AIM Newsletter - Spring 2006

WELCOME to our Spring/Summer 2006 e-newsletter. AIM Strategies® engages in periodic research to ‘take the pulse' of the business community. This past winter we chose the topic of IMPLEMENTING INNOVATION because of its increasing importance to 21st Century organizations. The article that follows, 'Innovating Your Innovation Process', is a sneak preview of our commentary on the research. It sites the innovation process of one of the greatest inventors of American history and offers readers specific steps to take to implement innovation. We hope you enjoy this article and find actionable ideas for your organization. As always, we appreciate your feedback.

Yael Sara. Zofi, CEO AIM Strategies®
Applied Innovative Management®
T: (718) 832-6767 / 6699, F: (718) 832-6660
www.aim-strategies.com yael@aim-strategies.com

Following in the Footsteps of the Father of Innovation

Thomas Alva Edison's numerous patents and inventions are among the most recognizable of the 20th century, including the light bulb, the electrical circuit, the phonograph, the alkaline battery and motion pictures. Edison is credited with a mind-boggling 1,093 patents and inventions, more than any other individual in history. He not only made enormous contributions to the modern world he helped create, but also produced a model for organizations to foster continual invention. Known as the Research & Development Facility (in tandem with the Skunk Works process), it was created in the late 19th century and still stands today as a true model for innovation.

Edison's rich legacy can serve as an inspiration – and guide - for today's leaders, who face competitive issues that were unimaginable in his day. More than a century removed from Edison's tentative beginnings, his ideas still stand as guideposts for today's leaders. These ideas serve as a blueprint for creating new paths that result in organizational success.

What aspects of Edison's own process can leaders extract and shape to their own ends? Below we give nine key elements of innovation that lie at the heart of Edison's ideas. We say to those managers who lead organizations in today's hyper-competitive world, ignore Edison's wisdom at your own peril!

“My main purpose in life is to make enough money to create ever more inventions....”

In 1871 Thomas Edison took the $40,000 in earnings from his first invention and leaped into the ‘innovation business'. Leaving a full time job, he set up a lab in West Orange, NJ whose sole function was to act as a hot house for innovation. Within a year of its inception it had grown into the largest scientific testing laboratory in the world. By 1887 this fantastic operation was recognized as the first full-fledged Research and Development center.

Before Thomas Edison, the concept of a Research and Development (R & D) facility did not exist. Inventions resulted from individuals tinkering with experiments. Edison was the first person to conceive of establishing a facility and hiring individuals whose sole purpose would be to create inventions. In fact, many historians consider the R & D laboratory to be Edison's greatest contribution.

Edison did not work in solitary, as did his contemporaries. He depended on dozens, and eventually thousands of workers and inventors to build and test his ideas. This organizational system enabled Edison to simultaneously create many innovations. His own role at the lab developed into that of the innovative leader, as he oversaw the development of each team project.

Today, R & D facilities are an integral part of technology-based companies throughout the world, thanks to Edison's vision. Assigning teams to specific Skunk Works projects is commonplace, as companies seek to innovate products and services as well as the marketing programs that support them. Today's leaders, facing competitive pressures unforeseen by Edison, should continually ask themselves two questions: (1) How can the boundaries of his R & D model be pushed even further to attain a competitive edge on innovation? (2) Can we establish a new system to further encourage innovation?

“I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent...."

Invention and innovation share the same root, but they differ slightly from each other. This distinction is slight, yet important. Consider Edison's first invention, a voting system (based on an improvement of the telegraph system) that Congress could use to instantly poll their votes. Though ingenious, Congress did not purchase this voting system, and so it never reached the stage of implementation. It qualifies as an invention, but not a true innovation because it was never brought to life. An invention becomes a true innovation if it has a practical use and finds its way to implementation.

This experience taught Thomas Edison the importance of being an innovator – not merely an inventor. From that point on, he first determined whether the market wanted or needed something before he set to work on a specific invention. He made a conscious effort to peg his efforts to the socio-economic needs of his environment and looked at the chances of implementation before committing resources to a specific project.

What can be learned from Edison's experience? That it is not enough to commit people and financial resources to a project unless you and your team first engage in a brainstorming exercise to determine whether a need exists to justify the effort.

“Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won't work, I haven't failed. I am not discouraged, because every wrong attempt discarded is often a step forward.... “

Why was Thomas Edison's new model of the Innovation Process so successful? When he invested his $40,000 windfall in a laboratory he could not have known that this Skunk Works facility would be so productive. However, as a true innovative leader he did know the importance of creating a culture of innovation. His first golden rule was that taking risks is an integral part of the Innovation Process. He accepted that with risk comes failure.

To illustrate this concept in Edison's life, consider this: in 1879 he set out to perfect a commercially viable light bulb, which involved discovering a filament that would not burn out. To find a filament that could hold a charge for a long period he tried thousands of substances and combinations of substances before hitting on the correct combination - a carbonized thread of cotton.

Edison had instilled a culture of acceptable failure in himself and in his organization, without which he may have given up his search for the correct substance. He learned that if employees fear failure they will be less likely to take risks, and he understood that willingness to take risks is the first step to Innovation. This concept is equally valid for organizations in the 21st century, and wise leaders encourage a culture of acceptable failure.

“Inspiration can be found in a pile of junk. Sometimes, you can put it together with a good imagination and invent something.”

Edison believed that no idea was absurd. In working to discover the correct light bulb filament, through trial and error he tested some things as outlandish as horsetail and human hair. Had he not been willing to “think outside the box” (a well-used cliché), he would never have persisted and finally arrive at the element that could produce light.

The concept of ‘acceptable absurdity' is a crucial value to instill in an organization's culture. All ideas should be welcomed. If employees doubt the genuine acceptance of the absurd, then they are less likely to express their ideas, thereby effectively reducing the organization's Innovation Capital.

"Genius is one percent inspiration and ninety-nine percent perspiration.”

Often we think of R & D departments and Skunk Works as elite groups of creative folks. However, Thomas Edison downplayed the importance of the so-called creative impulse. According to his model of Innovation, creativity is a byproduct of hard work. This idea of creativity as a commonplace attribute inherent in everyone demystifies the innovation process, making it accessible to all. Establishing a culture of creative equality opens up innovation to the entire organization, allowing for a greater pool of idea generators and innovation producers.

“Because ideas have to be original only with regard to their adaptation to the problem at hand, I am always extremely interested in how others have used them....”

Edison discovered another important concept – how to phrase a problem. He would often start a project by seeking an answer to a specific problem. Sometimes, at the end of the long development process, he realized that the solution was better suited to, or solved, a totally different set of problems.

For example, by 1899 Edison began developing the alkaline battery because he believed that batteries were an effective power source for automobiles. However, by the time the alkaline battery was perfected, gasoline had outpaced batteries to fuel automobiles. Rather than discarding his invention, Edison introduced the alkaline battery as a way to light railway cars and signals, maritime buoys, and miner's lamps. The battery eventually became Edison's most profitable product and his work paved the way for the modern alkaline battery. Had Edison remained fixated on powering cars, and cars alone, he would have missed the opportunity to answer a larger question - how can everything be powered better? The lesson here is to define your problem in a way that leaves room for solutions that are not immediately evident, but that may yield unexpectedly valuable results.

“I believe that restlessness is discontent, and discontent is merely the first necessity of progress. Show me a thoroughly satisfied man and I will show you a failure.“

Today, innovation is considered an integral part of product development, thanks to Thomas Edison. However, to gain the ‘innovative advantage' it is important to establish a culture of discontent. An organization's current procedures and systems may be adequate, but this does not mean that they are the best possible ones. Smart organizations understand the necessity of reinventing and improving operations and processes; in this era of hyper-competition leaders can't assume that present systems are the most effective. Additionally, even if an organization has best of breed operations now, they may not remain so indefinitely.

An important question to consider is: should we continually innovate a process, procedure or product that functions smoothly? Once again, Thomas Edison's experience is instructive. The telegraph machine was a critically important communication device, yet because of his willingness to tinker, Edison developed his first successful invention, an improved stock ticker called the "Universal Stock Printer”. This invention funded his first small laboratory. By establishing a culture of discontent, and being unwilling to accept what currently exists, employees are driven to find solutions to obvious challenges as well as to seek out areas of incremental improvement to processes and operations that function at an acceptable level. Could this way of thinking be the edge that organizations need to develop their competitive advantage?

“My principal business consists of giving commercial value to the brilliant, but misdirected, ideas of others.... Accordingly, I never pick up an item without thinking of how I might improve it.”

Thomas Edison understood that innovation does not consist solely of brand new inventions; incremental innovations can be equally important. In fact, the majority of his patents and inventions were incremental innovations to his phonograph, battery and electrical circuit.

As important as risk taking and striving to achieve great product / service innovations are for your organizations today, striving for incremental innovations to present day products and services is a worthwhile activity. Just as Edison's incremental innovation to the light bulb led to the greatest innovation of the 20th century, the centralized power system, today's “misdirected” initiatives may lead to the greatest innovation of the 21st century.

“Surprises and reverses can serve as an incentive for great accomplishment. There are no rules here, we're just trying to accomplish something.”

What will it take for organizations to arrive at the next process of innovation? Must established conventions be discarded, or, at the very least, should their current viability be questioned? Once again, Thomas Edison's conviction is instructive. For him, the only absolute was a commitment to achievement.

Consider how one innovative leader approached the issue of innovation. Since the early 1980's, Ricardo Semler, CEO of Brazil-based Semco, established an unorthodox system in which his employees set their own hours, wages, and even configure their own firewall and software to protect their PCs. The result: increased productivity, long-term loyalty and phenomenal growth. Ricardo Semler was willing to sweep conventional wisdom aside and turn his company's culture upside down. By doing so he achieved employee buy in, which in turn led to greater productivity and increased profitability.

The lesson here is to build hard-core questioning of all organizational conventions and processes into your organization. Had Thomas Edison stuck to convention he would never have established the laboratory, the model for today's R & D facility and Skunk Works. If Edison were alive today, one could hear him thinking, “Hmmm. Are R & D labs and Skunk Works systems the best way to innovate in the 21st century? They're okay for now, but let's think about ….“

We hope our message is clear. Edison was (as we say today) hard-core about seeking change, about resourcefulness and about risk taking in the business environment. Although few, if any, will ever surpass his incredible record of invention, every leader can emulate his way of thinking and raise the innovation capital of the organization. How can you ensure that your employees are on the path to innovative thinking? We think that success in 21st Century depends on answering this key question. Only those organizations that embed new ways of thinking will master an environment too complex and fast-moving for conventional thinking. To sum up, re-imagining your Innovation Process isn't just a smart choice - it's the only choice.

Written by Yael Sara Zofi and Saro Varjabedian

Research: Saro Varjabedian
Editing: Susan Victor

AIM's services are related to transformational change, including practical consulting, innovative training and hands-on coaching. Find out how AIM Strategies® can support you (call 718-832-6767 / 6699 or e-mail info@aim-strategies.com). See www.aim-strategies.com for more information about how AIM offers a personal, no-nonsense approach through the proprietary experiential learning methods (5D's™ Consulting/Training Methodology and the ACT™ Coaching Process). In upcoming issues of this newsletter, we'll update you on tips and techniques related to raising your innovative management IQ. Please forward this newsletter to your associates!