Innovation and Creative Competency

School teaches that there is one right answer. As students we are supposed to figure out that answer. It’s the one that matches what it says in the answer key at the back of the book or for the test.

But business and life isn’t like that. There isn’t just one right answer for most of the problems and situations we encounter. In business and in life we need to be creative, to explore many options, to be able to discover something or a process that is innovative.

It is too easy, too comfortable, and usually a mistake to think that we are searching for the one right answer. Instead, in business we are looking for as many options as possible and then be able to make a choice or choices among them. If we think there is only one right answer we will jump on the first answer that comes up that would work. Usually the first idea is one that comes up fast because it is common and over-used. You are better off making your choice because it won the comparison discussion, not just because it was the first and only idea expressed.

Innovation means something new to the world or at least new to the situation. To come up with something new it is necessary to tap into the creativity of as many options as possible. That will work best when you open up to other viewpoints, brainstorm to bring out all types of responses, and include multiple ideas and multiple versions of similar ideas.

Creativity. Without open minds embracing many ideas and options, the road to innovation will be completely fogged in. With the openness for creativity, the road will have many dead ends but will also have plenty of room for u-turns, start-overs, and what-ifs.

What is creative competency? It does not require that you be an artist or writer or any of the ‘creativity’ occupations. Instead, all that is required is that your mind be open to possibilities and you share and keep sharing the hundreds of ideas you have, rather than squashing them by saying, ‘No one would think it is a good idea,’ or ‘That’s silly.’

The ideas shared with others often form the germ of an idea to expand and share back.

If I share an idea I have with you and you share one with me, we both now have two ideas, or many more as we explore how to mix and match and build on those ideas. Ideas multiply like rabbits if only you have an open mind and let them.

7 Strategies for Sustained Innovation

The need for constant reinvention is a given in today’s business environment. And while a breakthrough product or concept can catapult an organization ahead of its competitors, in these fast-paced times, that advantage is often short-lived.

While major product or service breakthroughs make headlines, it’s the steady incremental innovations made by employees every day that give an organization the sustained growth it needs.

Sustained innovation comes from developing a collective sense of purpose; from unleashing the creativity of people throughout your organization and from teaching them how to recognize unconventional opportunities.

As innovative ideas surface, a clear sense of mission empowers front-line employees to act on new ideas that further your company’s purpose.

It Starts at the Top

Leaders create the psychological environment that fosters sustained innovation at all levels. The challenge is that as an organization grows, management structures and bureaucracies, designed to channel growth, tend to create barriers to small-scale enhancements.

While there are exceptions, in larger organizations employees tend to feel removed from the function of innovation and are less likely to take independent action or offer revolutionary ideas.

The commitment to establishing the right psychological conditions for innovation needs to start at the top. This means that, as a leader, you need to consider your own assumptions about innovation and their role in creating and changing your organization’s culture.

You need to appreciate the value of incremental as well as major innovations, understand the psychology of innovation and take the lead in promoting an innovative culture. Otherwise, it’s just not going to happen.

While your organization’s innovative capability depends on multiple factors, there are several steps you can take to create the psychological conditions that favor inventive thinking, regardless of your industry or the size of your organization.

Establish A Clear Sense of Direction

Changing cultures involves changing minds, and that takes time. But as with any initiative, a clear sense of the target helps to speed the journey.

Your organization’s mission helps to organize and direct the creativity of its people. What is the purpose of consistent innovation in your enterprise? Is it to add customer value to existing products and services…to speed delivery…to increase on-time arrivals?

Having a clearly articulated message allows everyone to focus on innovation where it can deliver the greatest value. Innovation, as Peter Drucker has defined it, means creating a new dimension of performance. A sense of mission clarifies the direction of performance and helps determine which new ideas to focus on.

Open Communication

Open communication between management and employees sets the stage for an atmosphere of trust. But if you want to establish a new, more trusting culture, you can’t expect employees to take the first step.

Company leadership initiates the process of open communication by sharing information with employees on a regular basis. This includes good news and bad.

Southwest Airlines policy of sharing information enabled the company to weather the sudden increase in fuel costs during the 1990-91 Gulf War. The company kept everyone informed as fuel prices soared. Southwest’s CEO Herb Kelleher sent a memo to pilots asking for their help. Through inventive thinking, the pilots found ways to rapidly drop fuel consumption without compromising safety or service.

Leaders of organizations that sustain innovation offer multiple opportunities for communication.

While not every company can offer an open-door policy for its senior executives, or even a chance for regular face-to-face contact, every organization can institute programs that enable front-line workers to feel heard. From CEO lunches with cross-sections of employees, to monthly division meetings between employees and the general manager, to open intranet forums for idea sharing and feedback, leaders can communicate their openness to hearing innovative ideas from those who are closest to the customer.

Reduce bureaucracy

While larger organizations are often considered less entrepreneurial and inventive than their smaller counterparts, it’s not the size of your company that inhibits innovation — it’s the systems. Bureaucracy slows down action and is a serious impediment to innovation.

Smaller organizations can often move faster on implementing innovative ideas because they have less bureaucracy. When Jack Welch was reengineering General Electric he said, “My goal is to get the small company’s soul and small company’s speed inside our big company.”

Faster implementation encourages further inventive thinking. Think for a minute. If you had an idea for an innovation, and it required 6 weeks to clear channels and another 3 weeks to get funding, would you have lost any impetus for further contribution?

Instill A Sense of Ownership

An ownership mentality creates a powerful incentive for inventive thinking. When an individual is clearly aware of how his or her interests are aligned with those of the company, he or she has a strong reason to “go the extra mile” to further the mission.

Stock ownership is a significant, if not essential, incentive for employees. However on its own, profit-sharing doesn’t guarantee your employees will think like owners.

When employees don’t see how their individual efforts affect company profitability, they tend to be passive and reactive. To encourage greater involvement, make sure each employee knows how his or her work affects company performance.

Southwest gave pilots the freedom to design and implement a plan to reduce fuel consumption because they were in the best position to determine what would be effective. Pilots pitched in enthusiastically because they understood the impact their actions had on the bottom-line and ultimately, on their own futures.

Make Sure Recognition and Rewards are Consistent

While financial rewards are often tied to innovations, rewarding only the individual or team responsible for the “big idea” or its implementation, sets up a subtle competitive atmosphere that discourages the smaller, less dramatic improvements.

Even team-based compensation can be counterproductive if teams are set up to compete with each other for rewards. These incentives discourage the cross functional collaboration so critical to maximal performance.

Companies that successfully foster an innovation culture design rewards that reinforce the culture they want to establish. If your organization values integrated solutions, you cannot compensate team leaders based on unit performance. If your company values development of new leaders, you cannot base rewards on short-term performance.

A Tolerance for Risk and Failure

Tolerating a certain degree of failure as a necessary part of growth is an important part of encouraging innovation. Innovation is a risk. Employees won’t take risks unless they understand goals clearly, have a clear but flexible framework in which to operate and understand that failures are recognized as simply steps in the learning process.

Toyota’s Production System transfers quality management and innovation authority to front-line plant workers. Workers are able to make adjustments in their work if they see an opportunity for improvement. If the innovation works, it’s incorporated into operations, if not, it’s chalked up to experience.

A major psychological benefit of Toyota’s method is the development of trust. Employees who trust their bosses are more likely to take intelligent risks that have potential benefit for the company.

Eliminate Projects and Processes that Don’t Work

As your organization innovates you need to practice what Peter Drucker calls “creative abandonment.” Projects and processes that no longer contribute should be abandoned to make room for new, progressive activities.

While no organization wants to squander financial resources on unprofitable activities, it is actually the irreplaceable resource of time and employee energy that is wasted if a company holds on to the old way of doing things.

Innovation requires optimism. It’s about an attitude of continually reaching for higher performance. You can’t expect employees to maintain an optimistic attitude if they feel compelled to continue in activities that are going nowhere.

© 2007 Dr. Robert Karlsberg & Dr. Jane Adler

Increase Business Revenue With an Innovation Strategy

Innovation provides many ways to increase revenue in your business. A properly managed innovation strategy can increase sales of products or services. An increase in sales can result from new products or services, as well as the introduction of new features for existing products or services.

Increased business revenue can result from:

  1. New customers that are attracted to your innovative products or new product features. These new customers may also purchase other products and services from your company.
  2. Existing customers who purchase your new products in addition to the products they previously purchased. This situation builds stronger customer relationships while expanding product sales.
  3. Existing customers who begin purchasing more frequently due to the new product innovations. Your new product features may cause existing customers to consume more products, or buy more of your products as “replacements” for products previously purchased from a competitor.

Promote your business as an “innovator” and show the market how your products offer unique benefits. Look for new product features that have the potential to become the “must have” features in your market. Tell people why these new product features are so valuable – give examples. Establishing yourself as an innovator in your market builds your customer loyalty and produces valuable word-of-mouth advertising.

Let’s consider an example. In a particular market, certain individuals have not purchased a particular type of electronic device due to perceived problems or confusion with operating the device. However, when a version of the device with an innovative user interface is developed by a new company, these individuals purchase the product from the new company due to the ease of use. This new device with the new user interface performs the same basic function as other devices in the market, but the “must have” feature is the easy-to-use interface. In this example, the innovative product brings new customers into the market and increased revenue for that company.

When developing an Innovation Plan, be sure to consider opportunities to increase business revenue with both existing customers and new customers. Also, consider how innovative products (and product features) can attract new customers who have not previously purchased products in your market. Implementing new product features that satisfy unmet needs in the market is a great way to increase sales.

Affects of Service Oriented Architectures and Web2.0 Phenomenon: Evolution or Disruptive Innovation

Wikipedia / O’Reiley defines Web 2.0 as the “second generation of Internet-based services” and while it is technically correct, it does little to communicate the significance of said advances. As used by its proponents, the phrase “Web 2.0” refers to one or more of the following:

  • The transition of web-sites from isolated information silos to sources of content and functionality, thus becoming computing platforms serving web applications to end-users
  • A social phenomenon embracing an approach to generating and distributing Web content itself, characterized by open communication, decentralization of authority, freedom to share and re-use, and “the market as a conversation”
  • A more organized and categorized content
  • A shift in economic value of the Web, possibly surpassing that of the dot com boom of the late 1990s
  • A marketing-term used to differentiate new web-based firms from those of the dot-com boom, which (due to the bust) subsequently appeared discredited
  • The resurgence of excitement around the implications of innovative web-applications and services that gained a lot of momentum around mid-2005

In the opening talk of the first Web 2.0 conference, Tim O’Reilly and John Battelle summarized key principles they believed characterized Web 2.0 applications

  • the Web as a platform
  • data as the driving force
  • network effects created by an architecture of participation
  • innovation in assembly of systems and sites composed by pulling together features from distributed, independent developers (a kind of “open source” development)
  • lightweight business models enabled by content and service syndication
  • the end of the software adoption cycle (“the perpetual beta”)
  • software above the level of a single device, leveraging the power of The Long Tail.

Let’s take a quick look at one of the representatives of Web2.0 applications, LinkedIn. LinkedIn is a professional (social) networking platform that allows professionals to connect with each other in search of common connections, joint projects, business opportunities, etc. LinkedIn is a web-based application. The value of the service is extremely dependent on participation and the service is powered by the data that its members provide about themselves and their services. The business model is subscriptions, advertising and marketplace driven and the company provides only one product. Other applications representative of Web 2.0 include:

  • Google AdSense – Monetization of content
  • MySpace, LinkedIn – social and professional networking
  • BitTorrent – peer-to-peear content distribution
  • WIKI – user driven content management
  • del.icio.us – bookmark sharing
  • Blogger, Typepad, WordPress – content generation
  • Digg – content syndication
  • SalesForce.com – move of enterprise applications to the web
  • Writely and Online Spreadsheets – web-based office applications

Innovations Service Oriented Architecture Service Oriented Architecture is one of the principal components of Web2.0 world and is the thinking behind some of the most innovative Web2.0 applications. In computing, the term service-oriented architecture (SOA) expresses a perspective of software architecture that defines the use of loosely coupled software services to support the requirements of the business processes and software users. In an SOA environment, resources on a network are made available as independent services that can be accessed without knowledge of their underlying platform implementation.( Barry, Douglas K., 2003. Web Services and Service-Oriented Architectures)

The convergence of SOA and Web 2.0, two highly interrelated trends that are very focused on:

  1. connecting people and systems together easily,
  2. making software and data available for reuse via services, and
  3. building new value upon the foundation of existing information resources and IT assets.

At the core of Service Oriented Architecture is the ability of one application to be built on the top of another application (service) and possesses the following characteristics:

  • – interface abstraction
  • – leverage of the existing systems in building new ones
  • – ease of extending the functionality through “mashups”
  • – an elegant implementation of data, logic and interface independence

Situational Software

Situational Software is a term for Rapid Software Development by non-programmers solving a particular business problem. Situational software allows for building such components/application as registration interface, task list, workflow and other functions without knowing any computer language syntax. This is a powerful new development as it exponentially extends the number of users who can develop their own application logic thus lowering the need for IT resources every and providing business functions with a much quicker way to accomplish their goals.

Mashups

One of the most consistent trends on the Internet is the rise of open APIs and the applications built on top of them, known as mashups. Programmable Web currently lists over 300 APIs that can be used for everything from building Web sites on top of Google Maps to using Amazon’s powerful infrastructure APIs for storage and cluster computing. The underlying trend: The desire to easily remix the vast pool of high value data and services on the Web today into useful new solutions, at home and in the enterprise.

Mashups provide a way to combine several existing services with a new User Interface and possibly new logic to create a new application. Examples of mashups are services build on Google Maps, RSS news feeds, Stock information, etc.

RSS

Real Simple Syndication (RSS) exposes the data behind a particular news or data source in order to be syndicated by other applications or services. RSS has become incredibly popular in the last few years with nearly every news or information source exposing their content as RSS. This type of content packaging allows the content provider to easily get their wares outside of the immediate readership group and provides an inexpensive marketing mechanism.

Social Networks

Social Networking represents a modern trend in maintaining and developing personal and business relationships. Internet services like MySpace, Classmates.com, LinkedIn, Ecademy are redefining how people go about staying connected and looking for new connections. Proliferation of the social networking sites with increasing specialization tells a story about the acceptance of the concept.

Collaboration

Practically all the applications in the Web2.0 category are taking advantage of collaborative properties offered by the centralized data storage. Some of the most notable implications of this trend is the ability to “associate on the fly” instead of having rigid, pre-determined groups, ability to share and version control documents accessible to groups of people, and finally, ability to assign tasks to the group members related to projects or documents.

Asynchronous Communication (AJAX)

One thing that characterizes Web2.0 class of applications is the fact that they are easier to use then previous generation of applications and start behaving in ways similar to desktop software. One of the difficulties that web-based applications had to face was the “stateful” nature of internet applications. In other words, the page had to be reloaded every time there was a new query to the database. This experience fit well with transactional applications that didn’t require a lot of user interaction, but prevented introduction of more complex applications where user interaction was key.

This is now changes with a new paradigm in web-based development, known as AJAX. AJAX is a methodology and technology to enable asynchronous data exchange with the server without requiring page reloads. This approach results in significant speed and usability improvements found in a lot of Web 2.0 applications.

Office 2.0

Office 2.0 applications represent the well known class of applications for word processing, spreadsheets, calendaring, email and collaboration shifted to the instead or in addition to being installed on the personal computers.

Office 2.0 represents freedom from the tyranny of installing software and updates, remembering where you keep your data and your programs (it’s all in the cloud with Office 2.0), and dealing with pesky things like admin rights, software versions, virus scanning, and more. Though browser-based software still has its limitations (like what happens when the server is down or you don’t have a connection), it’s increasingly clear that the network is going to become the pre-eminent location for most meaningful business software, if it hasn’t happened already. (Dion Hinchcliffe, Blog)

Web 2.0 in the Enterprise Enterprise computing is far more complex than personal computing. It includes legacy environments, innumerable vendors, mismatched data sources, stringent regulations and far flung users. While Web 2.0 can deliver genuine advantages for both business users and consumers, the real “Enterprise 2.0” will encompass a far broader and more complex vision. (M.R. Rangaswami, The Birth of Enterprise 2.0)

One company that’s leveraging the SOA in the enterprise to the fullest is San Francisco based Salesforce.com. Salesforce.com has recently announced it’s Apex platform basically providing IT departments with ready to use platform for building logic and tying to legacy systems with seamless integration with it’s Customer Relationship Management functionality as well as any other partner driven applications.

Impact of Web 2.0 and Service Oriented Architecture (SOA)

The impact of Web2.0 and SOA is going to be very significant on a variety of industries.

With the advent of Service Oriented Architecture, Situational Software and Mashups, creation of applications is becoming faster, cheaper and available to a much wider audience. This phenomenon has a potential to reduce the specialized IT workforce required to churn out often redundant, lower-level code and bring the emphasis on creating business logic by those who possess immediate domain expertise.

Acceptance of Service Oriented Architecture inside the enterprise is allowing said enterprise to deploy software solutions much quicker, thus providing a competitive and productivity advantage. With this come shorter IT development cycles and more creativity in developing and utilizing applications. It’s likely that the days of huge, monolithic ERP software applications are counted as each department is striving to deploy what’s best for its needs without being stuck with a global roll-out which can take years to accomplish.

New web-based office applications such as Google Calendar, Writely, on-line spreadsheets and on-line Wiki’s are making it possible for the user to enjoy much the same benefits brought to them by current Microsoft Office applications, for free or at a much lesser price, while providing an extra layer of functionality through collaboration. This trend will allow more and more underprivileged societies to participate in digital economies and will provide an extension to the office application for those wishing to collaborate.

Blogs (RSS) are providing a way for everyday people, specialists and companies to distribute information without needing to be associated with a news source. Whether done for marketing, public relations or fun, blogs are becoming a great mechanism for knowledge management and dissemination changing the way people go about getting information to improve their lives, careers, businesses, etc…

Because of the shift of access control and storage to the network, the services provided by the client operating system are going to become less relevant. With the advent of SOA applications, the client operating system is being reduced to supporting the browser and networking functions. The browser on the other hand is going to undergo continuous enhancement process improving its support for browser-based programming, asynchronous communications and Javascript processing.

This brings us back to the main question of this paper, namely “is Software Oriented Architecture a natural continuation of the existing technologies with minimal effect on the underlying industries or does it represent a disruptive innovation”.

Disruptive Innovation

Clayton Christensen defines disruptive innovation or disruptive technology as a technological innovation, product, or service that eventually overturns the existing dominant technology or product in the market. A new-market disruptive innovation is often aimed at non-consumption, whereas a lower-end disruptive innovation is aimed at mainstream customers who were ignored by established companies. Sometimes, a disruptive technology comes to dominate an existing market by either filling a role in a new market that the older technology could not fill, or by successively moving up-market through performance improvements until finally displacing the market incumbents”

If we were to look at the innovations that Web2.0 and Service Oriented Architectures are introducing and apply the definition above to gauge the disruptiveness factor, we would find that most of the innovations listed here indeed qualify as disruptive:

New Technology/Product

Old Technology/Product

Disruptive?

On what basis?

Wikipedia

Traditional or Software Encyclopedias

Yes

Cost, Easier to use, universally accessible

Online Word Processors & Spreadsheets

Microsoft Office

Yes

Cost, adds new area of functionality (collaboration)

Wikis

Microsoft SharePoint; Web sites

Yes

Cost, adds new area of functionality (content management)

Online CRMs

Oracle, SAP

Yes

Cost, available to users who weren’t served before

Blogs

Newspapers

Yes

Cost, fill role old technology couldn’t fill

Social and Business Networking Applications

New market

Yes

New, fills the role old technology couldn’t fill

Situational Software

IT departments, small consultants

Yes

Cost, fills the role old technology couldn’t fill

Software as a Service (SaaS)

Traditional Software Applications

Yes

Fills the role old technology couldn’t fill

Peer-to-peer Lending

Banks and Credit Cards

Yes

Cheaper, more convenient

Examples:

With Wikipedia is rapidly gaining popularity, and while the opponents argue about the accuracy of information on this open source information resource, it’s definitely eating fast into traditional and software encyclopedia market.

(Traffic statistics in reach per million internet users, Alexa)

Online calendars, word processors and spreadsheets eliminate the cost of having to purchase Microsoft Office applications, while providing collaboration capability not found in lower-end office applications.

(Online Calendar Application from Google)

Salesforce.com, a web-based CRM/ERP solution offering quick deployment options to corporations in addition to a much palatable pricing when compared to the traditional stalwarts like Oracle and SAP, has signed up over 100,000 corporate customers in less then 5 years on the market.

Conclusion Web2.0 and Service Oriented Architectures are having a tremendous effect on the world around us, specifically how we collaborate, how we communicate and how we innovate.

Web2.0 is changing the way software is designed and developed. Gone are the carefully planned software cycles. After the first version of the software is opened to public, the functionality grows continually in short incremental updates and the value grows proportionately to the usage.

What’s even more important, however, is that they are becoming a threat to a lot of established firms and technologies. The largest end-user operating system vendor Microsoft is under a threat as a lot of its Windows system services become unnecessary due to the tasks being transferred to the network layer. Media reporting has to reinvent itself to compete with a cheaper albeit less dependable source of news, the bloggers. Software development organizations are facing a threat from new breed of service based applications. Large software powerhouses, like Oracle and SAP, are under siege from the new entrants into the ERP space with the most well-known of them, Salesforce.com, reinventing the business models and proving to be extremely effective at winning the market share away from the traditional ERP vendors.

SOA applications in general have a tremendous capacity to change the landscape of many industries through changes in the product development lifecycles, harnessing innovation and introduction of the new business models.

The large incumbent software companies and media conglomerates are understanding the threats and opportunities provided by the SAO/Web2.0 generation of products and services as evidenced by a few high-profile acquisitions (Siebel by Oracle, MySpace by Newscorp, JotSpot by Google) and in-house development of competing SAO applications (Microsoft Office Live, SAP hosted services) The question remains whether the incumbents are flexible enough in their business models to be able to embrace the SAO movement or will the new entrants be able to capture large markets with the new SAO/Web2.0 technologies. Bibliography:

Leveraging the convergence of IT and the next generation of the Web, Dion Hinchcliffe

The Birth of Enterprise 2.0, M.R. Rangaswami

Paul Graham (November 2005). Web 2.0. Retrieved on 2006-08-02.

Tim O’Reilly (2006-07-17). Levels of the Game: The Hierarchy of Web 2.0 Applications. O’Reilly radar. Retrieved on 2006-08-08.

Jürgen Schiller García (2006-09-21). Web 2.0 Buzz Time bar. Retrieved on 2006-10-29.

Jeffrey Zeldman (2006-01-16). Web 3.0. A List Apart. Retrieved on 2006-05-27.

Tim O’Reilly (2005-09-30). What Is Web 2.0. O’Reilly Network. Retrieved on 2006-08-06.

Dion Hinchcliffe (2006-04-02). The State of Web 2.0. Web Services Journal. Retrieved on 2006-08-06.

Tim O’Reilly (2002-06-18). Amazon Web Services API. O’Reilly Network. Retrieved on 2006-05-27.

O’Reilly and CMP Exercise Trademark on ‘Web 2.0’. Slashdot (2006-05-26). Retrieved on 2006-05-27.

Nathan Torkington (2006-05-26). O’Reilly’s coverage of Web 2.0 as a service mark. O’Reilly Radar. Retrieved on 2006-06-01.

Tim O”Reilly. 9-30-2005. Design Patterns and Business Models for the Next Generation of Software.

Barry, Douglas K. (2003). Web Services and Service-Oriented Architectures: The Savvy Manager’s Guide

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