It’s election time

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This year we have plenty of elections in Spain, you name it we have it. There will be local elections for major in most cities, regional government elections in all regions and finally, to cap everything off we will have the national parliament elections in November. So, it is going to be a busy period on the political front from April to November.

Maybe this is a good time for a short recap on statistics and political elections. Here you have a Minitab article on politics, polls and statitics. I hope you enjoy it!

Innovation: the Ideo shopping cart example

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As an appropriate end to our innovation series we want to share with you this link to a good example of innovation applied to an object that we use regularly but that we usually do not associate with innovative thinking, the supermarket shopping cart.

This example comes from an old ABC documentary and shows in condensed form the way in which Ideo, one of the leading industrial design companies in the world, addresses the challenge of changing the shopping cart concept. The YouTube video is:

Innovation behaviours: the BEACONS model

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At the beginning of this series we identified the creation of an innovation friendly environment as the third key element for innovation success. No company can be innovative if the environment does not encourage innovative behavior and does not groom creative ideas so that they can develop and grow. Now we will discuss what are the key elements of creating an innovation friendly environment by adopting the right behaviours. We at Kairos Management structure these behaviours in the BEACONS model.

We consider that there are seven critical behaviours:

  • Being BRAVE, not being afraid of moving out of our comfort zone as a company or an individual. This means controlling fear of the unknown, of failure, of resistance we may face from the company or co-workers and fear of damaging our business with Innovation (remember if you do not destroy your business someone else will).
  • Being ENERGETIC, moving fast, being dynamic and passionate about Innovation. You can be successful being first to market or a fast follower but not if you are slow, too late to identify the new trends and success opportunities.
  • Being an ADOPTER of new environments. You can not stay put when the world is changing around you. The sooner you accept the world has changed the bigger your chances of survival and success.
  • Being a CHALLENGER. Look for new ways and alternatives to today´s world, creatively challenge existing products, processes and methods. Do not accept “this is the way we do things here”.
  • Being OPEN to experimentation and risk. Accepting that with innovation there is a risk of failure but trusting people to keep trying with good ideas and eventually doing the right things.
  • Being a NURTURER of innovation. Innovation is like flowers… it takes seeding, watering, fertilizer, a good soil to grow and time and care to grow and bloom. Do not make innovation tougher by being impatient and killing ideas before they are fully developed.
  • Being a SIMPLIFIER. Sometimes you can start Innovation by looking no further than ways of simplifying what you are already doing. Innovation is not equal to sophistication, advanced technology or complication and very simple ideas can be a winner for your business.BEACONS

Utterback’s model for innovation

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In his 1996 work “Mastering the Dynamics of Innovation” MIT professor James Utterback defined three phases of innovation in the marketplace for any product and service. Utterback called these three phases the Fluid, Transitional and Specific phases:

  • When launching new products and services to the market we are in the Fluid phase, an era of radical product innovation when there is an explosion of different designs of products and services coming from different competitors. Over time during the Fluid phase there will be a consolidation of designs around a Dominant design that will be adopted by all or most players in the market (i.e. do you remember the times when VCR was launched and the war between competing VHS, Betamax and 2000 formats?).
  • Once a dominant design is defined we are mostly out of the product innovation phase and start a phase of mostly process innovation when all players try to optimize their processes improving the quality and reducing the cost of their products and  services. This is called the Transactional phase.
  • Finally in the last phase called the Specific phase there is a reduction of the number of players in the market (those that can not compete anymore will move to other products) and innovation is focused on incremental changes trying to squeeze the last euro of profit out of the product.utterback
    Then, what happens after the last phase? That we start all over again, Innovation is a continuous exercise, otherwise our companies would be stuck with exhausted products and services that will eventually die. We have to think of innovation as a series of Utterback cycles where we will jump using innovation and creativity from the end of one cycle to the beginning of a new one with the next product or service.

    As an example think of the music industry moving from the vynil LP to the CD and then to portable devices and to streaming and cloud storage. Sometimes the cycles will be shorter sometimes longer, but remember that it will always happen. Sticking to your old products and services for too long is a recipe for failure.

Doblin’s ten types of Innovation

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In 1999, a Chicago based consulting firm called Doblin categorized Business Innovation into ten types. This framework, that has become increasingly popular as an standard for innovation classification, categorizes the innovations into four different areas: Finance, Process, Offering and Delivery depending on what area of the business is impacted by innovation.

Under the finance category we find ways in which we organize our company for maximum benefit under two different categories:

  • Business model, that is, how does your company make money.
  • Networking, meaning how you partner with other companies in order to achieve mutual benefit.

Under process we find process innovation under two more categories:

  • Enabling processes related to all those processes that support the company´s core processes and activities
  • And the Core processes themselves.

Offering is the category that is more usually coming to mind when thinking about innovation as it is related with the creation of new products and services under three different categories:

  • Product performance or how do we design  new products as part of our core product offering that will give us a competitive advantage in the marketplace
  • Product systems meaning how do we organize/arrange our product offering under one or several product platforms providing common look and feel, consistency of approach, opportunities for volume leverage, …
  • Service or how do we complement our product offering and provide value to our customers with an additional service offering beyond and around our products.

Finally the delivery category where we focus on how we make our products and services available to customers:

  • Channels or how we get our offerings to the market using the most effective channels for maximum reach and coverage of our desired customer base
  • Brand or how do we communicate this offering and create an image of our company and products for our customers.
  • And finally customer experience, innovating around the way customers feel when they interact with our products and services.

In the attached chart you will find examples of companies that at some point were considered to be best practices in each one of the Innovation categories. Where are you in these innovation categories? What should be the targeted ones in your company and what can you do yourself to drive innovation?


Why Innovation?

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This will be the starting point for a series of posts about innovation. Probably you have noticed our Webpage header “Operational Excellence, Innovation, Change”, though so far this blog has been all about Operational Excellence, we also provide services around Innovation, offering services in product and process innovation, helping you develop innovation capabilities within your company and facilitating creativity.

Why all the talk about innovation now? Because in an increasingly competitive business environment companies have to continuously evolve through “evolutionary” innovation, constantly improving their products and services (and the processes to make them available) or reinvent themselves through “disruptive” innovation, creating game changers that will give them an edge over competition, in order to  ensure they will survive in the marketplace.

But what is actually innovation and how does it differentiate from pure creativity?. Well, we define innovation as the capability of developing and implementing a new idea, so in order for innovation to be successful you need three elements:

  • The capability of developing the ideas, that is “creativity”
  • The ability to turn ideas into reality (the capability to execute)
  • And an environment that is favorable to innovation where ideas can be created, can mature and eventually be implemented.

The adequate combination of these three elements will provide successful innovation. During this series we will discuss some of the keys to innovation. Hopefully you will find it useful.

Heuristic Bias… does it sound familiar?

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During a recent holiday I was reading an economic history book, “The ascent of money” by Niall Ferguson (by the way, strongly recommended if you want to put the current economic crisis into some kind of historic perspective) when I found these definitions of “heuristic biases” (skewed modes of thinking or learning).

Though the author was referring in his text to skewed ways of evaluating financial risk, I immediately found a clear link to our experience as operation excellence consultants related to the way people understood and utilized data in projects.

This is Dr. Ferguson´s classification. I hope you enjoy it

  • Availability bias causes us to base decisions on data that is more readily available than the data we really need
  • Hindsight bias causes us to attach  higher probabilities to events after they have happened  than we did before they happened
  • The problem of induction which leads us to formulate general rules on the basis of insufficient information
  • The fallacy of conjunction which means that we tend to overestimate the probability of simultaneous occurrance of multiple events of very high probability compared to the probability of ocurrance of only one of  multiple events of low probability
  • Confirmation bias which inclines us to look for confirming evidence of an initial hypothesis rather than evidence that would disprove it
  • Contamination effects, whereby we allow irrelevant but proximate information to influence decisions
  • The affect heuristic whereby preconceived value judgements interfere with assessment of things
  • The failure of invariance that leads to risk aversion for events leading to positive outcomes while risk seeking for negative ones.
  • Scope neglect which prevents us from adjusting our efforts and actions to the relative importance or magnitude of an  issue
  • Overconfidence in calibration which leads us to overestimate the confidence intervals within which our estimates will be robust
  • Bystander apathy which inclines us to abdicate individual responsibility when in a group

A funny way of looking at Takt Time

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For some people Takt Time is still a new concept, but it has been used (even if not always knowingly) for a long period. You probably know that in order for your process to flow, process step cycle times have to be in line with customer demand rates as defined by Takt Time.

Well, sometimes this is easier said than done. This 1950s video from I love Lucy (the most successful comedy series of that period in US) shows in very clear terms that adapting to Takt Time is not always easy.

Enjoy it!