Chameleonomics: Greater Adaptability, Smarter Innovation
Holistic innovation and creativity – read my exclusive interview with Peter Cook of Human Dynamic which was originally posted on the Innovation Excellence forum. You can now read it by clicking on this link.
Peter asks questions such as ‘what innovation demons do you want to purge?’ and ‘what is the future of creative thinking?’. Peter’s love of rock n roll also mean that there is a musical reference. In this case you can listen to Something In The Air by ThunderClap Newman.
What is the cost of ideas? What normally happens when people come up with bright ideas at work? A manager will typically calculate the cost of implementing it. This cost will then be balanced against the value potential of the idea. This is normally additional income from increased sales or reduced operational costs. The more creative an idea is, the harder it can be to determine the value in monetary terms. Many potentially very exciting ideas are not implemented simply because a manager has decided that to do so would be too costly.
Many managers are excellent at working out the cost of implementing an idea. They often fail to calculate the cost of NOT implementing an idea. This can often be far more than the cost of implementing. The cost of ideas is thus a two sided coin.
How much does it cost not to implement an idea? Here is a simple example where an idea might lead to cost savings on a production line. The cost of the idea in terms of equipment and labour is USD500,000 and is a one-off cost. As a result of this, the cost of manufacturing each widget that comes off your production line is reduced by USD5.00. Your Sales department tells you that you are currently making 100,000 widgets each year. Sales are expected to rise 10% per year over the 5 year life of the equipment.
Simple maths tells us that the cost of not implementing the idea is zero in year 1 and then USD500,000 in year 2. Over 5 years the cost would be over USD2,300,000 which is significantly larger than the initial investment needed.
Things are not always this easy though. Imagine that one of your R&D staff has come up with a pen-sized device that can see through solid objects. There are potential applications in medicine, construction and intelligence gathering to name a few. To get such a device into production might cost say USD50,000,000 but how can you predict the sales potential of such new technology? How can you also keep it secret from your competitors until launch? The potential seems huge but you cannot put your finger on it.
We know that ideas do not spring from single sources. It is likely that a competitor will come up with a similar idea at some point. What will they do? Will they develop the idea and create a new product? What will happen, will it be a success? If it is then you lose out big time in terms of cash. But what about your reputation?
The cost of not implementing an idea might be both financial and long-lasting damage to your reputation and brand.
Does anyone remember Polaroid? Polaroid was the word that described instant images. The company failed to keep pace with digital technology and almost went bankrupt.
Next time an idea is put to you, think very carefully about the cost of not implementing it as well as the actual cost of implementing it.
The future of Leadership (and also Management) continues to be debated. It is widely recognised that things cannot remain as they are. We are in a challenging era and we need organisations to be more effective (not necessarily efficient), to be better places to work and to be sustainable. Up until now, these have mainly not been attainable apart from in a few organisations. These few do, however, show that what we are all striving for is in fact possible. The question is, how on earth do we get there?
There are professional bodies that see themselves as the custodians of Leadership or Management. Are these the bodies to take things forward? In fact, should there be representative bodies at all? The problem is that we are trying to paint a picture of the future which a) obviously does not exist b) which we wish to be different from the present.
This means that if we use the current knowledge and models from any existing sources then we are likely to be interpolating in order to create the future. Even current management thinking tells us to be wary of this. Surely what we desire is a way of extrapolating from what we already know. Fans of Douglas Adams will only be too aware of how the ‘Infinite Improbability Drive’ was extrapolated from an exceedingly hot steaming cup of coffee in The Hitchhikers Guide To The Galaxy (please read it if you have not already done so). If Douglas Adams had interpolated then he might have just created a frothy Latte rather than an ‘Infinite Improbability Drive’.
So what does this mean for Leadership? In terms of concrete actions, I am not entirely sure. However, to find out I believe that we need to paint a picture of the future which does not have to be complete fantasy. It should, however, not be limited by current thinking. This should maybe focus on organisational structures (or not), behaviours and the ways in which employees communicate as well as the requirements of organisations. The let us consider how we get there.
We should not throw away what we already know. Neither should we accept an interpolated future just because there are aspects that we are unclear about. If there are no Leadership and Management models then let us invent them. If we do not like the language used then let us create new language. Even if we cannot do that, let us experiment and create a prototype of the future which others can borrow or add to.
The danger is that this will be seen as too high a price to pay for creating a brighter future. What price are you and your organisation prepared to pay?
If you want to make your organisation more creative, you might be thinking of hiring some staff to help you with this. You must hire the right people for creativity. If these people are likely to be creative then you must keep a tight rein on them. You must ensure that their job descriptions are comprehensive, right? Wrong!
If we hire people against a strict job description then we run a risk of several things happening:
1. We hire people who only do what it says in their job description
2. We are unable to be flexible about how we make use of these people
3. We will hire people in our own image (since we have created the job specification) and will fail to inject the free thinking that we require
So what can we do? First of all, think about what it is that you want these people to actually do or the areas in which you want them to work. If you were a bank and wanted new staff to help you work on making your branches a better place to be you might be thinking of reducing queues. Previously you might have looked at someone with project management or mathematical skills to work out how much time a cashier should spend with a customer.
If you wanted your branch staff to allocate more time to satisfying customers then customers will get stuck in queues. So why not make queues a better place to be? Hire someone who has worked at a theme park such as Disney World or Alton Towers. They have huge queues but people do not mind being in them because when they get to the front they are not disappointed by their experience.
When asking for applications, try asking for something different. Ask a potential manager to draw a picture of the sort of workplace that they will create as a result of the changes they will implement. Ask customer service staff what a satisfied customer looks like. Make interviews practical experiences if possible, potentially throwing people into completely unfamiliar situations.
By doing something different we can expose the hidden but creative qualities that we are actually looking for. If we always hire the same type of employee we will always be muttering “you can never get the staff these days”. By varying the staff we hire we can easily find out the type that best fit our business whilst bring fresh ideas and energy. If you are averse to the risk of hiring in this way you can always experiment a little by bringing in contract staff and then making them permanent or hiring staff similar to the ones that have helped drive your business forward.
Is transparency costing us dearly?
I was speaking to Dr. Paul Thomas (of BBC’s Ban The Boss programme) and something that he said stuck in my mind. He stated that ‘monitoring costs’. This is so obvious but I had never heard anybody say this before. Each time that we want to monitor something we have to define a process or assign someone to keep a lookout. In many cases, we might have to create a job for someone to oversee this. Thus, a seemingly simple act might cost say £15,000 to £20,000 per year minimum. Why do we need to do this at all?
All across the country there are groups of people who are demanding to know how much their local council is spending on paper clips and they are justifying it by saying that if the waste is eliminated our council tax will go down. Similar arguments are put forward for the Health Service and other public sector bodies. Why not simply say to the nosey parkers that the records are there for them to look at if they wish to fish in the filing cabinets and let our public sector workers do the work that they should be doing?
Isn’t it about time that we began to trust each other again? So what if my local council spends an extra £100 on paperclips as long as they deliver the service that they should? On the flip side, public sector employees and managers must understand that they are required to do their jobs as efficiently and effectively as possible. £100 on paperclips or £20,000 to monitor the stationery budget? It is a no brainer.
Recently I have spoken with many public sector managers, and budgets are being cut but the demands for accountability are increasing which are pushing up costs!! Since this is a zero sum game, something somewhere is suffering. It is, spending on actually delivering services is being reduced.
Let us trust one another a little more and reduce the bureaucracy and overheads associated with monitoring and accountability. Let us reduce the number of managers, and learn to manage our public sector in a different and more effective manner. We really could reduce costs and maintain the standard of our services for long as possible. Let us be a little less public!