Gary Hamel's Idea Hatchery Ah, you gotta love journalists and their flair for trying to make old hat seem new. This time, it's BusinessWeek and well known author and consultant Gary Hamel, who has decided to start a "Management Innovation Lab" at the London Business School where he resides part time. Sounds cool doesn't it? Unfortunately the "lab" is a thinly masked way for Gary to get some publicity for his latest consulting offering - a two day workshop which essentially is there to get business leaders from Ground Zero, to the first steps towards creating a cohesive innovation strategy for that firm (Essentially the "Framing" stage of the Innovation Pipeline).

Not that I blame him for trying to make "a buck" as they say here in the US. In fact, he does actually make an interesting distinction for what he calls "A hierarchy of innovation":

'Economic progress is driven by three forms of innovation: institutional innovation, which includes the legal and institutional framework for business; technological innovation, which creates the possibility of new products, services, and production methods; and management innovation, which changes the way organizations are structured and administered. Management innovation has produced the most profound shifts [in business productivity].'

The article's not worth reading - but I'll be keenly watching to see if he writes more on the innovation hierarchy in the future.

Innovation Most Critical Factor to Success, Say U.S. Business Leaders; Cisco Innovation 2005 Study Although I have no idea as to why a company like Cisco is actually conducting this kind of study on Innovation (must be a marketing angle in there somewhere...I'm such a skeptic!), there were a couple of interesting stats coming out of this - for example:

"-- Innovation is clearly the most important factor in business success, according to business and technology leaders. Fifty-three percent cited it as having the biggest impact on competitiveness, while increasing employee education and skill levels was favored by 26 percent. Reducing wages (14 percent) and cutting corporate taxes (7 percent) were not seen as strong drivers of competitiveness.

-- Given the focus on innovation, it is not surprising that many business and technology leaders are seeking improvements in the education system. In particular, a solid majority cited a need for greater creative thinking and problem solving skills (58 percent) from students. A third of those polled called for stricter student requirements to accomplish this goal. Twenty-one percent proposed improved communications among teachers, parents and students while the same amount advocated broader access to global subject matter."

Interesting - not really worth reading in full though.

HBS Working Knowledge: Operations: Six Steps to Operational Innovation Seems like Michael Hammer has caught up to his old buddy James Champy (the two of them were behind the business process re-engineering craze of the mid-90s) in jumping on the innovation bandwagon - hey, better late than never!

In this article in HBS' Management Update, he sets out 6 key factors that make the difference between success and failure in the innovation:

1) Process focus - focusing your innovation efforts on a very small area, means that you are also limiting the scope of the benefits you'll get from innovation.

2) Process owners - Assign a process owner (a senior executive empowered to make the changes needed) to own the process for the whole enterprise.

3) Full-time design team - Use a full-time team to conduct the necessary process redesign rather than asking team members to do this part-time. Then invest in them - their education, methodology, etc.

4) Managerial Engagement - Actively engage the senior management team in the implementation process to make sure the projects don't languish in limbo and to ensure that departmental heads are released from their narrow focus to instead consider the end-to-end implications.

5) Building Buy-In - Engage participants throughout the redesign process so as to engage and enable buy-in into the process as it is developed, and to reduce the stress of future changes.

6) Bias for Action - Develop a solution that provides most but not all desired capabilities, get into the field quickly, and then enhance it over time. This approach allows concepts to be tested, builds momentum and credibility, and delivers early benefits that silence critics and sway doubters.

Overall an interesting short piece (he uses Scheider as a case study in this) that has some good, if slightly re-hashed, tips for change management and process design.

Champy: Get proactive about innovation It's always nice to see other people picking up on concepts you've been going on about for ages - and this article by James Champy is just that. In it he encourages companies to innovate - but not just on products. He then lists 3 other types of innovation - Business Model innovation, Process Innovation, and Experience Innovation. Short and sweet, this article is fine for beginners looking to start exploring beyond the narrow boundaries of product innovation - but falls well short of a comprehensive list. Imaginatik Research has identified more than 20 different innovation types for example - if you're interested in a presentation containing those - just send a request to research@imaginatik.com

NPR : Gates: U.S. Losing Advantage in Innovation Race This NPR interview with Bill Gates had Gates talk (amongst other issues) about an interesting dilemma his company has. He believes that the only time Microsoft sell a version of its operating system is when there have been sufficient innovations in the current version to justify them upgrading to the next version. As such, he believes that what Microsoft are really selling, in what is typically seen as a stolid monopoly market, is breakthrough innovations.

That comment got me thinking - especially with innovateEurope 2006 this year focusing on "Breakthrough and Beyond" (btw - 3M's Art Fry is a keynote speaker there in what I believe is his first ever appeaance in Europe, and certainly his first talk on innovation for many years!). In a monopoly market such as Gates', is a breakthrough innovation defined by a point of view? At what point do the cumulative incremental, or minor innovations add up to make a "breakthrough innovation" in his point of view? Then there's also the issue that you rarely purchase this "breakthrough" in isolation. How many times have you upgraded your operating system without upgrading any other component of your technology base? Personally, I find myself holding onto my version of Windows, until the cumulative increases in both Windows technology AND laptop technology have increased to the point at which I justify the cost of a new machine - so can a bundle of innovative products that go hand in hand constitute a single "breakthrough innovation"?

IndustryWeek : Pipeline = Lifeline IndustryWeek's John Teresko writes an interesting piece commenting on research that predicts that 70% of today's manufactured goods will be obsolete in six years. In addition, companies with strong enabling R&D strategies (read: those that still conduct significant R&D in-house rather than rely on outside sources to sell them innovative products) are 73% more profitable.

Compare those results then with a Deloitte study of 650 companies in North America and Europe that revealed that while manufacturers cite launching new products and services as the No. 1 driver of revenue growth, they also view supporting product innovation as one of the least important priorities.

Bizaare!

Teresko does also look at the trend toward "outsourcing" of innovation to developing and re-developing countries such as India and China - but in a twist that he neglects to notice - the companies he talks about are not conducting this outsourcing in the classic way being popularized in the media at the moment. They are not, in other words, relying on outside companies in those coutries to provide them with innovative products - but rather building R&D centers in those countries to take advantage of the unique human resource quality of the country's population (namely high education, low wages) without giving up the control over the IP and maintaining the competitive advantage of in-house R&D.

The advantages of capturing the brainpower from geographically and culturally dispersed intelligent people is not new though - Idea Management and Knowledge Management as disciplines have both looked into the role and value of diversity in the knowledge pool.

This is quite a heavy article that covers a wide range of topics and is certainly a great read!