Idea Generation for Game Changing Innovation

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1 Niels Scholtens S2219778 University of Groningen Royal Philips October, 2013

P

HILIPS

Idea Generation for Game

Changing Innovation

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Idea Generation for Game Changing Innovation

Niels Scholtens*

*Faculty of Economics and Business, Strategic Innovation Management, University of Groningen, Netelbosje 2, 9747 AE Groningen, The Netherlands

Abstract

Product innovation is often used strategically to stay competitive in markets. Incremental innovations are often developed to create a better product than the competition. However, competition is often improving their products as well. As a result, products get ever more optimized and further improving them will take more effort. A more radical product innovation can open up new opportunities for generating revenues. The development process of products is based on a funnel in which ideas enter and worse ideas are filtered out. This funnel needs an input of many ideas. However, the number of game changing ideas coming out of idea generation is very limited. This research focuses on the reasons for the limited number of game changing ideas generated. For this, idea generation at Philips Male Grooming is analyzed to find the root causes of this problem. These root causes need to be solved to improve the number of game changing ideas generated. It seems that a single group brainstorm does not generate enough game changing ideas to fill the game changing development funnel. During this brainstorm, Philips Male Grooming predominantly uses its specialized knowledge of shaving technologies, however, wide variety of knowledge is needed to create more differentiated ideas. Furthermore, not much time is given to the team to generate ideas, which results in not capturing ideas which are generated at other moments in time. To solve these problems, based on this research, the process of idea generation needs to be changed. The team needs to be multidisciplinary to ensure multiple knowledge areas are incorporated. Furthermore, an incubation time will be implemented to give the team time to capture all their creative moments and to give them the possibility to find ideas throughout the organization.

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1.Introduction

To survive, firms can combine incremental and discontinuous innovative activities. It is important to exploit current product lines to sustain profitability now and explore new product lines to stay competitive in the future (Tushman and O’Reilly, 1996). Initiating game changing innovations is critical for long term success of a firm; it lowers the risks of creative destruction and it provides possibilities for establishing a new source of revenues. Creative destruction is the event of a technology renders obsolete due to the upcoming of a new technology (Schumpeter, 1942). Incremental innovations will keep the current product up-to-date, so it can continue to compete with alternatives. Game changing innovations however, can change the rules of the game. Game changing new products restructure the marketplace; current products will be displaced, and market shares will be divided according to the new market environment. Initiating the new radical technology gives the firm first mover advantages, which can contain technology leadership, reputation benefits, and customer loyalty (Cottrell and Sick, 2002). Furthermore, a new source of revenue can be created as it provides a platform for long-term growth as incremental innovations can build on the new technology (Leigh, 2000).

Many firms use a model to manage their innovation activities. Usually the process of new product development contains three basic steps; front-end innovation, product development, and commercialization. The front-end of new product development is important, as decisions made during this stage will influence the number and quality of products which can be developed during later stages (Cohen and Levinthal, 1990). Studies indicate (Nobelius and Trygg, 2002; Williams et al., 2007) that improving the front-end has the largest potential to improve the process of new product development. The ability of a firm to innovate depends on the number of potential ideas available for new product development process (Brennan and Dooley, 2005). Often a single group brainstorm session is performed to generate these ideas. However, a single group brainstorm seems to be insufficient for the generation of enough game changing ideas.

The aim of this paper is to find out how an organization which has been focusing on incremental innovation for years, can become better at creating game changing ideas. This is done by searching causes for difficulties in idea generation at Philips Male Grooming. By doing this, creating solutions by which Male Grooming is able to increase the effectiveness of their game changing innovation process. This research is conducted at the innovation and development department of Philips Male Grooming. In the past, Male Grooming focused on incremental innovations. This resulted in the success of several products, which are dominating the market and have been generating stable revenues for many years. However, as the technologies are getting more exploited, it becomes harder to innovate continuously. To overcome this problem, and to be able to keep ahead of the competition, Philips Male Grooming wants to create more radical, or as they call it “game changing”, innovations. Male Grooming just started (in 2012) with the quest for new game changing products and is therefore searching for ways to improve the effectiveness of this search.

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6 research is conducted. A preliminary analysis at the organization is pursued to analyze the initial problem statement and validate the business problem. From this preliminary analysis a management problem and question are derived. After, a literature gap related to the management problem is described. In the literature study, the literature fields related to the problem are analyzed. For this research the idea generation process is analyzed. The method used for this analysis is described in chapter 4 followed by the results of the analysis in chapter 5. In the discussion an academic solution is developed followed by an business solution. In the business solution, the academic solution is customized on the business context. At the end a conclusion, together with academic reflection and possibilities for further research are described.

2.Problem

2.1. Problem Context

2.1.1. Company profile

This research is conducted at Royal Philips, commonly known as Philips. Originally a large electronic devices manufacturer, but nowadays it also produces non-electronic products. Philips produces a wide range of all kinds of products and therefore has many business units. The research is focused on the front-end activities of the innovation and development (I&D) site of Philips Male Grooming at Drachten, Netherlands. Philips Male Grooming consists of different product lines which all have to do with the removal of human hair, for example shaving, trimming and grooming devices. The largest and most important product category in this business unit is the electric dry shaver. The shaving market is divided into two main segments; dry (electric) 30% and wet (manually) 70%. Philips is only active in the electric shaving market in which they are market leader with their patented triple head shaving technology. However, the market is maturing in terms of growth and competition. The market divided by a few large firms like Braun, Philips and Panasonic. Philips Male Grooming wants to grow faster by delivering innovations that matter to the consumer. The innovation and development department is focused on inventing and developing new and improved devices in these categories. As the mission of Philips states “improving people’s lives through meaningful innovation” it wants to carry out an innovative image. Therefore, it is for Philips important to come up with new innovative products to enforce their portfolio.

2.1.2. Game changing Innovations

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Figure 1 Innovation quadrant

Game changing innovation is quite radical as it is a product innovation which is not an extension or improvement on a current product but it is also not completely radical because it aims to use existing technology and distribution channels. Philips Male Grooming started the game changing project in 2012. Before that time, the focus was completely on incremental innovation. Game changing innovations are more distant from the current product lines and therefore contain more uncertainty and risk than an incremental innovation. The definition of game changing innovation is discussed many times within Philips, as a result a game changing innovation needs to apply to the following, quite subjective, requirements set by Philips:

A Game Changing Innovation should meet the following requirements (Philips 2012): • They should be superior to the competition

• Expect to have significant impact in the market • Build the Philips brand towards innovation leadership. In addition:

• They should be validated in quantitative tests

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8 2.1.3. Front-end innovation process

Philips uses a process to guide the innovation process, this is called value proposition creation. It is a process with general sequential steps to come from a general trend to a proposition based on real understanding of trends, market demands and technology (Philips, 2013). However, in practice the model visualized in figure 2 is most used for front-end innovation.

Figure 2 Front-end innovation process (Philips, 2013)

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2.2. Preliminary analysis

For this research a problem solving method is followed. According to Van Aken et al. (2012) “within a

problem solving project, data are collected to arrive at a description or an explanation of a business problem, interviews will be held to gain insights into the problem mess”. To be able to arrive at a

description of the business problem, a preliminary analysis was conducted. For this preliminary analysis, interviews with 8 different persons within the innovation department of Philips Male Grooming were conducted. The group of interviewees fulfilled different roles within Philips Male Grooming, and comprised of a general manager, several group managers, and several project leaders. These people were chosen to get a variety of views on the current process of front-end innovation to be able to explore the problem mess. These interviews were semi-structured so it would be possible to explore the initial business problem. Some questions were added to guide the interview and to be able to validate the problem areas. These were questions about the innovation related processes, the organizational culture and validating questions about the problem areas. The first interviews were conducted to get better insight in the front-end innovation processes within Philips. These interviews were conducted with people working in these processes. From the preliminary interviews, the business problem was derived and described in the following sections. First, the strategic goal describes the overall problem on which this research will contribute. For this section, several managers were interviewed, including one general manager. From this, a business problem and a related management question are identified. After, a literature gap based on the management question is identified, and a problem and research question are developed on which this research will focus.

2.3. Business problem

2.3.1. Strategic goal of Male Grooming

According to a general manager, market share in the shaving market is not changing very rapidly. As a result, shaving is generating a stable revenue stream. However, due to the stability of market shares it is difficult to grow rapidly. In the last few years, Philips mainly focused on product innovations w to sustain their market share. These improvements where mainly incremental in its kind. Most innovations are focused on improving the way a shaver functions and improvements based on shaving results. As a general manager stated, “when was asked what extraordinary product we invented in the last years no

one could give an answer”. Furthermore Philips increased their revenues in the last years mainly by

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10 products do not have to be hair removing related, which lowers risks. If a new shaving technology will be introduced by a competitor, which renders Philips shaving products obsolete, Male Grooming will not lose all revenues streams if a bigger range of products are exploited.

2.3.2. Lack of game changing products introduced

As mentioned in the strategic goal, Philips Male Grooming wants to grow faster by innovating radical new products. The interviews conducted and the research of Glazenburg (2013) were used to explore the problem in more detail. This research is a follow-up on the research of Glazenburg (2013), which was also performed within I&D Philips Male Grooming for the same principle. In figure 3, three causes are stated which were mentioned during this research by the interviewees to cause the lack of game changing products introduced in the market. A cause is counted one time when it was recognized by an interviewee. Of these causes, the limited number of game changing ideas in the development process was recognized most by the interviewees. This problem was further investigated, because of its importance and feasibility according to the interviewees.

Figure 3 Causes for the lack of game changing products introduced

There are several causes which contribute to the lack of game changing products introduced to the market. One of the problems mentioned during an interview was that it is hard to convince the marketing department of the potential of the product. Marketing is holding game changing products off because it contains too much uncertainty about customers and market potential. The marketing department doesn’t want to fail and therefore chooses for less risky incremental improvements of current products. Therefore, it is hard for more radical innovations to reach the point of commercialization.

Another problem in the process is that there is time pressure on the projects. There is a need to come up with new products every several years. This is needed to see results of the projects. The time pressure is a result of the faster changing business environment. To keep up with the competition, new and improved products need to enter the market in a shorter period of time than before. This results in a shift of types of projects in the development portfolio, as found by research of Cooper and Edgett

0 1 2 3

Limited number of game changing ideas in

the development process

Preference for low risk projects due to time pressure on projects

Unconfidence in market potential by the

marketing department

# times cause recognized for the lack

of game changing products

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11 (2009). They say that the development portfolios of mature organizations changed from a diversified portfolio where radical and incremental innovations were balanced, towards a portfolio with a focus on improvements and modification to existing products. However according to multiple interviewees, to prevent failing less risk holding projects are preferred within Male Grooming. This while most game changing projects contain high risks.

Furthermore an innovation begins with an idea, however, chances of a single idea to become a successful innovation are small. When ideas are developed and explored further, more and more becomes clear about the final product. As a result, only the best products are selected to go further in to the developing process. As the best are developed, the bad ideas are filtered out. To be able to filter out the bad ideas during the process and prevent a total failure when relying on only one project, it is important to have multiple ideas in the development pipeline so if one fails they still can rely on the other idea. Multiple interviewees highlighted that in the current situation only a few game changing ideas are created and these are developed further. And therefore development process contains only a limited number of game changing ideas. This way the generated idea needs to become a success otherwise the whole product development can be stopped.

2.3.3. Limited number of game changing ideas in development

Many organizations are struggling with the idea generation phase while it is an important part of the development process (Cooper and Edgett, 2009). At Male Grooming, during the idea generation, many ideas come up but only a limited number of ideas with the potential of becoming game changing are created. In a previous idea generation session, in the form of a group brainstorm, almost two hundred ideas were generated. However, the variety of ideas was very limited. After the initiator analyzed the ideas, only one or two were believed to have the potential of becoming a game changing innovation (figure 4). Thus during these brainstorms, the participants were generating almost no game changing ideas, and therefore it contributes very little to game changing innovations currently. The limited number of game changing ideas will limit the chances of finding a game changing product in the end. It is believed that it takes roughly 100 ideas to find one successful product in the end (Cooper et al., 2001).

Figure 4 Distribution of ideas in idea generation session of april 2013

The front-end of new product development is crucial because decisions made during this stage will limit the number of products which can be developed during later stages (Cohen and Levinthal, 1990). According to a manager, in later stages of the development process where projects are already formed,

Idea generation session

-April 2013

Incremental ideas

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12 no new product ideas are able to enter the process. Projects are planned to have success within a certain time period. When ideas enter at a later moment, when earlier ideas are already being investigated, there won’t be enough time to develop these later incoming ideas. Therefore, later incoming ideas will not become successful because they are not developed enough to comply with the control measures and therefore will be filtered out. To improve the number of ideas in the beginning of the process is most important because this moment is the easiest place for ideas to enter.

2.3.4. Knowledge and cultural aspects

Although the input of ideas is crucial, the idea generation phase, where most ideas are created, is limited in various ways. In earlier research (Glazenburg, 2013) towards “Sustaining the inflow of game

changing ideas”, three main barriers to the inflow of game changing ideas were identified: Process,

Culture and Knowledge. Of these, the process barrier is an enabler for the other two barriers. In other words, the process barrier needs to be solved first before the other two barriers can be solved. Philips Male Grooming is at this moment (2013) trying to solve this enabling barrier by decoupling the front-end process from the rest of the development process. As the front-end of innovation has to deal with uncertainty about markets, technologies, resources, and quality of ideas, it can be harmful to the later stages of the development process (Kim and Wilemon, 2002). By decoupling the front-end from the rest of the process it is not depending anymore on the requirements of the later stages and is it able to focus on pre-development of ideas.

The knowledge available throughout the organization could be used better to come up with game changing ideas. Within Philips, as a whole, the variety of knowledge is very high, with many different products, specializations, and different backgrounds. People who possess different knowledge will look different towards a search area and therefore come up with different ideas. Besides, with their insights, they are able to recombine ideas in a different way as people with the same knowledge would do. According to multiple group leaders, in the idea generation the level of knowledge incorporated from outside Male Grooming is very limited. For most idea generations, only employees of Male Grooming are incorporated and there is not searched for other kind of knowledge sources. Also knowledge sources outside Philips are rarely used, however, incorporating knowledge from outside Philips contains difficulties with confidentiality and legal obstacles (Szulanski, 1996). A high variety of knowledge can result in a higher variety of ideas and can give the potential to create more game changing ideas. Multiple persons within Male Grooming recognized that the search for diverse knowledge is very limited, also when looking to the knowledge of other innovation departments. A manager stated “knowledge is not shared because every innovation department within Philips has its own processes and

priorities, therefore the synergy between departments is low”. Therefore, it can be argued that Male

Grooming is exploiting its current knowledge base and barely explores other knowledge sources.

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13 outside this focus is not stimulated. While with most game changing ideas the moment of finding the idea happened when looking for something else. The process oriented culture and limited usage of knowledge limits the number of game changing ideas coming out of idea generation, so the following problem statement is defined:

2.3.4. Business problem statement

The existing process oriented culture and the limited usage of available knowledge within Philips results in only a limited number of game changing ideas coming out of idea generation.

2.3.5. Management question

Game changing ideas are needed to enter the pre-development phase front-end innovation process. Ideas always arise with a new insight of an individual. Employees are a major source of game-changing ideas, but to turn this new idea into an innovation it needs to be made explicit so that the idea can be shared with others in the organization (Bjork and Magnusson, 2009). The idea generation process is the main place where ideas can enter the development process. Ideas can both be created and collected in this phase. The creation of ideas depends on the ability of the participants in idea generation. They use their knowledge about products and their creative skills to come up with ideas. They can be stimulated by the culture to generate more game changing ideas. When the right knowledge and culture is possessed, the ability to create game changing ideas can be improved. Furthermore other departments and business units have different sets of knowledge. When this knowledge is used in idea generation, the participants can build upon these knowledge with the specific knowledge about grooming and make the ideas more concrete and applicable to Male Grooming. However, a culture needs to be established where ideas are actively shared. Therefore, the management question is defined as followed.

Management question: How can, when looking at the usage of knowledge and the process orientated

mindset, the number of game changing ideas be improved by collecting the insights and ideas of Philips employees and by improving the ability of idea generation participants to create game changing ideas?

2.4. Research problem

Based on the management question, a literature gap is identified in the literature on which this research will focus. The management is searching for a way to improve the number of game changing ideas coming from idea generation. Idea generation is by the literature most seen as a single event of generating a number of ideas (Osborn, 1953; De Bono, 1985). However, there are reasons to assume that a single event is not sufficient for the generation of enough game changing ideas. In this research, the phenomena idea generation, consists only of the generation of initial ideas during a brainstorm. Enrichment of ideas is less important for this research as it will not generate new game changing ideas.

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14 variety in ideas. According to Girotra et al. (2009) by “A group may collectively latch on to one idea too

quickly so better ideas are never heard”. The variety of ideas will stay very narrow because the ideas will

build on each other, and other thinking areas will be ignored (Dennis et al., 1997). This is also recognized within Male Grooming, as an interviewee stated “if one good idea is suggested, this idea will lead the

following ideas into a certain thinking area”. Furthermore, ideas will occur most when they pleases us

(Weber, 1946), thus single event wont capture all ideas. Besides, a time factor between different moments of idea generation will allow the creativity process to develop (Rickards and Freedman, 1978). For incremental ideas, starting with a brainstorm seemed to be successful. However, to come up with more game changing ideas, this way of doing seems not to be the most effective way. Therefore the following problem statement is defined.

2.4.1. Problem statement

A single event for idea generation often results in a limited number of game changing ideas.

2.4.2. Research Question

When an organization needs more game changing ideas it often seems that a single idea generation event is not sufficient. Besides when changing from incremental towards a more game changing focus the idea generation method used by the organization is still based on creating incremental ideas. To make the idea generation better suited for game changing ideas, the method need to be changed in some way. This research will try to find a way to organize the idea generation in such a way that it better fits the search for game changing ideas. Therefore the following research question is defined:

Research question: How can idea generation be organized better to improve the number of game

changing ideas coming out of idea generation?

Employees are a major source of game-changing ideas, but to turn this new idea into an innovation it needs to be made explicit so that the idea can be shared with others in the organization (Bjork and Magnusson, 2009). The creation of ideas depends on the ability to be creative of the participants in idea generation. They use their knowledge about products and their creative skills to come up with ideas. Therefore employees are the most important factor of idea generation, making them more effective in generating game changing ideas is an important aspect to improve the number of game changing ideas.

Besides for incremental and game changing innovation the usage of knowledge and culture differs. Lavie and Rosenkopf (2006) highlighted the importance of culture and knowledge in balancing exploration and exploitation. Whereas exploitation of knowledge is often related to more incremental innovation and exploration of knowledge is often related to more radical innovation. Exploitation becomes stronger when routines and skills become embedded in decision-making. Inertia reduces the search for diverse knowledge. Exploration on the other hand is related to the search for external knowledge, knowledge which differs from the existing knowledge base.

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Sub question 1: How can participants of idea generation become more creative in generating game

changing ideas

Sub question 2: What effect does the usage of knowledge has on the ability of generating game

changing ideas during idea generation?

Sub question 3: What is the importance of culture on the ability of generating game changing ideas

during idea generation?

The research questions are visualized in the following conceptual model. First the importance of creativity of participants, the effect of the usage of knowledge and the importance of culture is explored. When idea generation is organized in the form of a process there are more possibilities to incorporate creativity, knowledge and culture than there would be in a single idea generation event. Therefore the number of game changing ideas coming out of an idea generation process should be higher.

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3.Literature review

A literature review is performed to get a better understanding of the concepts involved. First, the process and the methods used for idea generation are investigated in literature. After the requirements for successful idea generation are discussed to get a better view on underlying factors in idea generation. From this literature review a literature gap is identified which will be addressed in this research.

Mainly scholarly journals are used to perform the literature review, as these journals give findings of important knowledge areas and are often very focused (van Aken et al., 2012). The main method for literature research is using the catalogue of EBSCO-host and Google Scholar. Articles are selected based on relevance and quality. Besides, backward snowballing is used to find relevant articles used as reference in other articles.

3.1. Process and methods

3.1.1. Front-end innovation

Many firms are using a model to be able to manage their innovation activities. Usually, the process of new product development contains three basic steps, as can be seen in the following figure.

Figure 6 New product development process (Koen et al., 2002)

The front-end is the point where an initial idea is produced and early investigations towards the feasibility of the idea are performed (Koen et al., 2002). In the product development stage the idea is further developed from a sketch towards a prototype and in the end towards a final product. In the last stage, the product is finalized, tested, and introduced to the market (Cooper, 1990). The front-end is important in the process, as it is the place where most opportunities for improvement are coming from (Nobelius and Trygg, 2002).

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17 go on to the next stage, it first needs to comply with certain deliverables. These gates make it possible for a manager to manage the different projects and be able to stop them when needed.

However, according to others (Koen et al., 2002, Achiche et al., 2011) the front-end is not a sequential process which can be managed in this way. It is a fuzzy process where the nature of work is experimental instead of goal-oriented. And instead of milestone achievements, which are common in new product development, progress can be managed in the strengthening of concepts (Koen et al., 2002).

Figure 7 Front-end innovation model (Koen et al., 2002)

In the model (figure 7) of Koen et al. (2002) the fuzziness of the front-end process is depicted. In its model, the front-end innovation consists of three important parts. In the center of the model is the engine. The engine is the organization`s leadership, strategy and culture which drives the five surrounding elements. The surrounding elements are the key parts of the process. It consists of the actual activities in the front-end. It is not a sequential process, the different activities interact with each other and build upon each other. All these elements are influenced by several factors like the capabilities of the firm, the customers, competitors and the enabling technologies. These influencing factors have effect on the thoughts and actions of the people involved in front-end innovation. It can be a source of ideas, but also limitations to the process as the technology limits the possibilities of inventing, but can also be a source to build on (Koen et al., 2002).

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18 product idea is emerging when a new technology is combined with a technical or market vision of an individual. All these models have their own way of managing the process. However, they all consist of similar processes to where the new product idea emerges. This is idea generation, an active method to create ideas for new products, and opportunity scouting, which contains the search for new opportunities in technology or markets.

3.1.2. Idea generation in front-end innovation

At the beginning of the front-end innovation process, ideas are needed to be able to develop new concepts. An idea can be according to Koen et al. (2002, p7) described as “the most embryonic form of a

new product or service. It often consists of a high-level view of the solution envisioned for the problem identified by the opportunity”. In most front-end innovation models, two kind of methods are used to

get new product ideas into the process; idea generation method and technology and market scouting method. A tool for market scouting is corporate foresight. It is a tool for preparing the business for the future by predicting how markets and trends will develop in the future or as how Von den Gracht (2009, p381) stated, “systematic analysis and management of strategic issues, events, developments, or trends

that might affect the firm’s future performance”. A method for technology scouting is technology

foresight (Rohrbeck, 2010). Technology foresight maps emerging technologies, monitors the technological capabilities of competitors and assesses the performance potential of technologies (Rohrbeck, 2010). However, as these two techniques have the ability to detect and interpret changes, they are used to respond to changes happening in the environment of the organization (Rohrbeck, 2011).

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19 • Participants can have fear to be judged for their ideas and therefore desire to follow a stream of

ideas. This holdback of participants reduces the variety in ideas generated.

• Low group synergy can lower motivation to contribute fully as a result of free riding.

• Interacting within a limiting process structure, is the fact that in group brainstorming the production lowers because only one person can talk at a time, because of this others cannot contribute when someone else is talking, which reduces the productivity.

Besides for brainstorming, the organization provides the right setting and the employees provide the creative ideas, the creative process can be seen as an individualized process taking place within the context of an organizational environment (Williams and Yang, 1999). Therefore, the activity of idea generation and enrichment is influenced by organizational context, culture, and strategy (Koen et al., 2002). Besides, ideas can be enriched by expanding on it; an idea can trigger a reaction of new ideas based on the mindset established by the initial idea. Ideas can be enriched by everyone who has feeling or passion with the idea. These people are willing to think more in-depth about the initial idea and are therefore able to expand on the initial idea (Koen et al., 2002).

According to Koen et al. (2002) some effective techniques can be applied to make the idea generation more successful (Koen et al., 2002, p20):

• A culture which supports employees to spend unscheduled time on testing and validating ideas • Incentives to stimulate the generation and enrichment of ideas.

• A Web-enabled idea bank with easy access to product or service improvements, including linkages to customers and suppliers.

• A formal role for someone to coordinate ideas from generation through assessment. • A mechanism to handle ideas outside the scope.

• measurable goals to track idea generation and enrichment. These could include: Number of ideas generated, value of ideas in an idea portfolio, percentage of ideas that entered the new product development process, and percentage of ideas accepted by a business unit for development.

• Frequent job rotation of engineers, scientists, and inventors to encourage knowledge sharing and extensive networking.

• Mechanisms for communicating core competencies, core capabilities, and shared technologies broadly throughout the corporation.

• Involvement of people with different cognitive styles on the idea enrichment team.

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20 ideas within this domain. This can be done till the flow of ideas stops; when that happens a totally new idea must be indicated (Nijstad et al, 2002).

The goal of the idea generation can also influence the number of game changing ideas, Litchfield et al. (2011) describes that a specific novelty goal needs to be set in addition to the standard brainstorming rules to create more creative and novel ideas. It creates a high commitment to the goal because participants know what is asked from them, and, because of the novelty in the goal, are more committed to create creative outcomes.

3.2. Requirements for more game changing ideas

3.2.1. The role of creativity for game changing ideas

Creativity is the potential of a human to create something new using its imagination and fantasy to build and realize it (Brockling, 2006). Cooper and Edgett (2008) identified that creative employees are seen as the, by far, most important factor for the generation of breakthrough ideas. Therefore, creativity is an important part of idea generation for game changing innovations. Amabile (1988) identified the outcome of creativity is based on two criteria; ideas resulting from creativity must be novel and useful. Breakthrough or game changing innovations are often related to a creative jump, ‘creative

breakthroughs involve leaps into the unknown’ (Ogle, 2007 p-19). So when an innovation needs to be

more radical, a larger creative jump needs to be taken because most radical innovations contain more unknown aspects. On the other hand, incremental innovations are often an extension on existing products and therefore much more is known about the product and the creative jump is less big.

Also serendipity is seen as closely related to creativity. Serendipity is described in the dictionary as “The

faculty of making fortunate discoveries by accident”. These unexpected findings are often related to

breakthrough inventions. For example, Coca-Cola was invented in the search for a cure for headaches. According to Kakko and Inkinen (2009), serendipity can be stimulated to improve the ratio between the number of low-value innovations and the number of breakthrough innovations, in which a higher percentage of breakthrough innovation is wanted. Serendipity management aims to create an environment where serendipity is supported and creative resources are exploited effectively (Kakko and Inkinen, 2009). According to Kakko and Inkinen (2009) serendipity can be stimulated by three methods;

• Trust building

• Providing inspiration for co-discoveries • Connecting people to each other

Thus, serendipity is stimulated by connecting people with each other to create a diverse network from which a wider range of knowledge can be generated of which new insights on current problems can be created. A supportive environment and trust building is needed to create an open attitude by individuals so they connect more easily (Kakko and Inkinen, 2009).

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21 and solve problems. The wider this space the higher the possibilities for exploring, which makes the ability for a creative outcome higher. However, when the knowledge is too in-depth it can become a barrier to radical innovation, because it creates knowledge boundaries in which solutions are sought for (Sternberg et al., 1997). Furthermore, creative thinking skills refers to how an individual deals with a problem, how he questions the problem and redefines it, recombines ideas and experiments with new ideas. The expertise and creative-thinking skills are the basic components of creativity, the third component “motivation” determines if the basics are used. Especially intrinsic motivation, passion and interest, is perceived as essential for creativity. When individuals are intrinsically motivated, they are challenged in their job and having fun. Also, curiosity is seen as an important source of intrinsic motivation to find breakthrough ideas (Kakko and Inkinen, 2009). People will be most creative when they are motivated by their interest, satisfaction, and challenges in their work (Amabile, 1998). Creativity is not a given at a certain moment, as Weber wrote ‘ideas occur to us when they please, not

when it pleases us’ (Weber, 1946, p. 136). Creativity can be stimulated during idea generation, but it

cannot be forced. Therefore, a single moment of idea generation is not always most effective. To stimulate the creativity, the organization needs to provide the people with six categories identified by Amabile (1996):

1. Challenge people by assigning the right task to them so they can make use of their expertise, creative thinking skills and are intrinsically motivated

2. Freedom, people are more creative when they can make a choice on how to do their tasks 3. Resources, sufficient resources creates beliefs about the value that is given to the projects 4. Work-group features, team diversity and mutual openness to ideas stimulates creative ideas 5. Supervisory encouragement, a supportive organization reduces the fear of negative criticism,

therefore people will become more intrinsically motivated.

6. Organizational support, encouragement of risk taking in idea generation, rewards and recognition of creativity and collaborative idea flow across the organization.

3.2.2. Importance of culture for game changing ideas

The culture of an organization is the way people act and behave in the organization. According to Chirstensen and Overdorf (2000), there are three factors which determine what an organization can and cannot do:

1. resources 2. processes 3. values

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22 income, therefore more radical and more risky projects are less attractive. The organizational factors will grow towards a risk avoiding culture by focusing on incremental improvements to their current product categories (Christensen and Overdorf, 2000).

Mature organizations are often organized to develop incremental improvements; an organization increases its efficiency by repeating its activities time after time, the focus on variation reduction and increased experience in organizational activities results in innovations close to the current products (Benner and Tushman, 2003). In other words, processes are set up to let employees perform their tasks in a consistent way to make sure it can be analyzed and controlled, to become routines. Routines are perceived beneficial because they have proven success in the past and create certainty (Ohly et al., 2006). But routines are hostile to creativity because the leap of creativity is considered unable to be analyzed and controlled (Boden 1996). Conditions for idea generation need to be different when looking for more radical ideas, it is believed (Csikszentmihalyi, 1996; Grossman et al., 1988) that creative ideas arise under different circumstances than incremental ideas. To produce creative ideas, routines need to be challenged and barriers need to be eliminated so ideas can be captured from a wide space of ideas. This freedom must be created by eliminating directional guidance, constraints and criticism (Sagiv et al., 2010).

3.2.3. Importance of usage of knowledge throughout the organization for more game changing ideas

To innovate an organization needs to use its existing knowledge but also generate new knowledge. To be able to use the knowledge it often needs to be shared to get it in the right place. According to Zhou and Li (2012, p 1098) “a firm with a broad knowledge base is more capable of developing radical

innovations in the presence of internal knowledge sharing rather than external-focused market knowledge acquisition”. So in an organization which holds a wide variety of knowledge, the ideas can be

found all around the organization. There are not only a few people to rely on as the only source of innovative ideas. Idea generation is becoming an activity which requires the involvement of everyone in the organization (Cooper and Edgett, 2009). However, individuals do not always share these ideas. In the research of Ekvall (1971) on Swedish industrial organizations, he discovered that over 60% of employees did not communicate new product ideas. Therefore, many ideas throughout the organization are not captured as input for the development process. It is important to capture as much as possible ideas because the more ideas captured, the higher the chance that one of them will be unique (Grams, 2012). Knowledge sharing is also indicated to be an important part to create more novel and useful, game changing, ideas. According to Bjork and Magnusson (2009), interacting with other people should be supported to increase the number of high quality ideas. It is important that individuals are able to connect with other individuals both inside as outside the organization. This can be stimulated by the creation of meeting points where the sharing of knowledge associated with innovation can take place (Bjork and Magnusson, 2009).

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23 Overdorf, 2000). Besides, mature organizations are often not designed for organization wide collaboration and problem solving as managers break down tasks and assign them to separate units (Hlavacek & Thompson, 1973). This reduces the collaboration by which the department cannot fully make use of the organizations knowledge. To connect people around the company and therefore make use of all the knowledge inside the organization, collaboration is needed (Dougherty and Hardy, 1996).

Also knowledge sharing is believed to be an important factor for serendipitous findings. The role of connecting people is often defined as an important aspect of serendipity. In research of Burt (2004) it is found that managers with more contacts outside the immediate work group came up with better ideas, because people that are working within their normal work group will start to think the same. It requires to build up diverse networks, bringing together different fields and pieces of knowledge will stimulate heterogeneity, which stimulates serendipitous finding of breakthrough ideas. Thus, a diverse network increases the probability to generate breakthrough ideas (Kakko and Inkinen, 2009).

4.Empirical analysis

To answer the research question, the root causes for the problem are explored and validated at Philips Male Grooming. To do so, an empirical analysis is performed. The root causes reveal the limitations of the current way of generating ideas. To get to the results, several interviews were conducted with people involved in the idea generation process. To validate the results, internal sources were consulted and observation of an idea generation session was performed. First a description of the context in which the research is performed is given, after the research method is described.

4.1. Business context

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4.2. Methodology

According to Van Aken et al. (2012) “the most structured approach that is feasible should be chosen.

How feasible the approach is depends on the nature of the phenomena and the level of pre-understanding” (van Aken et al., 2012). To get to the roots of the business problem of the limited

number of game changing ideas coming out of the idea generations, a qualitative approach is the most feasible approach. In qualitative research, there are possibilities to find new causes for the business problem while validating the initial causes. A quantitative approach is less feasible because game changing activities started recently (2012), therefore not many cases are available which contain the specific problem. Furthermore, a quantitative approach is not useful to get a deeper understanding of the phenomenon, because deeper questioning into the problem is not possible in a quantitative approach.

4.2.1. Controllability

To meet the quality criteria of an academic problem solving approach the process of empirical analysis conducted is described in more detail. First, the controllability is discussed, according to Van Aken et al. (2012) “Controllability is a prerequisite for the evaluation of validity and reliability”. To make the research controllable, the process of executing this research is described. First, data was collected in several ways, by semi-structured interviews, by researching internal databases, and by observing an idea generation session. All were conducted in the same time period. Semi-structured interviews were used to get more insights in the business problem. According to van Aken et al. (2012) “the purpose of the

interviews is intended to further explore causes of the business problem in different perspectives. Also, the interviews are performed to validate causes by determining multiple sources of evidence among actors in a multiple departments” (Van Aken et al., 2012). A semi-structured interview is suited best

because the open part helps exploring for new causes and the structured part will help validating the causes. The interview guide can be found in appendix I. The ‘5 times why’ method is used to explore a problem completely till the root causes are determined. By exploring the problem, new causes came to mind, the new found causes in later interviews were questioned again with the early interviewees to make sure that all causes could be recognized by all participants. In total, 7 interviews were conducted to get to the results. The interviews were recorded and can be found on the usb stick. These interviews were performed with people around the organization which were involved in some way in idea generation. Of these people, there were 5 with the function of project leader, these project leaders are investigating IPP (front-end) projects and are participating in most idea generation processes where new ideas are generated. All have participated in several idea generation sessions. Furthermore, 2 group leaders were interviewed which all have to do with the front-end innovation process within Philips. The interviews were analyzed by counting the times a cause is mentioned by all the interviewees.

4.2.2. Reliability

According to Van Aken et al. (2012, p204), “the results of a study are reliable when they are independent

of the particular characteristics of that study and can therefore be replicated in other studies”, this can

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25 interests in the organization which can influence the research. The participants who took part in the interviews are all working in different functions or different projects. This way a variety of perspectives will be taken into account which lowers the bias of one participant. Furthermore, the interviewee was told upfront that the interview will be anonymously analyzed to make sure that the participant does not have a bias to protect its business. Also the participants were not given the details of the research upfront, this to prevent they would inform others to get their vision on the problem. To make the research more reliable, multiple instruments were used to get to the results. Interviews were held to both explore potential causes and validate these causes, also an observation of an idea generation session was performed to validate some of the causes. The researcher was not actively participating during the observed idea generation, but followed the steps taken in the process. Furthermore, internal data, like previous surveys and process descriptions were used to validate the causes. The last reliability factor is the circumstances the research is performed. The interviews were performed in different moments in time to make sure the research is not dependent on something time related (Van Aken et al., 2012), besides the scheduled time for the interviews was needed to avoid time pressure on the interview.

4.2.3. Validity

According to van Aken et al. (2012, p.209) “A research result is valid when it is justified by the way it is

generated. It refers to the relationship between the research results and the way it is generated”. The

validity is a construct of three types of validity, these are construct, internal and external. Furthermore, in a practical-oriented research, the recognition within the organization is also an important factor of validity. The construct validity is the extent to which a measuring instrument measures what it is intended to measure (van Aken et al., 2012). To ensure the construct validity, the interviews were conducted in a certain way. By using semi-structured the interviews are guided by the subject and not by specific questions, the guideline can be found in appendix I. At the beginning of the interviews, the subject and business problem were described and during the interview, the interview is guided to stay on the subject. This way the interview will keep its focus on the intended subject and it will measure the intended business problem causes. The internal validity refers to the adequacy and the completeness of the cause-problem relationships. By making use of multiple perspectives, the problem is viewed from several angles. A broad literature review is performed to find out causes related to the business problem. The external validity refers to the generalizability of the research results, according to van Aken et al. (2012, p.212) “external validity is less important in problem solving projects since these

projects focus on one specific problem”. This is also the case in this research, the research is conducted

in only one department of an organization, in other organizations or departments the circumstances can be different from the current circumstances, and therefore results can differ in another project. Instead of the external validity, the recognition by the organization, is more important, according to van Aken et al. (2012, p.212) “recognition is of crucial importance for the successful implementation of organizational

changes”. The recognition is achieved by regularly meetings with the principal within the organization,

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5.Results

5.1. Interview results

In order to be able to answer the research question, first, the causes and their relation towards the problem need to be uncovered. To arrive at a description of the problem, the data gathered needs to be analyzed (Van Aken et al., 2012). 7 interviews were conducted with project leaders and managers which are all involved in some way in the front-end innovation process. These project leaders and managers were purposefully selected on the basis of the knowledge about the front-end innovation process within Male Grooming. Interviews were conducted in a semi-structured way, first the interviewees were able to make clear what they thought what the causes could be and after a more structured way was used to get to know if they recognized causes mentioned in other interviews.

Figure 8 Results of interviews

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27 The results of the analysis are discussed with the stakeholders. To keep the research independent, the stakeholders couldn’t change the interview results, they were consulted for phrasing of the results. Besides, in the discussion with the stakeholders some extra root causes were found. Altogether 6 main causes were derived for the limited number of game changing ideas coming out of idea generation. These main causes can be separated in knowledge and culture aspects. To give a more clear view of the main causes and the related root causes a fishbone diagram (figure 9) is used were the causes are schematically showed.

Figure 9 Fishbone diagram

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Figure 10 Pareto of the cause and effect analysis

5.2. Diagnostic story

All causes derived from the interviews can be related to the knowledge and culture aspects of the ability of idea generation participants to create game changing ideas. The causes are described below.

5.2.1. Limited usage of knowledge

Philips as a whole possesses a wide variety of knowledge. Many different products require many different technologies and knowledge about many different market areas. However, within Male Grooming, the use of knowledge from other departments is very minimal, as a manager said “the

knowledge and ideas gathered in front of idea generation is depending on the internal network of the project leader, however, these networks are within Male Grooming often very limited”, thus the variety

of knowledge used for the idea generation phase is depending on the participants in the process and their close colleagues. Also group composition is believed to come short in idea generation, although this is not believed by the management. A mixed group with different kinds of knowledge, for example about marketing and other product categories, can bring together a wide range of knowledge which can complement the existing Grooming knowledge. And knowledge in different search areas can create a new insight on the current products (Tucker, 2003). From this mixed results can be derived that a mixed group is stimulated but there are still possibilities for improvements. As these participants all have about the same background and working in the same technology, grooming, their knowledge, and resulting

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29 from it, their ideas are very limited and focused on grooming technologies. Also to be creative it is important to possess a wide range of knowledge. This is available when looking to Philips as a whole. However, some people mentioned that they do not know where to find the right knowledge, or how to acquire this knowledge, as one project leader said “I know the right knowledge is available, but I don’t

know who the experts are”. It is believed that this is caused by the relationship with other departments,

who are only contacted in case of a problem, instead of building a relationship where it is common to find opportunities continuously. Besides, it is mentioned that within Philips the different innovation sites are all working on their own, collaboration between them is very limited. Therefore, the different sites are all developing their own specific knowledge bases and are limited to the product category they are working on. Sharing them could improve the diversification of knowledge on a site.

Furthermore employees of Male Grooming are very limited in bringing their ideas to the projects. There are several reasons for this. First, people often do not know what the game changing department is, as a project leader said “I have heard of its existence, however I don’t know what is meant with it”, it is not really clear what is meant with Game Changing Innovation. There is an official description of game changing innovation within Male Grooming, however people do not know about this description and the description is very vague. Due to this, the people do not know what kind of ideas they are expected to create. Second, people do not know where to go with their ideas. People know they can go to their manager with ideas, however in this case it is important to convince the manager of the potential of the idea. A team leader said “an initial idea is often very vague, to convince our manager we need time,

which we don’t have, to work the idea out”. This way only a small amount of ideas will be collected,

while a very vague idea still can be useful because it can generate a new insight. Tools for collecting ideas are not established in the organization. There is no formal role established to actively search for ideas and collect them throughout the organization, besides an idea bank where ideas from earlier idea generation processes are stored is just started, and therefore not developed completely jet and only recent ideas are incorporated. Because it just started, the idea bank is still under developed. The idea bank needs to be filled with ideas, and made easy usable for employees. Besides, project leaders need to be actively reminded in the beginning that they first look at the idea bank, to prevent ideas already mentioned in earlier idea generations. Later on they need to be triggered that the idea bank is checked as part of the usual process.

Furthermore, there is a lack of creative skills by some participants. Creativity is partly a skill of people, which some people have and other don’t have. However, participants can learn how to use their creativity best, they need to get education about how to be creative and how to work best with the creative techniques which Male Grooming is applying. This is not really provided to participants, because as a manager stated “I believe that the current graduates did get enough education about these

techniques, and the older employees got enough experience with these techniques”. However, new

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30 5.2.2. Cultural aspects

To be able to capture the ideas throughout the organization a culture is needed where ideas and insights are actively sought for and where ideas can land. It is believed that within Male Grooming the right knowledge to create innovative products is available, however, as said before, this knowledge is very specific. This mindset of possessing the right knowledge gives not the incentive to search for new opportunities in other product areas and by doing this, widen their knowledge. This can be found back in the idea generation phase of the development process. The group brainstorm is the most important place in the idea generation phase, however, the participants are all people of male grooming with mainly in-depth knowledge about shaving technologies. No people from outside male grooming are invited for the brainstorm. The current way of doing has been successful for years but it don’t work for game changing innovation. Because of this success a culture has grown with the believe that the people of male grooming possess the right knowledge and therefore other knowledge sources are hardly incorporated.

Also the collection of ideas and insights up-front is lacking, because of the believe of possessing the right knowledge no effort is spend on searching for other, differentiated, knowledge sources and ideas throughout the organization. Besides, within Male Grooming, participants of brainstorms do not have the possibility to search up-front for insights and ideas, because they there is a priority for day to day work. Furthermore, when coming up with an idea, there is the need to work an idea out to be able to convince the manager. The idea holder needs motivation and time to make the idea more concrete, especially for game changing ideas because of their novelty the ideas are harder to understand (McAdam and McClelland, 2002). The current culture within Male Grooming is to prioritize the day to day work, and when time left there is possibility to work on ideas. However, many people say there is no spare time. When stimulated to spend time to work the ideas out, more ideas can be collected from the organization and thus be generated. Koen et al. (2003) highlight the need for incentives to stimulate idea generation, an incentive could be given by the use of rewards, a reward can give an incentive to spend extra time on working out ideas. A reward could work both intrinsically as extrinsically, a monetary reward will give an extrinsic incentive while appreciation can stimulate intrinsically. During the interviews some interviewees said there are no rewards for ideas, while others said there are rewards for ideas. This makes clear that it is not clear for everyone that ideas are rewarded within Male Grooming, this lack of communication makes the current reward system ineffective.

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31 During idea generation it is also believed that creativity is coming short; the established way of doing things does not really stimulate outside the box thinking. The scope of the idea generation is often experienced as too narrow, it is in some cases already really focused towards the solution. Like a project leader said “in some cases the goal is to find a mechanical solution, while other techniques also could be

applicable”. Thus to create a higher variety of ideas it is important to widen the scope, however if too

wide the variety will be too big and too far from the scope and make the variety of ideas unmanageable (Sagiv et al., 2010). Amabile (1998) suggests that the team must share the teams goal, which is consistent with the organizations strategy. Furthermore, in a brainstorm the role of the moderator is seen as really important. This role is often performed by the project leader who will take care of the project. It is recognized that not all moderators always have the capabilities to lead a good brainstorm and therefore can kill the creativity during the sessions. Besides, it is recognized that the moderator often is trying to create an informal climate during the idea generation. However, this is often quite hard; idea generation is always done within the formal business environment, as a result it is hard for participants to free their minds of their normal day to day activities, which lowers the creativity.

6.Discussion

The goal of an academic problem solving project is that a solution is designed that when solves the business problem (Van Aken et al., 2012). The solution is designed based on the business problem, and therefore the most important source of ideas for solution design are the causes of the business problem (Van Aken et al., 2012). Besides, the organization and the literature can be sources for ideas for solution. The following contains an academic and a more specified business solution to create more game changing ideas in idea generation. The solution elaborates on the causes with the largest cause and effect score. The main causes are listed in the table below, five of these causes are incorporated in the solution design.

Main cause Recommendation Incorporated in solution design

Effect

Use of in-depth knowledge Involve other departments, network activities

Yes New knowledge sources can create insight that solutions are possible outside normal environment

Limited collection of ideas Idea bank, scouting for knowledge

Yes Search for ideas at other departments and idea bank to give ideas a place

Limited search for

differentiated knowledge

Scouting for knowledge sources

Yes A habit to standard search for knowledge before idea generation

Lack of creative skills Training about creativity and methods.

Recruitment on creative mindset

Idea Generation for Game Changing Innovation

P

HILIPS

Idea Generation for Game

Changing Innovation

Idea Generation for Game Changing Innovation

Niels Scholtens*

Table of Contents

1.Introduction

2.Problem

2.1.

Problem Context

2.2.

Preliminary analysis

2.3.

Business problem

# times cause recognized for the lack

of game changing products

Idea generation session

-April 2013

2.4.

Research problem

3.Literature review

3.1.

Process and methods

3.2.

Requirements for more game changing ideas

4.Empirical analysis

4.1.

Business context

4.2.

Methodology

5.Results

5.1.

Interview results

5.2.

Diagnostic story

6.Discussion