Companies do badly when the boss comes up with all the ideas.  Smart managers build companies that are ideas factories, organisations that can think for themselves. And that means creating a company where everyone is innovating.

Let’s put it this way. If you left all the innovation to the boss or a small group of geniuses, it could actually be counterproductive because people might feel their ideas are being suppressed. And it can be dangerous if the boss or the geniuses left the company.

So how do you build an ideas factory? Here are some tips. They’re not expensive, they’re just simple things that any company can do.

Create systems where everyone comes up with ideas

You see this operating at some smart companies. Award-winning advertising company Clemenger BBDO for many years had a policy of encouraging entrepreneurialism among its employees. It recruited employees who were film directors and artists or who ran businesses designing laptop covers, selling bottled water and fashion labels. Sounds unusual? It never interfered with their work. More to the point, it created an atmosphere where ideas were being cross-fertilised. As a result, employees were coming up with ideas.

There are some successful franchises where 90 per cent of ideas came from franchisees. That makes sense. After all, franchisees deal with customers every day so they know what the public needs. So the managers talk to franchisees every week, checking to see everything is working well and seeking their ideas. In addition, the company might even hold regular forums where franchisees can raise ideas. One very good example is Baker’s Delight. It’s long been part of their model.  

When Steve Jobs returned to Apple after a 12-year hiatus, he launched the “Think Different” advertising campaign. The campaign paid tribute to a wide range of innovators with is message:

“Here’s to the crazy ones. The rebels. The trouble makers… the ones who see things differently. They’re not fond of rules. And they have no respect for the status quo… they change things. They push the human race forward.” 

Everyone raved about the Emmy-winning campaign, proclaiming it as one of the most innovative of all time. What most people don’t realise, though, is that the campaign targeted Apple employees as much as its customers. The campaign put Apple employees on notice that it was their job to innovate.

At Virgin, Richard Branson has made innovation one of six key characteristics the company evaluates when screening new employees. To get hired at Virgin, you must demonstrate a “passion for new ideas,” you must “make your creativity apparent,” and show “a track record of thinking differently”. Virgin describes its people as “honest, cheeky, questioning, amusing, disruptive, intelligent and restless.”

These companies are long-term innovators because it’s everyone’s job.

Encourage failure: it’s part of innovation

Failure is important because the company learns from its mistakes and builds its market from there. Smart companies don’t punish people for making mistakes. They analyse what went wrong and rework it. What they’re also doing is encouraging people to be creative and take risks.

A large Indian conglomerate, Tata Group, gives out an annual award for the “best-failed idea”. The goal is to recognise and reward failures. Without them, successes would be impossible. For Tata, failure has become a goldmine. Pharmaceutical company Eli Lilly, hosts “failure parties” where employees come together to share their stories of failure and discuss what they learned from them. 

Eli Lilly assigns someone, usually a team of doctors and scientists to retrospectively analyse every compound that has failed at any point in human clinical trials. For example, the experimental chemotherapy drug Alimta failed in several trials and Eli Lilly decided to dump it. But one of its scientists begged for two weeks to save the drug. He and a colleague then analysed blood samples and medical records and found what was wrong. Today Alimta is an approved treatment for mesothelioma, a rare type of cancer caused by exposure to asbestos, and it has been approved for treating lung cancer. 


Make innovation part of strategy

At Deloitte, there is a very clear directive that 30 per cent of the firm’s revenues must come from new, or substantially new, services and offerings every three years. The reason for that is simple: nothing stays new. Anything novel is picked up quickly by competitors.

Innovative companies talk to customers and other partners

Creating ideas means knowing customers really well. Most creative companies say they find their best ideas by talking to customers. And "talking" means having senior executives converse with customers about new ideas and doing it regularly. It’s part of their job. It doesn't mean hiring a market research firm to talk to people, although so many companies end up doing it. That’s just lazy.  Nothing beats direct, unfiltered input from real-life customers.

So put these to work in your company and let us know how you go. Innovation is never ending. It's what gets us out of bed every morning and drives us each and every day.

Written by David Fastuca, Co-Founder and Chief Design Officer @ Locomote

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