To compete on a global scale, we have to be more innovative than our competition. The question is, "How competitive is our competition?" Very.

We see this with 3M. They have a stated policy of replacing all their products every five years with new ones. We see this with the major Japanese companies that are planning replacement products even before the current ones have hit the market. We see this with all the new companies that are popping up all over the world who want our markets. So, is your company innovative?

Innovation is not about having new technologies. Tons of new technologies never go anywhere, and most patents are never built as products. Innovation is a people skill. Innovation is the skill of fostering new ideas that other people will value and accept.

There are two parts to having an innovative company: a culture of fostering new ideas and mistakes, and a culture of rigorously testing those ideas against the market.

Most companies are not innovative because new ideas are not welcome. This is a normal human reaction. Most people do not want to have to change their lives, and as we age, we tend to get even more fixed in our ways. In business, we tend to build up systems and practices to reinforce what worked in the past. To make a company innovative means that we have to actively promote and reward change within the company.

Next, there is the cost. New ideas take an investment of both time and money. Yet, successful innovations bring high profits. True, successful innovations will breed competitors, but those competitors will take time to get to market. Successful innovation has a period of time where the innovating company can make high profit.

But the biggest reason companies don't innovate: innovations fail. Most attempts at new business processes, technologies, or products fail. But, companies that are innovative do not punish failure, they celebrate it. In failure, we learn the things that are most valuable in the next attempt.

For example, the common Post-It Notes were actually a failure in making a specific glue. Because the failures were celebrated at 3M, the results of that failure have built a significant business.

It takes top management commitment to innovation in order to have an innovative company. It takes a commitment to invest the time and money. It takes a tolerance of people pursuing "pet projects", instead of squeezing the last morsel of production on the current products and ways of doing business. It takes a culture of accepting mistakes.

The rigorous testing of new ideas is another difficult part of innovation. To build new products or to test new ways of doing business, most companies rely on the old stand-by technique of "sink or swim". In other words, most companies resist the idea until they have to accept it, and then, force it to work without taking the small steps.

For example, one computer company used to handle releases of new versions by having the programmers work long hours to pull everything together, and then they would throw the whole mess at all the customers at once. When they adopted a sequence of partial testing on small groups of customers and staged releases, the process became much, much smoother for both the development team and for the customers.

Innovative companies have a process to test out new ideas. This process is not just to "work the bugs out" of a new product, but to bring the customers into the "development, test, deliver" process much earlier. The process is designed to bring the developers and customers closer together os that the developers can change their ideas to better meet the customer needs.

Developers of all types (product, business process, new management ideas) tend to get fixated on their ideas, and rightly so. However, that means that they miss out on some of the details that make a big difference in the acceptance of their ideas. By having a process by which these ideas can be tested with actual customers, the innovations gets improved.

So, is your company innovative? To answer, ask: Does my company promote and reward those who bring change? Does my company plan for and budget time and money for people to experiment with new ideas? Does my company celebrate failure and promote people how have failed (and learned from it)? Does my company accept and ask what we have learned from each attempt?

It's a Risky World

Now that many people are using email for communication, a lot of people are learning about keystroke sequences to mean an emotion, such as the smiley face :). Unfortunately, not all systems are set to handle them correctly. A number of systems convert the keystrokes into icons, so that the smiley face :) actually becomes a little picture. Once such conversion program converted "401(k)" into "401" and a picture of a couple of pursed lips - in an email sent to a female boss.

Dave Randolph,
President, Prairie Trail Software

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