The Paradox of Open Innovation: Internal or External?

What came first, the chicken or the egg? This paradox has perplexed philosophers for millennia.

In the progressive workplace, a similar dilemma confounds executives. In the pursuit of open innovation, what comes first: Innovation created internally, or innovation developed beyond the organization?

People talk about open innovation. It’s the mantra of leadership experts and workplace counselors across the business landscape. But internal versus external innovation also presents a dichotomy. Often conflicting in nature, many proponents of open innovation get tripped up on why external innovation can fail to take root.
In my opinion, the paradox is easily answered: External innovation is destined to fail if the imperatives of internal innovation have not first been developed, deployed and adhered to. Workplace pundits extol the virtues of external innovation, but if innovation isn’t alive and thriving internally, innovation itself will fall on the scrapheap of failed initiatives.

Effective innovation isn’t about the Chief Innovation Officer or even the CEO mandating from on high what milestones R&D or Engineering must pursue or achieve. In fact, innovation that’s “required” to come from R&D, Engineering or some other “Department of Innovation” is susceptible to the Not Invented Here syndrome. If it wasn’t created by someone who’s mandate it is to do just that, it’s often likely to be squashed by exactly those who didn’t come up with the idea. “Quit meddling in my sandbox,” is the complaint.
Those barriers have to be removed. Effective innovation begins with breaking down silos that separate departments, divisions or teams – and encouraging, even welcoming participation from across the organization.

Sure, those directly charged with leading innovation might come up with good ideas. But will they speak to the heart of the organization and how it interfaces with its customers or constituency?

For example, since 1967, Hollywood Woodwork in Hollywood, Florida, has specialized in custom woodwork for use in premier hotels, spas, casinos, country clubs, public projects and corporate offices throughout the United States and Caribbean. Then the recession hit, and the company saw a drop off in its traditional business.

Then the company opened up and solicited ideas from all employees – not just those in Product Development. This led to a simple question: “Can we do church pews?” No deep analysis by skilled research teams or high-paid consultants. Just a simple query that made company executives wonder: Can we?
They could. And now, Hollywood Woodwork does, making many other products utilizing their assets. Building church benches helped diversify the company – and keep it afloat during the recession.

The request also made executives there realize something else: We must be receptive to potential innovation from all internal sources. Not-invented-here doesn’t exist at Hollywood Woodwork. Innovative suggestions are welcomed from across its workforce of 150.

With the foundations of open innovation secure within an organization, only then should a company seek innovation from beyond its walls. If you don’t have internal innovation down pat, and you haven’t removed all the emotional barriers that inhibit the free exchange of ideas, you never will embrace what comes from the outside.

Successful open innovation, then, becomes the preamble to effective external innovation –  if it’s needed at all. Paradox solved, the entire team can focus on true innovation.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley.

Inspiring Corporate Entrepreneurship to Fuel Innovation

It's been said that successful people either are entrepreneurs - or think like entrepreneurs.
Look around your company. Are you surrounded by "entrepreneurs"? Is your team comprised of people who take ownership of any project or task that comes across their desk or inbox? Do they embrace challenges, possess the process, and take responsibility - for successes and failures alike?
Some may come away thinking that "corporate entrepreneur" and "employee" are contradictory. They believe that "entrepreneurs" take the ultimate risk - ditching the security of the day-job, as it were, and facing the personal, financial and psychological challenges of business ownership.
That's one definition. Another would be "corporate entrepreneurship." This realm is inhabited by people who - though they receive a paycheck signed by someone else - see the organization (or at least their small domain within it) as their turf. This is the most valued of employee.
Innovation and corporate entrepreneurship are inextricably intertwined and fuel well-reasoned risk taking. Especially in large organizations traditionally risk averse, innovation drives leaders and teams to become more corporate enterprising. This process encourages growth from within, which helps set the stage for leadership continuity.
As a business leader, you must build an environment that tolerates such entrepreneurial thinking. It's the leader's job to encourage such entrepreneurial thinking - to exude and build trust, to embrace the risk to fail, and to inspire people to take well-reasoned chances.
In the book, "Grow From Within: Mastering Corporate Entrepreneurship," co-author Robert Wolcott discusses how companies can enable and support "internal entrepreneurs" to achieve innovation-led growth. Such entrepreneurial thinking drove IBM to realize some $15 billion in new annual revenues from 22 Emerging Business Opportunities, and Whirlpool to realize $4 billion in revenues from companywide innovation efforts - "despite global recession and the steep drop in housing markets," notes one review.
The authors reveal four models of corporate entrepreneurship laid out on an axis of organizational ownership (on the horizontal) and Resource Authority (on the vertical). Each possesses unique and specific characteristics. The Opportunist (bottom left), takes no deliberate approach to entrepreneurship; the Advocate (bottom right) evangelizes for it; the Enabler (upper left) provides funding and executive attention, and the Producer (upper right) establishes full service groups with mandates for corporate entrepreneurship
Applying Robert's Rules of Innovation , the Advocate, Enabler and Producer can thrive in this environment for each has corporate support. They have executive support, from Inspiration  to Net Reward, needed for innovation borne of corporate entrepreneurship to thrive.
Yet for corporate entrepreneurship to thrive, it needs more. It requires the structure and culture. Assuming the right people are in place, leadership must provide divisional and business unit autonomy. How can you lead your organization to a climate of corporate entrepreneurship?
-          Like Innovation, Define what "entrepreneurship" means. The phrase "Corporate Entrepreneurship" must mean the same thing organization-wide. Moreover, leadership must delineate objectives and point the way as part of its vision and mission.
-          Incubate and nurture. Corporate entrepreneurship doesn't flourish without guidance. It starts small - and grows through encouragement. Begin with small projects heavily supported by leadership. Those success stories should be heavily communicated as such. They then will become the lead project to pull the rest of the group or other entrepreneurial-minded teams along.
-          Create a reward system. Risk and reward, when properly aligned, can foster accountability. Rewards - whether in the form of praise from immediate managers, attention from leadership, or the chance to lead future projects or task forces - are powerful motivators. They also can help solidify the creation of stronger corporate entrepreneurs.
So look around your organization. Are you surrounded by employees - or entrepreneurs? The difference may be not only the way they think, but they way they're being nurtured.
By Robert Brands with Jeff Zbar
Robert Brands is the founder of InnovationCoach.com, and the author of "Robert's Rules of Innovation": A 10-Step Program for Corporate Survival, with Martin Kleinman, published March, 2010 by Wiley (www.robertsrulesofinnovation.com).

Observe & Measure: When Validating Innovation, ‘What’s Measured Is Treasured’

Innovation may be vital to creating competitive advantage.

But how costly is ineffective innovation? That is, if a company sets out on a new product or service development initiative – and that effort fails along the way for whatever reason – what has been lost? Investments in time, effort, capital – even reputation?

What if the company set in place a practice of observing and measuring innovation at select or pre-set milestones along the way? Roadblocks, sticking points or issue that otherwise might have doomed a project to failure would have been identified, reported and measured – even corrected – along the way.
Success might not have been assured. But there would have been a higher likelihood of averting failure, or at least identifying troublesome issues early on.

Innovation is meaningless without attaching measurable goals to an initiative. Yet, many organizations fail to give meaning and measurability to their programs. They don’t measure the percentage of income that comes from products younger than five years old, or new product sales, or metrics that serve as innovation dashboard to track innovation activities, or R&D spending or headcount.

The importance of having measurable goals in the innovation process cannot be overlooked – or overstated. Yet, it often is both overlooked and understated. Many organizations go through all the right motions – they plan a new product, service or internal initiative launch. They gather the team, provide the specs, and let them loose with an imperative.

But no metrics have been set out to track their success. And without the ability to measure, how can you know whether the initiative is successful?

That’s where observation and measurement come in. Observation means tracking or watching how the team advances on the path of innovation. Measurability requires that accomplishments are weighed against milestones. Done well, the end result is an initiative that adheres to the intended vision, mission or strategy.
Simply put, without goals – which then are observed and measured (and supported by associated rewards), things won’t happen. Observation, measurement and tracking of NPD results are essential to helping ensure optimal ROI.

How is this done? First, create your baselines, with initial observations and measurements. Then capture the time to each gate, the time spent inside each gate, etc. Look for improvements in terms of reduction of time spent within each gate.

Once a product is launched, a key metric is the ratio of new product sales to overall sales. One method would be to track historical new product sales for the first three years after launch versus total sales. This is your baseline. Next, set a target goal for this ratio, based on your needs and taking into consideration your competitive environment and the competition’s baseline. This would be further calibrated to account for the product lifestyle in a particular industry, but in any case, new product sales is measured as a percentage of the total.

Observation and measurement also can be fascinating to watch as headway is made. You see your margins grow, as the right mix of new products come on-stream.

This is part of an overall process of continuous improvement. Plan. Do. Check. Act. Repeat – or revise. Things won’t always go as planned, so take corrective actions and make ongoing course corrections.

Product lifecycles keep getting shorter and shorter, which mandates accelerated NPD cycles.  In the personal care arena, for example, lifecycles are only two to three years.  So each big idea has tremendous potential value and it’s important not to kill a potential success too early.

Some believe investment into R&D can help ensure success. Actually, R&D spend is no guarantee for Innovation success. In its simplest terms, what gets measured gets done.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

Value Creation: The Ultimate Goal of Innovation

Why innovate?

Some would argue that companies innovate to achieve a heightened competitive advantage, streamline the organization, or create intellectual property – including patents, trademarks and other protected property – that create value in the portfolio.

Many reason and rationales can be argued for the pursuit of innovation. Yet no purpose for or result from innovation can be more compelling than Value Creation. This metric is the ultimate measure of return on investment when measuring innovation’s role in creating value.
Simply put: Innovation done well drives value creation – for the organization, its customers, its internal stakeholders and its external shareholders.

Successful innovation turns ideas into money. All the processes, creativity, time, sweat, research, dreaming, refining, modeling and retesting transform effort into tangible, valuable results.

This includes innovation that touches all sectors in the company or organization – not just in the creation of a new product or service. Enhancing the business model or networking, enabling a new core process, creating a new channel, brand or customer experience delivery model, or offering a new product system, boosting product performance, or providing a new service each creates value.

Nowhere is this more relevant and apparent than in the acquisition process. If one were to look at acquisitions with and without a patent portfolio, I would argue that a well-created and -managed patent or IP portfolio can double company value. My former company, Airspray, created of the novel packaging and dispensing process that turned liquid soap into foam. It was a company with a typical value of 7-8x EBIT. Yet, the addition of this patent to its portfolio resulted in 15x EBIT paid when the company was acquired in 2006.

This is especially important in today’s market. Current economics continue to hold down already devalued corporate stock prices. Companies are challenged to find ways to boost their value to stakeholders – as well as to keep customers and prospects engaged and purchasing goods. Value creation borne from innovation can be critical indeed. As evident in the Airspray example, one item in our patent portfolio almost doubled the EBIT paid at acquisition. This example is not unique, but was the result of painstaking and thoughtful focus on value created by innovation.

Moreover, value creation and innovation done well can immeasurable enhance the corporate brand. Between adding new products, reviving the corporate dress, even launching new marketing creative or advertising campaigns, customer value can be created through the value-added components and enhanced public face of these endeavors.

Of course, it’s essential to find that delicate balance between cost, price, and return. Balance is found, in part, by seeking stakeholder input and customer feedback during development of any innovation process.

The arguments for innovation are, frankly, inarguable. Value, brand enhancement, share price and perception among various stakeholders can be elevated by innovation done well. Add to the equation the inclusion of intellectual property derived during the process, and the overall ROI can be well worth the investment.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

The Innovation Process- Process Innovation

‘Is This Yours?’ In The Innovation Process, The Answer Defines Ownership

“Excuse me, is this yours?”
If someone asked members of your Innovation Team about “ownership” of a current initiative, would individuals reply, “Yes”?
Or would the people involved point to the team leader, the CEO or someone else – someone other than themselves? Would they reply, “No, that’s his”?
I spoke recently with a CEO of a consumer products company who expressed disappointment that an idea for an exciting new wrinkle in sunglasses technology had faltered. In doing so, others had beaten the company to market.
Why did this happen? The “Leader” admitted he’d failed to sell the idea. “Others just didn’t get it,” he said. “Their hearts weren’t in it. They were moving forward out of duty, not out of passion. And we dropped the ball.”
In the world of Innovation, it’s the Chief Innovation Officer’s job to marshal forces, to empower, to inspire, and to transform team members into stakeholders of the process or project. In short, it’s to create and encourage a spirit of Ownership.
As one of the 10 key Innovation Imperatives “Ownership” ranks up there in importance (http://www.robertsrulesofinnovation.com/category/blogs ) with Ideation, Risk, Results, Idea Management and all the others.

Put as a business equation, Ownership Equals Accountability Equals the Foundation of Innovation. Without accountability, ideas stall. Progress dies on the vine of best intentions. Any real chance at success is lost.
Without ownership, positive results are almost impossible to achieve. A team member cannot point to the Chief Innovation Officer or team leader as a project’s or initiative’s owner. Every participant along the innovation process’s chain must embrace accountability as a champion of the idea, the development process, the success – and the failure – that may come in tow.

To be sure, Champions at the highest level – like a CIO – have the authority and (and should have the passion) to garner organizational respect needed to push Innovation from the idea stage to development and ultimately to fruition. Champions build consensus, convince others to take calculated risks and to work outside their comfort zone,But Ownership must extend beyond one single Champion. To be sure, a champion at the highest level ultimately drives projects forward. But “ownership” must be claimed by all involved, encouraged by the senior project manager, but wholeheartedly embraced across the organization.
How will you know a project has been welcomed into the hearts of its team? Ask one question:
“Excuse me, is this yours?”
The response will give you your answer.
By Robert Brands with Jeff Zbar
Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

Innovation Consultant:Build environments of greater commitment and trust to support learning and innovation. Save time and money and reduce stress.Helping leaders deliver profitable growth through "sustained Innovation”

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Innovation - Innovation Made Incarnate

By: innovationCoach.com

Here are seven steps to turn inspiration into innovation By Robert Brands When Apple (AAPL) unveils its iSlate in late January. Read the latest design news on product design, game design, branding, and planning. Get information on business process innovation.

Innovation Made Incarnate

Much of Apple's success relies on the inspiration CEO Steve Jobs has fostered in employees. Here are seven steps to turn inspiration into innovation.

When Apple (AAPL) unveils its iSlate in late January, the tablet computer will be just the latest wowing of the world by the pioneering computer company. With its iPhone, iPod, and MacBook laptops, plus the original Macintosh computer itself (and the "1984" TV commercial that pitched it), Apple's innovation has changed technology—and the people who use it.

Often overlooked in these rollouts, though, has been the inspiration behind the products. How does a man—CEO Steve Jobs, who co-founded Apple with Steve Wozniak—foster such an upwelling of inspiration? How does a leader motivate teams in the organization and transform consumers into loyalists? More importantly, how can you foster such inspiration in your organization?

Before you can answer these big questions, you need to start with another: How inspired is your organization? In a survey on InnovationCoach.com, a Web site I created with tools and resources for innovators, I asked, "Which elements of an innovation process and/or culture are in place today?" Half the respondents answered "inspiration." The good news was that half realized the need for inspiration. The bad news was that just as many didn't recognize its importance or hadn't put a process in place.

I've worked in innovation for 25 years, and over a 10-year span, I was charged with delivering at least one new product a year. In my new book, Robert's Rules of Innovation, I captured the imperatives of how to create and sustain innovation. In writing the book and creating InnovationCoach.com, I've sought to encourage the creative spark that ignites broader thinking and inspiration, which are vital to the continued growth of any organization. But you must first identify its source within your organization and channel that wellspring.

Inspiration from Everywhere

Inspiration goes beyond the thinking that brought us various Apple products. Inspiration is the creative spark that drives individuals or organizations to consider and create new products, services, or internal processes. It's how people think, collaborate, and then put new ideas into motion. Inspiration comes from anyone and everyone. It reaches from the chief executive to the customer-service help desk, from the factory floor to the retail showroom, from the longest-tenured employee to the newest hire as well as the customer hitting the Web site and submitting ideas via a "suggestions" box or a phone call. Savvy innovators even welcome partners, suppliers, and vendors into the process. No one gets a pass from thinking creatively about how to improve the company, its products, or its processes.

Back in the 1990s, I ran a company called Airspray. The category-killer we created and patented was an inexpensive mechanical pump that created instant foam. With it, we transformed liquid soap into a foamy cleanser. We began with a model for the hair-care industry and then added products for skin care, hand soap, and eventually body wash. This progression met my mandate for a new product each year.

But it all began with inspiration. I led the innovation team that came up with the original ideas. At the table were representatives from across the organization—finance, R&D, sales and marketing, customer service. I empowered them to think creatively by breaking down the barriers between my C-suite status to become "one of them" in the creativity process. I was still a leader, of course, but one who welcomed ideas from all corners, whether that meant engineers or consumers. Our efforts paid off. We sold Airspray in 2006 for $187 million, or 13 times Ebitda.

While thoughtful leadership has fueled other businesses, inspiration remains the spark that drives the creative process.

Robert's Rules of Innovation

How can your organization inspire innovation? Try these seven tips:

• Make inspiration an imperative. In Robert's Rules of Innovation, I write that successful innovation in an organization is fueled by 10 imperatives, including leadership, ownership, accountability, risk and reward, and value creation. None is more important, though, than inspiration. An inspired leader, organization, and process engage the team, welcome them into the act of innovative, and heighten chances for success.

• Install and empower a chief innovation officer, or CIO. Inspiration and innovation need a champion, someone who helps develop ideas, fosters an environment that encourages creative camaraderie, and steers the organization toward greatness. In small or midsize companies, this could be the owner or CEO. In large organizations with an especially thoughtful or charismatic leader (like Jobs), the CEO can serve this role as well. But generally big organizations need a CIO empowered by the CEO to push projects along the various pipelines.

• Set goals and create enthusiasm to meet them. Where do you want your organization to go today and tomorrow? Does the company need one new product this year, or a new process-management or workflow initiative? Although the CIO is the leader (after the CEO or other top exec), the team must embrace the challenge as a shared goal to be met together. Buy-in comes with small wins that need to be recognized and failures that must be tolerated. Measure achievements and use a reward system of monetary or recognition awards. You'll find sometimes recognition is reward enough to keep troops engaged and motivated.

• Create the right culture. Inspiration is bigger than individuals—it must permeate the organization. This is more than hanging motivational posters on the walls. Host regular brainstorming sessions to welcome new ideas. Hold team-building exercises, where inspiration is the focus. Inspiration must transcend hierarchy and silos. Together, the team enjoys success and learns from the lessons of failure.

• Imbue inspiration as a start-to-finish endeavor. On its album Dark Side of the Moon, Pink Floyd laments, "plans that either come to naught or half a page of scribbled lines." Life and business are littered with uncompleted tasks. Set deadlines, and again, use rewards to help ensure they're met. See projects through. Strive for the completed task.

• Observe, measure, and know. Inspiration—like innovation itself—doesn't happen in a vacuum. It must be measured to gauge performance and ensure a chance at success. Each project team must have a leader in charge of shepherding projects to their respective waypoints and end goals. Set up processes and milestones. Establish checkpoints to weigh accomplishments.

• Never relent. Inspiration is about the journey, not the destination. Herb Kohler, the bearded, 70-year-old chairman of the plumbing fixture company that bears his name, still heads Kohler's monthly new-product development meetings—that is, when he's not collaborating with legendary golf course designer Pete Dye on a new development or leading the company's acquisition of Scotland's famed Hamilton Hall in St. Andrews. At a time when his contemporaries are content just to hit the links, Kohler remains committed to product innovation—and helping to provide the inspiration behind it.

Inspiration sparks, propels, and steers innovation, which, in turn, fosters creative thinking and new business development. It motivates teams, encourages shared goals, and ultimately drives value to the bottom line.

Robert Brands is the founder of InnovationCoach.com, and the author of Robert's Rules of Innovation: A 10-Step Program for Corporate Survival, which will be published in March.

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Innovation -Training and Coaching-Business Coaching

Innovation: Training and  Coaching, Business Overlooked Imperative

Smart companies often pride themselves on training programs that introduce or enhance employees’ knowledge of corporate business practices. They promote mentoring initiatives that pair seasoned execs with rising talent. They create booklets or PDFs on corporate policy – and implore staff to read them.But introduce a business innovation initiative, and those involved are expected to just know how things are done. They’re supposed to possess some innate awareness of the concepts, the best practices, the goals, milestones and targeted end-game.It doesn’t work that way.Innovation is a learned concept. Training and coaching is the forgotten imperative in the process of innovation. For best practices in the pursuit of innovation have to be shared to be learned – and mastered.From the Chief Innovation Officer (CIO) to the innovation team to rank-and-file employees who will implement, follow through or carry forth on the fruits of innovation, people don’t just know. They’re taught.Organizations whose teams are not trained and coached in its unique approach to the imperatives of innovation are destined to amass a litany of failed projects.For example, a major multinational launched a new Innovation initiative with the hopes of turn-around renewed profitability and growth. After much initial excitement and visibility, expected results did not materialize – and in the turn-around world, false starts are more costly for an organization than starts or restarts.What happened? The team involved basic project management training. After a course of such training and coaching, associates had gained a common language and understanding. Progress was realized, and the company today remains on a growth path.

Training and coaching is vital to transmitting the organization’s unique approach to innovation – and ensuring people adhere to its practices. Proper hiring, training and coaching is the way to create, reinforce and enhance company culture and mindset. At its root, training and coaching introduces people to the organization’s vision, mission, strategy and objectives, and points everyone’s compass toward True North.Training and coaching should cover the lot – from the unique way ideation is treated, to the unique way ideas are cataloged and approached; teams are inspired, formed and managed; risk is assessed; new product development is explored; ownership is encouraged; value is created; accountability is attached; metrics are observed and measured; net results are rewarded; and yes, how teams are trained and coached.Training and coaching is developed and delivered on a continuum. No sooner are existing policies and best practices discussed, then new procedures are introduced to further the organization’s pursuit of innovation.Continuity is the key. Training helps your team constantly improve its skill set, through new techniques in ideation, process experience and intra-organizational communication of best practices. Ongoing reinforcement helps employees understand their place and aspire to greatness on the New Product Development team (whether that “product” is a product, a service or an internal practice).This goes beyond the team. Trainers and coaches need continuous training and coaching, as well. Even the CIO at times requires training and coaching on evolving corporate innovation practices.Alas, training and coaching often is lost or last as companies often believe they have little time and money to fund these efforts. Best of breed companies have earmarked a dedicated budget to training and coaching.Why? Because they realize the downside of not training – and retraining – their people in the process of innovation is to be mired in mediocrity.