This had to be one of the more fun sessions I attended at Davos, on a topic near and dear to my heart. Here’s the WEF summary:
Growth through Innovation
The financial crisis will be sure to squeeze R&D spending, but many participants were optimistic that companies will find ways to innovate despite the downturn – or perhaps even because of it, since the tougher business environment will push companies to boost efficiency.
Think about ways to innovate in leadership, processes, even customer markets. Innovation is about far more than products. One Chinese firm managed to boost sales of its washing machines in rural areas by marketing them as potato-washing contraptions.
Build an innovative team based on time-tested principles. One study of research papers published since the 1950s found that the work with the highest impact is done by teams, and that the most successful teams include a mix of people from different institutions, have a combination of experienced hands and newcomers, and the experienced members have not worked together before.
Set up a system that allows staff to submit innovative ideas, and recognize them. Or allow them to remain anonymous if they so prefer.
Create a rewards system. One company came up with a system of knowledge currency units in which workers win points for coming up with a new idea, then accrue more points as the idea gets referenced within the company and used by other colleagues. The points are convertible to cash.
Establish a contest to reward the employee who generates the best way to save money or eliminate unnecessary processes.
Find a meaningful goal to motivate employees. A participant said he was surprised to discover that one of his employees was less concerned with the greater profits that would result from innovation than with the notion that he could help improve agricultural prosperity for farmers.
Set high targets for efficiency improvements. Don’t bother asking staff to cut costs only 10%. “Say you want 50% and you’ll get 65%,” said a participant.
Rather than focusing only on grand innovations, think about how to make improvements at the bottom of the pyramid, what one participant called “shop floor ideas”. Process innovations may be especially useful during times of slowing growth since they often provide a fast return and help cut costs.
Realize that other companies may be more willing to collaborate with your organization amid the economic downturn. “Partnerships between large enterprises and SMEs might be a good source for innovation” one participant pointed out.
Consider macro-level ways to shift from being a consumer of innovations to helping create them. That may involve teaming up with other companies in your field or in other sectors. For example, Nike set up a green exchange that lets consumer companies swap ideas about how to reduce waste.
Keep in mind that innovations can come from customers. One t-shirt company lets web users post t-shirt designs and then vote on them. The shirts with the most votes go into production.
Be aware that, the more innovative an idea is, the more resources must be invested in organizational change to make it succeed. Sell an innovation by telling a concrete, meaningful story about it. “Knowledge sharing systems have to be about storytelling” said a participant.
Discussion Leaders GOPALAKRISHNAN Kris Chief Executive Officer Infosys Technologies Ltd. India
Discussion Leaders HAWKINS William A. Chairman and Chief Exe… Medtronic Inc. USA
Discussion Leaders IBARRA Herminia The Cora Chaired Profe… INSEAD USA
Discussion Leaders KUROKAWA Kiyoshi Science Adviser to the… Japan
Discussion Leaders LARRAIN BASCUNAN Felipe Professor of Economics Catholic University of Chile Chile
Discussion Leaders LIU JIREN Chairman and Chief Exe… Neusoft Corporation People’s Republic of China
Discussion Leaders MAHINDRA Anand G. Vice-Chairman and Mana… Mahindra & Mahindra Ltd India
Discussion Leaders SHAH Rajiv J. Director, Agricultural… Bill & Melinda Gates Foundation USA
Facilitated by BROWN Tim President, Chief Execu… IDEO Inc. United Kingdom