Tag Archives: Tools

Social Media – the Village Approach to Innovation

It’s interesting how social media has subtly made the migration from a peripheral domain for adolescents to share extraneous to a mainstream business tool. Even within the business arena, social media (SM) used to be relegated to a branding or marketing activity rather than the comprehensive resource many now realize it to be. In a recent blog post, Braden Kelly points out, for instance, how innovation can be fueled by social media:

‘What is the role of social media in innovation? (Either inside or outside the organization)’ Social media serves an incredibly important role in innovation. Social media functions as the glue to stick together incomplete knowledge, incomplete ideas, incomplete teams, and incomplete skillsets. Social media is not some mysterious magic box. Ultimately it is a tool that serves to connect people and information.

How can SM be like glue in your organization? Is there a way to use blogs, wikis, and online videos to enhance learning, information sharing, and collaboration within your daily practice? For instance, posting questions for which your team has no answers to elicit knowledge possessed by others can be a very good use of social media. Or, learning a skill foreign to your core team through an online video can be a means to spur growth or learn how to more effectively manage a contractor/consultant. 

(Kelly:) Social media can help ideas grow and thrive that would otherwise wither and die under the boot of the perfectionist in all of us. Do you remember the saying “it takes a village to raise a child”? Well, it takes a village to create an innovation from an idea as well, and social media helps to aggregate and mobilize the people and knowledge necessary to do just that. But, that is social media working in the positive. We must remember that social media tools are just that – tools.

Village innovation – Hillary Clinton should have thought of that! How does the collaboration effect pertain to SM? Quite simply, there is no substitute for building knowledge systems. For non-proprietary information, you and your peers can start an online conversation thread that others build upon and you are able to glean insights non-resident to your group.  When you do wish to protect methods, processes and intellectual property, it is still preferable to find an internal means to capture group best practices, lessons learned, and puzzles to be solved. How could one or more forms of SM enable you to do this better? Kelly suggests that SM tools are seen in a positive light when they do the following:

  1. To make innovative ideas visible and accessible
  2. To allow people to have conversations
  3. To build community
  4. To facilitate information exchange
  5. To enable knowledge sharing
  6. To assist with expert location
  7. To power collaboration on idea evolution
  8. To help people educate themselves
  9. To connect people to others who share their passion
  10. To surface the insights and strategy that people should be building ideas from

The better you become at the above, the stronger your organization’s innovation capability will become, the more engaged your employees will become, and the more ready you will become to engage successfully in open innovation…Please consider the ways in which social media in your organization might be able to strengthen inter-disciplinary cooperation, make the organization itself more adaptable, and how it could help to create an organization with the power to transform more ideas into innovations.

Retool for Catalytic Success

Business macrotrends are illuminating. With sufficient data, organizations like BCG, McKinsey & Bain can advise their clients better as to thought leadership positions, best practices, and optimization. As the national economy has improved from recession to stagnation or slow growth, businesses have shifted their focus from expense reduction to growth. Increasing revenues is important to companies providing goods, services, or non-profit benefits.

When Bain performed a study last year, 80 percent of the executives believed innovation to be important than cost reduction for long-term success. Also, 68 percent of respondents believed that taking care of customers and employees should come before shareholders. Bain’s interpretation: executives realize that growth depends on having happy, productive employees and satisfied customers. Shareholder returns will be the natural byproduct.

Growth Catalysts:

In the Bain survey, popular management tools were rated by respondents. Of 25 total tools, the top 3 were:

  • open innovation (expanding the sources of breakthrough products)
  • scenario and contingency planning (testing the “what ifs” to plan for the future/minimize risks) &
  • price optimization (addressing rising commodity prices). 

Social media was seen as an additional emerging tool of choice. Whether websites, micro-bogging, or online communities, there has been a growing commitment to explore the value of the medium to enhance relationships–internally as well as externally. “While only 29 percent of all respondents say they used social media in 2010, usage is expected to surge to 56 percent in 2011. Even so, executives tell us they’re uncertain about how to measure the effectiveness of this tool.”  

The standard approach with the introduction of new tools is to make a limited investment to vet the value of the tool, then make a more sizable commitment if it proves to have merit. Bain study leaders felt that this approach presented two risks:

First, while it’s understandable that companies do not want to make major investments before they fully understand how a tool will work, we have found that using tools on a limited basis consistently leads to lower satisfaction, so caution may inadvertently result in failure. The second risk we have found: companies start using a tool because their competitors are using it, or because it’s the hot topic in the business press, but if they do not fully understand how and why to use it, the experience ends up in failure.

Think of business process reengineering, where we witnessed an inverse relationship between usage and satisfaction rates when it was the hot tool of the 1990s. We witnessed reengineering drop from the tool with the fifth highest satisfaction rate in 1993 all the way to 21st in the late 1990s. It was only after usage rates declined that satisfaction began to improve again. Any time we see high usage but low satisfaction, there is cause for concern.

What Tools Work & What to Degree?

Benchmarking made a comeback a couple years ago and displaced strategic planning, a perennial No. 1, as the tool of choice. In addition to benchmarking, the most widely used tools during the recession period were strategic planning and mission and vision statements. These tools have rated in the Bain top 10 for usage over the years, regardless of the economic climate.

The survey found the least used tools included open innovation, decision rights tools and rapid prototyping. One tool that was surprisingly unpopular was mergers & acquisitions. During a downturn, M&A deals often create bargains that give the acquiring company increased scale and broadened scope. Yet in each recession we see relatively few deals. 

Among the  preferred tools, strategic planning was the tool with the highest satisfaction rating. Other tools with above-average satisfaction scores included mission and vision statements, total quality management, customer segmentation and strategic alliances. On the other end of the spectrum, downsizing, outsourcing and shared services centers–despite being seen as expense reduction tactics–were three of the five tools with below-average satisfaction scores. The other two tools with low satisfaction ratings were knowledge management and social media programs.