Just Business Unit 8 Innovation

Unit 8 Innovation

“The best way to have a good idea is to have a lot of ideas”

Dr Linus Pauling (1901 - 1994), American chemist

LEAD –IN

Comment on the quotations below.

•Man will never fly, not in a thousand years. Wilbur Wright (1867-1912), American aviation pioneer.

•Innovation! One cannot be forever innovating. I want to create classics. Coco Chanel

(1883-1971), French fashion designer

How creative are you?

1.Do you consider yourself to be creative? Are you the sort of person who gets sudden flashes of inspiration or are you more of a methodical problem-solver?

2.How important is creativity in business? Are creativity and innovation the same thing?

3.Some suggest that luck plays a major part in any innovative breakthrough.

4.Below is a list of tips on how to maximize your chances of striking it lucky, taken from Tom Peters' bestseller, 'Liberation Management'. Which piece of advice strikes you as:

•the most useful

•the cleverest

•the silliest

aListen to everyone. Ideas come from everywhere.

bDon't listen to anyone. Trust your inner ear.

cConstantly reorganize. Mix, match, try different combinations to shake things up.

dRead odd stuff. Visit odd places. Make odd friends. Work with odd partners.

eDisorganize.

fGet out of your office.

gGet rid of your office.

hNurture intuition.

iForget the same tired meetings, talking with the same tired people about the same tired things.

jGet fired. If you're not pushing hard enough to get fired, you're not pushing hard enough!

Do you have a strategy of your own for coming up with new ideas?

What are the most important inventions and innovations for you:

a)at work

b)at home

c)For you which is the most important invention of the last 100 years?

d)Which one do you wish had not been invented?

The words below are often used when talking about innovation. What do they mean?

R&D brainwave

blueprint

prototype

breakthrough

patent

copyright

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Just Business Unit 8 Innovation

Business Brief

Read the texts and do the exercise below.

Traditionally, a company’s new ideas and products come from its research and development (R&D) department, which first designs products (makes plans or drawings for how products are to be made) and then develops them (makes the new ideas successful, for example by making or improving products) The initial idea for a car will be turned into a series of prototypes and tested. In software development, the final

‘prototype’ is the beta version, which is beta-tested. Pharmaceuticals go through a series of trials.

Different industries have different lead-times, the time between conception and product launch; a new drug might take 10 or 15 years to develop. In consumer goods, market research will be a key part of the development process, with focus groups: small groups representing cross-sections of consumers talking about their reactions to proposed designs, and wider consumer surveys. Consumer products are test-marketed or trialled, and feedback gathered.

Creativity refers to the phenomenon whereby a person creates something new (a product, a solution, a work of art, etc.) Creativity is the essential source of all invention and innovation and is derived from imaginative thought rather than from rational thought. An invention is a unique or novel device, method, composition, process or discovery. An invention that is not derived from an existing model or idea, or that achieves a completely unique function, discovery, or result, may be a radical breakthrough. Inventions often extend the boundaries of human knowledge, experience or capability.

Innovation is the creation of better or more effective products, processes, services or technologies. Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.

How to develop innovation and creativity in large, bureaucratic companies? Company leaders talk about corporate venturing and intrapreneurship, where employees are encouraged to develop entrepreneurial activities within the organization. Companies may set up skunk works, often a small group of people outside the usual structures, to work on innovations: development of the PC at IBM is the most famous example. The article about Hewlett-Packard in this unit discusses another approach to fostering innovation in large organizations. Another problem that organizations have to overcome is the not-invented here syndrome, where managers not initially involved in an innovation may resist its development. Resistance to new ideas is well known. In organizations, the best way of killing an idea may well be to take it to a meeting.

Entirely new innovations are perhaps more easily developed by entrepreneurs in start-up companies, but here the problem is finance: how to get the venture capital to develop the product, manufacture it on an industrial scale and market it.

Information or knowledge that belongs to an individual or company is proprietary. A product developed using such information may be protected in law by patents so that others cannot copy its design.

Other companies may pay to use the design under licence in their own products. These payments are royalties. In publishing, if a text, picture, etc. is copyright, it cannot be used by others without permission. Payments to the author from the publisher are royalties. The area of law relating to patents and copyright is intellectual property.

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Just Business Unit 8 Innovation

Verb	Noun:concept	Noun: thing (countable)	Noun:
	(uncountable)		person
design	design	a design	a designer
develop	development	a development	a developer
innovate	innovation	an innovation	an innovator
invent	invention	an invention	an inventor
	technology	a technology	a technologist

Exercise 1 Choose the correct forms to complete these sentences containing words from the text and table above.

1.White came up with (a design/design) that combined lightness and warmth.

2.There's an exhibition on architecture and (the design/design) at the Museum of Modern Art.

3.McGrew is vice president of (a development/development) and product planning.

4.The FDA has approved (a development/development) for treating tooth disease, a new laser machine.

5.Electric light was (an invention/invention) which enabled people to stay up later.

6.Sometimes (an invention/invention) is so obvious that it is hard to believe nobody thought of it before.

7.Channel Four has always encouraged experimentation and (an innovation/innovation) in its films.

8.He discovered (an innovation/innovation) that has enabled him to build guitars more efficiently.

Exercise 2 Match the expressions (1-6) with their meanings (a-f).

1	copyright infringement				a		a payment to the owner of a design, or to an author
2	intellectual property				b		an arrangement between the owner of a design and
							someone else, allowing them to use the design for money
3	patent application				с		when someone uses another's text, pictures, etc. without
							permission
4	proprietary information				d		when an inventor asks the authorities to officially
							recognize an invention as his/her property
5	royalty payment				e		designs, ideas, etc. that belong to someone
6	licensing agreement				f		the law relating to designs, ideas, etc. that belong to
							someone
	1	2		3			4	5	6

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Just Business Unit 8 Innovation

Listening

Listen to the texts about innovation, creativity and novelty and answer the questions below.

Bright Ideas

1What is the main point on the agenda of the meeting at the cosmetics company?

2Why is everybody frustrated?

3What does the marketing consultant suggest?

4How much does he want for his idea?

5What are the conditions for creativity in business according to the psychologists?

(give five points) 1)___________________________________________________________________

2)___________________________________________________________________

3)___________________________________________________________________

4)___________________________________________________________________

5)___________________________________________________________________

6What did Sir Clive Sinclair invent? Was his invention a success? Why?

7Who was Akio Morita?

8What was the reason for his success?

9Why do high-technology companies seek to merge multinationally?

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Just Business Unit 8 Innovation

The Lateral Thinker

10What book did Tom Logsdon write? What is it about?

11What are the responsibilities of the young executive?

12What problem does he have to face?

13Why is the upgrade of the system ruled out? What is the lowest estimate for reconstruction?

11What solution does the young executive find?

12How much does it cost to implement the idea?

13How much can the hotel save by using the idea?

14What does the term “lateral thinking” mean according to Edward De Bono?

15How is idea generation encouraged at 3M?

16How do Hewlett-Packard, Glaxo, ICL, etc maintain their innovative lead?

17What is the difference between creativity and innovation?

18What mistake did Xerox make and how did Apple profit from it?

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Just Business Unit 8 Innovation

Reading and Language

Read the texts Bright Ideas and The Lateral Thinker and do the exercises below.

BRIGHT IDEAS

The scene is the boardroom of a multinational cosmetics company at the end of an exhausting all-day meeting. The conference table is littered with screwed up papers and empty Perrier bottles. The financial controller is tearing his hair out and the director of R&D is no longer on speaking terms with the head of marketing. The launch of a new shampoo has backfired badly. All decisions have had to be deferred until the next meeting. Nobody even wants to think about the next meeting.

At this point a young marketing consultant cuts in. "Ladies and gentlemen, I have an idea which is guaranteed to double sales of your new shampoo. Now, believe it or not, my idea can be summed up in just one word and for $30,000 I'll tell you what it is." Naturally, objections are raised, but the chairman finally agrees to the deal. "Here is my idea. You know the instructions you put on the back of the shampoo bottle? I suggest you add one word to the end. And the word is: 'repeat'."

Not all good ideas are this simple, but in business a surprising number of them are. At least, they seem simple after they've been thought ofthe secret is to think of them т the first place. As someone once remarked, "If you can't write your idea on the back of your business card, you don't have an idea".

So what are the conditions for creativity in business? And is there a blueprint for having bright ideas? Here's what the psychologists think:

1.Be a risk-taker. Those who are reluctant to take risks don't innovate,

2.Be illogical. An over-reliance on logic kills off ideas before they have a chance to develop.

3.Let yourself be stupid from time to time. Great ideas often start out as stupid ideas.

4.Regularly re-think things. Problem-solving frequently involves breaking up problems into parts and putting them back together again in a different way.

5.Take advantage of lucky breaks. The most creative people never ignore an opportunity.

They say the West creates and the East innovates, and there may be some truth in this. Take British entrepreneur, Sir Clive Sinclair, the great electronics inventor of the 70s, whose C5 electric car flopped when people found it quicker to get out and walk. Then take Akio Morita, the chairman of Sony, who has seen his company claim 85% of the world personal stereo market with the much imitated Sony Walkman - a masterly innovation which merely took advantage of existing technology. The comparison speaks for itself.

And maybe one reason high-technology companies seek to merge multinationally is so that they can combine both creative and innovative strength. For anything that won't sell isn't worth inventing and it's an expensive waste of time coming up with ideas you can't exploit. But it's even more expensive if your competitors can exploit them. And there's not much point doing the research if another company is going to end up doing the development, and making the profit.

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Just Business Unit 8 Innovation

Vocabulary

Exercise 1 Look back at the article. Find the expressions that mean:

1.very tiring (par.1)

2.squeezed or twisted (par.1)

3.be frustrated (par. 1)

4.feeling unfriendly, angry with somebody (par.1)

5.go wrong (par. 1)

6.postpone (par.1)

7.express disagreement (par.2)

8.a master plan (par. 4)

9.benefit from something (par.4)

10.unexpected opportunities (par. 4)

11.fail badly (par. 5)

12.win (market share) (par.5)

13.suggest an idea (par.5)

14.use something to gain as much as possible (par.5)

15.obvious (par. 5)

THE LATERAL THINKER

In his book on creative problem-solving, 'Breaking Through', Tom Logsdon tells the story of a bright young executive hired to manage a San Francisco hotel. One of the first problems the young executive has to face is a flood of complaints about the hotel lifts, which are infuriatingly slow. Guests are actually starting to demand rooms on lower floors. But an upgrade of the lift system is ruled out when the lowest estimate for reconstruction comes to $200,000. Clearly something else has to be done, and pretty quickly, before people start checking out.

Finally, a creative solution occurs to the young executive. The key to the problem, he decides, is boredom. With only the lift doors and a blank wall to stare at, guests are understandably getting bored, and when people are bored they tend to complain. So instead of speeding up the lifts, full-length mirrors are installed both inside and directly outside the lifts on each floor - at a cost of just $4,000. Now, with their reflections to look at when they use the lift, people stop complaining, thereby saving the hotel $196,000.

This is what Edward De Bono calls lateral thinking, and it's the result of looking at the problem in a different and unusual way. Indeed, reformulating and redefining a problem is just one of the ways in which you can create a climate for creativity in business. And an increasing number of companies now see such creative strategies as vital to their survival.

At 3M, for example, employees spend as much as 15% of their time on new ideas and 25% of every manager's product portfolio consists of products that are less than five years old. At Hewlett-Packard more than half their orders in 1992 were for products introduced in the previous two years. It's a similar story at Glaxo, ICL and SmithKline Beecham. For it's no coincidence that in research-driven industries, like computers and pharmaceuticals, an innovative lead creates the market leaders. Management guru, Tom Peters, talks nowadays of a company's whole culture being creative. But creativity would be useless without innovation, and the two terms should not be confused.

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Just Business Unit 8 Innovation

According to the team running creativity courses at the Cranfield School of Management, creativity is essentially about generating, not judging, ideas. Innovation, on the other hand, is the successful implementation of those ideas on a commercial basis. In a brainstorming session, you don't criticize ideas before they're fully formed. That would be counterproductive. Evaluation comes in at the innovation stage, where you're turning good ideas into a commercial proposition. It follows that you cannot be both creative and innovative at the same time.

For making a discovery is one thing; exploiting it quite another, as the Xerox Research Centre found out to its cost when its system for making personal computers easier to use was copied by Apple Macintosh. Apple led the market for almost ten years with the enormously successful desktop system it 'borrowed' from Xerox. But Apple had the foresight to copyright the system. Xerox didn't. Originality, it seems, is the art of concealing your source, and too many companies fail to see an opportunity until it ceases to be one.

Exercise 2 Look back at the article. Find the expressions that mean:

1.out of the question (par.1)

2.calculation of costs (par.1)

3.come to one’s mind (par.2)

4.put smth into a place (par.2)

5.using imagination to solve a problem in an unusual way (par.3)

6.a creative environment (par.3)

7.it's not by chance that (par.4)

8.giving a lot of attention to research (par.4)

9.mix something up (par.4)

10.management expert (par.4)

11.basically (par.5)

12.express a n opinion, criticize something (par.5)

13.putting an idea into practice (par.5)

14.idea-generating meeting (par.5)

15.having the opposite result to the one you intended (par.5)

16.viable enterprise (par.5)

17.the ability to predict things (par.6)

18.not telling people where you got the idea (par.6)

19.stop continuing (par.6)

Exercise 3 Complete the presentation extract below by matching the two halves of each sentence. Referring back to the articles may help you.

1	As you know, in our view, too many companies	a	… to think of these things in the first
	fail to see ...		place.
2	So what we try to do is to create ...	b	... the whole problem really is
			technology.
3	Indeed, we see such creative strategies ...	c	... a climate for creativity in everything
			that we do.
4	Nevertheless, you don't need me to tell you that	d	... advantage of existing technology
	the launch of our latest product ...		instead of redesigning the whole system
			from scratch.

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Just Business Unit 8 Innovation

5

And, no doubt, you'd like to know why we

e

... into a commercial proposition.

haven't been able to turn what looked like a

great idea ...

6

Well, the main difficulties we've had ...

f

... an opportunity until it ceases to be

one.

7

And the key to ...

g

... to face have been technical.

8

You see, this new product is extremely

h

... as vital to our survival.

advanced, and clearly, we should have taken ...

9

The ideal solution would have been to simply

i

... a pity this didn't occur to us sooner.

add new features to our old system, and it's ...

10

With hindsight, we know what we did wrong,

j

... has backfired badly.

but, as always, the secret is ...

1

2

3

4

5

6

7

8

9

10

Exercise 4 Group the following verbs according to whether they form strong word partnerships with research, problems or ideas. Some of them belong to more than one group.

solve	fund	implement	carry out	generate
create	put money into	face	develop	brainstorm
tackle	promote	define	come up with	address
come up against	cut back on	cause	conduct	reject

Research: _________________________________________________________

Problems: _________________________________________________________

Ideas: __________________________________________________________________

Exercise 5 Now complete the following paragraph using some of the verbs from the previous exercise. How many word partnerships can you find in it?

Companies who are prepared to (1) ... research know that it will be money well spent. Many research-driven companies will even go so far as to invest up to 20% of their turnover in new research in the hope that their R&D team can (2) ... at least one new idea which will ensure the company's future profitability. And companies who, in times of recession, decide to (3) ... research are probably making a big mistake.

These days it is the business of all departments within a company to (4) ... as many ideas on improving the business as possible, some of which, if (5) ... further may turn out to be major breakthroughs, for the R&D department is not always in the best position to

(6) ... a particular problem, let alone (7) ... it. Of course, you may have to toy with an idea for quite some time before you can see a way to actually (8) ... it, and it is this implementation stage which is the test of a really good idea.

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Just Business Unit 8 Innovation

Reading and Language

Read the article about innovation, put necessary prepositions where necessary and then complete the sentences below. For each sentence mark a or b.

It has often been said that if you could invent a new mousetrap, the world would beat a path ____ your door. But many companies used to pay little or no attention ___ investing money ___ a Research and Development department. They preferred to respond ___

market forces, waiting ___ the consumer initiated product development ___ modifying demand in the market place. This usually resulted ___ simple fine-tuning of a product's salient features and many missed opportunities.

Manufacturers frequently discovered that innovation had passed them ___ when it was too late to act. When they finally woke ___ to the news, they found a competitor had stolen their customers. A frequently heard argument was, “If it's not broken, don't fix it!” Unfortunately, it is still a fact that ___ a small business time is seldom devoted ___ intense brainstorming sessions to consider the long-term future ___ a particular product. Manufacturers often find that they've done too little too late.

But companies ignore investment ___ research at their own peril. The Swiss watch, Swatch, is a prime example ___ a product which was produced ___ response ___ the loss of a market through competition. Japanese manufacturers stole the Swiss watch industry's market, virtually overnight, when they flooded Europe ___ cheap digital watches. Digital watches were examples ___ new technology which soon displaced the old-style analogue watches. The Swiss responded ___ innovation of their own - a fashion watch, produced

___ automated machines ___ economies of scale, which reversed the economic decline

___ the country.

Role models ___ efficient R&D departments are hard to find, and many managers acknowledge their inability to produce a true blueprint. Finding staff is not easy; people who invent new concepts do not always go ___ university and gain degrees ___ innovation.

___ fact many ___ the great inventors from history were ordinary people pursuing their own interests. Michael Faraday could never have known how his early experiments ___

electro-magnetism would influence _____ and shape modern society. Nobody knows how many Faradays work ___ present day R&D departments. What is clear is that industry has been alerted ___ the need ___ continuing research. ___ the tough business environment

___ the early 21st century, the command “Don't just sit there, invent something which has been replaced ___ hard cash and budgets totaling _____ 20% ___ turnover to ensure future profitability and company survival”.

1.	Companies need to innovate because:
a.	new inventions are the life blood of a company and ensure its survival.
b.	consumers are never satisfied with the products they have.
2.	Small companies:

a.use the available time wisely to discuss new concepts and ideas.

b.do not consider R&D departments as a necessity.

3. Swatch succeeded because:

a.the Swiss invented the digital watch.

b.the company developed Japanese technology and interpreted it in a unique way.

4.According to the writer you have to:

a.have a university degree to be a great inventor.

b.invest serious money to maintain market share.

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