Round Table Debate: Innovation
Posted on the 12 August 2015
Innovation means a lot of things to different people, from cutting edge development to “just doing something differently”.
The third Entrepreneurs’ Forum Round table of 2015 looked at what innovation meant to members and how it was implemented in their businesses.
Hosted by Nine Software, at their offices in Hebburn, the discussion was chaired by Forum Chief Executive Gillian Marshall, who was joined by Nine’s Managing Director Andy Walton and fellow Forum members:
Darren Williams, of Redu
Mark Ions, of Exclusive
Matt Mavir, of Last Night of Freedom
Tony Slimmings, of Prismatic Thinking
Tim Toomey, of Ward Hadaway
Lisa Eaton, of Unwritten Creative
Amy Jackson, of Unwritten Creative
Duncan McDonald, Jordan Engineering
PwC research has shown:
- Two-thirds of the most innovative companies say innovation is a competitive necessity
- Nearly 80% of the most innovative companies say they have a well-defined innovation strategy
- The most innovative companies are more likely to manage innovation efforts formally or in a structured way
- The most innovative companies are planning to enhance the business model with new value offerings over the next three years
- When it comes to developing new products and services with external partner, the most innovative companies collaborate over three times more often
- The most innovative companies are growing at a much faster rate; 62.2% vs 20.7% over the next five years
What does innovation mean to you and your business?
Darren Williams, of Redu
We connect consumers to retailers. Innovation for us, being an internet company, is about staying one step ahead of our competitors; launching new features, providing things that make the visitors think “wow, this is the place to be”.
Lisa Eaton, of Unwritten Creative
For me, innovation is about improvement. What’s out there now and how it can it be built upon? Trying to come up with ideas that break the norm in order to improve efficiencies and experiences.
Tony Slimmings, of Prismatic Thinking
We set this company up about 18 months ago as a spin off from a very traditional financial services based employee benefit consultant. It was quite a big jump for us and it came out of that need to innovate out of financial services, which, in our opinion and my opinion especially, is going through some pretty poor times at the moment, with poor reputation from commission, sales, the whole pensions issue, which has been building for the last five or six years, so I wanted to take us away from being financial services based and use our corporate base to help, and we sort of drifted into the business psychology.
Matt Mavir, of Last Night of Freedom
We essentially sell stag weekends and hen weekends and the way we used to make our money back in 1999 was we would take out an advert in FHM, we would have a brochure, the customer would apply for one, we would send it to them, and we would essentially just sell them what it was that we wanted to sell them. The reason that people would use us is because there wasn’t really that much of an internet and we were selling knowledge, essentially. We would sell a nightclub, a hotel and everything, and we would be non-descriptive about that; it’s a hotel, a nightclub and once we get the pack we would tell them exactly what it is. The difference is that over time that’s changed and the internet is fantastic for us, what it does is it helps people to get hold of information, so our service has gone from one where we just keep the secrets to one where we are divulging everything, trying to facilitate their weekend.
Innovation is all about making that possible, we have a platform that’s all about allowing that to happen.
Mark Ions, of Exclusive
Innovation, for me…it’s a very crowded market, or it can be a very crowded market that we operate in, so we constantly need to innovate on the service. We look to do that in two ways. One is utilising technology a lot and trying to streamline processes, so we are making a better service for our clients and candidates. But, it’s also about getting the right people into our business, so innovation is a big thing for us.
Amy Jackson, of Unwritten Creative
I think there is quite a bit of confusion around what constitutes innovation. Our clients often ask us for an ‘innovative’ design solution, but when we question overall marketing objectives and the desired result of a design piece, the answers can be vague and often not considered with the end buyer in mind. An innovation, in terms of design, doesn’t necessarily need to mean total change, certainly not if it’s simply to be seen as being innovative. A small, well thought-out change that has a specific goal in mind, can be sometimes be just as impactful.
Tim Toomey, of Ward Hadaway
As a lawyer the subject matter we deal with 'the law' is not fast moving. As a service provider however we constantly must look at improving how we deliver our services. In that regard I think we [Ward Hadaway] are quite innovative. We are a large business with a central element to it, but each unit is distinct in its own right and sells its services in different ways. I handle commercial disputes and in an ever more digital world we have recently introduced an online dispute management tool, called ViewPoint. This is free and provides an executive or manager with a way of easily pulling together the information needed when a dispute arises. This can then be sent to us and we will then provide a free view on the issues arising. This tool is useful and provides us with a potential introduction. It’s about thinking of ideas like that and how we might deliver our service in a slightly different way.
Duncan McDonald, of Jordan Engineering
Innovation to me as an engineer, is about doing “things” better, faster, cheaper. That’s been the message for the past 30 to 40 years, back to the influence of the Japanese cultural change in automotive, aerospace, rail, and the oil & gas industries.
The O&G industry is extremely innovative as it becomes ever more difficult to extract hydrocarbons. It has been said that the latest challenges in installing equipment three miles under the sea are comparable in scale to the ones faced in going to the moon.
Typically within engineering, the innovation process is driven by a problem that needs to be overcome (necessity is the mother of all invention), which then leads to a better design of the product/process resulting in better quality or a lower cost process.
This is typically how Jordan fit into a client’s innovation process. Jordan are a comparatively small business, but that allows us to move faster/be more flexible for our clients, so that we are able to collaborate fully with them in realising design changes and solving their issues.
Andy Walton, of Nine Software
Often what we see from a client basis is that innovation isn’t always the big light bulb moment, it’s not always creating something that’s new. It’s often taking something that has been around for a while and making it much better. It can be about being able to pivot and change for your market and sometimes that’s where innovation has its real value.
Where does innovation start in your organisations?
It starts with me, because as a business leader you’ve got to be able to show your team that you can be innovative. It has to be led from me from a cultural perspective but actually everybody must buy into it as well. We’ve just done a major project for a client that came to us and what they were asking for was the wrong thing. The concept of what they were trying to achieve was fundamentally brilliant but actually the way they were going to try to implement it was fundamentally flawed. So, it was our guy’s job to be able to try to help them figure out how, not necessarily the why, but how.
If it doesn’t start with me, I will have it claimed by the end. About three years ago we went through a whole rebranding process, we were just going through the motions, taking money, and we then realised we needed to up our game and stop trying to set up 101 different other companies that weren’t focussing on stag and hen and just get down to the business of what we did best. With that, we came up with mission statements and did the whole thing top to bottom and probably took it far more seriously than we ever thought we would. It’s been probably the best thing we have ever done and it’s put the customer right at the centre of everything. With the customer at the centre of things, that breeds innovation.
Is it everybody’s responsibility to come up with new ideas?
I try very hard to put that back to everybody, but it does start with you as a business leader, to put the seed out there, so somebody else can come up with the idea and you know, deep down it’s come from you. I’ve tried hard, as the business has got bigger, to get people to sit and think “actually this customer has got this requirement, how do I deliver that perhaps in a slightly different way, a more innovative way?”. It starts with the business owner.
As we have grown, we have people who know they can come up with an idea and you allow them to run with it, often because you are so busy doing other things that you think “great, if you come up with an idea, go for it”. You will give them enough rope, but stand by to support them if it’s needed, but generally you want them to be coming up with the ideas.
We have to be innovative to find the right types of people for our clients, how do we become innovative so that when we are representing all of these different types of businesses, where do we find the right person for that business.
Innovation can be all sorts of things. It can be coming up with a great idea that improves the product, but it can be some of the processes and the things that you do day to day, which you might think “why are we doing it that way, can we improve?”
People might think they need to change something, where, quite often they don’t. Always try to simplify it, try to streamline it and that’s where technology really comes into it. It’s not a case of what I am doing is wrong, it’s just looking at a different way of delivering it.
I think there is confusion because everybody has a different take on what innovation means. In our studio we have a team of creatives who are constantly solving problems and coming up with new ways to deliver a message or engage with a buyer. I suppose that in itself is innovative, but I wouldn’t have described us as an innovative business. In a project we were working on, we were curious to know if a client would qualify for funding available for innovative technology. We spent a long time talking with the organisation who controlled the fund trying to understand what they would class as innovative, and they couldn’t give us an answer. It was really frustrating. This is a grey area for a lot of people, even those who are meant to be qualifying what IS innovation, struggle to define it.
Mark, you spoke earlier about simplification, and I agree with you. When we set up Unwritten Creative we discovered a piece of accountancy software that for me was a real innovation, compared to previous packages I’d used. It’s called Xero, and it’s cloud-based, meaning I can do accounts from anywhere that has a wifi signal any time of the day or night. It also talks in layman terms and being from a non-accounts / finance background this made my life so much easier. Anything that makes life/work easier than it is could be seen as innovation.
It’s just buzz words, isn’t it. Some Minister will come down and say we need more innovative companies and there is a grant for innovation and then you say, “well, what is innovation?” and everyone looks blank.
Where do people find support for innovation?
If there is one thing that is guaranteed to take the fun and the speed out of innovation, it’s these processes, having to fully explain the business model and really, all you have got is a hunch; it might work, it probably won’t…
And isn’t that the point?
…and can you give me the money, without asking too many questions?
It’s about taking a risk, a lot of the time, it’s about having a bit of a hunch that this is going to work, let’s give it a shot and if it does then we can invest further and go for additional funding.
I think it would be far better if funding organisations said something like “if you are an individual who can prove you have a proven track record with innovation then this is what we have got available for you”.
Duncan’s way of explaining it sums it up for me. Taking a solution that is working well and making it better, making it simpler and cheaper, is essentially what innovation is.
Where does innovation start in your business?
We are delivering innovation for our clients, so the how and what has to come from them. We have to get right into client systems and get to the bottom of what they are doing and then sometimes turn it on its head. We are often too busy doing it for other people that we don’t really do it for ourselves.
Particularly in the last 15 to 20 years with the arrival of software, IT has radically altered how we deliver everything that we do. The scope for innovation, in terms of that sexy lightbulb type moment, is that much greater. You cannot sit still and have to think about how you improve what you do.
I think a good way analogy is that of Dave Brailsford and the Sky cycling team. He says “what we do is try to make small improvements in every little thing that we do and this produces a better result”. In Sky's case, two or three years later this led to them winning the Tour De France.
From a legal point of view, as a service provider you’re not going to have a lightbulb moment and radically change the way the world operates, it just doesn’t happen that way. So, I think the key thing is making sure we take out time to think about what we are doing, how we might improve that and involving the whole team in that process.
Do you think that’s why sometimes it comes from the top, because everybody is executing the processes, delivering, aiming towards a certain goal, achieving it and then moving on to the next, whereas, as a business leader you can stop, see a problem and think how can we improve that next time?
I saw a great example of technology innovation when I put my wife’s Audi A4 in for a service and they called to say there was something wrong with the tyre and all of a sudden they said they were going to send a video of it. I got a text with a pin number on it, and an e-mail with a link that I clicked on, put the two together and there is this technician standing there telling me about this tyre and why it needs to be changed. All I needed to do was click “agree”, “disagree” or “ask a question”. It was incredible, but it was very simple.
Audi is tackling a big issue head on here. I think it’s great that they are addressing fear about whether work is genuinely needed or not.
That’s a great example of a large company coming through with innovation, probably because of a customer complaint or that sort of scenario.
The last business we had sold beauty products online and we got our own products manufactured in China so one of the things I did was I looked at similar products on Amazon and I went through all the customer feedback and reviews, and, based upon that feedback I would look at our products and how we could make them better and build in features that were missing or whatever. That was a great example of how we used customer feedback.
Going back to the question of where does innovation start with, for me it has to start within the company culture and it has to be instilled from day one so in one of our previous businesses, as part of the online login system that the staff use there was a “bright ideas” section, where staff were encouraged to submit a bright idea. Then we created a points-based system, where you would get points for various things, so you would collect these points and then redeem them; it could be a meal out, it could be coffee for the office or some cupcakes, even fill your tank full of petrol. This was a great way of encouraging staff to think what they could do to make their jobs easier, be more efficient. It’s something we are looking at implementing into our current business, it’s all about embedding it into the business and having it as something we think about all the time.
We practise innovation and improvement every day, in terms of the work we produce for our clients. However, finding the time to step away from the day-to-day and centre the same level of attention on our own business, is something we know we need to focus on.
We are one of maybe around ten stag and hen companies and we are probably around number two or three at the moment and we reckon that you are probably better off being number two, because the top guys innovate like crazy, working with massive budgets, and because we work in seasons you probably get the benefit of that for one season if you launch it at the right time.
Innovation is often copying a competitor, but doing it a better. A lot of organisations see staff go off and set up their own business because they have seen an opportunity.
To me, it’s starts with trust and is about having people who have the confidence to know that their opinion matters and that there is no wrong answers. We have probably spent about 18 months ripping up ideas and starting again, going down blind alleys, realising we are in a blind alley and starting again. Having that confidence to know we don’t have to keep going down those roads, that we don’t have to work with people we don’t want to work with, and I’m passionate to get that across to the team that if you don’t like the person you’re working for, you don’t have to. There is no such thing as “the customer is always right”. One of the comments that was made was that you need to understand what the customer wants. Most times, the customers don’t know what they want.
Most of the great ideas are the ones where you think “that’s really obvious”.
What’s the Henry Ford saying? “If I’d have asked people what they wanted, they would have asked for faster horses.”
From day one, I have grown my business with young graduates because a) they know no fear, b) they know there is no wrong way, c) they know their opinion is as valuable as mine, and d) they know they are better than me, because I’m not a business psychologist. I don’t want to be. Where I think my advantage is, is to be able to stand outside an industry, see its potential and try to harness that potential, so they can become a little bit more innovative, they can become creative and introducing them to the fact there is more to life than just what they are seeing every day.
Everybody looks at the world through their own glasses and sometimes the best thing is to give them somebody else’s glasses.
Everybody is talking about the need for it to come from the top, how empowering it is, how crucial it is to the business and, depending on the size of the organisation, how you badge it. But we are all the same, the day job gets in the way. It's therefore about how you make the time to actually think about it and then make it happen. In my business, you can take a business case to the senior management and say “this is my idea, which I would like to follow through” and people are actively encouraged to do that. However it's about taking time to make sure that this happens. I think, far too often it can be pushed to one side whilst you are busy with something else.
That’s why, culturally, it has to come from us for the teams to be empowered to come up with ideas. I don’t know if anybody has read the book “Only The Paranoid Survive”, it’s Andrew Grove, who was the chief executive of Intel and he recognised very early on that all his PCs were being sold, but actually it was their chip sets that were running the PCs that actually did the clever bits, so they moved to this whole brand and marketing strategy out there that sent the message that it was “Intel inside”. So, what he talks about is that every business goes through strategic inflection points and that’s the bit that we should all be looking at. A business will go through a period of growth to a point and then it will have this opportunity. That, I guess is what our roles are when it comes to innovation within our businesses, it’s looking for that strategic inflection point where you can pivot, change, evolve the business in the right way.
The first phase of extinction in our industry was not evolving when the internet grew.
Do people really understand what innovation is?
It sounds big and grand. It’s just improving stuff, really.
We have mentioned the bottom line a few times and we don’t see it like that. We think of it very much like evolution in the Darwinian sense. If you don’t change your tune you are not going to be here in three years’ time, particularly the way our industry is moving. It’s buying next year’s ticket. You need to still be there, because we see so many falling by the wayside and so many people coming in new, with a better way of doing it.
I think, for us, it’s about understanding our staff personalities as well. Amy and I are on the project management side, so we live and breathe processes. Our side of the business has to be very organised and processes play a critical part in ensuring projects are delivered on time and on budget. However, our team is also made up of creatives who work better when they are more relaxed about the working methods. Some do like to follow a process, but there are others in the team who just like to get on with it in their own way. Sometimes they will come up with an idea and it might take days to happen, but trying to get them to follow certain steps to come up with an idea is very difficult. I think we work on that by trying to understand the particular person, who they are and how they perform best. Do they work best with a process in place? If they do, let’s make sure it’s there for them. If they don’t then let’s not force it on them.
As you develop an innovative process or product, do you do it yourself, or reach out to others, such as universities, funding organisations or specialists to support you?
It’s a tricky one, because we are at a bit of a crossroads, we are doing all right, we are doing fine, but if we are going to take things to the next level it is probably going to take funds that we don’t have. We’ve been self-funded for 15 years, so it’s tricky, because I doubt that if I were to set up “newco” whether I would get a load of money chucked into it. They want “oldco” and they want a percentage and I’m used to owning 100% of this thing and I’ve worked very hard for 15 years. It’s a tough one, because I can’t keep on selling stag and hen weekends forever.
In the oil and gas industry, one of the greatest challenges is extracting hydrocarbons from deep water sources. The key phrase of recent years has been “deeper, darker, colder” as the operating conditions in deep waters requires stronger, low temperature resilient materials and comparable manufacturing processes.
We have been developing such manufacturing processes to support our clients’ designs and operating parameters and although it is time consuming and expensive, this continual innovation cycle is critical to our future prospects.
We are fortunate that even though we are an SME, we are able to access world class welding experts within the UK, which allows us to “punch above our weight”. This in turn is allowing us to grow our business in what are quite difficult times, and we are also very grateful for the help received in the form of RGF funding which has allowed us to invest in both infrastructure and capability acquisition so that we can continue our “innovation journey”.
It seems to be all hidden behind forms and applications as well. Why not just have a panel and have people pitch?
In years gone by, we all knew where to go because we had the information bombarded at us, we all knew another business who had been through it, what the process was and generally what was available.
We are a Teesside based firm, we’ve got Teesside University, the Teesside LEP, you’ve got the five local authorities trying to get together as one unitary council, which is another group of people. As a local business person, I haven’t got a clue who to go to.
There is information about innovation on both North East LEP and Tees Valley Unlimited websites. The Forum would be happy to signpost to the various organisations who can help.