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Few rules of innovation

Tags: creativity, innovation, innovation management, management, process, teamwork
Written by: Nikola Tosic
Publishing date: 12 May 2020

wright brothers bike shop

1) Most problems are complex. They can appear simple in the start but solving them in practice is complex.

2) Complex problems require diverse and multidisciplinary solutions. If teams working on innovation are not diverse they will not be competitive.

3) Simplest form of innovation is elimination of errors.

4) Most complex form of innovation is paradigm change.

5) Innovation is a cycle which starts with a customer who accepts that they have a problem and ends with a customer accepting a solution. Therefore, innovation is an important part of a customer relationship.

6) Creativity of one individual (idea black box) is crucial but alone it does not create innovation. Innovation is a process of many individuals each being creative and working together for the benefit of customers. Therefore, innovation is always an incremental chain of creativity and one of the most complex forms of teamwork.

7) Innovation requires highly rational communication between customers and team members. It needs to remove all the restrains created by the power relationships inside companies and also between companies and customers. Innovation can only exist as a highly rational communication and teamwork, when it is fully open.

8) Innovation is too complex to be controlled by a precise process, but it should be managed. Goals, rules, deadlines, and tools can substantially accelerate and focus it.

Will 2020 and 2021 be Anni Mirabiles?

Tags: Coronavirus crisis, creativity, innovation, openness
Written by: Nikola Tosic
Publishing date: 9 May 2020

newton apple tree

Under in crisis and under stress we tend to be more open and innovative. This is our natural reaction which allows us to cooperate and solve new complex problems. Openness also is an important component of innovation without which innovation is always drastically reduced.

Coronavirus crisis is causing substantial stress to everyone, including company owners and managers, and, as a result we have noticed that in past months SMB owners and managers have shown an increase in openness and innovation which manifested as:
– More direct requests for business cooperation with other companies and individuals;
– More direct requests for practical advice from people who were previously not engaged;
– More direct inquiries towards customers instead of reliance on covert analysis and sales-only-communication.

It is our expectation that after the Coronavirus crisis we will see an increase in cooperations, partnerships, know-how, and innovative products and services. While the effect of Coronavirus crisis is devastating to the majority of us, innovators had a chance to channel more of their creative resources into new projects, which hopefully can benefit everyone.

Maybe 2020 and 2021 will be Wonder Years in some industries.

How many people innovate?

Tags: globalization, innovation
Written by: Nikola Tosic
Publishing date: 29 Apr 2020

global innovation

At least 10 % of the world population are innovators. This means that approx. 760 million people designed, manufactured, and sold something new and different. Sale definition also includes non-monetary exchanges such as use of government and non-profit services.

Simplified logic behind this guess:
– There are 7.58 billion people in the world,
– There are approx. 200 million companies in the world,
– There are also millions of government and non-profit organizations,
– Some companies and organizations employ thousands and some have no employees,
– All companies and organizations must innovate in some way,
– Innovation output can be a product, process, service, content, business model,
– More complex companies must have many more innovators in order to deliver the initial idea to customers,
– 10 % or 760 million innovators suggests approx. 3-4 per company and organization.

The more companies and organizations there are the more innovation there will be available for customers. Number of innovators will increase as population increases, conditions for business improve in developing countries, and open innovation improves in developed countries.

If you can offer an alternative estimate let me know.

Understanding innovation, part 1 of million

Tags: big data, black box, competitivness, creativity, decision making, innovation
Written by: Nikola Tosic
Publishing date: 23 Apr 2020

Luke Vincentini cake innovation

Innovation is important because what and how a company sells today might not work later.

Innovation consists of three main phases:
1) Input – understanding the customers,
2) Design – processing the input and designing the output,
3) Results – something new is made and offered to customers.

Each of these phases has its own rules:

Input
Input consists of all the data, information, feedback, reports from the customers, partners, internal team, and all other sources. More is better, even though not all is relevant for the Design phase. Companies should not a priori censor the Input and should learn how to sort and understand the data and feedback.

Design
Big problem in companies is that all the resources are dedicated to whatever sells now and not to creating something new for tomorrow. If there is no time dedicated to processing the input and working on the results then it is impossible to compete in the future. Another aspect of Design phase is that decision making is often a black box. This is unavoidable because of the very nature of creativity.

Results
It is best to innovate with new products, but waiting for the big thing to happen will make the company less competitive in the meantime. Companies do not have to innovate only with products but also with business models, added software, added services, sales methods, distribution, content, etc. Thinking of a company as a product innovator makes it less competitive.

Since innovation is highly creative and hard to formalize, large parts of these phases depends on intuition. This means that formal approaches to improve innovation should not be operational but higher level tools supported by creative motivation and strategic direction.