To win in the highly competitive markets of today, we need to win in the emerging creative economy. Key to this success is helping our teams re-discover their natural ability to be highly creative. Today's show is the audio from a keynote speech I gave at the Business Alliance Bootcamp for growing companies and entrepreneurs in Washington DC.
Knowledge is becoming a commodity. If you have a job that can be taught at a University, your skill is at risk and your job is at risk. The impact of this is everywhere. Think about the transitions from an agricultural to a manufacturing economy to a knowledge economy. My argument is that the creative economy is here. What’s the new thing? The new thing is this creative economy. In the early 1980s the market value for companies listed on the stock exchanges was concentrated on book value with most company’s stock valued at 95% book value. Twenty years later 23% is the average book value. So, in 20 years a major fundamental shift occurred on how companies get valued. I would argue that one of the key pieces on the increases in that intangible value is the role of creativity and innovation. It is the value of ideas. It is no longer what you can do with your hands or with a machine, it is the ability to continually generate new ideas, new products, and new services. A lot of companies are unable to do this and as a result, do not survive. Economic stability going forward is the ability to have ideas being continuously generated from the organization. Innovation is important, but a lot of companies make the mistake of putting all of the pressure for innovation on their Chief Innovation Officer. Go out and do a survey. Eighty-six percent of CEO’s admit that innovation is key to their business but less than ten percent have any formal process to innovate within their organization.
Bringing Back Creativity
My strong belief is that creativity is not a gift. It is not bestowed on people, it is a skill that anybody can learn, practice, and become proficient at. It ignores age, demographics, education levels, and geography. It is the ability to put your own thought processes in place, to come up with the next idea, product, or service. A lot of people are self-pessimistic and are convinced that they do not have it and they are not creative. The fact is that we are creative creatures; we were created to create. Think about kids and how creative they are with a simple object like a toilet paper roll. The problem is through the process of our education systems and through jobs, we literally beat that creativity out of our people. How do we bring back that amount of creativity that we see in kids and bring it back to our day to day lives? We need that ability to take our filters off and see things from an unbiased and different perspective. I had a conversation with a co-worker many years ago about “old think and new think.” Old think is when you are coming up with an idea and then you put a filter on it and decide to go safe and go with the old way of doing things. New think is all about breaking perspectives and getting rid of perspectives that confine and restrict us from coming up with new ideas. The best ideas will sound stupid. If you are not coming up with stupid ideas, then try harder!
FIRE and PO
“FIRE” is a very simple method you can apply to come up with ideas.
- “F” in the acronym “FIRE” stands for focus.
- How do you bring focus to where you are going to innovate?
- Pick an area of focus.
- “I” stands for ideation.
- How do you generate ideas?
- Ask better questions.
- “R” stands for ranking.
- What is the best idea?
- I rank through five questions:
- Will this idea fundamentally change the customer’s experience or expectation?
- Will this change the competitive landscape?
- Does this fundamentally change the economics of the industry?
- Do you have a contribution to make?
- Will this generate sufficient margin?
- “E” stands for execution.
So, what does “PO” stand for? “PO” is two fundamental skills that you should do each and every day in perspective to “FIRE.”
- “P” stands for perspective.
- You must be able to change your perspective.
- Look for the non-obvious.
- “O” stands for observation skills.
- Watch how customers buy your products and your competitor’s products.
- Get out there and see how your customer’s use your products.
Idea’s without execution are hobbies. People’s individual career success is going to be in their own individual ability to participate in the creative economy. What are you contributing to those intangible values that your company is creating and is going to get a return back from those investors? Companies are suffering today on a huge innovation gap. Small businesses are the most prolific patent producers in the entire segment in the U.S. Small businesses are fourteen times higher than any other segment on the marketplace. Patents that are highly referenced by other patents or materials are highly valued patents. If you look at the top one percent of the cited patents today in the U.S. it is two times more likely that it is a small business patent. That says that the most important innovations that are being created are coming from small businesses. Companies and economies are going to be dependent on creating an environment where people can bring their creativity skills to create value for the business, create jobs, create economic stability, and put all the economies back on the growth curves. Thanks for taking the time out of your busy schedule to join us today. If you have questions or comments on this week’s show, I’d love to hear from you. You can also carry on the conversation with other innovators at The Innovators Community.
If you have an interest in learning more of our 3.5-day Innovation Bootcamp based on our FIRE framework and the 7 Laws of Innovation or our 1.5-day Disruptive Ideation workshop, drop us a line.
To listen to Phil's morning keynote speech at the fifth annual Business Alliance Bootcamp, here's this week's show: Innovation Bootcamp.