Embed innovation, creativity and new ideas into the DNA of a company's operation and culture
... most companies have been heard repeating this statement in recent times. That is because as 
products get copied or become redundant at a faster rate than before, innovation is the only 
source for sustainable competitive advantage.

Isaac Getz, professor at ESCP-EAP European School of Management, Paris, and one of Europe's 
leading authorities on innovations and idea management, was recently in Delhi to conduct a 
workshop organised by the Indian Institute of Planning and Management.

He spoke to The Strategist on what business leaders should do to drive innovation in their 
companies.

According to Getz, most companies have individuals who are creative and bubbling with ideas that
improve processes and operations. However, they are not keen to share these.

The reason is simple. Companies are not interested in the ideas of their employees. They would 
rather pay millions to consultants to get the same ideas.

As part of his research, Getz studied over 100 companies in 11 countries to find out the best 
practices that companies followed to exploit the potential of their employees, and manage ideas.

He cites the example of a unit at Delphi Corporation, one of the world's biggest automobile parts
supplier, to drive home the point. The unit had machinery that broke down frequently.

Despite the efforts of technicians, the problem was not sorted out for several years.

One day, an employee who had been working on these machines fixed the problem in an hour. He 
simply replaced certain parts with modified ones.

The employee had known this solution for four years. But he didn't share it because he was 
convinced that the company was not interested. Back-of-the-envelope calculations showed that if 
the employee had spoken earlier, the company could have saved 3.5 million euros a year, or 
approximately 14 million euros in four years.

The employee said that it was only when Delphi launched an "idea management system", was he 
convinced that the company is interested in listening and implementing ideas suggested by 
employees.

The biggest advantage of implementing such a system is that the organisation becomes a breeding 
ground for innovative ideas. Says Getz, "Companies typically seek breakthrough ideas by hiring 
employees in R&D, strategic marketing and so on, pay them high salaries and tell them to sit 
everyday and provide the company with innovations."

"It's similar to what happens in casinos, you need a lot and lot of ideas to hit the jackpot to 
succeed in the market," he explains. Research shows that you need 3,000 ideas for one product to 
succeed in the end.

"With a few R&D teams working on a few lines, it's unlikely they hit upon breakthrough ideas 
every now and then. In many cases, big companies working on these lines haven't been able to 
hit the jackpot in even 10 years," he says.

In fact, Getz says that research shows that if a proper idea management system is in place, 
80 per cent of the breakthroughs or innovations will come from the company's employees, and only
20 per cent from those paid to do so -- the R&D and strategic marketing teams.

What's the way out? Getz emphasises on companies having an idea management system. The system 
should encourage each and every employee, regardless of their position and nature of job, to 
come up with ideas.

In fact, suggesting ideas may be made mandatory. And, of course, good ideas must be implemented.
Getz gives the example of a hotel that looks into the ideas of even a barman or the attendant at
the concierge.

He says that such employees deal with customers and in most cases, even with the suppliers, 
everyday. They often note things, which skip the eye of a R&D or strategic marketing department.

"Most of the times their ideas will be simple, but they are likely to be more realistic and 
practical, and often result in significant cost reductions," says Getz.

He cites the example of French-Italian firm STMicroelectronics that was able to generate 10 to 
20 innovative ideas from each of its employees. The net result was a cost saving of $4,000 from 
each employee. The clincher: this company had thousands of employees.

To implement such a system is hardly difficult? Getz is against the "suggestion box" practice 
followed in many companies. "Hardly any of those suggestions get implemented. There should be a 
simple system by which an employee can approach his immediate manager with the idea, who in 
turn should take it to the top. If the idea is practical, it could be implemented," says Getz.

Once people see their ideas being implemented, there will be sea change in their attitude. It w
ould no longer be "their" company but "our" company.

Says Getz, the entire approach in managing ideas and creativity is to focus where the problems 
occur. On many occasions, problems occur at the frontier of the company --  while dealing with 
customers, suppliers or partners.

The system should work in such a way that the employees who represent the company to the world 
become antennas to capture the problems. "If you cannot satisfy the customer go back and look 
for a solution, and then again come to the customer," says Getz.

He cites networking giant Cisco's example: "Cisco is very good at listening to its customers. 
When a customer asks for specific solutions or systems that are hard to find or implement, 
Cisco doesn't say it can't be done. Instead, it goes back and finds a solution."

Cisco bends backwards to satisfy its clients -- often looking for a right start-up capable of 
meeting the demand and buying it. "Its strength is not having thousands of engineers or R&D 
people but senior executives listening to customers," Getz signs off.

Source: http://in.rediff.com/push/newsletters.htm1