No8 Wired – Enabling a Culture of Innovation

number-8-wireWe like to think that as kiwis we are pretty innovative and draw this back to our heritage as pioneers (both Maori and Pakeha) on the land solving problems by using what they had around them, invariably a spare piece of number 8 wire. Perhaps it is simply as atomic scientist Ernest Rutherford said “We haven’t got the money, so we’ll have to think”.

Team NZThere is a proud heritage of innovations such as the Hamilton Jet boat, the Martin Jet Pack, Maclaren Racing Cars, Zuru Toys, the Britten Motorbike, Icebreaker, Animation Research Limited, Weta Workshops, Rocket Labs, Seequent data visualisation software or the ‘Cyclors’ used by Team New Zealand to win the America’s Cup – the list goes on.  Maybe we have a culture of innovators, or maybe no more than any other country, but it certainly seemingly creates a national notion of innovation and problem solving.   I would like to think we have gone beyond make-shift No8 wire solutions to quality world class inventions.

This got me thinking, how do we create innovation in business, because businesses don’t come up with innovation – people do?  So how do we get the best people and then how do we grow a culture that stimulates innovation?

Innovation apparently boils down to people ie sourcing the right entrepreneurial talent; having clear business intent about what you are trying to achieve through innovation (not innovation for innovation sake); having the right culture, set-up, systems and policies to enable innovation to happen; external collaboration to bring the outside in and use greater collective brainpower and thinking than you own; and customer insight to know you are solving their biggest problem or enabling their aspiration to happen.  So lets take a look at a couple aspects.

People.  So who is most likely to be innovative?  We may like to think that young people such as Zuckerberg, Hsieh or Jobs will bring our newest and best innovative thinking but some interesting research by MIT of US tech businesses found that the average and median age of the founders of successful U.S. technology businesses (with real revenues) is 39. They found twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. So everyone has a shot at success, but age provides a distinct advantage. Studies in the arts by Philip Hans Franses from the Erasmus School of Economics shows that on average, Nobel Prize-winning writers produce their best work at age 45. Painters peak at age 42. And classical composers produce their most popular works at age 39.

So what does this tell us, perhaps we should blend the new with the ‘old’?  Stimulate the thinking with some fresh blood, coupled with some thinking from those who have been around the block once or twice, those who know the industry and have been potentially cultivating an idea or two.

Culture.  We also need to create an environment where it is ok to take risk and even fail. People need to understand the strategic direction so that their ideas compliment what is trying to be achieved, and have licence to try something new and even fail fabulously to learn, adapt and iterate.  And how do you just stimulate curiosity?  How do you get people to ask: ‘What if we…? How could we….? That’s a great idea and we could…..’

Plastic and silicone extrusion manufacturer, EPL, utilises Incubation Labs and visible innovation boards and discussion, to continually stimulate and create the space for innovative thinking.  They even count the number of innovations as their big hairy audacious goal (BHAG). With 196 innovations and counting on the wall, EPL is not only encouraging new ideas but also improving efficiency within their business, leading to a more productive and positive environment. “Most of the ideas are about improving the workplace,” EPL CEO Mark Field says. “Having core values such as ‘Innovation Sets Us Apart’, ‘One Team’ and ‘Making a Positive Difference’, means that no idea gets pushed aside or ridiculed. And every now and then a really good one comes through.  “We’ve had two or three great ones so far, one of which will probably have an impact of $150,000 on our bottom line, if not more.”

This approach may stimulate innovation anywhere on what I consider the innovation continuum, from continuous improvement through to disruption.  However other recent research also shows that if you want true disruption in your current business, you are better to set this up off to the side as a separate entity to stimulate a skunk works or ‘black ops’ project with a separate entrepreneurial identity.

This blog doesn’t intend to give a road map but give some considerations, at least – stimulate some thinking and keep stimulating the conversation.

Greg is a Strategic Adviser at Advisory.Works

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