Helping Your Employees to Self-Learn (Part 3)

Two young employees
Originally uploaded by N A Y E E M

Please read our previous post, here, as it provides a background to the following:

Innovation - an individual or business' ability to create products, processes/methods/ways of doing things that can be successfully commercialized (sold), is essential for gaining a competitive advantage in your industry.

A competitive advantage is something that your businesses has, that's of value to your customers, that your competitors can't easily replicate...either because they:

1) Haven't caught wind of it as yet

Or

2) Even if they have, can't capitalize on, since it has been protected (e.g. by copyright, patent, trademark, etc.) and hence cannot be legally copied until after a certain number of years.

This is especially important when there are few points of differentiation among competitors in an industry.

New or extended product lines that resonate with customers, can breathe new life into your business and can leap-frog it against its competitors.

E.g. Apple's product lines got a boost from the introduction of the iPhone and iPad in 2007 and 2010, respectively..

1) So much so, that in August 2009, the iPhone eclipsed the iPod as one of the top two (2) contributors to Apple's revenue stream...contributing to over 20% of Apple's revenue. Apple's revenue in 4th Quarter, 2009 was $9.9 billion.

...20% of which gave iPhone a cool $2 billion revenue contribution in 4th Quarter, 2009. (Apple's fiscal year starts in October and hence its 4th Quarter runs from July-September).

2) So far, over 2 million units of the iPad have been sold. At an average $600/unit, the iPad is projected to have brought in $1.2 billion revenues by May 31, 2010...and is projected to bring in another $1 billion, at end of June... this from a product that was just released on April 3, 2010.

Apple's projected revenue for their 3rd Quarter (April- June) of 2010, is between 13 billion and 13.4 billion...thus giving the iPad an expected revenue contribution of $ 2.2 billion, or 15% of revenue.

Both the iPhone and iPad have enabled Apple to leapfrog ahead of it's nearest competitors, by having a year over year (yoy) quarterly revenue growth of 48.6%, while its nearest competitors - Dell, HP and Microsoft, have only managed yoy revenue growths of just 20.5%, 12.8% and 6.5%, respectively.

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There are many ways in which companies can innovate:

E.g.

1) Cisco (the worldwide leader in the manufacture of network solutions) innovates by buying promising, new companies, with a growing customer base, whose product/service solutions not only extend the range of Cisco's existing product-service offerings, but ensure them huge profit margins at minimal cost

2) Google, Apple and Facebook (all technology companies) innovate by:

a) Having competitions for developers who build upon existing applications (apps), or who offer completely new apps to these companies' existing cadre of apps. These companies then go on to fund those developers who win prizes at these competitions.

b) Funding independent developers with proven and burgeoning customer-bases for apps added to the above companies' online stores.

3) 3M (a US-based conglomerate that produces over 55,000 products, ranging from adhesives to optical film)innovates by giving employees 15% of their time (a few days off per month), to work on their own projects...it's called their "bootlegging policy".

These projects sometimes solve customer problems at 3M, thus becoming customer hits and so are adopted into 3M's product offerings, or as we say in marketing - into their breadth of product offerings.

E.g. Post-it Notes and Scotch Tape are two such innovations which were created by 3M's bootlegging policy.

Both have contributed, greatly, to the recognition of the 3M company brand and at least 30% of 3M's revenues over the period 1977-present.

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But can you really teach your employees to innovate?

...and which employees should be innovators within your organization?

Should innovation be left up to Product Development teams?

...Or should other employees and  innovators outside your organization, be given opportunities to license products to your organization?

Well we'll attempt to answer these questions, below:

Now let's examine the first question... can you really teach employees to innovate?

The answer is a resounding yes!!

Innovation is as much a science as it is an art...

Once an individual is aware of how to:

1) Create commercial-ready products - products which solve a customer problem and for which there is strong demand

2) Protect his/her innovation (either through patent, trademark, copyright,etc.) whilst commercializing it...

...then this knowledge opens new pathways to creativity.

If employees know that their employers are willing to consider new product concepts and fund said concepts through to product launch, this is enough motivation for employees' creative juices to flourish...

The higher the potential gain, in thousands or millions of dollars, by licensing (renting) their concept, the more likely that the most cynical employee can be converted into an innovator...

However employees need to brush up on marketing skills..(free courses are available, online, via Massachusetts Institute of Technology's OpenCourseWare site), as well as purchase books that help them jump-start the innovation process.

E.g. the following are great books that: 

1) Assists employees with commercializing their million dollar ideas: "How to License Your Million Dollar Idea: Everything You Need To Know To Turn a Simple Idea into a Million Dollar Payday, 2nd Edition" by Harvey Reese.

2) Enables understanding of the different protection mechanisms for their inventions is: "License Your Invention: Sell Your Idea & Protect Your Rights With a Solid Contract" by Richard Stim.

Which leads us into our second question...

....Who should be allowed to innovate?

Should innovation be left up to members of the Product Development team (consisting of members form Sales, Engineering, Marketing and Finance)?

...Or can new, actionable ideas that can be converted into commercial-ready products, be encouraged of every employee, or from persons with expert knowledge outside the organization?

Well, the truth is that anyone can innovate...from the janitor to the CEO...each employee can be transformed into innovators.

However the following characteristics are most common amongst successful innovators:

1. Tenacity (not easily set back by failure, but have dogged drive/willingness to succeed)


2. Astute customer focus (after all, products created should fulfill a customer need or solve a customer problem)


3. Takes rejection in stride...learning from mistakes


4. Not a perfectionist, but willing to release products with a few major functionalities, but which can then be built upon (augmented) to suit market demand


5. Stridently focused on time to market..bearing in mind that competitors can innovate too and bring products to market,rapidly.


6. Aware of what can be protected and how to go about protecting it and thus earning from it.

These attributes can be learned...but what would ordinarily take a year to learn, can be drastically reduced to a few months, with the right aptitude and incentives:

When employees know that their innovation skills are valued and that they will be rewarded, accordingly, they will shorten the innovation learning curve, out of their own self-interest.

These newly-found innovators will now look at your business in a new light, this increasing the likelihood that more commercial-ready, new product ideas, will emanate from within the organization.

When your employees become problem-solvers, who can be therefore aptly rewarded, the more likely they are to find solutions to your business problems, rather than contribute to these problems.

...which is a win-win situation for your employees and for your business.

But commercial-ready ideas need not only come from only within your organization...there are industry experts who have studied your industry and company for years and who are in touch with experts within your supply chain, who provide them with valuable and up-to-date customer information.

Many of these experts also license innovations and can be turned to help breathe new life into your existing product/service offerings...by extending same with their innovations.

The two books mentioned above, will show you how to find these experts and to tap into their knowledge and know-how.

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Well, we've come to the end of our series, "How to Help Your Employees to Self-Learn"...we hope that the series has been of immense benefit in helping you to create more intelligent employees who will become problem solvers and who will, because of this mindset, propel your businesses way ahead of its competitors.

Please refer to this series often, to learn how to enable your employees to learn effectively and efficiently, thus increasing your profit margins.

(I would like to thank NAYEEM for the use of his Flickr inset photo, above).

Gillian
 

Sources Include

1) Direct comparison between Apple and its Nearest competitors, via  Yahoo Finance, accessed May 31, 2010

2) Article, "Apple iPad Sales Rocket Above Two Million, Revenue Could Be $1.2 Billion" via 247wallst.com, May 31, 2010

3) Article, "Last quarter iPhone revenue quietly eclipsed the iPod", by Jason Hiner-ZDNet.com, August 5, 2009

4) Web page, "Post-it the whole Story- a Noteable Achievement", via 3M.com, accessed June 1, 2010

5) Webpage, "3M a Culture of Innovation", via 3M.com, accessed June 1, 2010

6) Webpage, "The Evolution of the Post-it Note", via 3M.com, accessed June 1, 2010

7) Article, "3M" via Wikipedia.org, accessed June 1, 2010