Alan Milwidsky featured in InfoAge

Every day around 250 engineers turn up to work at Cisra, Canon’s Australian information systems research group, knowing that their job is to innovate.

Dividing innovation into technology innovation and process innovation, Cisra’s director, Jim Metcalfe, defines innovation itself as: “A new idea that’s implemented and adds value.” The raw ingredient, he says, is people and Cisra seeks problem solvers and employee diversity, and fosters a workplace culture that expects, values and rewards innovation. By working to “develop deep domain expertise and understand competition on a global scale”, Cisra keeps the innovation spark alight. For Metcalfe the measure of success is the patent count, because “if you’re not thinking about patents you’re kidding yourself”.

Adele Whish-Wilson, founder and CEO of Momentum Technologies, which has developed technology for live video streaming over the Internet, adds that companies should put themselves up for innovation awards which give teams of innovators tacit acknowledgement of their progress. Keeping in touch with other companies and innovators, and sharing experiences, is important to avoid innovation succumbing to a vacuum, she says. Most of us experience the odd “lightbulb” moment; for organisations like Cisra or Momentum the lightbulb moments have to keep on coming week after week and year after year.

It’s the same for nations. The Government’s innovation statement due later this year will explore how Australia might develop “a culture that pursues opportunities”. It’s the language Dr Terry Cutler, who led the Government’s six month innovation review, uses to describe the most valuable and sustainable form of innovation. The statement will inform innovation policy and budget measures for the next two or three years at least – and the ICT sector in particular will be looking for some balm having seen the $700 million Commercial Ready R&D fund summarily axed by the incoming Rudd Government.

No blueprint

There is no one “right” way to innovate. In some organisations – such as Momentum – the technical innovator is the owner; the good idea begets the company. In others it’s the business executive who identifies a market niche or opportunity and then hires in R&D skills to develop a product or service to fill the gap.

Simon Butler is in the latter camp. A former investment banker, Butler set up eOne Business Solutions in 2000, and more recently Stretch Technologies, which sells Contivio which hooks into existing CRM systems to create virtual call centres. More a conductor of innovation than a creator himself, Butler first identifies what the market needs, the strategic alliances needed, and only then does he go and find someone to develop a product or service. His is the big picture role rather than the technician’s.

This approach of “framing” the innovation process and grounding it in reality works better than just waiting for a lightbulb moment according to Arthur B VanGundy, author of Getting to Innovation published last year. A professor at the University of Oklahoma, VanGundy says executives, particularly in established organisations that need to constantly nurture innovation, should ask themselves questions such as “what are our core competencies; where are we positioned in the minds of customers; where would we like to be positioned?” The answers can then help identify the challenges to be tackled.

Then, when working out how to tackle the challenges, executives should ask “how might we increase sales, how might we increase the emotional attachment with our customers?” – questions VanGundy believes will prompt more targeted and successful innovation.

Even great ideas don’t always fly easily, however.

David Yonan is the founder of Easybiz.com.au, an online business directory and creator of tools targeted at helping SMEs develop an online presence inexpensively. While he believes a product or service doesn’t “need to be the most innovative solution – it’s just got to be the most appropriate” in order to succeed, he remains passionate about his idea, and has bootstrapped the business, often taking on external ICT contracts to fund development and keep it afloat.

“I had nine people working for me. We got it finished and had some company money, but I had to take a contract to make sure the mortgage was paid,” he said. After working his day job to pay the bills, Yonan worked weekends and three nights a week until midnight on Easybiz.com, admitting “it would have been more but the wife wasn’t too impressed”.

While passion can sustain much of the innovation journey, sheer dogged determination at some point kicks in. For Yonan, the challenge as an innovator is to know when to let go of something. “I’ve put a lot of time and money into this. I’ve thought of throwing in the towel but I really believe in it.” At the moment the business is ticking over with about 250 businesses using the service, but he’s realistic that “the mortgage takes priority over dreams”.

Lean and mean

When it comes to developing a revenue stream for an innovation,Simon Butler thinks it’s best to be able to offer a new product. “Twice as good for half the price; that’s where I like to start then you can drive things pretty hard.” This lean and mean approach is a common thread binding many successful innovators. Alan Mildwisky, director of BSI, a company he describes as a “venture catalyst” which helps businesses set up and grow, says start-ups typically “Try and reserve cash as well as they can – partly for bootstrapping,” and where possible will barter with suppliers to keep hold of cash as long as possible.

Parsimony certainly has its role. At Bio Recognition Systems, the R&D engineers will select a resistor for a circuit board just because it’s a couple of cents cheaper than another.

Jim Stamatelos is chief executive officer of the company which makes a fingerprint-activated lock called BioLock. “We have a couple of R&D guys there who’ll say ‘don’t use that resistor, this one costs two and a half cents less’.” It’s this focus on the small details that can make or break innovations in terms of getting them successfully to the market says Stamatelos.

He says innovation breaks down into four logical steps: “Someone has a good idea, they draw up the specs, they say can we do it, and can we do it cost effectively?” But as he explains that cannot happen in isolation as: “What normally happens is that the market dictates what will happen”, and successful innovation needs to account for that market demand.

No limits

Companies seeking to retain their innovation capital also need to remember that it’s not a 9 to 5 game. Says Stamatelos:“We have no timing controls on our innovation guys. I can get e-mails at three or four in the morning – but then they might not show up until 1pm.” Fired by a passion to develop new stuff, the R&D team needs to be sensibly remunerated, but money is “Not the ultimate driver. Engineering is their passion,” according to Stamatelos, so they need a work environment and culture that recognises and supports that.

One challenge, though, is to ensure that the innovators don’t get so fixated on the technical elegance or completeness of their solution that they miss the market’s window of opportunity.

Says Mildwisky: “Canny innovators know when the product is ready to take to market. I’ve seen people who say that the product is 90 per cent there and then take too long to commercialise it. Take VOIP – four years ago there was a lot of people developing a VOIP platform, now the margins are so squeezed.” The challenge is to get to market with a product which is enough to secure an early mover advantage, then build on that with further innovation.

The flaw Butler sees in many innovation cycles is that people identify a point solution which may indeed “be very good but might not be worth much”. He instead wants the first release of a product to be relatively simple and clearly articulated so that people use it. Later versions of a product can add more functionality as innovation continues – further ensnaring user loyalty.

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