Stephen Shapiro: Changing the Rules of Innovation and Creativity...

For those of you who were following he previous blog entries and are curious, here is the winning logo design.  We are hoping to launch the new website next week.

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On Wednesday I posted an open innovation dilemma.  In summary, as I created my short-list of logos developed using an open innovation approach, certain designers decided to “build on” (plagiarize?) the concepts I liked.  Although this resulted in an improved design, it also presented an ethical dilemma.  Only one designer can be awarded the prize.

This spurred an interesting email exchange between me and a friend/business colleague, Mary Sandro.  (be sure to read the previous post first)

Mary:  What would make it really fair is if the submitters could only see their work and none of the other submissions. 

Me: Well, that would stifle innovation.  Building on the ideas of others is the source of great innovation. 

Mary: I would argue they should be getting their inspiration to create something new, innovate, not an inspiration to copy and tweak.  How creative is the second guy?  Could you really hire him in a stand-alone relationship? 

Me: That raises an interesting point.  I am not hiring someone on how creative they are.  I am hiring them because of the results they can deliver.  If they are not creative in developing the initial concept but can tweak something to perfection, then that is valuable to me.  I am interested in the final product.

Mary: As a creativity and innovation expert who increases profits for businesses, what would you advise your clients to do?  Which guy should they go with?

Me:  Ah, that is a good question!  If this were truly a one-time deal and I never wanted to use open innovation again for anything, then maybe I would take the final design that I liked most.  This would maximize the returns from that one transaction.  However, if I ever hope to do open innovation again, that would be a bad move.  Good businesses are built on relationships, not transactions.  Maximizing the return on one “transaction” may have a detrimental impact on long-term relationships.  Therefore, I would take the design of the first person, but still give something to the second person for their tweaks.  To do this, I would also set up the competition with those rules clearly right up front.  Big fee for original concept, but money given for improvements.  Everyone wins.  This encourages building on the designs of others.

Mary: Good answer!  I’d buy that.  Pun intended.

Footnote:  I hired the guy who did the original concept.  In the end, most people preferred that design, so the ethical issue was moot.  But it makes for interesting discussion.  In a compensation driven innovation environment, how to you ethically reward innovation?

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As mentioned in my previous post, I decided to use open innovation for the development of a logo.  OK, it is quite small scale, but I wanted to see the results.

Here are two quick interesting observations.

Signal to Noise Ratio:  This is my favorite measure of the innovation process.  This is the ratio of a signal (what you want - that is, good ideas) to the noise (what you don’t want - the duds).  Higher ratios are better.  Traditional suggestion boxes have a low signal to noise ratio because you get ideas about everything, even things that don’t matter.  And although campaign-based innovation (including open innovation) can yield a higher signal to noise ration, unless you are quite specific with your brief, you will still get a fair amount of “noise.”  There has been more noise in this process than had I used just one designer.  But given the limited number of entries (<50), this has not been an issue.  Had there been thousands of entries - or if the designs being submitted were more complex (e.g., chemical compounds), the evaluation process would have been tedious.

Building on Ideas of Others: Here is the most interesting observation.  In the beginning, few designs were of interest.  But after a period of time, some good concepts emerged.  The website I am using, 99designs.com, allows the other designers to see every logo submitted. They can also see my feedback on which designs I like the most.  As I created my short-list, certain designers decided to ”build on” (plagiarize?) the concepts I liked.  Although this resulted in an improved design, it also presented an ethical dilemma.  Only one designer is awarded the prize.  Do I select the best design - even if it is a variation on earlier work by someone else?  Or do I do the “fair thing” and award to the person who developed the original concept? 

Building on the ideas of others is critical to innovation.  Let’s face it, most new ideas are just improvements on old ideas.  But financially-based, winner-take-all competitions can impede collaboration and innovation.  They may force knowledge/creative hording. 

In this situation, a reasonable solution might be for me to split the award money; a percentage to the person who developed the winning concept and a percentage to the person who developed the best final product.  But that is not an option with this open innovation website.

We want collaboration and open innovation.  Yet, if people feel their ideas are being stolen, this will have the opposite effect.

What thoughts/observations do you have on this topic?

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In the past I have written several blog entries about the power of Open Innovation. The most robust open innovation website out there is InnoCentive.

Yesterday I decided to try some open innovation for my own business - on a much smaller scale.  As mentioned before, we are launching a new website with a new web-strategy.  As part of this, we are returning to the “24/7 Innovation” brand.

And for this, I need a new logo.  The logo above was the original logo from 2001. 

I have had friends and professional designers provide their ideas, but with little luck.  I could not explain what I wanted.  I’m a “I’ll know it when I see it” kind of guy.

So I turned to an open innovation website called 99designs.com.  There I was able to post my brief and within 12 hours I had over a dozen designs by different designers.

When the process is completed (in 6 days, 10 hours), I will ask for your vote on your favorite.  Or you can chime in now by adding a comment with the number of your favorite logo.  Click here to view the designs and the brief.

In the past, I used eLance.com for some design work.  But there you select designers based on a portfolio and how much they charge, not the finished product.  99designs is a truer open innovation model in that you select based on the solution, not a bid. 

Where in your business could you benefit from open innovation?  What open innovation website do you use?  I would love to catalogue a large list of good open innovation sites.

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Although I have written about this many times before on this blog, we have created a formal article on “The Performance Paradox.”  This is part of an eBook being published by 21 professional speakers.

You can find this, and a dozen other articles in my “innovation articles” section of the website.

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Coming June 1, 2008

I just heard from the lawyers this morning, and they gave me the green light to tell everyone about our newest product - “Personality Poker (TM).”  We applied for both a trademark (hence the TM used everywhere) and a Provisional Patent.

What is Personality Poker (TM)?

It is a fast-paced, highly interactive game that helps employees (and individuals) understand how they contribute to – and detract from – the innovation process. 

How do you play? 

All participants trade 52 specially designed poker cards with each other. The objective is to get a perfect hand that reveals your preferred innovation style and how you can best contribute to the success of your organization. 

This game will help you discover…

• why the person you like the least may be the person you need the most
• how your innovation strength may ultimately limit your success
• how to get the right people in the right roles - and where you may currently be misaligned
• a common mistake that people make when selling to others - and how you can easily correct it
• how others see you - and how that might be different than how you see yourself
• if you work personality is different than your “home” personality - and why you should care
• why certain leadership styles are more likely fail…and what you can do about it
• how to improve your relationships - both professionally and personally

If you want to have 24/7 Innovation, where innovation is part of your organization’s DNA, then it’s not about finding your strengths, it’s about finding how your strengths work best with your team.

Remember, the person you like the least is the person you need the most.

About the Cards

These high quality cards are made by the same company that manufacturers playing cards for Las Vegas casinos.

In addition to the cards, an instructor’s manual will hep you play the game and interpret the results.  More in depth support materials such as audio and video will also be available for purchase.

Licensing opportunities may be available.

Innovation Speeches Using the Cards 

Stephen Shapiro is also available to deliver Personality Poker (TM) as a speech for your organization. He can provide in depth insights into the innovation process and the innovation personalities.  He has delivered Personality Poker (TM) to audiences ranging from 15 people to 300 people.  This is a great, high-energy session to kick off your next event.  It can be combined with Stephen’s other speech topics.

We will let you know when the product is officially available. 

Patent Pending

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In  audio, there is the concept of the “signal to noise” ratio.  This is the ratio of a signal (what you want - such as the music) to the noise (what you don’t want - such as the background noise).  Higher ratios are better.

Over the past few months, we have been doing some interesting analysis and experiments on our website. 

Our core finding?  We had a low signal to noise ratio.  Although we have lots of “content” (signal), visitors have a difficult time finding the gems.

Here’s what we did. 

We installed Google Analytics.  We quickly discovered that we had an 82% abandonment rate.  That is, of the 20,000+ visitors each month, only 18% stayed for any length of time.  We hypothesized that there could be two main reasons for this: 1) we had the wrong visitors (so they left), or 2) our visitors were confused and did not know what to do.  Assuming the latter to be true, my web guru (Ariel Coro) tried some experiments.  When he removed half of the options on the home page (fewer menu items, less content, and reduced clickable images) we reduced the abandonment rate to 58% in a matter of days.  42% of the people now interact with the site.  This mean I have tripled the number of active participants…by giving them fewer options.

We also looked at blog statistics.  There we noticed that quantity beat out quality.  My blog strategy has been to write almost daily.  As a result, people had difficulty finding the best blog entries because they were lost in a sea of “filler.” Our solution?  We will replace our blog with monthly “briefs.”  These briefs will be longer, meatier, value-oriented pdf files with high quality content. 

We will be launching a new website within the next few weeks.  The improved site will be simpler and streamlined with fewer options and more content.  We will provide a larger article repository.  We will enable interactivity.  We will give you more of what you want…and less of what you don’t.  Our goal: a high signal to noise ratio. 

Simplicity is the best innovation.

Stay tuned for the launch.

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I was quoted in today’s online edition of Forbes.

Read the article, How to Unlock Your Company’s Creativity

Also be sure to click on “In Pictures: Six Tips For Fostering Innovation At Your Company”

I am quoted in Tip #4 and Tip #6

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When my computer is not working, life is miserable.  Unfortunately, over the past few months, my computer has crashed nearly every day.  To make matters worse, the expert technicians could not recreate my problems, so they could not fix the underlying issue.

What if your computer had a TiVo-like device that recorded all of your activities and allowed you to replay them later? 

According to an interesting New York Times article, a new product called ReplayDirector does exactly that.  It allows you to replay the events leading to a computer crash, enabling technicians to recreate the problem.  The idea was devised when the inventor Jonathan Lindo asked the question, “Wouldn’t it be great if we could just TiVo this and replay it?”

Once again, this is a great example of analogy-driven innovation - taking an idea from one industry and applying it to another.

It’s a good article, so be sure to read it.

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“Build it and they will come.” We hear that mantra a lot. But with innovation, it is often more like, “Solve a pain and they will come.” The ultimate success of the automated teller machine (ATM) is a great example of this.

The other night I was having dinner with someone who in the mid-1970’s worked with Citibank, the second largest bank at the time. He shared with me the story of the birth of the ATM, at least from his perspective.

In 1977, after investing hundreds of millions of dollars in ATM technology research and development, Citibank decided to install machines across all of New York City. But at first, they were not very popular. The technology was confusing to first-time users, the machines were not always accurate (they sometimes dispensed the wrong amount of money), and they were impersonal. I was told that customers who used ATM machines were so frustrated that many closed their accounts.

The ATM may never have been an instant hit if it weren’t for a natural disaster.

January 1978 will always be remembered for a blizzard that dumped as much as 4 feet of snow in the Northeast. In New York City, nearly 2 feet of snow brought the city to a halt. Banks didn’t open. Instead, people got their money from supermarkets. But most of those quickly ran out of money.

This created a massive “pain.”

Where did people turn? The ATMs. It is estimated that during the storms, use of the machines increased by over 20%. Soon after, Citibank started running TV ads showing people trudging through the snow drifts in New York City. That’s when the company introduced their wildly popular slogan, “The Citi Never Sleeps.” This was the real birth of the automated teller machine.

I found an interesting Fortune article that corroborates his story. The article claims that by 1981, Citibank’s market share of New York deposits had doubled. A lot of this growth could be attributed to the ATM.

This story illustrates an innovators dilemma. Brilliant innovations are not necessarily taken up by the masses. Some ideas just need time to incubate and gain acceptance. But can your business survive long enough to see the success? Too many ideas, like Webvan, could not endure the incubation period. Sometimes your innovations need a little boost.

As I have pointed out in previous blog entries, people take massive risks to eliminate their pains, but play is safe when it comes to adding convenience. ATMs were primarily about convenience. What did it take for them to become a success? A pain caused by a natural disaster.

Are your new ideas solving a pain? Or are they just a nice to have? If they are just a convenience, what can you do to create a pain – without having to rely on a natural disaster?

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