Creating an Ideas Factory

February 13th, 2013 | Posted by John Kapeleris in Ideas | Innovation - (1 Comments)

Ideas FactoryMany people come up with ideas on a daily basis. However, they don’t capture the ideas in a written or electronic journal and the ideas soon dissipate.

The process of generating, capturing and implementing ideas is the basis of innovation. Ideas can solve problems within organisations but can also generate opportunities for new products and services, innovative business models and organisational systems, and novel marketing concepts. Ideas also help organisations keep an eye on the future by anticipating future trends and technologies and applying these ideas to deliver the needs and wants of the future.

The concept of an “ideas factory” can be implemented within an organisation to capture the wealth of ideas generated by individuals but also ideas that come from customers and other external sources. Some of these external sources could include the internet, publications, competitors and suppliers.

How do you create and implement an ideas factory within your organisation? Following are some of the key steps in creating and implementing an ideas factory within your organisation:

  1. Create a culture that supports and encourages the continuous generation and flow of ideas. The continuous flow and capture of new ideas provides organizations with a source of new products and services, product improvements, and novel processes that contribute to the organization’s survival and growth. Creativity is therefore an important key driver of innovation by providing new ideas and new ways to solve organizational problems.
  2. Develop a well defined ideas management process – Generating, Capturing, Processing, Evaluating, Implementing and Measuring Outcomes. Organizations need to adopt a formal ideas management process to capture, develop, evaluate, protect and implement ideas and suggestions, which form the foundation of new opportunities that satisfy needs and wants in the market.
  3. Provide the skills and tools for employees to develop competencies. Harnessing the creativity of the workforce forms a critical component of an innovative culture. Professional development of employees should include skills development in creativity tools and techniques. Furthermore,  creating an environment that encourages participation, learning and fun allows new ideas to be generated and improvements implemented.
  4. Evaluate the ideas using a set of pre-defined criteria – impact, strategic fit, value, cost, risk, timeframe etc. In evaluating ideas an initial feasibility should include a preliminary market, technical and risk assessment to determine the viability of the opportunity. It should also include an intellectual property search to determine whether someone else has already patented the idea, and to confirm that you have the freedom to operate.
  5. Implement the ideas to solve a problem, capitalise on an opportunity or transform your organisation. One of the most difficult steps is the implementation phase. Implementation requires the development of a project plan and then the execution of the plan through action. A typical implementation process may involve:
    • clarifying the objective,
    • developing the plan,
    • identifying key processes and tasks,
    • prioritizing activities,
    • resourcing and budgeting,
    • funding,
    • assigning responsibility, and then
    • doing it!

An ideas factory will require top-down management support, in addition to committed and disciplined champions who can drive the processes and methodology. Collaboration will also be an important element in the ideas factory. Champions can also make a significant contribution to the implementation stage.

Dr John Kapeleris

 

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Entrepreneurship is defined as the process by which a new venture is created when an entrepreneur identifies a new opportunity in the market to create economic products and services. An entrepreneur is therefore someone who is willing and able to convert a new idea or invention into a successful innovation in the market. The innovation could be in the form of a product, a service, or a novel business concept or model.

The typical characteristics of an entrepreneur include:

  1. An enthusiastic person with a vision
  2. The ability to identify new opportunities
  3. Calculated risk-taking
  4. Responsible in decision-making
  5. Overwhelming urge to succeed
  6. Discipline and persistence
  7. Confident and persuasive communicators
  8. Driven by the sense of accomplishment
  9. The ability to coordinate and manage scarce resources (time, money and people)

Studies according to Arthur Cole (1959) have identified four types of entrepreneurs:

  1. The innovator
  2. The calculating inventor
  3. The over optimistic promoter
  4. The organisation builder

Entrepreneurship is a very difficult undertaking, where many new businesses fail. Only a very small percentage (approximately 1%) of people who go into business succeed. Entrepreneurial activities range from solo businesses, many now being created online, to establishing large businesses, such as mining, employing large numbers of people. Entrepreneurs can also exist within existing organisations who identify new opportunities able to grow the existing organisation or alternatively are involved in spinning out new businesses. These entrepreneurs are referred to as intrapreneurs. An innovative high performing organisation should nurture and support the development of intrapreneurs as this activity can create significant growth for the organisation, either through the internal development and commercialisation of new ideas or through the creation of subsidiary businesses. If organisations do not identify, nurture and support intrapreneurs then many will leave the organisation and create their own businesses.

Entrepreneurship has been identified by many economists, including Joseph Shumpeter, as a driving factor that creates value in the economy through the following benefits:

  • Creating new jobs
  • Expanding new markets
  • New products and services
  • Satisfying domestic consumption
  • Developing new and existing industries
  • Income generation and economic growth
  • Healthy competition creating higher quality products
  • Supporting the existence of government and their budgets

Dr John Kapeleris

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Beyond Mediocrity

September 10th, 2012 | Posted by John Kapeleris in Innovation | Personal Development - (0 Comments)

Having grown up in Australia and being exposed to its unique culture and beautiful environment one of the disappointing aspects has been the “fair go” mentality. From a legal and human rights perspective giving people a fair and safe environment to live in is extremely relevant and important. However, when we as Australians use the “fair go” or the “she’ll be right mate” mentality it unfortunately reduces our competitiveness to a playing field that is well below some international standards, thereby negatively influencing our attitudes and productivity. We begin to blame the system or someone else, instead of taking responsibility and massive action to change the current situation.

When one of my children states, “It isn’t fair Dad!”, I reply with, “Yes you are right, because life and business is not fair, but highly competitive”. If our sporting heroes and teams adopted a “fair go” or “she’ll be right mate” mentality, Australia would not have been so successful in many of its sporting achievements. Business and work life is no different, therefore we need to have the passion and the desire to succeed in a very competitive global arena.

One of the drivers of productivity is innovation and I don’t mean just research and development, although this is a very important component of the innovation ecosystem. Innovation in the sense of the practical application of new and creative ideas to generate value in the market, either through, new products and services, processes, organisational systems or novel business models, can provide competitive advantage for an organisation and stimulate increased productivity. A good example is reflected in traditional manufacturing firms that adopt innovative practices through design integration, business model transformation or simply adopting advanced manufacturing concepts, such as additive manufacturing or systems integration, that can differentiate themselves in the market place, increase productivity and transform into a high performance organisation.

Australia’s recent productivity metrics have been well below international levels, continuing to deteriorate despite the mining boom. The deteriorating trends can be confirmed in the recent article “Australia’s Productivity Performance and Real Incomes“. Many sectors, in particular retail and manufacturing have been suffering in the current economic environment.

It is important to note that the majority of productivity improvements can only be made as a result of management decisions and strategies implemented in firms. Public policy can also play an important role in improving Australia’s productivity, particularly in areas of regulation reform, taxation reform, public spending and skills development. Australia is already the third highest cost environment for businesses in the world and with diminishing productivity this can only get worse for Australian businesses.

I believe innovation is the key to improving productivity in Australia. Innovation can create higher value products and services, improve production process efficiency, design new business models, and differentiate firms in the global market. There is no doubt we have to work harder, but more importantly work smarter to improve productivity efficiency. Having a “fair go” or a “she’ll be right mate” attitude is not going to help Australian businesses become more competitive on the global arena.

Dr John Kapeleris

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Design integration is defined as the concept of creating breakthrough innovations in business by applying design thinking to corporate strategy and business processes in a coordinated way. Design thinking applied to business is a methodology utilising a creative, solutions-based approach to solving business problems and capitalising on market opportunities.

Design integration has the potential to drive product, service and business model innovation in an organisation, and redefine the way the business interacts with customers and the market to create competitive advantage. Design integration creates value (Bucolo, 2008) through:

  1. A deeper understanding of customer insights, needs and experiences
  2. Expanding the business vision and purpose with customers and stakeholders
  3. Mapping insights to all aspects of the business
  4. Challenging and redefining business models and processes
  5. Design driven, innovation oriented people

If applied as an integrated strategy, design can provide a number of advantages to an organisation including:

  • Products and services aligned with the needs of customers
  • A differentiated market position
  • Increased market share
  • A more compelling brand awareness
  • Creating new market segments
  • Reduced production costs
  • A sustainable competitive advantage

For example, Apple uses design thinking in an integrated way across all aspects of their business model to differentiate its product and service offering. Apple has focused on creating a compelling and seamless user experience through design integration by utilising a user interface that transcends traditional hardware and software models. The following video extract provides insights into Apple’s business design:

 To learn how design integration can increase growth and productivity to transform your business a number of Design Integration Workshops are being delivered by the AIC in partnership with QUT. For more details refer to the link Design Integration or register online.

Dr John Kapeleris

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Innovation is a highly interactive, multidisciplinary process which increasingly involves cooperation and partnerships between a growing and diverse network of individuals and organizations. We find increasingly more organisations innovate through partnerships and collaborations.

Collaboration is defined as the process where two or more people or organizations work together towards achieving mutually beneficial goals and objectives. Collaboration extends over a range of activities, including the provision and transfer of skills, sharing of information, conducting research and product development, accessing channels to market and creating new market opportunities.

The aim of collaboration is the co-creation of value through sharing, creating new insights, and leveraging existing resources. The diagram below outlines a continuum of collaboration intensity from traditional business approaches of engaging customers and suppliers, to a shared destiny of creating new competitive space.

Collaboration in Australian firms has been comparatively low as reflected in the 2010 OECD Working Party of National Experts in Science and Technology Innovation (NESTI) project data outlined in the graphic below. The graph shows the percentage of innovative firms with national and international collaboration on innovation during the period 2004–06.

Therefore, what could be the causes of the low percentage of collaboration. A number of issues and barriers can occur in pursuing potential collaborations, including:

  • Lack of professionalism on both sides of the collaboration, including poor project and intellectual property management
  • Diverging interests and cultures, including impulsive relationships
  • Problems over speed of negotiation, ownership of results and intellectual property, including exclusivity
  • Compensation for indirect costs and background knowledge
  • Equitable returns in the event of successful commercialisation

From a government policy perspective, a lack of incentivisation and program support for collaboration could also be a factor of low level collaboration in certain countries.

The concept of open innovation is worth re-visiting as collaboration plays a significant role. Open innovation implies that an organization has the willingness and desire to source and utilize external knowledge, ideas, intellectual assets and technologies, in addition to its internal capabilities, to identify solutions to problems, capitalize on opportunities, develop new technologies, create new products and services, improve processes, or design new organizational systems and business models. A great example of an organization practicing open innovation is Proctor & Gamble, where many of its products have been developed with external partners providing research, development and cross-licensing of intellectual property.

A number of benefits can be gained by firms and organizations through collaboration and open innovation:

  1. Reduced costs due to utilising others people’s experience, skills & equipment and sharing costs of research
  2. Higher quality research and development
  3. Accessing new and different skills, networks, contacts and distribution infrastructure
  4. Risk mitigation – collaboration can have reduced risk as it is shared
  5. Increased speed to market

How can we better collaborate to drive innovation?

Dr John Kapeleris

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Australia is now characterised as a high cost environment due to a number of factors, including increased labour costs, increased regulatory costs and the increased value of the Australian dollar. Many traditional businesses are struggling to survive in this competitive environment. For businesses to become more competitive and gain significant advantages in the current global environment, they must innovate their business models, not just focus on products and services.

According to Osterwalder, a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams.

Business model innovation involves the design and management of innovation at the organisational and systems levels of businesses. It involves re-thinking the business approach, focusing on the unique offering, servicing clients, re-designing the business and creating value. Innovation requires constant thinking, planning, experimentation and learning by doing, to create new capabilities and to successfully implement a new business model.

IBM’s global CEO study conducted in 2006 indicated that firms innovating their business model exceeded the growth of firms that were innovating their products, services, markets or operations. A summary of the results is outlined in the figure below:

A great example of business model innovation is Dell Computers. The computer hardware industry has become a highly competitive industry where we have seen a number of consolidations through mergers and acquisitions but also divestment of existing business, such as IBM making the decision to stop selling desktop and laptop computers. Dell however was willing to rethink its business model and develop a new approach to remain competitive in a highly dynamic business environment.

Dell’s business model was redesigned, refined and modified by focusing on the following components:

  • Direct customer relationships
  • Direct sales
  • Customer segmentation for sales and service
  • Build-to-order production

The Dell business model was refined by removing the elements and activities that did not create value for Dell or its customers. The following diagram campares the Dell business model with the traditional personal computer distribution model.

The business model innovation implemented by Dell has provided the following advantages for the company:

  • Increased market share for personal computers
  • Ability to deliver a “made-to-order” customised PC quickly to the customer
  • Increased client satisfaction
  • Reduced cost through minimising inventory
  • Increased profit by utilising a direct sales strategy

Businesses should consider reviewing their existing business models and determining whether business model innovation can create competitive advantage.

Dr John Kapeleris
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Idea Auctions and 3M

March 26th, 2012 | Posted by John Kapeleris in Ideas - (0 Comments)

New ideas, the basis of innovation, depend upon tapping the know-how (tacit knowledge) of employees and making this knowledge available to others within the organisation. Once the knowledge is shared and recorded within the organization (codified knowledge) it becomes a component of the corporate memory of the organization. What the organisation then does with the new ideas presented by employees will have the potential to add value to the organization. Although many organisations capture and record ideas they fail to develop these ideas further or fall short of converting these ideas into new products or services, new processes or new organisational systems.

The global company 3M, known for its unique innovative practices, encourages employees to spend 15% of their time to work on their own ‘pet’ projects. These pet projects allow employees to investigate and test their ideas, and subsequently develop these ideas into concepts or applications. Known as the ’15 percent rule’, 3M use this approach to stimulate unplanned experimentation that may turn into successful, but unexpected innovations. Had it not been for the existence of the 15 percent rule Art Fry and Spence Silver may not have had the opportunity or the conducive environment to develop the 3M Post-it® notes.

In the spirit of 3M, organisations that generate and capture a large number of ideas through their employees could hold internal ‘idea auctions’. Idea auctions are essentially forums where employees present and showcase their own ideas to an audience of interested parties who might be keen on taking on the idea and working with it, either individually or in groups. The process allows employees who come up with the ideas to ‘sell’ their ideas to anyone within the company, especially where their immediate supervisor or team members refuse to support the employee. Furthermore, some people are good at generating ideas while others prefer the implementation phase.  Using a team approach to reviewing ideas will also quickly provide important feedback from an ‘internal customer’ perspective on whether the idea should be progressed or killed off.

What are you doing in your organisation to capture new ideas from your employees?

Dr John Kapeleris

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The rapidly changing biotechnology environment, influenced by globalization, competition, financial pressures and the advancement of new technologies has impacted on the small to medium biotechnology firm. Entrepreneurship and innovation, in addition to collaboration, are the key factors that are needed to ensure emerging and small to medium biotechnology firms survive the discontinuous change.

Commercialization is broadly defined as the process of taking an idea to a successful outcome in the market, whether it is a product, service, process or organisational system. Commercialization should also include knowledge diffusion, consulting services and contract research rather than just the linear transfer of technology or intellectual property (IP).

The following five strategies for successful commercialization are founded on the three key factors of success: entrepreneurship, innovation and collaboration.

Create an Entrepreneurial Culture

The small biotechnology firm is exposed to a number of challenges impacting on its survival and sustainability. Therefore, an entrepreneurial culture must be implemented to ensure the effective leadership and management of the limited expertise, resources and funding that may be available to successfully commercialize opportunities. Many small biotechnology firms are dominated by a research or academic culture that must quickly evolve to become entrepreneurial and commercially focused. Establishing an advisory board with the required business expertise will ensure access to a balanced resource pool. Furthermore, the small to medium biotechnology companies, at an early stage, need to start defining the products and services that will address a market need, rather than focusing on the technology itself. Companies that quickly develop the products and services that customers need or want will have a greater chance of success.

Undertake Early Stage Market Research

Biotechnology companies need to carry out market research early to identify the specific market needs in order to drive their product and service development strategy. Firms need to identify a differentiated market niche to ensure that a demand exists for the specific type of product or service. Market research therefore informs a market driven strategy that allows biotechnology firms to commercialize more effectively and rapidly. Speed to market of a first generation product for a defined market allows the biotechnology firm to leverage success in an initial market to further fund and develop core technology to migrate into secondary markets with similar customer needs.

Embed Innovation across the Organization

In today’s environment, to achieve success, embedding innovation across the whole organisation is required, not just within the R&D functions. Innovation should include process innovation, organizational innovation, business model innovation and marketing innovation, in addition to product and service innovation. Biotechnology entrepreneurs need to better understand the business aspects of biotechnology and what is required to ensure successful commercialization. They also need to think creatively in order to solve complex problems and to differentiate their business model from their competitors. The ability to leverage the intellectual capital of employees through idea capture and encouraging team participation will impact on the firm’s future success.

Establish Strong Alliances and Networks

Biotechnology firms also need to establish strong alliances, research collaborations and commercial relationships, if they are to be a significant player in the biotechnology industry. One of the impediments to converting biotechnology opportunities into tangible outcomes is the “commercialization chasm” that divides the early stage “proof of concept” from the latter stage translation of the technology to a product or service.  To overcome this chasm small biotechnology firms need to adopt an open innovation mindset that facilitates networking and collaboration in order to access expertise, channels to market and novel funding options; not just continue to rely on government support and funding.

Identify Novel Funding and Resources

A novel approach to accessing expertise, resources and funding that has successfully been used in biotechnology is the “stepping stone” approach to commercialization. The approach involves the small biotechnology firm establishing a collaborative strategic alliance with another larger, established organisation or institution to co-develop the technology. The technology is essentially “incubated” in the other organization where expertise, resources and funding can be applied to fast-track the development of the product or service. The small biotechnology firm will need to offer the other organization either an equity contribution or a percentage share (royalty) of the revenue generated by the product or service.  The terms of the arrangement will need to be established during the preparation of the collaborative agreement prior to forming the strategic alliance.

In conclusion, in order for a commercialization strategy to be successful it must be effective, efficient and focus on outcomes as soon as possible. A biotechnology commercialization strategy, specifically, should focus on creating an entrepreneurial culture in the firm, founded on early stage market research, leverage innovation and creativity across the firm, integrate strong alliances and networks, and incorporate novel funding and resources where possible.

Dr John Kapeleris

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Biomimicry simply means imitating nature. By observing and studying nature, its elements, processes, models and systems, through biomimicry, we can design, develop, engineer or emulate new innovations and technologies to solve a range of simple and complex human problems. An everyday example is solar energy which is essentially related to the process of photosynthesis – the solar cell is modelled on the function of a leaf.

The study of biomimicry can provide insights into nature and how natural elements and systems can provide inspiration and solutions for the development of sustainable and environmentally friendly innovations. One of the well-known serendipitous discoveries that is now used worldwide was the development of Velcro®. In 1941 Swiss electrical engineer George de Mestral, after returning from a hunting trip with his dog in the Alps, noticed that burrs had stuck onto his clothes and also on the fur of his dog. Being curious he decided to view the burrs under the microscope to determine why these burrs were sticking to fur. He noticed a large number of little hooks on the ends of the burrs. De Mestral was inspired by these observations to emulate the function of the burrs using synthetic material. He settled on using nylon which was an emerging material at that time and invented Velcro® which is now used widely in a range of different applications.

Incorporating biomimicry concepts into design and innovation processes can provide a number of  advantages when developing new products or solving problems:

  1. Sustainable – Nature inspires products and processes that are natural and adapted to the environment.
  2. Efficient – The natural environment seems to be more efficient than the environments created by humans.
  3. Cost effective – Nature has a tendency to design structures and shapes that utilise materials efficiently thereby cutting down on materials and associated costs.
  4. Energy saving – Nature maximises the use of natural resources by using processes and systems that optimise energy usage.
  5. Minimal waste – In nature, materials and waste are minimised or recycled into value-added products.  Both waste and new materials are integrated in natural systems.
  6. Differentiated brand – Nature has a tendency to create its own unique shapes that define its brand which becomes enduring.

Leonardo da Vinci was an exemplar for utilising the concept of biomimicry through his observations of nature to bring to life his paintings and drawings. Many of Leonardo da Vinci’s inventions were inspired by observations of natural phenomena. For example, Leonardo’s design for a flying machine was inspired by closely studying the wings and flights of birds, while his designs for a parachute and a helicopter resulted from his observations of seed pods and flowers falling from trees.

The Biomimicry Institute’s Student Design Challenge shows some amazing design’s inspired by biomimicry http://www.biomimicrydesignchallenge.com/gallery.

I encourage you to take some time and connect with nature as a means to providing inspiration in your work and personal life. Who knows; your next idea for a new product or design may come from your observations of nature!

Dr John Kapeleris

 

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Insanity: doing the same thing over and over again and expecting different results” Albert Einstein

The “Red Queen Effect” refers to the Lewis Carroll (1872) story “Alice Through the Looking Glass” where we read that the Red Queen runs hard but never gets anywhere because the surrounding landscape is also moving. The Red Queen tells Alice, “Now, here, you see, it takes all the running you can do to keep in the same place”. The Red Queen Effect metaphor is very relevant to business – you need to run hard to stay up with the competition, otherwise if you do nothing you will fall behind.

Innovation speed (which is implied by the Red Queen Effect) refers to the length of time it takes for a product or service to move from idea to commercialisation. Many entrepreneurs and organisations struggle to quickly translate an idea to a successful product or service, and therefore are left behind. Some of the reasons may include lack of available early stage risk capital, lack of skills and experience, difficulty in aligning the product or service to the market need, fear of failure, difficulty in accessing resources or inability to manage risk. Improving innovation speed provides a number of advantages for the innovator, including:

  • First to market advantage
  • Reduced R&D expenditure and other costs
  • Improved profitability
  • Maximising value before patent expiry

The “Red Queen Effect” is occurring all around us; in new technology developments, increased competition through globalisation, climate change and the rapidly evolving business environment. We also find the “Red Queen Effect” impacting on our personal lives. Rapid and discontinuous change is the main cause of the “Red Queen Effect”.

To stay ahead of the competition organisations must take the advice of the Red Queen, “If you want to get somewhere else, you must run at least twice as fast as that!” The metaphor implies that for businesses to be able to run at least twice as fast, they will require innovation to allow them to think differently and outperform their competition.

Does the Red Queen Effect apply to your organisation or personal life?

Dr John Kapeleris

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