Tag: ideas

What Is The Cost Of Innovation?

cost of innovationThere is no manual that says exactly how to estimate innovation costs but here is a common sense approach that seems to work well.

Imagine that you are a company that needs to introduce 5 new products into the market place. First of all you need to spend some time generating ideas. Without knowing your actual method of idea generation and until you have had time to calibrate your own process then this is a bit of ‘wetted finger in the air’ calculation.

We know that the ration of truly wacky ideas to those that might be worth looking at is one order of magnitude i.e. 10 to 1. Similarly, the ratio of ‘might be worth looking at’ to ‘definitely worth a look’ is once again an order of magnitude.

So if we want to have just one idea that is worth pursuing then we should expect to generate at least 100 crazy ideas, thus our small company wishing to create 5 new products will need at least 500 crazy ideas.

So far so good, but how do we generate the ideas? You could collect them in a suggestion box but the quality would be variable and it may take a while although the cost would be low.

An idea generation session with a group of people could generate your ideas in less than a day. This would be more expensive and would only use a ‘snapshot’ of the expertise and knowledge available to you.

By now you should get the idea that we can roughly work out how many ideas are required, and how long this would take, and the resources that would be used.

Not all ideas make it to products so some extra redundancy needs to be built in, and then there are overheads such as management and the costs of prototyping and manufacture, but these should be aspects with which you are already familiar.

So there you are, a simple way of working out your Innovation costs. But hang on a minute, life is not quite that simple. Below is a list of other things that you might wish to consider:

  • HR requirements (culture, motivation, working practices)
  • Idea capture systems (how do you record ideas and avoid forgetting them)
  • Knowledge transfer (what worked, what did not, avoiding reinventing the wheel)
  • Feedback for improving all aspects of your process (including estimating costs!)

This is a simple guide but good enough to allow you to get some sort of handle on the cost of Innovation if you have never done anything quite like this before. Reality can be a little more complex.

There are often reports published of how much some larger companies spend on Research and Development (R & D). This is not strictly the same as Innovation but allows us to get a handle on it. The figures vary a little but figures of around 1% of turnover are not uncommon.

So a company turning over say $100 million would expect to budget around $1 million then?

Maybe but not necessarily. I once helped a company with such a turnover and the budget per annum was probably closer to 0.1% of turnover.

How come, you might wonder? Well for a start I used some tools to measure the capacity of the business to innovate which meant that when we identified areas for improvement we did not have to spend money across the whole of the company. Investment in training and development activities was targeted.

Because we rotated staff through the Innovation ‘centre of excellence’ we had the opportunity to work with all staff eventually and the postings were seen as beneficial, something everyone looked forward to. Not only that but it was an ideal way to spread know how gained back into the business as a whole.

This is a complicated topic but you can find further reading on Innovation Not Spots and Innovation Measurement by clicking on the links. Please get in touch if you would like to know more.

Boosting Your Creativity

boosting your creativityThere are loads of different ways you can consider boosting your creativity – from small changes you can implement in your daily life to exercises that can help you develop your creative mindset.

Here are 5 very simple things that you can do to start off:

1. Change your workspace. There are many small changes you can implement in your office and daily life, to encourage creativity. Did you know that 60 % of the creative people operate in 2 or 3 different workspaces? Occasionally changing your environment allows your mind to see ideas from a different perspective and even formulate new solutions. Try to change your office workspace, or, if that’s not an option – maybe try working from a local coffee shop, library or even your home office just for a day.

2. Get inspiration from external stimuli. A simple way of encouraging inspiration and creativity is filling your office with various visual stimuli, especially if they aren’t related to your industry – interesting furniture, plants, paintings, photographs, different magazines.

3. Wellbeing and creativity. Our health and wellbeing can significantly influence our creativity. The healthier we feel, the more creative we tend to be. Consider standing desks, sleep-in policies, a corporate gym membership, fruit deliveries, add indoor plants or organise walk-meetings. According to studies, compared to sitting, walking while brainstorming can demonstrate a 60 % increase in the creative output. So, next time you need to come up with new ideas, consider taking a brief walk around the neighbourhood.

4. An office that supports creativity. Many hours are spent in our workplace, so naturally, it has a significant impact on our creative thinking. Even the layout of your office can contribute to everyday creativity. If you can arrange the office in a way that constantly makes people run into each other, it will encourage more interactions and conversations. The more people interact with each other, the bigger the chance for new, creative discoveries. Try and engineer those coffee machine and watercooler moments.

You can also set up different workspaces that support creative thinking: quiet rooms, chill out zones, rooms for large teams, or one on-one-discussions. Of course, not everyone can afford a major revamp of office space – you can start with simply moving the fruit bowl or a coffee maker to a new location or rename the meeting rooms to encourage a different type of thinking.

5. Let ideas brew. Interestingly, researchers discovered that allowing your ideas to “brew” for a while or go through an “incubation period” is important when it comes to our creative success. Even taking a break and stepping away from your project for just 20 minutes can significantly enhance your performance.

No wonder it is said that the best ideas come to us while in a shower. It so happens that the relaxing setting and absolute isolation of a warm shower makes an excellent incubator for new ideas. In fact, any other activities that make us feel good and relaxed, like exercising, taking a walk or cooking,  increase our dopamine flow, and fuel our subconscious “idea generation machine”.

Three Ways To Ensure Your Innovation Efforts Fail

Innovation tips. Innovation successAs you might have guessed, I do not really want to see your Innovation efforts fail!

I am not saying that if you accept all of my advice you will succeed either. Ignore all of these and I can almost guarantee failure in the near future.

Avoid Groupthink

Groupthink is probably the biggest killer of Innovation. It occurs when a group of people collectively decide to simply follow what the group thinks. Usually, this is done with no communication at all.

This often happens when there are very few contributors with nobody willing to challenge them. There may very well be ideas that do not get put forward and those that do are not thoroughly evaluated.

Try This:

Get someone to play the role of ‘Devil’s Advocate’. This person’s job is simply to question and challenge the ideas provided. Hopefully, such challenges will be made in a non-repetitive manner (i.e. not asking the same questions or waiting until the same point in time) which will force critical thinking within the group.

Ensure There are Sufficient Resources

Sometimes, it’s not the lack of ideas that stops us – it can be a lack of resources. It is true that rationing resources can lead to enhanced creativity but if you go too far you will find that your Innovation output will decrease. It also makes it exceedingly unlikely that you will actually manage to implement anything concrete.

Try This:

You need Innovation champions who are able to lobby the right (high level) people for money, manpower, and materials. You will need your ‘Innovation Manifesto’ to ensure that people know the importance of Innovation with regard to competitive advantage and sustainability (and of course your bank balance).

Without adequate resources, any money you spend will simply be a cost, not an investment!

Believe In Your Ideas

Even organisations that come with hundreds of ideas can stumble along the wayside. Assuming that you get a heap of ideas you must DO something with them. From the point that ideas are generated, there are many barriers that lie in wait.

Ideas may not be evaluated because they do not come from ‘the right people’, or you tried something similar last year or there is an arbitrary decision made about resources required (we don’t have the money, it’s too hard, etc).

Try This:

You must have a process in place for ensuring that action is taken. And you must also ensure that whatever you decide to do with an idea, you ensure that the originator knows what has happened to it and why. If you do not at least do this, then your sources will dry up quickly. Have you ever wondered why the typical company suggestion box does not work?

These are just the tip of the iceberg, something to get you going. If you are serious about your Innovation projects then I’d like to talk to you to see how I can help ensure your projects succeed.

Creativity On A Shoestring – Get Yourself A Cheap Whiteboard!

Creativit on a shoestringThis article came about as part of a project to create some ideas around ‘Creativity On A Shoestring’. I thought about a) keeping things simple (one of the major requisites for both Creative Thinking and Innovation) and b) keeping things relatively low cost.

Top of my list was a whiteboard. These can be useful for a number of things including capturing ideas when they leap into your head, logging issues and problems and for people to contribute to solving such issues. In fact, you can use a whiteboard for just about anything. The main thing that guarantees effectiveness is its location.

First of all, let’s talk about cost. You can buy a cheap one but it is likely to be small. But what is a whiteboard? It is just a shiny white non-porous white surface so you could use any white gloss painted surface. So you could make your own from a large offcut of wood or (as I did) use one side of a white door. You can even paint part of a wall if you feel so inclined. If you have a home office you might find your spouse or partner complaining about this. Please use the right side of the door.

So where should your whiteboard be located? I am assuming that you have the luxury of choosing a location where everybody in your business, office or team has access. No one person should be seen to be the guardian of this precious resource.

You might be suspicious of staff or colleagues but they have to be trusted at some point. Locate the whiteboard where it can be accessed by the maximum number of people. This could be near the watercooler or coffee machine in a small office e.g. a solicitor or financial adviser. For larger offices, use your common sense (or imagination).

The only major things that you must do are to give people an idea of why this whiteboard has appeared and what it might be used for. It is also important to acknowledge all contributions and suggestions.

Happy whiteboarding!

 

 

Newsletter – Why brainstorming does not work!

Dear Reader,

If you are reading this because a friend or colleague was kind enough to forward it to you, then you might like to sign up for your very own copy by clicking here.

As we are now heading towards the holiday season many readers will be winding down. Hopefully, I can provide a little entertainment and some useful titbits in this rather odd period of the year.


#justthinking

At this time of year retailers are all desperate for our business. Keep an eye open for good examples of customer service, and good ideas generally that you could adopt. I saw some excellent examples of how to treat a customer at a high end candle shop and also a jewellers. At the opposite end of the scale, I noticed some very poor examples at a large chain store. Definitely no Magic & Sparkle there!


#justsaying

Would you like to achieve more with less effort? Yes really. Well a spot of fluffy thinking is what you need. Get in touch to find out how a spot of alternative thinking could help you and your organisation.


How many of you saw the subject of this email and thought ‘What is he on about, of course it works!’. Well for dramatic effect I did leave out ‘a lot of the time’.

Have you had this experience?

How many times has somebody summoned you to a meeting room using the words ‘ let’s go and brainstorm the solution to this problem?’ And how many time has it not worked very well or maybe not at all? And when it did not work did you put it down to the facilitator, or perhaps the problem was too hard, or maybe you just did not give it long enough?

Well, there is a reason for this, you were most likely using the wrong technique! Often we think we know what the problem is when in fact all we know is the situation in which the problem occurs. So, we have to determine the problem or possibly identify a range of potential problems. Next, we must pick THE problem or the most critical.

Picking the right technique

Having done this there might be a range of possible solutions out of which we must pick one to work with right now. Do you see a pattern emerging here? I have briefly outlined four stages which have the format diverge/converge/diverge/converge.

You will not be surprised to learn that one of the ways of classifying creative thinking techniques is as divergent or convergent. Other classifications can be group/solo working, exploring, reframing etc.

Anyway, if you use a technique incorrectly in the wrong phase it is likely not to work very well (or at all).

Let’s return to Brainstorming. This is a divergent technique as it is intended to generate a number of ideas or solutions. It will therefore not work when you are trying to converge i.e. focus on one specific issue.

So when you are summoned to a meeting room to generate solutions to a problem you will generate something but it is likely that you will not have identified what the problem actually is so the solutions will not fit very well.

I have a little black book with around 144 of these techniques, so if you would like to give this sort of thinking a try, please get in touch and I will find something tailored to your needs.

Please do get in touch or provide feedback by replying to this newsletter, or using any of the contact methods listed on the website derekcheshire.com.

Merry Christmas and a Prosperous New Year to all readers everywhere,

Derek Cheshire

Ways I Can Help You

1. Keynote/online speaker - How to avoid the Innovation black hole,  how to add Creativity to your business toolbox
2. Innovation measurement - find out where your strengths lie using tools created from my Innovation Equation
3. Innovation programs - help to set up and run your innovation initiatives.
4. Workshops - idea generation, managing creative people and much more

Derek is a Fellow of the RSA, a speaker, facilitator, award-winning radio presenter and Adjunct Professor at VIT University, Chennai. He has been working in the field of Business Creativity and Innovation since 2002.