Tuesday, March 14, 2006

Chemie.DE News-Center: Innovation and portfolio optimization strengthen BASF's Agricultural Products division

Here is a timely reminder about the results that innovation can bring. BASF have just announced their figures which are being driven by new and innovative products whilst highlighting their pipeline is also looking promising for years to come. This is an interesting point that we have observed at Imaginatik research. Innovation is a repeatable process that can deliver consistent value over many years. To achieve this you need to build a pipeline of good ideas, concepts etc. to continually achieve corporate goals.
MacDailyNews - Apple and Mac News - Welcome Home Apple Computer No. 1 on Fortune's 'Most Admired for Innovation 2006' list

What to see who's on the list (surveyed by the Hay Group from 8,645 executives and directors at those companies, as well as to analysts) for the most admired for innovation from the Global Fortune lists apart from Apple....Oh and you can also see who isn't or check to see where you came...

Monday, March 13, 2006

Xinhua - English China seeks growth impetus from technological innovation

We have all pretty much heard that innovation in China is coming. In the last few months, "the blueprint of national economic and social development for the 2006-2010 period has been submitted to the ongoing annual session of the National People's Congress (NPC). This will see China speed up building an innovation-oriented country in the coming years. For example, The Chinese government will invest 71.6 billion yuan (8.95 billion U.S. dollars) to encourage innovation this year, 11.526 billion yuan (1.44 billion U.S. dollars) more than that in 2005, up 19.2 percent." However, where is all this spending being targeted? On a relentless pursuit of economic wealth?

Interestingly, "in terms of the cost efficiency of resources, China trails behind 53 others on a list of 59 countries, according to a research report on sustainable development released by the Chinese Academy of Sciences at the end of February". It would seem that the first clear innovation challenge for China is perhaps a more environmental sustainable one.
CRN IBM PartnerWorld: Change Is In The Air IBM's New Mantra: 'Innovation That Matters'

Here's an interesting one. IBM are moving from "On Demand" to "Innovation that Matters" as the company mantra. From the article "On Demand" was defined as the technology foundation. Innovation is more directed to focusing on solutions that drive the business. I agree that innovation is very much about delivering value (to the company, consumer and those all important share-holders). I hope this is taken forward properly and is not just a marketing ploy to use the innovation word to attract customers? I'm sure it's not especially as it came from IBM’s vice president of technical strategy and innovation, Irving Wladawsky-Berger.

It also appears that IBM are opening their research labs to help all of its business partners, and not just their top clients, to solve those tricky problems. This I hope is a good thing by extending the innovation pipeline along the partner route (one of many types of innovation) by giving them access to experts they may not have been able to collaborate with in the past. "On Demand" is dead long-live "Innovation that Matters"...
futurethink's Innovation Tracker Taps 2006'S Best Innovators; Survey Finds Corporate Climate is Key to Successful Innovation:

This is something you have probably read a lot in innovation books and hear at conferences but to have the message again reinforces one of the key ingredient that innovation leaders cite as key for firms wishing to take innovation seriously in that they need to approach innovation as an overall business strategy with direct impact on financial stability and growth. Consequently, they have created an environment (climate) that not only invites but stresses calculated risk taking as standard procedure.

The article goes onto highlight that just focusing on the breakthrough ideas do not make a company innovative. I would agree with this, it makes sense to have a balanced portfolio between the different types of innovation, whether they are breakthrough or incremental in nature, let alone which one or combination of the 20 or more types of innovation we have identified at Imaginatik research.

The most effective innovators were companies that engendered a risk-taking climate and continually worked at it. "Top innovative companies respect the demands of a constantly changing marketplace. What product is selling today can be easily eclipsed by technology and competition come tomorrow (remember the the Sony Walkman?). They understand that innovation is a long term business practice, only as effective as the environment that sustains it."

One respondent put it quite succinctly in reference to Apple "they are on an 'innovation bullet train'. Innovation is integrated into everything they do. Apple has created an environment that expects and rewards risk taking. They depend on sustainable and rapid innovation but to lead in the marketplace". My take-aways from this are sustainable, rapid, reward innovation that is integrated into everything they do. It may seem obvious to some but innovation is a repeatable and sustainable process across an entire organization. Drive it positively, rapidly enough, with reward and it can become exciting and self-fulfilling not only for the individual but the entire company.

The remainder of the article goes on to define what innovation is and that creativity alone doesn't mean you will be innovative. I can't grumble with that. Innovation needs to be focused on achieving value, not only for the company but the consumer. The definition we have at Imaginatik Research states that "innovation is a process of handling new things that deliver value". It is multidimensional and repeatable. This is critical. Whilst innovation produces things, people may think innovatively, it's actually much wider than that and it's about the process delivering time-and-time again across an entire organization innovating in all the many different dimensions and knowing how to manage each of them accordingly as they can require different approaches.
Components in Electronics - CIE -British Public expects UK innovation to benefit society.

This survey from QinetiQ, conducted by MORI, highlights that the types of technological innovation that the British public expect will have the most positive impact upon, including slow-releasing cancer drugs (47%), renewable energy sources (38%), and new drugs to treat AIDS (37%). It also points out those innovations can have had a negative effect, with mobile phones and text messaging combining to be 25%. It would be interesting to understand if these are social or health concerns? I would imagine it's both.

"Looking further ahead, the issues most people want addressed through innovation in the next 20 years include disease (54%), pollution (42%), famine (37%), terrorism (37%), climate change (28%), road congestion (22%), recycling and waste (22%)."

Sounds like innovation has some very rewarding and adventurous goals to achieve in the coming years. However, whilst technology will play a large part in bringing these to society, we mustn't forget the role that people (who have the imagination to take us there) and government (who can guide and co-ordinate effort) amongst others can bring in concert to these issues. Technology alone will not solve them. This is highlighted in the article by Stephen Lake, QinetiQ's Director of New Business, although with a slightly different intent and take to mine where he highlights that entrepreneurial and political will is present but focused government funding to take it forward is lacking. This is an interesting comment from the partly owned government defense organization (23.7%), who recently released more shares on the market thus reducing the central governments ownership of it.
Components in Electronics - CIE It's not often I come across a short but interesting article that highlights my own belief about innovation but today I read such an article.

In a recent study, conducted by the organizers of MDT 06, 46% of UK's leading medical device manufacturers report that they are using innovation rather than price to take on their competitors.

I recently has the pleasure of meeting one of these companies in the UK and got hear first-hand how they innovate their medical devices by spending time with the customer, and no not the people in procurement but the medical technicians, doctors and patients who use their devices. The point that really impressed me was that they took a representative from every aspect of their organization (many eyes see different things) to observe what was happening, along with a video camera. The insight that provided and the connection from the engineer to the patient became a personal experience that really drove them to be innovative. For example, I saw a heart resuscitator being used in an ambulance that had been originally designed for use in a hospital. As a consequence, a vital cable to charge the device was practically impossible to plug in when the ambulance was in motion, owing to its position in the ambulance. This could potentially lead to the device not being charged and ready for action. As soon as the engineer saw this device being used in a different environment the improvement to the device was made, amongst many others.

Surely, and particularly in the medical device industry, this behavior towards the consumer should be encouraged. It can't be all about cost? Well not in the UK medical device industry anyway I'm please to highlight...

Thursday, March 09, 2006

CEOs find innovation hard to achieve: survey??Reuters.com IBM have just published an interesting survey that states

"nearly two-thirds of the world's top chief executives said that due to pressures from market and competitive forces, they plan to radically alter their companies over the next two years, and corporate leaders are increasingly looking to innovation in their business models to drive growth".

What interested me further about this article was not the proportion of CEOs that are turning to innovation but the follow-up statement from Ginni Rometty from IBM Enterprise Business Services "that it's no longer about product innovation....it's about understanding how to innovate a business model, or an operational process..." This reminds me of an earlier post where I mentioned the how Imaginatik Research has identified over 20 types of innovation (this paper is being prepared a I write). There are so many different areas you can focus on. Ignore them at your peril, one of your competitors wont.

In addition, these findings from IBM identified that only 14% of CEOs thought internal R&D were good sources of new ideas. I'm not surprised by this. Companies we work with at Imaginatik utilize idea management across their entire organizations, to great effect and of course across the many different types of innovation.

And the biggest obstacle these CEO's identified in taking innovation forward? Internal problems in their own organization rather than external ones. And the top one they polled? An unsupportive culture and climate. The main reason they infer is that they are poor at managing change, some 80% of CEOs said they had been very unsuccessful in doing this in the past. I would question what are the common themes here? Was change used to reduce head-count? Were employees engaged properly or at all in any of these change programmes? So change may now be viewed as a bad thing for employees instead of an energizing thing? Innovation is about adding value, CEOs are waking-up to this but their are tough challenges ahead but the good news is there are people who can help.
How Whirlpool Defines Innovation - I have just finished reading this facinating and insightful view on how Whirlpool do Innovation. This article highlights so many of the important things a company should do to innovate:

Soliciting ideas from everywhere and everyone (some 61,000-employees in total).
Estabishing a seed fund for innovation
Having a team of seasoned and trained innovators.
Setting an innovation goal and acheiving it!
Building an innovation pipeline and knowing how big it is/needs to be/what's in it etc...
Defining innovation metrics/innovation criteria for projects
Keeping senior management and employees engaged and rewarded

Still the process is always being improved, as they highlighted , the issue of killing ideas that aren't going to work early enough is something they struggle with..

And the rewards? They have netted $422 m on sales of $14.3 billion, share prices at an all time high. Excited and engaged employees. This is a must read.