of innovators

Remember that small organizations are simple organizations and simple organizations will spend less time on maintaining the organization, and more on task achievement.

Expanding Thinking Leading to Innovation

Some Rules to Release Yourelf from Being Stuck by Barriers to Innovation

Assume every experience you have can positively stimulate personal growth-reframe every experience as an opportunity to grow experience
Discover fundamental truth and fundamental illusion in barriers you face- work at overcoming your fear of failure
Clearly envision how you want to be (and what you want to be doing)-create your own affirmations and use them
Evoke the situation and emotions surrounding the barrier and hold strongly to your vision and your inner strength-face your demons
Take action and/or communicate with another person-establish a network of support
Allow yourself time and have patience for creativity to bloom and grow-transformation takes time

Overcome Negative Anti-Creativity Attitudes

Victim: victim of outside forces-sense of being powerlessness
Lack Confidence/mistrust: see world as antagonistic, lack “can do” attitude
Underutilized talent/contribution: not sure you can impact your world
Narrow expectations: blame others when your expectations or goals not met
Low Self-Worth: feel need to earn approval of others not sure of internal self-worth or esteem

Avoid these Inhibitors on Your Team’s Creativity

Unclear objectives and expectations
Information overload
Repetition and wheelspinning
Straying from one subject to another without completion
Talking at the same time-not listening
Personal attacks
Win-lose approaches in decision making
Unresolved issues of roles, responsibility & authority
Manipulation – “rubber stamping”
Insufficient preparation and/or follow-up

Strategic Issues Driving Need for Innovation:

Fierce competition: domestic, international, cross industry
Deregulation of industries: competition, changing markets, industry restructuring
Changing Markets: segmentation, consumer values, offshore markets
Economic/financial uncertainty: growth/stability, capital availability, international monetary system
Government Policies/uncertainty: taxation, regulation, trade, political risk
Technological impact on business: tracking & timing of investments

Changing workforce: productivity, education/training, succession planning

Steps to Successful Managing of Innovation

Explore the need for change
Relate the organization’s purpose & vision to the innovation
Identify organization’s qualities needed to implement this innovation
Assess the gaps between current state of organization & needed state & readiness to change and implement innovation
Determine transition strategy for innovation
Determine tactics for implementing innovation
Implement & monitor transition process
Recognize completion points of transition

Stages in the Innovation Process

Idea Connections
Idea Generation
Idea Screening
Idea Injection
Concept Testing & Development
Business Analysis
Product Development
Test Marketing
Commercialization

APPEARE for Innovation

A = Be aware of your complete current Situation

P = Be persistent in your Vision

P = Perceive all your Alternatives

E = Entertain your Intuitive Guidance

A = Assess your Alternatives

R = Be realistic in your Actions

E = Evaluate your Results

Characteristics Needed for Innovation

Spontaneous – fresh, childlike, take risks
Persistence – energetic, assertive, independent
Inventive – new ways, skeptical, ambiguity
Rewarding – shares credit, self-rewarding
Inner openness – intuitive, emotions, open
Transcendent – chose growth over fear
Evaluative – discerning, discriminating
Democratic – value & respect peoples

Creating a Creative Climate

Preparation: acquiring skills & abilities to achieve breakthroughs in your particular field
Incubation: passive process allowing skills & abilities to mature and develop naturally
Insight: A spontaneous breakthrough in which a person achieves new level of insight or performance
Verification: Process of determining validity or truthfulness of that which was achieved through insight

Tips for Maintaining Creativity

Don’t be afraid to try and fail-be a risk taker
Let your playful side come out-listen to that Kid inside you
Identify time periods in day when most creative and only schedule planning then
Borrow ideas, read a lot, watch the NET
Maintain an “idea notebook”

Bureaucratic Barriers to Innovation

Top Management Isolation
Intolerance of Fanatics
Short Time Horizons
Accounting Practices
Excessive Rationalism
Excessive Bureaucracy
Inappropriate Incentives

Characteristics of Corporations which Encourage Innovation

Atmosphere and Vision Appreciate Innovation
Market Oriented
Small, flat organizations
Multiple approaches
Developmental Shoot-outs of prototypes
Skunkworks
Interactive Learning

Strategy for Encouraging Innovation

Maintain an Opportunity Orientation: Little Engine that Could
Taking care of Business while planning and innovating
Incrementalism-phased program planning
Accepting Change and Chaos as inevitable

Where do you GO from Here?

In your life you have the choice between the following which will you choose:

Change Agent or Cynic?
Innovator or Blamer?
Creator or Reactor?
Empowered or Powerless?
Optimist or Pessimist?
Self-worthy or Self-deprecating?
Productive or Stuck?

Goldratt's Theory of Constraints

Let’s Listen to a Voice of One Who is a True Innovator: Avraham Goldratt Author of The Goal, It's Not Luck and Critical Chain

Formulator of the Theory of Constraints (TOC)

Goldratt’s Five Focusing Steps

Find the constraint (s) of the business.

“What decision (s) must you take to exploit the constraint?"

Subordinate everything else to the above decisions

If the constraint is still in the same place after it has been fully exploited it is time to elevate capacity by investing money

If during any of the above steps the constraint is broken go back to step one. BUT do not let your inertia (your paradigms about your business system) become the system’s constraint!

Four different types of constraints

Physical constraints within the business
Supply constraint
Market constraint (the market will not buy all we can sell)
Policy constraints, the way things are done, are probably the most important and least understood.

What is the most frequent response to a constraint?

Often it is to invest in more capacity. Is this the correct response? Of course not!
Goldratt suggests exploit the constraint.
This decision will, if implemented, ensure output of the system is maximized.
If a business were to invest before it knows how much can be wrung from its constraint it could very easily spend money unnecessarily

Implement Goldratt's Third Step

Huge paradigm shift for many managers
E.g.: Sales subordinates to manufacturing or vice versa
Constraining resources determines what will be done
Every executive must get the most from his constraints - which necessarily means subordination by the rest of the organization.

Goldratt’s Fourth Step-Investing

Only after the constraint is fully exploited do you know you are investing in the right place.
When a business adds capacity and/or breaks the constraint - the whole situation changes –
all the things it knows about a business need to be re-evaluated!

Goldratt’s Caution in Step 5

Re-evaluate all your assumptions about your system -or you will make grave mistakes
Goldratt believes that questioning one’s paradigms should be very high on every manager's agenda.

"It follows that an acceleration in the rate of change will result in an increasing need for reorganization. Reorganization is usually feared, because it means disturbance of the status quo, a threat to people's vested interests in their jobs, and an upset to established ways of doing things. For these reasons, needed reorganization is often deferred, with a resulting loss in effectiveness and an increase in costs." Niccolò Machiavelli in the “Prince”

Which system (A or B) is more complex?

If complexity is defined by the amount of data required to describe the system, then the answer is “B.”
If complexity is defined by the number of points within the system that must be addressed in order to affect the system (i.e., the degrees of freedom), then the answer is “A.”

A basic belief (something that you cannot prove) in science is that there are no complex systems in reality.

The TOC Thinking Processes (TP)...

Tools which enable the use of cause-and-effect logic and necessity to gain an understanding of our reality and why it is the way it is, and to find ways of improving it by altering the currently prevailing assumptions/causalities.

The two basic constructs that underlie all of the TOC Thinking Process:

Causality: “If… then…”
Necessity: “In order to… I must…”

Theory of Constraints is the Combination of

TOC Thinking Processes (TP) and
Breakthroughs: resulting from generic solutions being applied to specific application areas (e.g. marketing, sales, production, distribution, project management, human relations).

Definition of TOC Terms

Constraint: restricts our ability to improve
Process: systematic series of actions
Ongoing: process can be repeated over & over
Operating expense: rate of input of what it takes for a company to produce
Throughput: rate of output of company’s production-What are people supposed to be achieving?
Net profit: throughput minus operating expense
Return on assets: net profit divided by total asset value

Example of Terms Cost World View Vs. Throughput World View

Comparison Cost World View Throughput World View

Prime Measurement Weight Strength

Definitions of Critical Chain

Critical Chain: longest chain of tasks that considers both task dependencies & resource dependencies
Parkinson’s Law: work expands to fit the allotted time
Critical Chain Project Management: applies to planning & tracking
Planning: done backwards from date of completion to start date
ALAP: schedule tasks as late as possible based upon target end date-putting more work at end when knowledge base on project is maximized
Buffers: adding lumps of time in the projects chain-look like slack, feel like slack but are not slack
Tracking as relay race: each task accomplished with no eye to time but rather to maximization of resources and energy of workers

Tools for Improving Your Critical Thinking

Innovation Promotion-Need for Critical Thinking

Introduction To Innovation & Problem Solving

Paradigm Shifting

Thinking that Encourages Innovation

Expanding Thinking Leading to Innovation

Goldratt's Theory of Constraints