Archive for June, 2010

Idea Pipe Line

Critical to any organization that is attempting to grow is a flow of ideas through that organization. This first hit me when I was reading “One Up on Wall Street” by Peter Lynch several years ago. Somewhere in there he describes that if he made 1000 investments, ten would break even. Of that ten, only one would perform well, so well in fact that it would pay for all of his other investments. It’s a Pipeline Constructionsimilar situation for innovation, you generate thousands of ideas but only a few will pan out. Of those few an even smaller percentage will perform above expectations and pay for everything else. The problem is that you can’t predict where these ideas will come from. Flashes of brilliance can come from anyone and at anytime, you just can’t predict either. Therefore you need a process to enable these ideas to progress through the organization while along the way they are supported and enhanced by other disciplines such as Finance, Marketing, Sales and IT.

If today you don’t currently have a systematic process (having a suggestion box doesn’t count) to allow ideas or suggestions to move through your organization, here’s how to start roughing one out. First, what objectives do you want to accomplish; process improvements, new products, cost cutting measures, or all of the above? Second, what are these ideas worth to you and the organization? If you can’t put a dollar figure on them then the chances are your employees won’t value their own suggestions either. If however you’ll cough up $1,000 or more for each idea that gets to production you might be getting somewhere, especially if that idea becomes a new line of business worth several million in annual revenue. Place your highest rewards on what you considered to be the most important objectives you wanted to accomplish.

The suggestion process – this is where things can get bogged down. If it’s made too complicated then the level of effort will be to great for people to take the time to submit the idea. If it’s too simple you’ll get ideas like “let’s start making beer” which is fine if you’re a brewery, a bad idea if you’re an insurance company. In my opinion the submission should be two sections:

  • What’s the general description of the product, product enhancement, cost cutting process, etc.
  • How does it benefit our business or is it a potential new business

Keep the financial data out of it for now. Yes it’s important but for reasons I’ll cover in future posts, you don’t want to start there.

One of the most critical components (probably the most critical!) is the team reviewing the ideas. If you staff it fully with operationally oriented people, any new ideas you get will be met with ‘what about…?’ questions. This will kill new ideas. If you staff it with ‘what if…’ people then you’ll get some very off the wall stuff.  Instead staff it with a mixture of ‘what if…’ people and ‘what about…’ people to balance each other out. This will be covered in future posts here as well but the important part is that ideas (aside from “let’s make beer”) do not get killed off. They are put ‘in the parking lot’ for future review, they are re-submitted with more information, they are placed into the queue with the rest of the business changes, or they are fast tracked. For any of those, let the submitter know immediately, preferably along with a small cash reward, or time off, or whatever you’re using to compensate people.

Next is the actual process to get vetted ideas moving. This is another critical juncture and one where you may start to see the ‘not invented here’ syndrome preventing things from moving forward. It’s where ideas and suggestions start getting some structure and where financial models are applied, product development plans are impacted and infrastructure changes start being recognized. Weekly status reports should help the ideas continue to progress through the organization, I’d recommend them highly.

Let’s try this with an example.

Say someone in your organization had the idea to stop buying paper towels for all the bathrooms and replace them with Dyson Airblades, where would that person start?

First, answer two questions

  • What: The Dyson Airblade dries hands in 8 seconds, is faster than our current air driven hand driers, and is more sanitary.
  • How: The Dyson Airblade is 50% more energy efficient than what we have today, it’s more sanitary because we don’t touch anything, and is probably cheaper than all the paper towels we go through every year.

Next, this idea goes to the Review Team. For this example the team should actually assign it to someone to figure out how much is spent every year in paper towels. At that point you can’t reject the idea, compensate the employee based on how you rank cost savings suggestions. It’s probably not feasible to figure out how much power is used by regular air driers but Dyson does state that they’re 80% more energy efficient and gives you a quick web interface to estimate your cost savings. Each Airblade is about $1,200 so if you need six that’s $7,200 without installation. If you’re spending $6,000 a year on paper towels then you’re looking at a two year ROI. Sounds like there’s something here so put it in someone’s hands to oversee, demand weekly reports and push it through the organization. Once it’s installed I recommend additional, and larger compensation for the employee that suggested it. Don’t kill your ROI (unless you’re trying to make an example!) but If you’re saving $4,000 in your second year you can probably afford $200-$300 this year.

That’s it. Although this is a simple example you can probably extrapolate to larger efforts and larger benefits. Future posts will cover compensation options, refining the submission and review process, recognition for your best idea people, as well as teaching the rest of the organization to look at everyday things with a more critical eye.

The Chemistry of Teams

DerailmentOften overlooked when putting people together, the ability of individuals to communicate and cooperate often times determines the success of a venture more than  their work experience. In many environments ‘teams’ of people are assembled with the assumption that ‘team work’ will carry the day and something useful will come out the other end. My own experience has show that this produces random results, you need to hand-pick a small cross-functional team from a cadre of volunteers to increase your potential for success. Not everyone gets to participate but one disengaged or confrontational personality in the team will be disastrous. An entire chapter, ‘The Chemistry of the Creative Team’ was dedicated to this subject in  ‘Making Ideas Happen‘ by Scott Belsky. In that chapter is a particularly important sentence “…strike a balance between flexibility expectations, idea generation and execution, and helpful disagreements and consensus.” The team needs to be composed of equals – each has their own specialty but must be comfortable expressing themselves and their own opinions without being in a position where they feel they need to support the boss.

In my opinion, ‘how’ people interact is often a better predictor of outcomes than ‘what’ they have worked on as individuals in the past. For innovation teams this can be even more of an issue as you’re often times working in ambiguous circumstances with tight deadlines. In these times an individuals character will show it’s flaws and it’s brilliance. Teams like this do not just fall together, you need someone that understands the relationships between the team members, as well as how to get the best of them when the shit hits the fan. If you end up with a bunch of individuals or an overbearing ass, results will be poor and the innovation projects and team will come off the track.

How do you start building these teams? Within almost any organization there are usually clumps of people who are involved in outside projects. Some may be working with non-profits or some may be working on the next great thing. You may also have stealth groups working within your organization that were formed to bypass the bureaucracy and just want to get things moving.  Don’t kill these! Put a fence around them, protect them, fund them and put ‘em on the spot to deliver a proof of concept or a full blown model. Most will be more than willing to produce results, that’s why they went underground in the first place.

Sometimes you get the bear…

And sometimes not.

In 2008 I was at Caeser’s in Vegas, sitting at one of the roulette tables. I sat down just before 10AM and had the entire table to myself. For the next three hours, whenever we’d hit red, red, red, the fourth spin would always be black. I’d started off with $100 and probably worked my way up to $2,500 until it was time to go. Lucky for me the table hit red, red, red and I put about $500 on black so I’d walk away with an extra grand.Bear. Big Bear. Red. Shit. Ok, well it will hit black this time, so I put $1,000 down on black. Nope. Red. Son of a bitch. Ok, well, I’m WAY up (and I knew I should run!) so what am I going to lose? I put the rest on black. Not happening. Red again. I pulled another $100 from my pocket and this time it hit black and I ended up even. But that’s how life goes at times too. You may have everything figured out, you see exactly what’s going on, you’re connected and producing great stuff. Sometimes you just land on red. Not always your fault. Your best bet is to grab your chips and move on, but unfortunately just enough of us claw our way back to the top to make it tempting to stay. What’s more, you truly believe in what you’re doing which makes it even harder to walk away. This is where a key attitude, resiliency, comes in to play and your character either grows or collapses. As far as I’m concerned, it’s a numbers game – play enough times and eventually you’ll win. But you have to be resilient, bounce back, and as long as you’re staying true to your beliefs and not selling yourself out, you’ll succeed. Hopefully.

Dinner and a Movie

I’m not sure who at Cobb Theaters put “dinner” and a “movie” together but I freakin’ love Cinebistro! The service program is a little awkward and you don’t have a lot of time to get seated and order, but I appreciate the convenience of the overall concept. The theater inGrey Goose Tampa is well designed and the seats are big enough to sink into and relax for a couple of hours. It’s not cheap as dinner is usually running us about $80 and the tickets are about $17. The real advantage is that, as I’m sure I’ll inevitably get dragged to yet another Twilight movie, I don’t have to deal with screaming 10 year olds. Yes, I will pay extra for this benefit, as well as ordering two martinis so that they’ll last me through the entire movie.

What really impressed me was the technology. The wait staff walks around with a POS system with hip mounted printers as you pay for dinner when you order. When I was working to implement a large deployment of new POS systems in the mid-90′s they were enormous, so I can appreciate the progress made since then. Even though it’s only a printer it still makes things substantially more convenient. I’ve also seen similar deployments on flights that have arrived late to the gate. For those that need it, the flight crew can now print boarding passes so you can make your connecting flight.

The other thing I can really appreciate is the idea that someone at Cobb took “dinner and a movie” literally. We’ve been saying this for years but I’m curious as to the organizational process that made an upscale experience like this a reality, especially with the economic situation over the last couple of years. And by the way, the staff is always friendly and patient, even though I’m sure they’re stressed to get the orders in and back out as they stop service when the trailers stop. I definitely recommend trying this out if there’s one near you. Now if they’ll only give me an alternative to Flash navigation so I can see what the showtimes are on my iPad.

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