Creativity Invention and Innovation
A guide to building your business future
By Alan Williams
The Need for Innovation in Business
Chapter 1: What are creativity, invention and innovation?
- Innovation is closely associated with and flows out of creativity
- In practice, in most instances innovation can result from discovery or invention
- Most innovations occur in organizations of some kind
- Innovation works as a value adding process leading to commercialisation of
ideas and inventions and ultimately to a better business
- It is a common business notion that businesses need to innovate or they will not
be competitive
- High-tech companies are more likely to have a pool of creative talent than other
industries because of the changing nature of technology
- Creativity is the essential source of all invention and innovation and is derived
from imaginative thought rather than from rational thought
- Creativity creates change
- Creativity is a process:
= Awareness and interest: the recognition of a problem or situation which
engenders curiosity and compelling interest to do something about it
= Preparation and understanding: early analysis, diagnosis and planning which
increases understanding of how the task might be approached and the situation
remedied
= Absorption and incubation: working out the problem by seeking out possible
solutions
= Inspiration and illumination
= Testing and verification
= Refinement and adjustment
= Acceptance and commitment: the creation in whatever form it exists must be
sold to others as novel, attractive, workable and cost effective
= Implementation: the solution must be sold or implemented successfully
- Success often requires relentless attention to making effective changes and
improvements
- Creativity in business is needed to counter the effects of aging, complacency,
obsolescence etc (new ideas become old ideas)
- Managerial creativity is a vital factor contributing to business survival and
success – problem solving and problem avoidance
- Seemingly nonsensical ideas can spawn creative solutions to complicated
problems
- Sharing of ideas can lead to creative solutions
- Discovery can occur because of planned action to achieve a result, an accident
or other methods
- Invention is making something new which will do something new or better
- Innovation is the application of an invention or an idea – creativity is the thought
process of the idea or invention, innovation is its implementation
- Innovation can also be described as the generation, acceptance and
implementation of new ideas, processes, products or services “techno-stress” is
a condition that affects those who can’t cope with the rapidly changing world.
- Change needs to be managed – hence, an innovation needs to be carefully
considered before implementing it
- Change is often resisted some common reasons are:
= Uncertainty
= Threatened self interest
= Wrong perception of change
= Personal disruption to routine and self confidence
- Every effort must be made to reduce the negative effects of change on people
- Survival, rather than growth or change, must be given top priority
- Small firms generally have difficulty in deciding whether or not they need to
grow and how fast they should grow
- Unless well managed, growth can seriously undermine resources
- It can be fatal to neglect a business opportunity if you are afraid of the growth of
your business or the change in the business.
- All innovation has a cost and that cost must be weighed against the benefits
- Although there are no businesses that can “shrink themselves to success”,
there are those who have attempted growth and gone bust
Chapter 2: The need for creativity and innovation
- Innovation in a business is not an option, it is an imperative for survival
- John D Rockerfeller admonished his employees if they stuck to the old ways
and didn’t look towards new ways and innovative methods of doing business
- Almost all innovations in the workplace is undertaken for a particular purpose
and not for its own sake
- A business can survive or fail on whether or not it is conducive to change and
embraces change
- Purposeful innovation destroys and makes obsolete the old
ways/methods/products/services
- Innovation must have a purpose
- Innovation allows you to:
= Create a new business: the business had to be differentiated from all of the
others by a unique business idea or fulfils existing needs better
= Achieve total responsiveness to customer wants: pay close attention to what
the target market wants – adapt to the change in customer needs and wants
(become obsessed with dekivering quality products and services, too)
= Offset customer attrition: it is inevitable that you will lose customers over time
so it is vital that you replenish the customer base with new customers (a
business can lose 50% of its customers in 3-5 years)
= Enhance value adding: make better use of your productive resources to add
value to the business “Something cannot become a resource until a use is found
for it” – Peter Drucker
= Offset product and process obsolescence: every existing product and service
will inevitably become increasingly irrelevant and thus obsolete
= Renew the product life cycle
= Create new technology life cycles. Limits in the success of a single product or
service without improvements or changes prompt businesses to innovate to
overcome those limits and progress (once Robert Bannister changed his training
techniques, he was able to break the 4 minute mile and progress further)
= Once a technology has reached its peak, the only solution to stay in business is
to change technology
= Help solve problems – complex problems that cannot be solved by traditional,
routine or common methods must be solved by using an innovative solution
= Problem prevention
= Build a sustainable and competitive advantage – innovation is vital for business
success – do something that your competitors can’t or something they haven’t
heard of
- Innovation needs to be implemented carefully to fit in with the direction of the
business and the product and with the protection of resources in mind when
resources are very limited
- Time is the biggest cost in innovation
- Can the firm afford “not” to make the change?
Chapter 3: The Role of the Entrepreneur
- The motivation and skills of entrepreneurs need to be conducive to change and
innovation which give the business vitality and relevance
- Attributes of creative individuals:
= Imaginative
= Intense
= Original
= Intelligent (but not particularly brilliant)
= Non-conformist
= Self reliant
= Casual
= Impulsive
= Emotionally unstable
= Assertive and highly observant
= Intolerant of routine
= Socially inept
= Inventive, resourceful, shrewd etc
- Highly creative people also tend to have:
= Perseverance
= A high level of curiosity
= A low fear of failure
= Strong need to achieve
= Broad interests
= A high energy level
- Entrepreneurs must introduce into the business whatever changes are
necessary to meet the challenges of a changing and turbulent world
- Leaders must be innovative and, thus, entrepreneurial
- Entrepreneurial leaders take innovative ideas and bring them to the market
place
Chapter 4: Types of Innovation
Inventions
= Invention is the essential first stage of innovation
= One of the most visible forms of creativity at work
- New and Improved Products
= Product innovation is the most visible form of innovation
= The sources of satisfactions underlying the reason people buy them are varied
(eg: Price, service, quality perceptions)
= R&D is an essential part of the innovation process
= Often the products developed by smaller firms are bought by larger firms
because of their ability to realise the product’s true potential through their
massive resource base
= Product improvement keeps manufacturers on edge because they have to
keep up with the competition, gain or sustain a competitive advantage
= Some innovators improve on existing products to the point where consumers
believe that they are new products
- New and Improved Services
= Services are intangible: quality is often harder to measure
= Service performance (delivery) and consumption are inseparable: the
consumer is almost always present while the service is being performed
= Services are perishable: this problem is overcome by using pricing schemes
(eg: cheaper tickets for matinee shows or off-peak rates etc)
= Services are labour intensive: it costs more to employ a person than a machine
= Services are more heterogeneous: because most services are different, it
stands to reason that each service will differ for each consumer
= Services are performed rather than produced: some companies, eg: pizza
delivery, sell both the tangible (pizza) and the intangible (delivery) and are judged
on both
= Business has to improve in both service quality and consistency as well as
improving productivity and efficiency
= Innovation in service must be directed towards: recruitment, job skill,
interpersonal relations, customer service, attitude development, time
management etc
- New and Improved work operations, processes and methods
= Process innovation is important for business
= All work operations must add value
= Unless operations are well planned and maintained, a business can self
destruct
= Quality control is vital for successful business
= A Boeing 767 has six million parts, Boeing holds 25 million spare parts at any
one given time, Boeing manufactures the equivalent of 2 Jumbos a week in its 26
hectare building which houses 9000 employees – if one process fails, the flow of
work can come to a grinding halt
= Waste and errors must be minimised, costs controlled, processes must be coordinated etc
= Innovation can be applied to improving all parts and components of the end
product
- New and improved machine design, engineering and layout
= This applies especially to manufacturing
= Plant and office layout can either contribute to an increase or decrease in
efficiency
- New Markets and Marketing Methods
= Some focus on improving their marketing and others focus on creating new
markets or expanding into new markets (market development)
= Market penetration can result from a careful marketing strategy – ie continually
generating new demand for their products
= Diversification can attract new buyers
= Innovation in marketing should not be ignored when redefining the company’s
goals
- Pattern Multiplying
= Devise new ways to do business
= Create a distinctive way to do business, such as franchising McDonalds
burgers which was innovative in its day
- Synthesis
= Combining existing products, services or process to create a new idea, product
or service (eg: adding convenience stores, motels, restaurants etc to petrol
stations is an example of combining existing services to create a new one)
- Replication
= Take someone’s good idea and apply it to a new situation
Chapter 5:Innovation Myths
- Myth 1: Innovation is easy
= Innovation involves coming up with exciting ideas, the fun of discovery and
creativity and enjoying the rewards of a successful commercialisation of the new
product or implementation of a new process
= Making progress and solving frustrating problems can be exhilarating. In many
innovation projects there can be long periods in which little worthwhile seems to
be happening, and the daily grind of thinking, discussing, testing and running
meetings
- Myth 2: Innovation can be planned as a logical step by step activity
= It is virtually impossible to plan an innovation project in fine detail
= You are moving through unfamiliar territory
= Employees must be accountable for their time and keep in mind that a
business is not a social club
= Broad guidelines and objectives need to be put into place
- Myth 3: Innovation depends totally on new technology
= Innovation can be the combination of existing technologies
= Innovation can be the restructuring of a system or process
- Myth 4: Innovation involves making big changes
= Some innovations are based on significant technological or scientific
breakthroughs, but most innovations come from small changes
= Small improvements to work methods can cut costs
= Small changes are less risky
- Myth 5: Creativity and innovation depend on dreamers
= All creativity begins as an intellectual activity but having a vision is not what
creativity is all about – you have to bring it to fruition
= You need focus, leadership and resources to transform an idea into a reality
- Myth 6: Most Innovation has an unacceptably long lead time
= Some forms of innovation take a long time, but most innovations are the
outcome of small projects to improve existing projects
= If the business has achieved an innovative culture, it will take less time to
implement innovations within the business
- Myth 7: Innovation is too risky for small firms
= Refusing to change is far riskier than changing
= Making many small innovations, rather than large innovations, reduces the
risks involved
- Myth 8: No business can have too much innovation
= Innovation must have a defined and predetermined purpose – innovation for
innovations sake is worthless and can be detrimental
= Innovations must result from strategic decisions to make specific changes
- Myth 9: Innovation is really only appropriate for manufacturers
= Innovation stems from knowledge so a change in a company’s knowledge, be it
a manufacture, service or retail business can be considered an innovation
- Myth 10: Innovation really only needs money
= Sometimes there is a financial cost involved in innovation, but there are some
resources needed for innovation that money can’t buy – praise for workers, nonfinancial incentives etc
Sources of Innovation Ideas
Chapter 6
How and Where to Find Creative Ideas
- Sometimes it just happens! – flash of inspiration
-60% of all new ideas and innovations come out of small to medium business’
R&D departments
- Larger businesses tend to take up these ideas commercially because the
smaller firms don’t have the expertise or resources to develop the ideas into
commercially viable products/services
- Most innovations come from the following sources:
- Curious and Creative minds
= All inventions and ideas are created from an idea in someone’s mind
= Personal interaction stimulates creativity
- Awareness of a Problem or Fault
= A large proportion of innovations stem from the realisation that things aren’t
working the way they should and need to be fixed
= A problem is an invitation to innovate
= “Fix it even if it aint broke” to prevent problems
- Awareness of a Process Need
= Necessity is the mother of all invention
= Everything that needs doing can be done better eg: In 1912 the Bell telephone
company projected the national telephone usage figures to 1925. They found that
if the popularity of the telephone continued at the same rate they would need to
employ every woman in the US between the ages of 17 and 60 to operate
telephone switchboards to cope with demand. They invented the automatic
switchboard.
- Awareness of an Opportunity
= A chance to take action which leads to more sales or improving your
competitive position
= Creative individuals see opportunities where others only see problems
= Opportunity identification is converting a dream into a clear vision of what can
and will be
= An opportunity is a course of action that is possible and obviously worth
pursuing
- Hobbies
= Either a problem or opportunity is encountered while engaged in leisure activity
- Finding an Inventor Wanting to Sell or Licence
= Sometimes inventors will look for buyers for their inventions and sometimes
businesses have particular needs for investing in those ideas (eg: it could lead to
a competitive advantage)
- New Knowledge, New Technologies
= New knowledge often leads to new technologies
= New knowledge often leads to new ways of doing things
= Peter Drucker said in 1985 that on average new knowledge needs a lead time
of 25 years to be converted to new technologies (in 100AD Hero, an Egyptian
physicist and inventor built a small steam engine but the idea was forgotten for
1500 years until Robert Boyle discovered that a small explosion of gunpowder
could drive a piston – which led to the invention of the steam engine)
= The more complicated the knowledge, the longer the innovation process
= But new products are hitting the markets with ever increasing speed
- Awareness of Competitor Activity
= Each major competitor must be seen as “the enemy”
= Knowing what your competitors are doing can breed innovation
- Talking With Customers
= Customers are a fertile source of ideas
= Few know more about what improvements need to be made or features need
to be included to make the product better
- Talking With Suppliers and Manufacturers
= Talking with suppliers and manufacturers can lead to new ideas on processes,
machinery and technology
- Talking With Employees
= Develop a culture of innovation to extract ideas from employees
- Monitoring Industry and Market Changes
= Industry-wide changes may: indicate a need to improve, provide opportunities
to innovate or suggest guidelines as to what type of innovation will be most
fruitful
= Nowadays, change is frequent and fast moving
= Often firms outside the industry can perceive an opportunity before those within
the industry
- Monitoring Demographic Patterns
= Understanding future trends can give businesses the advantage to foresee
opportunities and act on them
= Whole industries have emerged out of changing demographic patterns eg: the
demand for investment and superannuation has increased dramatically over the
past decade because of the baby-boomers reaching retirement age
- Other Trends
= Foretelling trends is a big business. Here are a few predictions from
“futurologists” and “trend-trackers”
- Cashing Out (Cocooning)
- This is the stay at home syndrome / the fortress mentality
- Purchasing online, work from home etc
- Fantasy Adventuring
- Virtual or simulated danger (eg: indoor rock climbing, scuba aquariums etc)
- Ego-nomics and indulgences
- Gourmet foods at home
- Computerised home weather systems
- Craving for personalised services and attention
- Down-aging
- Fun camps for adults
- Return to childhood values and living in later years
- Vigilante Consumerism
- Protests against shabby quality
- Emphasis on business ethics
- Staying Alive
- Search for longer happier healthier life
- Focus on healthcare, travel, entertainment
- 99 Lives
- The desire to take on multiple roles in life (eg: being a mother and a career
woman)
- The Unexpected
= Don’t ignore the fact that an unexpected event can throw an opportunity in your
face
= Unexpected failures can prompt you to rethink the product and re-invent it to
become a success (the result of the complete failure of the = Ford Edsel was the
Ford Thunderbird and Mustang which were the most successful cars in history
- Active Involvement in an Investor’s Association
= Be careful about discussing new inventions with others
= Join Inventor’s guilds etc to pool creative thought
Chapter 7: How To Improve Your Success as an Inventor
- Only a small fraction of inventions ever become successful
- An invention may be a technical success but a commercial failure
- Notes for successful inventions
= Identify the problem
~ Simple observation watching how things work
~ How can I make it work better?
~ Reward people who come up with creative and workable ideas
= Focus on Meeting an Existing Need
~ The invention has to fulfil a market-wide need, not just a personal need
= Don’t get ahead of your time
~ Timing is often out of the inventors’ hands, but the invention must be practical
for today and not just a vision for the future when the technology to produce the
invention my be available
= Experience is Never Wasted
~ Problems and delays are inevitable and you can only learn from mistakes
= Check For Originality
~ You can’t invent something that already exists
= Build a working model
~ Inventions must be tested thoroughly!
~ It might look great on paper but could be lousy in practice
= Don’t Attack Established Interests
~ If you market an invention yourself you might be up against much stronger and
better resourced companies
~ Don’t become a dead hero
= Learn the Patent System and Use It
~ Keep the idea a closely guarded secret unless you have a confidentiality
agreement in place
~ Patents provide legal recognition of ownership
= Find a Product Champion and Get Backup Support
~ You may find that you have gone as far as you can go with your invention and
to take it to the next level you may need added support or expertise
= Sell Yourself As Well As the Invention
~ All claims made about the product must be honest, factual and not overly
exaggerated
~ Personal integrity is an excellent selling tool
= Practice Being Creative
~ The starting point is to become curious as to how things work, why they are
that way and how they could be improved
= Persevere
~ Inventing something can be easier than selling it!
~ Edison tried 1300 times until he came up with a light bulb that worked!
~ Genius is 1% inspiration and 99% perspiration
Chapter 8: Encouraging Innovation in Your Business
- Realise that innovation requires work
= Innovation has to be considered as a necessary part of the company’s day to
day activities and treated as such
= Innovation requires thought, planning and resources ie: effort
- Overcome the “Urgency” Addiction
= Innovation is often put in the too hard basket and regarded as something that
“we will get around to when we have time”
= There is always something more urgent to attend to than innovation
= Managers often tend to view innovation as a change-creation process and thus
avoid it because change is time consuming and difficult
- Work at Reducing Change Resistance
= Change is required for businesses to remain vigorous, relevant and viable
= Change can be considered as “creative destruction” – the new is created and
the old is destroyed
= Most people find imposed change uncomfortable and it is important to manage
change properly to reduce the number and intensity of resistance to change
= Four actions to take to avoid change resistance:
~ Identify and publicize the need for change
^ This is a “top-down” responsibility
^ The change must be made known to the employees
~ Plan the implementation of the change
^ Thoughtful planning and recognition of employee’s fears
^ Involve employees in managing the change
~ Implement the changes
^ Take the necessary steps to change and thus implement the change as
planned
~ Monitor the effects
^ Monitor and evaluate all reactions to the change to be able to respond and
quash the negative effects
- Give the change 100% top-down support
= The change must be given top priority at the senior level
= Listen to the ideas of subordinates and implement them if they are worthy
= If top level management preach ultra-conservatism then the corporate culture
will end up becoming change resistant
= Sometimes an innovative culture at the top will be torpedoed by those lower
down who are afraid that their careers could be on the line if their subordinates
come up with too many good ideas
= Just because a firm is change resistant it doesn’t mean that the world around it
has stopped changing
= Employees should have the opportunity to put aside their workload from time to
time and have the freedom to discuss and work on changes and improvements
= Senior management must lead by example
- Expect evolution rather than revolution
= Most innovations tend to be improvements on existing
products/services/systems rather than brand new inventions
= Many incremental improvements can lead to totally new products
= Encouraging small improvements in a company can have a cumulative effect
over time – making small changes is less risky and easier to implement than
making one large change
= Small improvements over time may also have little or no financial costs and
you don’t have to “bet the farm” on the one invention or innovation
- Focus your innovation: know your strengths and weaknesses
= Analyse your strengths, weaknesses, opportunities and threats SWOT
= There needs to be a focus on what needs to be done rather than just instituting
change for changes sake
- Avoid excessive planning but set innovation goals
= Creativity cannot be enforced
= Innovation is an inherently messy and unpredictable business
= Don’t plan the innovation process too closely to avoid becoming bogged down
and limited
= Detailed planning can stifle creativity and undermine the whole process of
innovation
= Newness implies “unexpected” how can unexpected be planned?
- Look for problems and creative ideas that will solve them
= Many bright ideas stem from the awareness of a problem
= Obsessing about problems cannot be helpful
= There is the scientific method to solving problems – step by step and there is
also: the hunch, judgement, gut feeling, intuition, guestimates, imagination
- Look for opportunities and creative ways to exploit them
= An opportunity is a favourable opening or a chance to take action to improve
your firm’s competitive position
= Change can be the cause of many problems, but it is also the source of most
opportunities
= Most opportunities require an innovative process to bring them to commercial
success
- Expect, recognise and reward initiative
= Employees should be provided with the necessary motivation to exercise their
creative potential
- Have the courage and the sense not to penalise mistakes
= Mistakes are inevitable when experimenting with changes and innovations
= Mistakes can result in extra costs, depletion of time and resources
= The results of many mistakes can be very profitable
- Don’t demand results by yesterday
= Innovative work will incur delays
= Creativity cannot be hurried
= Being involved in a creative process is not a license to waste time or money but
a guaranteed result in a guaranteed timeframe is not realistic
- Chase ideas from customers and suppliers
= It is shortsighted to believe that only those within the business can come up
with worthwhile changes
= Talk over issues with customers and they may come up with creative solutions
that you may never have considered – it also helps to build up a good
relationship with the customer
= Some firms formally solicit information and creative solution from their
customers
= Suppliers are also an excellent source of ideas as they often know the products
they deal with and their industry very well
- Watch Your Competitor’s Moves
= Monitoring what your major competitors are doing is almost guaranteed to give
you some worthwhile ideas about how to improve your sales and marketing
performance
= There may be firms in the same industry that are not in direct competition with
you with whom you can share information and ideas
= Utilisation of commercial espionage may be appropriate in some instances (eg:
sending a friend into a competitor’s shop to have a look around) – other times it
may be illegal
- Free Up Needed Resources
= If people are too busy to be bothered with innovation, they won’t innovate!
= Most innovations have a cost and it will be impossible to innovate in those
circumstances without the adequate allocation of resources
= Resources: money, time, people and know-how
- Use and Support Product Champions
= Innovation is a step-by-step process which may take months
= Failure rate of innovations is high – 95% of new ideas or products never make
it to the market place
= When someone is given the privilege or the responsibility of leading and
coordinating the development of the idea or product, chances for success
improve dramatically
= Product champions must have the ability, motivation and authority to co-opt
others, negotiate for resources and call in favours as and when needed.
= The product champion has to be entrepreneurial
- Encourage Team Work and Collaboration
= Innovation requires coordination and teamwork
= Having others in the loop can provide support for the product champion
- Encourage Open Communication and Open mindedness
= It is essential for communication to be open and unrestricted among team
members to ensure success
= People should be able to communicate readily across departmental lines
without going up and down the hierarchy
= Much of the flow of communication will be informal
= Many good ideas are killed off by early ridicule and rejection, before their worth
has been adequately considered
= Good relationships encourage more efficient and more effective interpersonal
interaction – important for persuading others to commit resources
= Your interpersonal style will have a significant effect on how successful your
innovation efforts are
- Use a loose and flexible business structure
= Rigid corporate structures build barriers between departments
= Information doesn’t flow naturally between departments where there is a rigid
chain of communication
= Flexible structures seem to get things done more efficiently and effectively
= Loose business structures lead to decentralised power and the possession of
knowledge and expertise will determine the more valuable members of the team
- Treat Information as a Vital Resource
= In all businesses and at all times, information must be regarded as an essential
resource which managers need in order to make good decisions
- Expect Obsolescence – never settle for what you now have and do
= Change is the only source of commercial opportunities
= Firms that do not embrace change fall by the wayside and are replaced by
more dynamic companies
= Products and services move through life cycles and with ever-increasing speed
= To encourage innovation we must recognise the need for it
= Any product, service or business will become obsolete unless it is reinvented to
suit the changing market places
= What is working well and profitable today may not work well or be profitable
tomorrow
= Work to avoid obsolescence by encouraging proactive change
- Adopt a sensible and healthy attitude towards risk
= One of the strengths of small enterprises is their flexibility to make changes
= Risk averse managers will sometimes lose out if they fail to take risks they
can’t afford to miss
= A sensible attitude to risk involves knowing when to act, in what direction and
how far to go.
= Doing nothing can sometimes be dangerous
- Encourage community interaction
= Companies that are well known as successful innovators encourage
employees to use contact with the wider community as a means of gleaning
useful ideas for changing and improving their performance
Chapter 9: The Innovation Process
- Most innovations seem to follow these steps:
- It starts with a need to act – an awareness of a problem which needs to be
solved or an opportunity which is worth exploring
- Careful analysis and diagnosis must follow so that the problem or opportunity is
accurately understood before any action is taken
- Ideas must be generated
- The most appropriate idea must be chosen and a broad plan of action worked
out
- The decision to go ahead
- Careful thought to how the problem of change resistance might be avoided or
overcome
- Initiation of the project
- Results must be monitored and evaluated at each step. During the
implementation stage, it is highly likely that a number of procedural problems will
occur and these may require review and reconsideration of earlier stages in the
whole process.
- Depending on the nature of the actual innovation, the whole process may take
as little as a few weeks and cost a few hundred dollars or need as long as a year
or more and cost many thousands of dollars
- Most innovations that fail, do so because of problems that occur during the
implementation stage
- Product innovation: new and improved products
- The foundations: is the innovation justified?
= Observe and identify a problem or opportunity
= Analyse and diagnose the situation
= Is the innovative action justified – is the effort worthwhile?
= Select a product champion
- Planning and organising
= Generate broad ideas for action (do not evaluate, just collect ideas)
= Develop specific and feasible ideas
~ Will it work?
~ What is the likely cost?
~ Will it be cost effective?
~ Is the cost justifiable?
~ Will it give the best result possible?
~ Will it be reasonably acceptable to all or most people involved?
~ Will it be impossible or too difficult to reverse, if necessary
- Action should be taken to prevent innovative ideas from leaving the company
(loose tongues)
- The innovative proposal, which should contain:
= the urgency of the perceived problem
= the attractiveness of the perceived opportunity
= the quality of the innovation ideas proposed
= the availability and credibility of the product champion
= the overall quality of the innovation proposal itself (including a comparison of
the need for change and cost of doing it).
= the technical complexity and difficulties likely to be faced
= the expected life cycle of the proposed innovation
= estimated development costs
= potential market size
= sales forecasts by specified time periods
= forecasts of profitability
- The innovative proposal should give a clear indication of the general methods to
be used – but avoid excessive detail
- Technical development:
= This is the “hard slog” stage
= This stage also involves design, engineering, technical feasibility studies and
getting external advice as needed
= The end result of this stage is a working model or a fully operational prototype
= Protection of intellectual property is vital in this stage
= monitoring of development costs is crucial
= negotiation and coordination skills are highly utilised in this stage
- Develop designs specifications and drawings:
= develop computer models and designs
- Test:
= test, test, test and test. When you have finished testing, test some more!
= Adjustments to a design will take place in this stage.
= No problem can be ignored
- Re-Test:
= Monitor and evaluate faults and re-test the changes
= the performance of the product must be painstakingly monitored
= performance must be evaluated:
~ Does it work?
~ Does it work well enough?
~ Does it work better than before?
~ Does it work better than the competitor’s product?
~ Is it safe to use?
~ Does it work without any unwanted side-effects?
~ Is it easy to use?
~ Are we satisfied that without spending more than $x we can do no better?
- Re-test, modify and improve:
= This process of testing, improving and re-testing must go on until all possible
improvements are in place and the innovation works as closely as possible to
your 100% satisfaction.
= What failure rate is acceptable? 5%, 10%?
= There comes a point where pouring more money into the improvement of a
product produces disproportionately fewer improvements
- Build and test a working model
= You must eventually arrive at a point where you have to construct a working
model of your invention or new/improved product.
= This model is something that you can demonstrate to potential buyers.
= ****If you launch a product with which you are not totally satisfied, it is likely
that your customers will not be 100% satisfied, too****
- Marketing, the ultimate test
= The ultimate test is not whether it works, but rather, whether it sells.
= Performance will need close monitoring and the means established to provide
ongoing data on the new products sales in the form of a feedback cycle
- Test marketing:
= If done properly, an adequate sample of potential buyers actually use your new
product and monitoring their responses can give you a vital and reliable
prediction of whether your new product is likely to pass the marketing test.
- Production:
= If you can’t manufacture the item yourself, then you can sell the product
outright (and lose all claims to it) or licence out the manufacturing process to
another company.
- New Product Launch:
= The product launch should be a skilfully promoted launch to which all potential
customers are invited (expert help is recommended)
= A high-impact product launch for a faulty or inferior new product will be a waste
of money
- Monitor Sales Performance:
= All innovation has a cost and this can be heavy.
= Sales needs to be monitored to ensure that the cost of innovation has been
covered.
= Sales must be monitored and compared to forecasts and production/innovation
costs
- Ongoing monitoring and feedback
= Evidence of decreasing sales and/or market share, escalating production or
other costs, or of falling profits may suggest that remedial action is needed – and
urgently
= A competitor may hit the market with a superior product or service
= Your technology may be superseded
= Your marketing strategies may be inappropriate for your changing industry
= Generate new ideas to revitalise your business with new and improved
products and marketing strategies
= If you want to be successful, develop and maintain an innovation culture in your
company
- Service innovation: New and Improved Services
= For any service firm, the overall quality and reliability of all work performed for
customers will depend not only on the nature of the services it sells, but also on
having and using high-quality tools and equipment
= The quality of the services performed may also be affected by the firm’s
efficiency or inefficiency it its core operations
- New and improved work operations, methods and processes:
= The way work is done has a significant impact on end results
= Process innovation involves improving
~ Work flow
~ Factory or office layout
~ manufacturing process
~ materials or merchandise purchasing
~ inventory management
~ handling customer complaints and after-sales service calls
~ computer network throughout the business
~ formal communication channels
~ job specifications
~ employee hiring, firing, compensation and handling grievances
~ workplace health and safety
~ debt collection
~ filing procedures
~ equipment maintenance
- Implementation
= New and improved processes are planned, designed and developed to be
used:
~ Monitor performance and reliability
~ Monitor productivity gains and cost savings
~ Ongoing monitoring and feedback
- Technical Innovations: New and improved machines, tools and engineering
= Once a prototype exists, the new improved machine or equipment must be
installed and used:
~ monitor technical performance and reliability
~ monitor productivity gains and cost savings
~ ongoing monitoring and feedback
Chapter 10 – How to protect your intellectual property
- This is the product of our minds: creative thoughts and ideas
- A difficulty sometimes arises with those forms of intellectual property that are
intangible for which it can be hard to prove ownership.
- If, without some form of protection in place you tell someone about your idea or
shoe them any technical details or drawings, a competitor can copy and use
them and there is little, if anything, you can do about it.
- You can’t get a patent on something that is not new – so don’t tell anyone about
it before getting a patent!
- Intellectual property can take various forms such as:
= inventions
= literary words, programs etc
= industrial and commercial design
= distinctive marks (logos etc)
= confidential information (trade secrets etc)
= circuit layout rights (eg: omputer chips etc)
= new varieties of plants etc
- You must take all appropriate steps to protect your legal ownership rights
before you do any of the following:
= discuss your ideas with an “outsider”
= offer your invention for sale
= try to interest a potential financier or investor
= arrange for your new product to be manufactured
= arranged for your new process to be used by a manufacturer
= use an adviser or consultant
= advertise for, or negotiate with, a potential business partner
= seek finance for further testing and development
= negotiate with a potential licencee
= for any other reason disclose information about your idea, invention or
innovation to any other person
- Proving date of ownership
= proof of ownership will be requested from potential licencees who will surely
want assurance that the licensor actually owns the invention of process being
sold or licenced
= full legal protection is required, such as:
~ seeking patent rights
~ registering a design
= other forms of protection:
~ establishing an ownership date eg: © Insureware Pty Ltd 15 Sidwell Avenue 01
January, 2003 on al original papers, drawings, specs and other written materials
~ register ownership date. The process is the same as above but a written
declaration of ownership is prepared, signed, witnessed and lodged with a lawyer
in a sealed envelope.
- Confidentiality Agreements
= It is wise to avoid all non-essential and non-confidential disclosure of
information before obtaining legal protection.
= when disclosure does occur, it should be within the framework of a signed
confidentiality agreement.
- Full legal protection:
= Patents: Covered by the Commonwealth Patents Act of 1990 and the Patents
Regulations of 1991
= A patent gives a temporary monopoly to the creator of an invention when it is
publicly disclosed. Once granted, the owner of a patent has the exclusinve right
to prevent others from commercially exploiting the invention
= Patents must be lodged with the IPA office and the item becomes public
property at the end of the patent period
= a standard patent is for 16 years with extensions available for certain types of
inventions
= There are five conditions for gaining a patent:
~ the invention must be tangible (not discoveries or ideas)
~ it must be novel
~ it must be an inventive step – distinctive and advanced
~ It must be useful
~ It has not been secretly used
= patent infringements: upon infringement, the owner of the patent can sue
= Copyright:
~ a business plan
~ computer programs and source codes
~ building plans, drawings, specs and models
~ data held in a data bank or computer memory
~ a compilation of facts and figures
~ integrated computer circuit layouts and diagrams
= Designs:
~ The physical shape, appearance and structure of an item
= Trademarks:
~A distinctive mark, logo or symbol used to distinguish a product, brand, heading,
label, ticket, name, signature, word, letter or numeral, or any combination thereof
used for commercial purposes.
Chapter 11
Keeping your innovation on track
- Questions to ask yourself about innovation:
= Will my invention meet all legal requirements?
= Is this product safe?
= Will my invention have a positive or negative environmental impact
= Will my invention benefit society?
= Does my invention work reliably under all normal operating conditions?
= Is production of my invention feasible?
= Are the total development costs are within my budget?
= How long will it take to recoup development expenses?
= What is the expected revenue from selling this invention?
= Has market research proven your invention to be a viable product?
= Has the technical R&D been successful?
= Who is the potential target-market for my invention?
= What is the expected product life-cycle?
= What is the estimated potential sales?
= What is the likely trend in demand?
= What is the likely stability of demand?
= What is the potential for product line expansion?
= How much learning is required for correct and safe use of the invention?
= What is the level of need for your invention?
= How much will people depend on your invention?
= Are the advantages of this invention obvious to all?
= What are the costs of promoting the features of this invention?
= What are the costs of distribution of the invention?
= What kind of after-sales service will be required?
= How does the appearance of the product compare to the competition?
= Is the performance of this product superior to the competition?
= Is the durability of this product superior to the competition?
= Is the price of the product within industry standards?
= What is the existing competition?
= What new competition do you expect to enter into the industry?
= What legal protection do you have?
Appendix 1
How creative am I?
- Among the kinds of recommended creativity building activities are:
= try solving heuristic problems rather than algorithmic ones which are governed
by a set of rules and processes
= keep an open mind and avoid making quick and critical judgements
= look for different and unusual relationships among things and people – how can
things be used together
= look for functional relationships for new and better ways by which things may
be used.
= avoid thinking about and classifying things as either this or that
= practice relying on your intuition, hunches and gut feeling
= avoid stereotyping
= don’t get too hung up on making mistakes
= be alert to odd and puzzling facts
Appendix 2
Am I an entrepreneur?
This appendix is a quiz.
Appendix 3
Am I receptive to change?
- How resistant are you to change?
- Innovation is the purposeful introduction of change into a business and for any
enterprise to be innovative, its owners, managers and employees need to both
accept changing circumstances and be willing to initiate change
- Whenever change occurs the known and comfortable situation is replaced by
the new one.
- People are worried that the new situation is unfamiliar and there may be
ambiguity
- Ambiguity replaces clarity and causes stress
Appendix 4
What is my interpersonal relations style?
- Leadership needs to be focused – directed at getting the task completed and is
knows as transactional leadership
- All employees are constantly involved in finding, creating and acting on
innovation opportunities
- Informational leadership is the ability to inspire others to perform above the
expected or normal level
- You must build a well-balanced and productive relationship between all
members of the business team.
- Build trust, respect, loyalty and cooperation throughout the workplace.
- Two different but related communication skills must be developed:
= disclosure: open and sincere sharing of information
= feedback: actively seeking ideas, information, opinions and feelings from others
- Effective communication requires effective listening
Appendix 5
Sources of innovation help and advice
- Some of these sources are:
= customers
= suppliers
= competitors
= trade associations
= inventors groups