Try these practical methods to squeeze more new ideas out of your executives and workers.

Innovation is what everyone wants, but it often seems difficult to achieve. Some40 percent of executives polled feel they are weak at fostering it. Even once you generate an innovative concept, acting on it may prove challenging: The average cost of bringing a new product to market has more than doubled in thepast decade, according to the Boston Consulting Group.

“Innovation isn’t new, people and organizations have been doing it for many years,” says Lisa Bodell, CEO of Future Think, a consulting firm in New York.“The successful people are the ones making innovation more of a discipline. That’s the difference.”

We took a look at some of the newest ideas in innovation to help you tap into the discipline you’ve been seeking.


1. Tap into creativity

Drawing out ideas in a corporate environment can be arduous. That’s why some companies are turning to innovation retreats, sending executives on excursions as long as a week to study with creative types and learn how to unlock their own creativity in business. “Innovation is applied creativity. You can’t be innovative unless you’re creative,” says Suzanne Fetscher, president of the Innovation Institute at the MacColl Center for Visual Art in Charlotte, N.C. The MacColl Center runs a six-day retreat where corporate executives perform exercises with sculptors, painters and photographers designed to broaden methods and approaches to their own businesses.

Fetscher says the program generates “positive deviance,” including “having more tolerance for the creative individuals in your business, and giving them the space to be creative and to value [their] ideas.” Companies that have used the program include Wachovia, Accenture and National Gypsum.

2. Lead—and fail—by example

Starbucks’ magazine, Joe, was supposed to become a must-read for the millions of people who use the coffee chain everyday. The brainstorm of chairman Howard Schultz, the magazine featured writers like Douglas Coupland and a modest,frappucino-like price of $3 when it debuted in 1999. An executive at Time, which custom-published Joe for Starbucks, said the company simply needed to sell three copies per store per day for 45 days “to be a home run.” Instead, the first issue swung and missed with readers. After two more issues, Joe was out for good.

Rather than bury the failure, Schultz keeps copies of Joe in his office to this day. Leaders who innovate by example—both successfully and decidedly not—give the whole organization permission to innovate without fear, says Future Think’sBodell. “If Schultz had never tried something like that, maybe [Starbucks] never would have gotten into music. You have to try different formulas that don’t workto find the one that does.”

3. Do the math to test the ideas

In the 1960s, a frustrated Pentagon called on statisticians to figure out why atomic bomb assembly had a catastrophic 85 percent rejection rate. The math developed to solve the problem, multivariable testing, has quietly moved from the Cold War to the competitive struggle. MVT, as it’s known, works by testing many hypotheses at once in real-life situations. It susses out the ones that have a meaningful impact by crunching resulting data through statistical models.

A small Tennessee consulting firm called QualPro uses MVT to help companies with any number of notions—from assembly-line methods to pricing to the shirt colors worn by salespeople—to see if they have a positive effect on business. Using MVT, ideas can be statistically whittled down over a succession of steps in just days or weeks. Firms like Lowe’s, BASF, Exxon Mobil and Procter & Gamble are believers. One client, Circuit City, used MVT a few years ago and saw an immediate 3 percent same-store sales bump after vetting some 3,000 ideas it had solicited from employees.

4. Try Six Sigma for the people

The typical company in the S&P 500 has 80 percent of its market value tied up in intangible assets, such as its brands, customer base and R&D. Those intangibles are built and sustained primarily through employees and customers. That’s a problem, since many executives view the two groups as largely unmanageable, thanks to the emotional cauldron that rules relationships. “Feelings are facts,” say two Gallup Organization executives, John H. Fleming and Jim Asplund—meaning they are ignored at a business’s peril.

Fleming and Asplund propose that corporate leaders should adapt a human-centric version of Six Sigma, the methodology for systematically eliminating product defects. Detailed in their book Human Sigma: Managing the Employee-Customer Encounter (forthcoming in November from Gallup Press), the pair says emotions are “quite predictable” and can be systematically managed. To do so, companies must reorganize to evaluate employee and customer experiences together. This ultimately allows firms to identify ways to get employees more engaged, which in turn improves the company’s relationship with customers: the ultimate driver of sales.

5. Go American

Companies looking to invigorate their innovation may have one simple step to take: hire American. Psychologists Joyce Pang and Oliver Schultheiss studied 700 American and German university students to determine if subjects are subconsciously driven more by achievement or power. U.S. students scored higher in achievement motivation and lower in power motivation than Germans.

Prior research links achievement motivation with innovation, small business success and economic growth. The need for power is linked more closely with successful leadership. “The difference in achievement motivation is very consistent with the fact the U.S. currently has a stronger economy than that of Germany,” Pang stated in 2006. Perhaps it’s just the way that Americans structure organizations. An April study of IT operations by the United Kingdom’s Centre for Economic Performance determined that Americans run more productive IT departments than their British counterparts, even when it’s a U.K. branch of a U.S. company. Adjusting for various factors, the study concluded Americans organize their businesses in ways to use technological innovations more quickly and effectively.

6. Digitize the suggestion box

Employees on the front lines should be an invaluable source of ideas. Yet of those employees who submit ideas, their biggest complaint is that their companies squander those ideas, according to the Employee Involvement Association (EIA).

One solution: move the suggestion box into the tech age. Innovation management software encourages employees to submit ideas to a centralized database, where they can be reviewed, vetted and shared. Carlson Marketing, which offers its iThink innovation system starting at $14,500, says such systems work best when employees also get rewards for submitting ideas, from a thank-you e-card to a slice of the revenues generated.

The EIA says companies that use innovation management software see an 18 percent boost in the number of ideas submitted, with each idea generating on average $9,300 to the company. All told, the return on investment is 14 to 1.

7. Stop throwing dollars at innovation

In 1998, Steve Jobs’ first full year as CEO after he returned to Apple Computer, he slashed research and development spending by 38 percent, from $485 million to $303 million. Over the next three years, R&D spending remained essentially unchanged. Yet that period was Apple’s renaissance—the company developed the operating system it uses today, recaptured its design savvy and, most importantly for Apple and music lovers alike, invented the iPod.

It’s taken as gospel that innovation goes hand in hand with R&D spending, but that’s just not true, says a Booz Allen Hamilton study of the world’s top 1,000 R&D spending companies. The study found that R&D funding levels had “no apparent impact” on sales growth, the bottom line or shareholder returns. What does matter is effectiveness of spending. The best R&D spenders do four things: align innovation strategy with corporate strategy; manage the pipeline with speed and efficiency; create a corporate structure and incentive system to drive innovation; and, like Apple, make the right bets, managing the pipeline with an eye toward balancing feasibility with potential payoff.
___________________________________________________________________

BRENDAN COFFEY is a freelance writer in New Jersey.