Lean Solutions by Womack & Jones

I’ve raced through my latest book, sign of a good book, an interesting read, and most of all, a sign of large print!

This month’s book has been Lean Solutions by Womack and Jones (2005), two of the original authors of The Machine That Changed the World (Womack, Jones & Roos, 1991).

In some ways, Lean Solutions is an update of the earlier book for the start of the 21st century. It updates the ideas with some good examples from outside Toyota. I particular like the Tesco example, and the study of the sports shoes.

Did you know that training-shoes (sneakers) need to be ordered 5 months in advance? Or that Nike alone produces more sample shoes than the fourth largest manufacturer? (And that was before Adidas bought Reebok, so I guess it’s more shoes in the third largest manufacturer now.) It all because the industry is not lean.

Order have to be made so far in advance so they can be sent to Asia for manufacture. They have to manufacture enough to ship a large container to the US or Europe. And that transport takes time. That needs to be divided into smaller loads and distributed. There are delays and buffer stocks at every stage.

So, not only is there a lot of surplus in the system but the company isn’t very responsive and customers often find items out of stock. In fact, it puts the whole economics of lowest-cost manufacturing into doubt – and all that implies for offshore production.

The book focuses on customer rather than manufacturing. The authors identify the main customer problem today: lack of time. So it is fitting that several of their studies are drawn from service industries such as medical care and car maintenance.

But the authors go beyond lean thinking and case studies. They envisage a world where lean is the norm, they discuss how the world could be and how all our lives could be improved. The author’s set an agenda that you massive change the way the world works.

If you know a bit about lean this will teach you a lot more. If you know about lean from older books this will update you. And if you want to be lean this will give you some good examples and stories to tell.

Pricing on the internet and destroying your brand

Things are cheaper on the internet right? We all know this, no stores to rent, no shop windows to make up, no sales staff – and customers pay for delivery.

Well it seems not. According to a report in today’s FT Sony has lead a group of electronics firms (including Philips, Panasonic, Hitachi and Sharp) who have been charging internet retailers more for goods then high street retailers. Their rational is that high street firms help build “the brand proposition and purchasing experience.”

Purchasing experience? Have any of these people ever shopped at the likes of Dixon’s or Currys? Its a ghastly experience. And I don’t recall Best Buys being much better. There are shops I go to for a positive purchasing experience but I know I’m going to pay more.

If Sony and co want to reward retailers they should pay them a separate fee, one that is open and clear to all – the same way Intel do with their “Intel inside” promotion. What they are currently doing is just keeping prices high.

For Sony this comes on top of last weeks Rootkits revelation (see SysInternals for all the details) which resulted in them being branded SpyWare by non-other than Microsoft – full story on the BBC

Sony has enough problems at the moment – declining market share, declining profits, restructuring and redundancies. The new CEO Howard Stringer has enough to sort out without the company getting a bad name.

And that is it really, Sony used to be known for quality (e.g. Trinitron televisions), innovation (think Walkman), reliability – maybe a little more expensive than Sanyo or Sharp but worth the money. Now it isn’t the leader – in TV (that’s Samsung in flat panels) and Apple’s iPod has displaced the Walkman, its not the competitor it was.

The firm has tried moving into software – hence Sony Picture Entertainment and PlayStation Games – but that bet hasn’t yet paid off – so its still dependent on hardware where it has problems competing.

So, is there a connection between a declining market share and attempts to increases prices by the back door? Or putting their neo-virus software on our computers? One thing is for sure, customers certainly don’t want higher prices and don’t like their SpyWare.

Maybe there is a link, maybe as Sony struggles managers are trying covert tactics.

Will it work? Probably not but as these stories emerge it isn’t going to help the brand, in fact, the more Sony carry on like this the more damage they will do to their brand and reputation.

And I don’t think Howard Stringer really wants that. I’d guess the first he knew about these activities was when he read his morning paper. And I’d hazard a guess that he doesn’t like the idea. Trouble is, someone further down the tree is trying to optimise their little bit of it: prices up, piracy down – may it will work for a little while but it could damage the whole company.

Outsourcing has downsides too

It seems that outsourcing is nothing to do, we regularly hear announcements of companies outsourcing one activity of another. And when I am gathered in professional company the topic of conversation frequently turns to outsourcing. When it does there are two reoccurring theme is, the first being fearful ones own job, and the second being the difficulty of working with outsourcers.

It is worth spending a moment to clarify our terms. Outsourcing is when a company decides that one activity or another is no longer core to their business and then subcontract it to a third-party. So for example, a marketing company might outsource their IT helpdesk.

Then there is offshoring. This occurs when a company decides that one activity or another is better done in a foreign location, perhaps somewhere where the wages are lower. In the few years there has been on lot of attention given to services offshoring, in the press.

We should be clear that offshoring is not outsourcing and outsourcing is not offshoring. True, that two often go hand in hand, but they do not need to.

Sometimes it seems like outsourcing is inevitable, and all companies must do it to the maximum. However, I suspect that many organisations involved with outsourcing have not really contemplated the downside or downsides even.

There was a good example of this a couple of months ago, when British Airways flights were disrupted by a strike at a catering supplier. According to the BBC this has cost British Airways £45 million.

Now, the logic of outsourcing service that British Airways is not a catering company. Therefore it should outsource its catering, this logic seems sound.

Think again, British Airways make most of their profit from business class travel, and one of the reasons they gave for someone travelling business class, as opposed economy, is the superior food. So, if BA food is so good that I should pay more money for it how come it isn’t core to BA’s activities?

Second, this supplier has now cost BA £45 million. By not having the catering under its own control BA has exposed itself to a risk, one wonders how much money BA has saved by outsourcing the catering.

Finally, there is a damaged BA’s reputation and image. The catering dispute disrupted their flight schedules, their reputation for timely flights and their reputation for food on flights. All of this needs to be considered when outsourcing operation.

Now these thoughts about BA have been on my mind, for while, but I had been prompted to write about them, because of a personal experience with outsourcing.

So at this point you might want to stop reading because what follows is largely a personal moan. I’ve not done this kind of public blog complaint before but I think it fits in with my outsourcing theme, and yes, there is a lesson at the end.

Having said that, most of what follows is me getting this matter off my chest!

A few months ago I decided to change my credit card. I have for over 10 years been a customer of First Direct – a division of HSBC. First Direct are a good bank but about six months ago they introduced a new credit card statement format. To put it simply, this format is pig ugly, I have enough ugly things in my life as it is and I don’t need this statement format.

So I started looking around the new credit card, and as it happened one of the department stores I like, John Lewis, happen to have a credit card available. This looked like a good deal to me. So I decided to get one to replace my existing First Direct card.

Things started badly, I applied on their website and was told I was rejected, it seemed my credit rating wasn’t good enough. This was a big surprise to me and I immediately got in contact with them. It was an even bigger surprise when they told me I had actually been approved the card, and I be receiving it soon.

Web site says one thing, computer system record another. That sounds like a problem to me – it should have been warning enough, but I carried on.

The ironic part is that during the application process, I discovered that John Lewis has outsourced their credit card to HFC, who are a division of HSBC! (Fortunately, they had a different statement format.)

The card arrived, and I had to get registered with their Internet banking service. They took three attempts to send me an Internet ID that worked. Even then their security regime is painful. I know credit cards need security, I don’t dispute that, but the inconvenience level is just unrealistic.

Again, I should have given up at this point but I carried on.

Then I started to find the card was refused places. First by Amazon, I called the company, who told me that the Amazon debit had been authorised. Now what am I supposed to do here, and you can’t speak to Amazon and Amazon has always worked on my other credit cards. In fact, if Amazon software had a problem of credit cards they would be out of business very quickly.

Still, I carried on using the card, including on some trips overseas and to the USA. But then, on my second trip to the US since receiving the card it started being refused there too. Having a card refused is always embarrassing, and it also very inconvenient. The thing was, it worked sometimes, and got refused some other times.

So on my return I called HSBC/John Lewis, and they told me that before I go aboard I should call them and tell them I’m travelling, this kind of defeats the purpose of having a credit card. The whole point of having a credit card is for convenience – I have been abroad eight times since I got the card and now they tell me I’m supposed to call HSBC bank and spend 10 minutes on hold before I can use it, then it is inconvenient.

Neither does it explain why the card worked on my first US trip, my trip to Germany or Finland. And I don’t care that they are open 24 hours a day to be told, when I do call them nobody is available to take my call.

So, you might guess, the card is going. The point of recounting the story is that it does link up with my earlier discussion of outsourcing. John Lewis department store, have a very good reputation, a very good brand, a brand that is about quality and service however the credit card that bears their name is about anything but quality and service.

Although we say John Lewis has outsourced their credit card operation this is a historical view. The company used to run its own store card operations but decided to convert the store card to a full credit card and pass the management of this to a specialist credit card provider.

In truth John Lewis have nothing to do with this card, it is really a brand stretching exercise for them, their brand on one more product. While for HSBC it is just another “badged” affinity credit card.

My card will be cut up and returned to “John Lewis financial services” most likely with a complaint along lines of what you have just read. An HSBC employee will handle the query and John Lewis will be none the wiser but it is their brand that has been damaged.

The IT systems behind the card clearly have problems:

  • the website tells people they are refused when they are approved,
  • the online banking system issues IDs that don’t work,
  • the system is incompatible with Amazon
  • and it erratically blocks debit requests from overseas (either it should be blocking them all or none.)

Have they actually tested this system?

Again, nobody at John Lewis or HSBC will hear these problems because the card return will be processed as one of many but their quality is falling.

How do you loose a million customers? One at a time. I’m actually a good customer, I’ve told them my problems, I’ve given the opportunity to get things right but they can’t. Most customer will just give up using the card silently.

Yes, John Lewis may make some money out of their branded credit card, but the card is damaging their brand. Next time I shop there will I find kitchenware outsourced? Or deliveries? Stock control?

I hope they have checked their numbers – especially since one disgruntled customer has just told the world in his blog!

Why does everybody write their own CMS?

There are two website in my life. First, the one I’m paid to look after as a product manager, this is my company’s, extranet site that provides information on our product and allows customers to log support calls. The second is the ACCU’s website, yes, it looks a bit dated, we been trying to put a new one in place using a subcontractor but things haven’t gone smoothly as we’d like.

In both cases, the companies concerned have written their own CMS system – that is my employer the subcontractors. When we asked for tenders to develop a new. ACCU website four out of the five submissions used proprietary systems.

Yet the world is full of off-the-shelf CMS systems, for example Plone, Mambo, OpenCMS, Microsoft SharePoint , and the list goes on. Yes, some of these are portals and some provide other functions, but my general point is: There are a lot of you choose from, without writing your own.

Yet, everybody seems to write their own, since getting involved with these websites I have spoken to several companies, and many individuals and it is a reoccurring theme, everybody writes her own CMS.

I think part of it is that CMS systems should be simple, and anyone who has a little bit of development knowledge feels they can write one.

And it seems that many of the CMS systems available are very complicated.

The term is CMS is quite broad, and covers a lot of ground, it seems mean different things to different people.

And add to all this the fact that so many CMS systems are actually evaluating them

I sure there are more reasons, it would seem that nobody has written the perfect, or even the 80% good, CMS system. So maybe there is space on the market for one more CMS system…

Do you ever start something and then wish you hadn’t?

I’m not the kind of person to drop things, I might start something and regret starting it but it is unusual for me to drop it part way through. Well I do sometimes but there is often a good reason.

I feel like this about my recent set of Blog entries on innovation. I got fired up by an idea, wrote about it then kind of found myself in a dead-end. I would have liked to research this and come up with more ideas but two things happened. First, I have a lot more projects on the go and these are projects I have commitments too (e.g. EuroPLoP, VikingPLoP write-ups) and second, I came to realise how vast the subject of innovation was.

So, I’d like to attempt a quick summary of where my thoughts on innovation are and then move on to other subjects. The need to complete my ideas on innovation is getting in the way of writing other blog entries and thoughts.

(I’ve also learned something about the blog media, it is better suited to short self-contained pieces which are loosely linked than long running closely linked entries.)

So Innovation…

I started my search with an appeal for me ideas like 3M’s “20% personal projects.” I was hoping to find some more ideas along these lines. Now I look at that and think that many of these ideas would be simplistic “quick fixes.”

I’ve come back to something I already knew – in fact something I stated in the first piece but didn’t pick up as a theme; namely: Innovation is about learning, problem solving and knowledge.

As a manager you should be concentrating your effects on making your organisation learn better. Innovation will follow. In a learning organisation you can then proceed to things like “20% projects.” Introducing these ideas into an organisation that has difficulty learning may get a few wins but isn’t going to be very effective.

But there is more to it than just learning. You need to create an “operating system” in your organization, onto of this you can run your learning and innovation applications. The operating system needs to provide for: trust between individuals, respect for individuals, rewards from the company, feedback to everyone, a tolerance of diversity and an understanding of failures – which implies that failures don’t get punished.

In reality I’ve come full circle on these ideas. Back where I was before I blasted off on my “innovation mission.”

Anyway, normal Blog service can now be resumed. Yes, I’ll talk about innovation from time to time but no long campaign to pin it (or anything else) down.

Drawing innovation to a close

It’s been about two weeks now since I started this series of blog entries on the subject of innovation. I have given the subject a lot of the thought both online and offline. What is interesting is that I came across nothing on a par with 3M’s “20% personal projects time” rule, that is. I’ve not managed to come up with any more specific actions you can take.

But not quite there are two more things. One of which I have mentioned in passing already.

You can copy the big corporations, of all, and create your own research and development group. This group can be specifically charged with innovation. This is traditional approach taken by big corporate, and in particular, pharmaceutical and other research based companies.

Big R&D departments are not so fashionable these days, they still happen, Microsoft in particular is an example of a company that spends extensively on traditional R&D. Of course as I pointed out there is a danger in creating an R&D department.

Another way to get innovation is to buy it. I had kind of forgotten about this until an article in the recent issue of Knowledge@Wharton brought up the subject.

Although some companies like Cisco have made a strategy of buying innovation iit has always seemed a bit of a cheat me. After all it is not so much your innovation, as so many else’s, you are just rich enough to buy it! And this is probably not be a viable strategy for small company.

So there you go, another couple of ways to get innovation. In my next blog entry, I intend to round off the subject with some thoughts I’ve been having. Then we can return to business is usual… of course. I’m not really sure what business the usual is in this blog, but there you go!

More on innovation

I’m taken with this idea that innovation is obvious. Why? Well, if innovation is not-obvious we need to work at it, and I’m not sure what we do about it. Maybe those answers will come.

But if we stick with the idea that innovation is obvious I’ve got lots of ideas on how to help it. Considering obvious innovation is the base case, if innovation is obvious and we cannot exploit it, if an organisation cannot harness it, then what chance does it have with non-obvious innovation? So, lets crack obvious innovation then we can tackle non-obvious.

In a modern world it is very easy for innovations – obvious or not – to be crushed, to be passed over or to be ignored. How does this happen? Well, there are a number of hurdles any idea must overcome.

For starters there is the time hurdle: we as individuals only have so much time, most of us have demands on our time from within our organizations and outside. If we can’t give time to innovation then how can we ever hope to think of the ideas let alone develop them into something?

The second is money: to develop an innovation may require money, say to buy the parts we need to create a prototype, or to get the resources (e.g. books, software) we need to explore the idea.

And of course, time is money so if we are short of money we are probably short of time too.

In both these cases there is a need for Slack. Tom De Marco has even written a book on just this subject – obviously called Slack (2002 – Slack). The thing is, if your every minute and every penny is accounted for in advance you aren’t going to have the time or money to pursue innovations. This is frequently the case when we work on highly scheduled projects.

When an innovation is processes based we open the whole question of change management. For example, suppose you want to try XP in your software development organization: yes XP is an innovation; yes it is obvious (because enough books have been written about it) but, are people prepared to change the way they work? Are managers prepared to take a chance on something?

So, innovation may be stifled because some people are not prepared to try something new.

It may also be held back because people are risk averse. In particular, people in positions of responsibility may be more comfortable repeating something they have done before than trying something new. And if they will not try something new then who else in the organisation will?

Neither will people pursue new idea if they are seen to be punished when it doesn’t work – or even ignored when they try something that does work. For example, sticking with the software development process example – because I know a little here – lets consider Joe and Fred who work for two separate software development companies.

Joe and Fred learn about Agile processes. They introduce the ideas to their teams. Fred’s team fails miserably and come pay review time every other manager is given a rise but not Fred. Clearly he will be deterred from trying any other new ideas.

Joe meanwhile has a modicum of success. Then his organization is re-organized – as companies are wont to do. And in the new structure Joe finds that he is effectively demoted. Is he going to be inspired to try any other new ideas?

Thing is, organizations need to be tolerant of risk and failure, and, just as importantly, ambiguity. This is easily said and hard to do.

Sometimes we crush new ideas because we put people in boxes. We assume that the R&D department will have the new ideas and not front-line staff. People respond accordingly – I spoke about this in my last Blog, “the Jackson Pollock example” and it related back to what I said a while ago about identity.

Ideas can also be crushed when they seem threatening. Again, Joe’s Agile team may not have space for an “architect” in the team, people in the company who consider themselves to be “architects” may feel threatened and work against Joe – either actively or passively.

Just because one person exists in one place on the organizational chart, say “Marketing” doesn’t mean they can’t have a good idea about another area, e.g. manufacturing.

The same thing happens when a potential product threatens to cannibalise sales of an existing product. Perhaps it is better to burry the new idea. But isn’t it better to cannibalise your own sales than have a competitor come up with a similar idea and steal your sales?

With all these ways to crush an innovative idea is may seem remarkable that new ideas survive at all! Big companies have more of these “defence” mechanisms than small companies and so crush more ideas. Small companies have few defences – indeed some small companies come about when people get fed up of their ideas being crushed and leave the big company to pursue a new idea.

Of course, in a big company there may be more time and money to develop the new ideas. The firm may be profitable enough that it can take more risks with more new products.

So, both big and small have their advantages. However, there is a need to develop and nurture a culture of innovation. If you don’t do this when you are small it is harder to introduce (retro-fit) when you are large.

Obvious innovation and the Jackson Pollack example

My recent entry on innovation attracted a few comments, some verbally to my face, and some online, were we can all see them. One online poster, ended his comment by saying “innovation is obvious, isn’t it?” – I find very interesting idea itself. Certainly there is a tendency to regard a lot of innovation as non-obvious. If for a moment we flip the default and assume innovation is obvious then there is a lot we can learn about innovation.

I would like to introduce something what I call the Jackson Pollack example. We will use Jackson Pollack is an example, although Mark Rothko, Ellsworth Kelly or a number of other modern art artists could fill the bill equally. It goes like this

Have you ever been to a modern Art exhibition, and as you view a piece by Jackson Pollack, a visitor close by, says “that’s not art, I could’ve done that” or perhaps they say: “Looks like something my child date.”

They might be right. In these observations there is an important point is: they didn’t do it, Jackson Pollack did, it was he who had the idea, it was he who implemented, it was he who showed the idea, it was not the person standing next to you at the exhibition. Sure, the idea may appear obvious in retrospect, but did it appear obvious when Pollack did it?

At the time the Pollack worked art was changing. Still, he went against a lot of conventions produce his drip paintings. Other people may have had the same idea as Pollack, but they didn’t implement it, why they didn’t implement it we don’t know, we can only speculate, but I’m sure that some of them would have been bound by convention, the convention and that says the painting must be easily recognisable, the convention that says it should be a landscape or a portrait or a still life.

We are surrounded by conventions, and sometimes an innovation needs to break the convention. In retrospect, it may be a convention that needed to be broken but that might not be obvious the time. To break convention risks upsetting people, it may even be career limiting, and so there are good reasons why we don’t break conventions – reluctance to break convention is itself a restriction on innovation.

Of course, one reason why Pollack was able to do what he did was because he was an artist. He had an artist’s training, and he had a track record of producing pictures. Therefore, he was taken seriously by the artistic community and the art dealers. The same might not be true of your neighbour in the Art Gallery, who has no training or background in art.

This scenario plays itself out in business as well, firms may expect to see innovation from the Research and Development Department, but may not be expecting it from other places in the company. When innovation is posed by, say, the checkout operator iIt may not be taken seriously.

The question for business is: can it afford to only take innovation is from where they are expected? By ignoring the proposal from the checkout operator the company may be closing its eyes to proposals worth thousands or millions of Euros.

So, to sum up then: innovation may be obvious, but there are plenty of reasons why we might lose it.

The Jackson Pollack example shows us:

  • Having the idea is important, but so is having the idea first. And so is following through on the idea.
  • What is obvious in retrospect may not have been obvious at the time.
  • We sometimes need to break conventions and this might make us unpopular.
  • Sometimes, we only take innovation seriously, when it comes in, the people we expect to be innovative.

So challenge for the company wishing to be innovative are:

  • How do we help people follow through on their ideas?
  • How do we allow people to break conventions?
  • How do we harness ideas when they come from unexpected sources?

Skunkworks teams for innovation

Continuing on the theme of innovation, there is another common technique used by companies to produce innovation. Often it used to develop somebody’s innovative idea and is sometimes used to generate innovative ideas as well. This is the skunkworks model – or to give it a less jazzy title: separate your imaginative team.

In this model, the team that is to produce the innovative product is separated from the main organisation. The people involved a ring fenced, they may work at a separate location, they are removed from the day-to-day life of the company, and in particular, the politics and blocks on innovation that exist normally. Sometimes these teams are kept secret.

This technique has been documented in countless stories, indeed, Lockheed Martin have trademarked the term skunkworks. If you want to know more about this method you could read Coplien and Harrison’s Skunkworks pattern and in their book, Organizational Patterns of Agile Software Development, 2005.

(I have also discussed the technique in pattern form, Separate Imaginative Teams.)

Hamel and Prahalad also noticed this technique in their Harvard Business Review article, Corporate Imagination and Expeditionary Marketing – May-June 1991.

There is something macho about this technique: the image of a bunch of brave souls going off to design and create a new product, cut off from the Corporation, free from the politics and infighting. And sure it does work, companies do create new products this way, however, this technique also has a downside.

This technique may create a new product, it may bring about an innovation, it may get you out of a hole right now, but it does little to make the overall organisation more innovative. In fact, it may detract from the overall company’s innovative ability.

To start with the innovative people are separated from the rest of company so none of their expertise or experience is directly accessible by the rest of the company. Neither do they form role-models for other people in the company. Many times, the new product development is invisible to rest of the company – they just get on with their regular work.

And when the product is produced in must somehow be folded back into the company. The rest of the company may not understand the new product. Indeed it might be quite different from the company’s main products. Therefore there is a learning curve, while the new product becomes part of the stable.

The people who have created the new product also need to be folded back into the company. But while they have been outside the mainstream, they may have got used to a different way of working, a freer environment, a lack of politics or structure. To these people re-entering the corporate fall might be difficult. Indeed it might be easier to leave the company altogether.

Meanwhile, the people who remained with the company working on the old products are not working on the shiny new thing, they may become resentful of those working on the new product – especially if the skunkworks team are seen to be given privileges or better resources.

And there’s not forget one the points made by Arie de Geus which I noted a few days ago: it is not just the taking of decisions that takes time but the acting on them too. The people outside of the company have made all sorts of decisions, and when they returned to the company they expect those others to act on them – there will inevitably be a delay. Indeed, there may be a repeat of the learning curve.

Perhaps, one of the most famous examples of this approach was Xerox’s Palo Alto Research Centre – or PARC for short. Xerox set up a research centre on the other side of the country, stuffed it brilliant people and gave him plenty of money. The project succeeded, it invented most of the features we find in the modern PC.

But the project also failed, the team was so far removed from the main Xerox Corporation and the company could not usefully exploit their innovations. Still the researchers found a way, and many of them left Xeroxto found successful start-up companies in Silicon Valley, for example Adobe and 3Com.

So, on balance, I am not a fan of the skunkworks approach to innovation. If you want your company to be innovative you have two embed, within the company, and within the values.

How do you do innovation?

There is a lot of hot air spoken about innovation. Indeed, there is probably more talk about innovation than there is actual innovation itself.

I started to get all excited about innovation on Friday, when one of my managers said:

“Allan, do you know anything we can do to improve innovation?”

Of course there is one obvious answer: 20% personal projects, its the 3M example – and now Google. Just about everyone seems to have heard this example so I’ll be brief in my comments: at 3M engineers are encouraged to spend about 20% (figure varies depending on who you read and which company it is) on “personal projects.” Some of these projects eventually make it to full products, like Post-it pads and Google News.

But are there other things you can do?

I was excited so I went home and started looking through some of my textbooks and journal archives, my question: just what do you do to produce innovation?

On the one hand innovation is just an extension of problem-solving, which is itself an example of learning. So doing innovation is firmly within the knowledge and learning agenda I keep banging on about. But on the other hand, innovation is so specific it is a subject in its own right.

Regular readers of this Blog will know I don’t have much time for “big brains”: I don’t believe that the CEO, CTO and a few managers can sit in the boardroom for six hours and come out with a new product. Most innovation is bottom-up.

Nor do I believe you can schedule innovation: Ever seen a project plan with a date pencilled in for innovation? No, you can’t timetable it.

So, how do you do it?

Looking at my books I find advice like: improve you ability to learn, trust your employees, organize your business structures to promote innovation, value innovation, align your HR policies (reward innovation and risk taking), don’t punish failure, and so on. These are all big, macro solutions, they may be necessary but they are not sufficient, you need something else.

You can set your business environment up to encourage innovation with these ideas, you can show people it is valued, but what do you do?

This is where the 20% personal project comes in. It is something you could do today. It is easy to see how you could get a new idea out of it – whether that is a product or process innovation.

A few months ago I was able to speak to someone who works at Google and they described how this works.

Engineers need to spend 20% of their time on a personal project. But many of them don’t know what to do, so most of them are open to suggestions. Meanwhile, the product managers have the opposite problem. They are identifying things the company could do, but without a prototype or proof of concept they can’t get any official resources.

So the product managers look around and find engineers who need projects. They then have to interest the engineers in working on their idea. If the project goes well they can then go official and ask for full project status.

(By the way, read my lips: No project managers!)

The trouble with this example, the 20% example, is the one everybody cites. It seems. When asked: “how do you do innovation?” People reply with a 20% example. What is actually happening is that this example is getting in the way of other ideas and examples of how you do innovation!

So, dear readers, the challenge for you:

what does your company do to encourage innovation?

I need your ideas and experiences.

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