The following two articles both originate from the Report103 newsletter which I urge all of you to subscribe to. If the articles had been available online I would have linked to them using del.icio.us but they are not, so I am going to copy/paste them here.
Spreading the Creativity
I saw the latest Star Wars film, Revenge of the Siths, the other day. The special effects were stunning. The film was rich with all kinds of realistic inventions, floating vehicles, spaceships, weapons and much more. Moreover, the detail down to the mud stains was incredible.
Sadly, the story, plot and characterisation all lacked the creativity of the special effects. And while I was overwhelmed by the special effects (I’m one of those rare birds who sits up at the front of a cinema so that the screen fills my field of view and I can admire the detail work), I was actually bored by the film itself.
The problem with Revenge of the Siths is that George Lucas and company invested the bulk of their creativity in the special effects, rather than in the story and character development. In the end, of course, Mr. Lucas will make sacks full of money on his latest film so it can hardly be classified as a failure. But it could have been so much better.
Poorly invested creativity is a problem in business too. While many
firms invest creativity in developing new products and services, they
often focus the creativity on a single aspect of their product: cool
design but dull functionality; dull overall concept but innovative
detail work; or innovative product but lacklustre marketing campaign
which fails to promote product adequately.
In industry, two examples come to mind of products which
demonstrated a great deal of creativity poorly invested in one aspect
of the product development. Both are now defunct European car
manufacturers: Daf and NSU.
Daf was a Dutch manufacturer of cars and trucks and they still make
highly regarded trucks today. In 1959, Daf introduced their first car
and it featured their highly innovative Variomatic automatic
transmission. Without going into excessive detail, a typical automatic
transmission includes 3-5 gears and a torque converter which feels the
torque going from the engine to the wheels and upshifts or downshifts
gears appropriately. The Variomatic transmission, on the other hand,
comprises two cone shaped gears and a belt that runs between them. The
Variomatic automatically selects the best position of the belt between
the two gears for optimum efficiency. The result is a phenomenally
smooth automatic transmission Moreover, it was far more efficient than
automatic transmissions of the time.
Unfortunately, while the Variomatic transmission was and still is a
very innovative and efficient approach to automatic gearing, it was
always Daf cars’ main innovative feature. So, while potential buyers
may have been intrigued by the Variomatic transmission many were not
compelled enough by the rest of the car to buy one. Daf was eventually
bought by Volvo.
NSU was a well established manufacturer based in Germany. They
started producing cars in the late 1950s and introduced the first
Wankel rotary engined car in 1960. The rotary engine uses a huge, fast
moving rotor where normal cars use pistons, to move the car.
NSU made the same mistake as Daf. They invested too much of their
creativity on one component of their product: the engine. And while the
Wankel engine theoretically is more efficient and simpler than the
piston engine, NSU did not focus enough on quality control and so their
motors were notoriously unreliable. Add the fact that cars that were
otherwise uninnovative, and it is understandable why the public did not
buy up NSUs in droves. Sadly, when NSU did put together an all round
innovative car the then futuristic Ro 80 launched in 1967 they still
did not put much effort into the quality control of their Wankel
engines. As a result NSU did not make money on their car sales and were
eventually bought by Volkswagon.
The lesson to be learned here if you are not George Lucas with a
successful film franchise behind you is that when launching new
products or services, you need to invest creativity across every aspect
of the product development cycle: from initial concept, to
pre-implementation development (concept, prototype, market research,
trial runs,etc) to development and even marketing. Yes, marketing is
critical too. After all, if you have the most innovative product in the
world, but market it badly, you will never sell it. Indeed, 3M’s
post-its almost didn’t succeed because the marketing team used their
traditional industrial adhesive marketing approach to market their new
Post-its. It was only when a new team introduced an innovative
marketing approach that Post-its took off.
Needless-to-say, once the product hits the market, you cannot stop
your creative investment. You need to continually improve your product
and the marketing of your product to ensure sales growth.
Sticking to the motoring industry, two examples of companies that
have successfully invested innovation are Toyota and Citroen. Toyota
cars may seem less than inspiring to motoring aficionados. But, over
the years, Toyota have introduced their fair share of innovative cars
and car features generally targeting families, young people or other
groups. More importantly, Toyota have continually invested in all
aspects of their product development, from designing competitive cars -
that appeal in terms of practicality and reliability rather than
sexiness and outright performance to devising and improving the
just-in-time manufacturing process.
Citroen has not been as successful as Toyota, and they are all but
unknown in the US market. But, until they were bought by Peugeot (also
not well known in the US market), Citroens were highly innovative cars
designed by sculptures and engineered by creative engineers. Citroens
were always stunning looking cars with incredible suspension systems
and quirky functionality. Although Citroen was eventually bought out by
Peugeot, Citroen is still a successful brand and part of their
continual success is the result of their innovative history. Sadly,
however, Citroens now are not as exciting as they were in previous
decades. We shall see how this affects their future success.
The lesson is clear. If you want to reap the rewards of innovation,
you have to make a creative investment across the product development
cycle.
In case you are interested, examples of Science fiction films which
invested creativity better than Revenge of the Siths, include: 2001: a
Space Odyssey, Forbidden Planet, Dark City and of course the original
Star Wars film.
Some Basic Calculations
Creative investment in a project includes several cost points. The main one being people. Breaking them down, we get…
- Project workers: The main creative investment in any
project is staff time invested by the project workers in devising,
developing, testing and implementing ideas. Very rarely can a good idea
be implemented immediately. Often there is a need to develop and test
ideas. For example, if a coffee mug designer has the idea to replace
the traditional coffee mug handle with a knob, she will probably need
to draw up some examples to see how the knob looks as well as make some
prototypes. Very likely she will find that it is very hard not to spill
a knobbed coffee mug when you hold it by the knob. Hence the idea must
either be further developed or dropped all together. This testing and
revising of ideas takes time.
- Management approval: Most project teams must take their
projects to senior management for approval. Even autonomous project
teams will normally want to take radical ideas to top management to
ensure their backing. Moreover, when innovation new concepts are
proposed, it often takes managers longer to analyse the new ideas and
approve them. This is because managers may be reluctant to take on
creative risk (see below) or simply because an innovative new product
or feature needs to be analysed in a different way than in the past.
- Testing: Occasionally, a new idea is so obviously brilliant
and a company so dynamic that a bold new idea can be developed into a
bold new product and launched immediately. Very occasionally. More
often, new ideas need to be tested via prototypes and market research.
Sometimes legislation or ethics demand testing for safety or meeting
specific industry standards. Testing is often carried out by outside
suppliers who specialise in such testing.
- Consultants, trainers and other outside thinkers: Consultants
and other service providers can often bring new ideas to projects as
well as train project workers to be more creative. Nevertheless, they
do add cost to projects.
- Tools and facilities: Tools such as Jenni idea management
which solicit, capture, evaluate and implement ideas generally improve
the cost effectiveness of capturing and evaluating new ideas.
Nevertheless, there is a cost investment in such tools. Likewise design
tools, creativity helpers, drawing paper, modelling clay, meeting
facilities and other tools and facilities are necessary for developing
creative projects.
Before you panic and decide you cannot afford the creative
investment necessary to devise and develop innovative projects, bear in
mind the rewards, which in business is usually increased income which
comes from either or both of these sources:
- Increased revenue: an innovative new product should result
in increased revenue as your firm earns more money from selling a
product the competition cannot match. If it is an all new product,
there is a possibility of cornering a new market. If it is an improved
version of an existing product, there is the possibility of capturing
more market share as customers see your product is so much better than
the competitors’.
- Cost savings: very often, the benefit of creative ideas is
not increased income, but reduced costs. If you can cut 10% from the
cost of manufacturing your product, that can result in a 10% increase
in the revenue generated by the product or the possibility to reduce
pricing and undercut the competition or a combination of the above.
If additional creative investment always resulted in proportionately
increased income, the investment decision would be any easy one to
make: invest as much as you can. Unfortunately, creative new ideas also
carry a creative risk. Sometimes ideas are too radical for the market
place. Sometimes, the creative investment is too focused (see above
article). Sometimes a concept that works well in the prototype does not
work so well in practice. Likewise, a cost-cutting idea may prove more
complicated and thus more costly to implement and maintain than
predicted.
As with any investment, creative investment carries a risk which
must be analysed accordingly. Unfortunately, the most radically
creative ideas not only have the greatest profit potential, but they
are also the hardest to analyse as there are few if any comparable
predecessors that can be used as a basis for measuring income
potential.
One comment so far
I have a idea you might be interested in a new type of innovative house for extreme storms and its easy to manufacture contact me if your interested in new product developments.