Corporate innovation – and indeed any kind of innovation – is never the result of spontaneous ideas appearing for no reason. Rather it is a process that begins with a problem or a goal and ends with the implementation of one or more ideas deemed to offer value to the organization. On those rare occasions when a researcher makes an unexpected discovery, she still needs to turn that discovery into an innovation – and that means she has to start with a goal: turning the discovery into a product, for example.
As noted, the innovation process starts with a problem or a goal. In this article, we will look at problems. In a future article, we will look into goal oriented innovation.
Most people, when confronted with a problem will look for a solution and apply the first solution that comes to mind. Often, they will follow past examples, ask a senior colleague or do some research, such as on Google. The result is a solution, but it is rarely an innovative solution.
Turning Problems into Creative Challenges
Creative thinkers – and bear in mind that business innovation is the result of implementing creative ideas in order to generate value – turn problems into creative challenges (also sometimes called “innovation challenges”). The creative challenge is then posed to a group (or in some cases to the lone creative thinker herself) who generate ideas to solve it. In the innovation process, this is followed by an evaluation phase to identify the ideas which offer the most value and finally by the implementation of the selected idea or ideas.
In order to turn a problem into a creative challenge, you need to deconstruct the problem so that you can identify its causes and consequences. In the corporate environment, it can be extremely effective to perform the deconstruction exercise as a team in order to exploit the creative thinking of the group.
We’ll imagine a typical problem these days: Acme Co, Ltd is not selling enough of its products to cover operational costs.
Incidentally, many managers put little or no thought into formulating effective creative challenges. Indeed, many would simply turn the above problem into a non-challenge such as: “We need to sell more products”. Others might quickly rephrase the problem as: “How might we sell more products?” The non-challenge is so unclear that many employees would be reluctant to suggest ideas. The quick challenge is so broad that while it might generate a lot of ideas, few of them will actually address the underlying problem.
The more innovative manager, however, will spend some time deconstructing the problem. Let’s see how it works.
Step 1: Why Is This a Problem? x 5
The first thing to do with any problem is ask “Why is this a problem?” five times. This will enable us to identify the negative consequences of the problem. Using the example, we can ask “Why is it a problem that we are not selling enough of our products?”
- We are not generating sufficient income to cover operational costs.
That’s definitely a problem! But, we need to ask this question five times. So let’s ask “Why else?”
- We cannot finance the growth of our company.
- We are losing market share to the competition
- Our sales people are becoming demotivated, making it even harder for them to sell.
- We are in danger of losing our existing customers to the competition.
Now we have a clear view of the consequences of insufficient sales. Clearly the most worrying is the first why: insufficient income. But all of these are relevant and indicate a clear need to generate more income.
Step 2: Why Has This Occurred? x 5
We now need to try and understand how the problem has occurred. Again, we ask the question, “why has this occurred?” five times. This ensures that we think about the problem in detail. Very often the first reason we give for a problem is not the primary reason. By digging deeper, we can get to the root causes of a problem and devise a creative challenge that addresses them.
So, we ask the management team at Acme, “Why has it occurred that you are not selling enough of your products?” The initial reaction might be to blame the sales people:
- Sales people are not performing well enough.
But if we dig deeper and, ideally include a sales person on the problem deconstruction team, we are likely to learn more about the causes of Acme’s poor sales. They respond:
- Ever since we cut back on our marketing budget, we’ve been getting far fewer leads.
- Sales people are not generating enough good leads to get sales.
- New sales people are not getting any training at Acme.
- Clients are cutting their budgets.
Step 3: How Urgent Is the Problem?
We need to determine the urgency of the problem. This is unlikely to affect the challenge itself, but it can speed up the innovation process and is highly valuable during the evaluation phase of the process. If the problem is urgent, solutions need to be quickly implementable. In this case, it would seem the problem is indeed urgent.
Step 4: What Are Your Competitors Doing About This Problem?
It’s always a good idea to see how your competitors are dealing with the situation. Do they seem also to be having trouble selling? This information can be difficult to glean. But by listening to clients, watching for tell-tale signs (such as deep discounting and laying-off staff) you can often get an idea of your competitors’ situations.
In any event, you probably do not want to take the same action against the problem as one or more of your competitors has done. Leaders do not become leaders by following other firms. They lead! And innovators do not copy their competitors. They are copied by their competitors!
Of course if your competitors appear to be suffering the same problem you are – and in the current climate, low sales is indeed a wide-spread problem – your swift, innovative solution is likely to maintain your leadership in the market or propel you to leadership if your firm is not already there. That leaves your competitors to follow in your footsteps or find an alternative innovative solution.
In our example, we’ll assume Acme’s competitors are also seeing reduced sales and suffering for it.
Step 5: Putting It All Together
At this stage, we have quite a lot information. We have a problem, a list of consequences resulting from the problem, a list of reasons the problem has occurred, a sense of urgency and the knowledge that our competitors are similarly suffering, indicating that there is a real opportunity to take the innovative lead in this situation.
The key factors in the example are clear:
- The firm needs to generate more income. This would normally be done by selling more of the product.
- Sales people are not getting the leads they need to generate sales, nor are new ones being sufficiently trained to generate those leads themselves
- Customers have lower budgets and so are unable to spend as much on Acme’s products as you would like.
Each factor represents an underlying problem and so deserves a challenge of its own. The first factor is that the firm needs to generate more income. Although this normally comes through sales of the product, there may be other ways of generating income. Hence we can formulate a challenge like this:
1. In what new ways (ie. Other than selling our products) might we generate income?
The second factor actually includes two problems: the sales people are not generating leads and new people are not being sufficiently trained. The latter problem does not require creativity to solve. Acme can provide them with more training. Nevertheless, we would hope the training itself will be creative! However, the first problem clearly suggests a challenge.
2. How might the sales people generate more leads?
The third factor would at first seem to be the customers’ problems. They do not have enough money to buy Acme’s products. But with a little thought, this problem actually suggests a wonderful challenge for Acme:
3. In what ways might we make it financially easier for our customers to buy our products?
Each of these challenges deserves a separate ideation event – such as an ideas campaign, brainstorm or other activity – assigned to it. However, the order in which you tackle each challenge is important. Challenge 1 should certainly go first. Alternative income generation models may include leasing your products rather than selling them or offering products as a part of a service package or not making products at all and rather licensing the right to make the products to others.
Next, Acme should tackle the challenge 3 and identify ways to make it easier for customers to buy their products. Very likely this ideas campaign will generate similar ideas to the first! That’s not surprising. Both challenges are addressing a very similar issue, but from different perspectives.
Once ideas from these two campaigns have been clustered and evaluated in order to identify those ideas that offer the most value, it is time to tackle challenge 2: how to generate more leads. This challenge is last because the innovations in income generation will affect they way the product is sold and, indeed, may suggest some suitable lead generation approaches. For instance if Acme decides to sell their product as a service in exchange for a low monthly fee, sales people can use this information in their lead generation methods.
The Challenge of Challenges
This last step of transforming the key factors into challenges is something of an art form and it takes practice. There are no clear cut rules. However, potential challenges should meet a few key criteria.
- A challenge should be a short, concise question.
- A challenge typically begins with “In what ways might we..?” or “How might we…?” or “What new…might we…?”
- A challenge addresses only a single issue. If there are two issues involved, the challenge should be split into two separate ones.
- A challenge should neither be so broad as to invite irrelevant solutions nor be so narrow as to prevent any potential solutions from fitting it.
As you become accustomed to deconstructing problems into challenges, you will find it becomes more and more natural. And once this happens, the process becomes easier and that, in turn, makes it easier for you and your colleagues to innovate on behalf of your firm.
Jeffrey Baumgartner is the founder of jpb.com, makers of Jenni innovation process management software. He also edits Report 103, a popular eJournal on business innovation. Contact Jeffrey at firstname.lastname@example.org or visit http://www.jpb.com/