I want to start our conversation very broad with the term Innovation. Everybody seems to have a different understanding about what innovation means. What do you think, Jim?
So, when I think about the term Innovation – I would like to see people innovating in a very active way. So, actively seeking out how to apply new ways of thinking, new ways of doing – you know, think differently. Hey, at the end of the day it’s a new piece of technology, it’s a new tool, a new programming language or something that I can automate things with.
So, that’s piece number one. Innovation shall be an active way to do new things, not just thinking differently. And then, the other way is challenging the assumptions. Imagine you have a process where you need to open a kind of spreadsheet and add into that a piece of information you are getting from the internet. Therefore, you need to open your internet browser, go to the webpage, hunt for the information, and put it to your spreadsheet. Then you are putting that spreadsheet into an email and send it to someone.
Now, you can be really innovative by applying the new cool tool that reduces the entire workflow to a push button. It will automatically open all these things, put together an email and send an email out.
But a really innovative thinker would think: “Why are we doing that in the first place? Maybe there is an easier way to get done what we are trying to get done and doesn’t involve automating anything it involves simplifying the work?”
That reminds me exactly on a situation my company was in several years ago when a competitor invented a hydraulic hose with pressure and return line in one thread per say. It caused a lot of attention to customers since it made setting up the hydraulic tools a bit easier. Since we felt we had to react to that, we exactly asked ourselves why we need a hydraulic hose in the first place. We did an ideation workshop and discovered ways to get rid of it and were daring enough to execute it as well. By doing that, we’ve changed the way fire fighters are operating their hydraulic rescue tools in the entire world.
Yeah, that’s a good example of what innovation means to me. It’s a combination of actively looking for different ways of doing things and actively asking why are we doing that in the first place.
Okay, but why is innovation important? I mean, it seems to be obvious, but hm, why is it important?
Well, yeah, to some folks it’s obvious but to other folks not. Look, life is change. And the world is changing all around us all the time. You know, somebody changes the fundamental rules of a marketplace for example, and the way things have always been suddenly change. That happens all the time. And so, if you can’t be innovative for the small things and the things that happen every other day, it’s gonna be difficult to react well when something really momentous happens.
You know, electric cars are coming out. And just think of all the different oil-based components and services. All these things are gonna change massively. And so, innovation has impacts on you and you can choose to be impacted, or to be the one that makes the impact happen.
So, innovation is actually important because to react to circumstances in the market or customers changing their needs?
Yeah, it could be a negative thing – to react to pressure. But it could be a positive thing, to react to opportunities, you know. If you learn to think innovatively and all of a sudden there is a new material, it’s like there is an opportunity. But you have to change what you are doing to take advantage of the opportunity.
So, innovation is a means to isolate yourself from the crowd of others which are doing all the same, so that you are getting a unique position in the market?
Yeah, definitely. My mind goes in a bunch of different directions. In some ways you almost don’t have to stand out, because there is such a demand for very specific services you provide, that if you are doing it you are done. But in other ways you have to be innovative. Especially if you are not in the position to provide that specific service but just the same service many others are offering as well. So, sometimes, I think, it’s almost required, it’s almost expected to be innovative.
I remember when we launched the battery driven rescue tools as a result to pressure from the market. We learned to be innovative, we felt the success and how much fun it can be. So, we applied a process to be positively innovative, an ideation process. And we invented a hydraulic driven rapid intervention tool for fire fighters. By doing that we substituted a lot of mostly hand operated tools by one multipurpose and really strong tool. We reacted to surveys where customers didn’t want to change their needs because they were used to the situation which we improved by that tool.
You got it. Innovation is important to react to changes or to steer changes in order for you to gain advantages in the market you are operating in.
That’s interesting. Because I was checking out what certain companies are claiming about themselves. And many are claiming to be inventive. Even when it appears that last invention happened quite some time ago.
Everybody wants to be innovative, but a lot of people don’t know how to be innovative.
But that actually triggers a question in my mind. How does one measure innovation? How does one know if somebody is being innovative?
Well, a classic way of measuring innovation is to track how much sales and profit you are doing with new products. Another classic one for product innovation would be to count the number of patents filed. But you can also make a benchmark with your direct competitors. Or you make a customer survey or a market survey and asking how people view your company in this regard.
Yeah, you could also measure it with a maturity scale. You know, come up with a couple of statements about what innovation is. For example, do you think innovatively, do you regularly introduce innovative changes to the small things, do you regularly talk about innovation and what that means to customers, do you regularly talk about innovation in terms of your products? And then, describe what bad is and what awesome is. Then define, let’s say, five stages and talk to your customers and employees to say rate this. And then it gives you that picture that says how your employees and customers see you in this regards, how they judge your company about innovation with your products, with your operation, with your employees. It will show the biggest innovation gap so that you can decide to work on that gap to close it and after that do the maturity model again. That might be a way to measure it as well. Because then you can measure your progress over time. The tougher thing would be, if you take a maturity model or a metric that counts patents filed or something, to figure out if you are doing enough or you are doing as much as your competitors or you are doing innovation your customers care about? So, there’s another way to measure it. We just ask people’s opinion, ask your employees if they feel like the company is innovative, ask your customers if they think that your products or your conversations are innovative. So, measure motion and with opinions you raise you can measure direction and impact.
Exactly, that will give you a signal if you need to do something and in which area. As you say, direction and impact. I remember that we did this survey too. We also measured sales with products less than three years old. The combination gave you a wonderful overview. It provided you with an image how stakeholders judged you but also about a measurable impact on sales and profit. You could see the impact of innovation by these numbers.
It is critical to understand how people’s opinion about you is in terms of innovation to enable yourself to focus on the right thing. But at the same time, you need to have a system to track progress of your innovation, to measure direction and impact.
Sometimes it can be that you are really innovative but that e.g., your operations is pushing back on it just because the well-established processes of the old are gonna change. So, you mentioned that a minute ago, too. But turning that spirit into embracing and inspiring innovation doesn’t seem to be an easy thing to do.
Yeah, because how do your people really get excited about something or bought in? I mean at the end of the day there got to be something in it for them. That sounds really cynical, but I think it’s true. You have to take your employees with you on this journey and communicate what is in it for them. Things like having a safer job because your company doesn’t shrink anymore…
But have you ever come across a situation where that applies also to people which really have to make decisions?
Absolutely, people that need to make decissions that is typically driven by their “official” performance objectives – the metrics that determines their bonus. Innovation comes along with a certain amount of risk. But people don’t have an appetite for risk, they often don’t have an appetite for experimentation. They need sure things to meet their objectives. They only have a year. They have to get this thing done, to hit this number or to make this growth target or whatever – this year.  Not because people are sticking their head in the sand, it’s because their pay or their job is relying on it. They could fall into this trap – but not everybody does it by the way.
So, a goal setting process that tries to encompass all the different objectives within a company and dove tails them between different departments might be advised?
Well, it’s always interesting how people lay out plans and to expect them to not change, even over the course of one year. I mean markets, etc. can change over a couple of months. And all of a sudden, everything you’ve planned in the normal cycle is just out the window, doesn’t work anymore. I’m not saying you don’t need a plan, but you have to find a balance, you have to find a way to adjust matters during the year. And even that is an innovative way of thinking different about how to manage a team and manage an organization around what you think can fit in versus how do you react to change, unplanned change.
So, to foster innovation and mitigate any push backs in your organization, a kind of change management process in combination with a smart goal setting process having regular reviews is important.
When I was in university, the only thing that I was taught about ideation process was brainstorming. Do you know that there is an ideation process to be innovative or is it just somebody coming in saying I have an idea?
I think there are ways to guide brainstorming. I think you need to have someone within the ideation workshop be the facilitator. And the facilitator’s job is not to take actively part in the ideation workshop, their job is to tell people to stop all the talking or to make sure nobody gets hurt or stuff like that. After the brainstorming you need to make sure that you have check points where and you make decisions on how much experimentation you can do before you kill this project or go in a different direction or continue for full strength.
What you say is actually not complex. And it doesn’t necessarily cost a fortune to be innovative it just is kind of spending time and discipline or is it more than that?
Well, I think it’s definitely practice. Practice and a solid kind of ideation process which helps you being innovative and yet disciplined enough to just making it happen.
I made the same experience. When we applied an ideation process the first time, it was really important to have a facilitator to make sure people are not going too long away on tangents during the session but also to execute afterward and harvest. Just so to inspire the team for the next event. It wasn’t always easy for me but at the same time it also was fun.
Yeah, it can be fun. Having an ideation process to create ideas and also a process afterwards to execute is key to be successful and thus having fun.
In conjunction with the term innovation people are using the word breakthrough sometimes. What do you think is a breakthrough innovation, Jim?Depends on your definition of breakthrough. But it also depends on your universe. Breakthrough would be the big stuff. Not necessarily in the monetary sense but in the sense of the impact that innovation has. You could do something that’s a breakthrough innovation for yourself within your universe.
Or look at the electric rescue tools you did. I think going to battery power was a breakthrough. Because it was a huge change and the processes of getting them off the truck and to the car, it just massively changed that. It massively changed the attack plan, because you could literally put this thing wherever you could lift it versus dealing with a hose. It freed up a pair of hands or maybe even two persons. It was a huge fundamental change in the use of tools. But it is like a fifty-million-dollar year business, globally. Which in the grand scheme of the global economy, is a drop in the bucket. Monetarily. And yet, it was a huge breakthrough for the people that were trapped in cars, right? So, that’s a breakthrough innovation that saved lives, that’s great. Monetarily it was extremely impactful to the company – also a breakthrough – although globally it was a drop in the bucket. So, it really depends on your universe.
To answer your question, I think a lot of breakthrough innovation takes place that people don’t either understand or give it credit because of the matter of the scope.
So, if an innovation is considered breakthrough or not depends really on your personal interest. It can be small and meaningful to you only or impact the entire globe, but it really depends on your point of view, if it changed something meaningful to you.
Yeah, but, there’s also nothing wrong with incremental innovations. There is something to be said for. Big breakthrough innovation like electric rescue tools – that’s great, you don’t have hoses on your rescue tools to deal with. But a ten-year run where every single year the tools are getting better and smarter and more capable and stronger is something you get points for, too. That’s a lot of small things you did. What’s more valuable? A lot of small things that add up to a big change from ten years ago or one really interesting thing that is a big change from last year?
It is just as valuable.
Sometimes it appears that industries are harvesting from ideas created in adjacent industries for different purposes. At present in IoT related areas it seems that this is taking place. There must have been an origin somewhere back in time where this IoT was invented but right now it’s applied to so many adjacencies and applications.
Well, I think what happened with IoT is, that it was a combination of innovations in electronics, communications, power technology and handling data. The internet basically. So, electronics got small and cheap, there is cellphone power all over the place there’s satellites there is ways to communicate inside without wires. Battery cell technology evolved rapidly when lithium technology was invented. The fourth area was data handling and management in the cloud. So, all these inventions happened not related to each other but more or less at the same time. All of a sudden you can now do an awful lot of things, because you gave me a better tool.
Or look at 3D printing. You need to take out 20% weight of an No idea how. You’ve shaved off as much as you could from the outside. But 3D printing allows you to have a void inside the metal – this is something you can’t do in normal subtractive manufacturing. So, with 3D printing it’s like a no brainer to have a void inside of something. And then all of a sudden, hey there’s 20% weight gone. A huge innovation just because the tool changed.
So, maybe that’s another piece of innovation. Keep up to date on the tools and the materials. How many innovations were you able to introduce because of somebody made a discovery on the materials side of life that allowed you to do something different?
I was definitely using inventions made in battery cell technology when lithium-ion technology was invented. This technology was so superior to previous cell technology that without it, fire fighters would still have hydraulic hoses on their tools. Another one was sure inventions in motor technology. Where folks found ways to build electric engines way smaller enabling to have a relatively small handheld yet powerful device.
So, sometimes one need to be lucky that certain key innovations are taking place. But one also need to watch for new ways to combine these new technologic discoveries to something which can help you obtain an advantage.
So, to summarize what we just said, innovation is thinking and doing things differently, challenging the assumptions and keeping up to date with developments. It is important to obtain an advantage in the environment one is operating in, and it is advised to measure how innovative one is. It is important to take employees with one on the journey and to make sure that one has enough opportunities to review if annual plans still apply. Striving for breakthrough innovation is not necessarily more desirable than incremental innovation. It all depends on the impact it has to the objectives. A process for being innovative is also important to help focus on a target and get it done.
That’s right, Carsten.
Well Jim, thanks for your time.