Spotting danger to drive innovation

Last Friday, I had the privilege of visiting a medium-sized, family run company in The Netherlands. I am sure there are lots of medium sized, family run companies in that country, so why visit this one, especially as they “only” make concrete?

The reason was simple. The company had been identified in some benchmarking research we carried out to have an excellent track record in the murky and challenging world of Front End Innovation!

How come?

Simple really (aren’t all the best solutions)

• They recognised their market was stagnating, orders were drying up and they were in a price war as their product became more and more commoditised – a classic red ocean scenario
• The senior management recognised the problem and wanted to find a way of ensuring a 5th generation of the family would inherit the business – there was a problem and they created a sense of urgency
• The business leaders created a cross-functional,  dedicated team of 10 people and asked them to work on this innovation project for up to three days a week for 6 months. They ensured the managers of those people had support to do “the day job” when their teams were absent
• They identified a simple, repeatable and sustainable process to generate new ideas and business cases for them. This is called The FORTH Innovation Method
• The senior management communicated and communicated again why they were doing this and why those not involved in the innovation project were being asked to work a little harder to cover for their colleagues

And what came from all this effort?

• 964 ideas
• 15 business cases
• 4 ideas were taken forward to development
• 1 of those ideas is now an innovation and is delivering cash into the business
• the other three are on track to launch over the next three years

What now?

• There are now 60 people in the company involved in the innovation projects
• The marketing manager is now the innovation manager and is transferring those innovation skills from the FORTH methodology to the rest of the business
• The company is expanding and seeking to recruit 25 more people to work on the new business cases – how much more can we get to market?

And finally, the company now has a clear idea creation process, using FORTH and more importantly, a route ahead for that 5th generation to follow and the company is growing and not just struggling to survive.

Do you want to know more about a sustainable and robust business case creation solution? Watch this short webinar on the subject

https://attendee.gotowebinar.com/register/2408649927704424204

 

“Our commercial team have appointed a design agency to come up with ideas for us”

This is a direct quote from someone I have been communicating with over the past few months about Front End Innovation.

Now, I have nothing against design agencies, when I worked at Unilever we used them all the time, and for precisely the same deliverable this company are after. The issue I have with this statement has a lot to do with value for money, and whether a few people in a design agency and a few people in the customer organisation can come up with enough ideas of true value and opportunity for this global consumer health company.

Where do the best ideas come from? How do we make sure these ideas are on strategy for where our business is going in the future? How do we use idea generation to create a culture of “all working together”, rather than “have you seen the latest bright idea from marketing/development/senior management (delete as applicable), do they know anything?”

We have always seen the best ideas generally come from the people within the organisation, as they understand the company, and they also know how to make the ideas stick in that organisation. This is because we are all creative, in some form, and we always want to please, but to get the most out of your people you need some way of telling them what areas you want ideas from and how they can submit and talk about those ideas.

The generally accepted way of achieving this is idea management – you have a need, and you share that need with your network of employees, or even people from outside your organisation, using some sort of browser based application. People can create ideas, build on ideas and even vote on ideas, which is all great stuff, as they feel involved in the future direction of the organisation, rather than having it imposed upon them.

As a small health warning, make sure that you have enough people to assess the ideas as they come through, or you run the real risk of disenfranchising your employees, as they will feel you don’t care, if you don’t feed back to them on their idea. Also consider, how you recognise the efforts of the most prolific idea contributors in your organisation. This is not all about money, but can be non-monetary awards too, as your actions in this area will drive how people feel about the company, as much as being asked to participate in the first place.

The best example of this comes from Nissan. They encourage all their employees to come up with ideas and improvements in processes. One person found a clip used on an engine was not really necessary and could be dispensed with. When this was investigated further, the company identified this clip was used on several different engines and removing it gave the company a saving of several million dollars.

How did they recognise that employee?

They knew that giving him a percentage of the net saving would drive the wrong behaviour and start to negatively affect the strong team culture they had, so they rewarded his team by giving them a microwave oven so they could make hot food during their shifts, which in the North East of England in winter is a huge benefit!

If you would like to see how we deliver idea management at Pure Insight, click HERE to learn more!