In a world where all organizations potentially face global competition, the poor productivity and innovation record of Canadian business compared with its international counterparts is receiving increased attention from several groups including journalists, economists, business leaders, and government politicians and bureaucrats.
There are few commentators who give Canada high marks for performance in these two areas.
As far back as 2008, the federal government’s study, “Compete to Win,” stated:
“Much of Canada’s poor productivity performance can be attributed to the comparatively poor performance of Canadian firms with respect to innovation. We rank poorly across almost all areas of innovation: the creation of knowledge, the diffusion of knowledge, the transformation of knowledge and the use of knowledge through commercialization.” (page 18; “Compete to Win”, 2008)
In 2011, Canada’s labour productivity improved by 1.4 per cent, in comparison with 3.8 per cent in the U.S.
Glen Hodgson, the Conference Board of Canada’s Senior Vice-President and chief economist, was quoted in June 2012 on Canada’s dismal productivity growth compared to the U.S. and other major economies. In August 2013, he stated that when reviewing Canada’s performance in the area of Multi-Factor Productivity (MFP), often known as “innovation”, Canada had zero growth over the 32 years that Statscan has kept records, “Thanks to chronically weak productivity growth, Canadian incomes are $8,500 per capita below where they would be if we had matched the U.S. on productivity,” he said.
Although some experts believe Canadian business productivity has been systematically underestimated for decades, the above figures suggest there are opportunities for Canadian organizations to improve.
Many experts focus on proposing ideas on how government could be revamped to encourage firms to do more R&D and be innovative. Consequently, numerous government programs and initiatives and many millions of dollars have been thrown at this issue. Unfortunately such actions have been predominantly based upon the unlikely premise that if the government invests more money in initiatives that have not worked in the past, they might somehow work this time. This strategy hints of desperation, lack of innovation, and vested interests.
Most of the proposed cures for the existing lack of productivity and innovation are based upon the following five assumptions:
- Innovative new products and services (and companies) only emerge as a result of expensive R&D programs;
- New innovations or productivity improvements occur as a result of an individual or team working in an expensive laboratory having a “eureka” moment;
- Organizations depend on government funding to finance R&D/innovation;
- Government needs to strengthen or overhaul its current financing programs and policies to increase innovation and productivity; and
- There is a “silver bullet” out there and Canada just has to find it.
These assumptions prevail despite the fact that many Canadian businesses never apply for R&D tax credits or to other government programs. For many senior managers, the idea of allowing government any contact with, input in, or partial ownership of their R&D/innovation projects is unthinkable. In addition, many radical innovations, such as ideas for new business models, actually occur before any company is created. Companies that do not yet exist cannot apply for R&D funding. A company is only formed after the innovation has been conceived in order to develop, refine and test the new product or to service and to effect its commercialization.
One of the most basic ways to encourage innovative thinking in a company is to imagine what it might have to do if its prevailing assumptions (e.g., about current customer needs, a product design, costs, etc.) were no longer valid. That is, to use “Contrarian Assumptions.”
If we apply this same exercise to Canada’s competitiveness and productivity issues, the challenge becomes the following: How would we innovate in a world where the government never gets its act together, where all of us can be innovative – not just scientists and engineers, where it has to be done “on the cheap,” and where there is no “magic pill”? This contrarian view is a much more valid representation of the reality faced by 80 per cent of Canadian businesses.
This article proposes ten “no-cost” and contrarian ideas, techniques and solutions that all organizations (and individuals) can apply in their work environment, and which just might serve to make them more innovative and productive. Each one goes “contrary” to a popular belief about innovation or productivity.
The Contrarian Approach
1) “We need to have a team dedicated to R&D/Innovation”: In fact, innovation – i.e., new ways of doing things to deliver something better – is something everyone should be striving for in their current products or service offerings and activities, both internal and external.
However, employees will only do so if quantifiable targets and key performance indicators (KPIs) focused upon driving the desired types of innovation are introduced as an integral part of the measurement and reward systems. Otherwise, employees will continue to do what they are rewarded for doing today, i.e., produce more of the same in the same way.
2) “What topics are on the agenda?”: A list of topics on a meeting agenda promotes a series of discussions, whereas a short series of key questions on an agenda promotes a search for answers. As such, topic-list agendas should be replaced with very well-crafted questions to address. It takes more time to prepare a really good question for a meeting, but the productivity of the meeting (and people in it) will rise markedly by doing so. When organizing a two-day strategic planning retreat, I sometimes spend hours or even days trying to decide which questions we should discuss in order to maximize the value of the outcomes.
At the other extreme of the spectrum are those who rush from one meeting to another without even looking at agendas. Frankly, as it stands, this may actually be the most adaptive thing to do as many meeting agendas are simply cut-and-pastes from the last one with nothing more than a date change. How many of our meeting agendas are actually prepared based upon the actual potential economic impact of an issue, question or decision, as opposed to political, egalitarian or “first-come, first-served” considerations?
3) “The boardroom is free, let’s use it”: Boardrooms are designed for board meetings, which are not generally known for innovative thinking. However, for many meetings, particularly an unscheduled meeting to solve an urgent or important problem, people end up in the boardroom simply because it’s available. We need to hold meetings in spaces designed to encourage more innovative thinking. Bearing in mind the no-cost challenge of this article, such spaces can often be created inexpensively by simply taking “things” out, thereby creating more “free space,” which can facilitate both physical and mental movement.
4) “That’s how we run our meetings here”: Most people call a meeting on a given topic and simply hope something new will emerge. Normally it does not. We would never use the same manufacturing process to make both ice cream and wood furniture, so why run every meeting with the same conversation process, irrespective of the question we are trying to address and the solution we are seeking? How many people have heard of or use Edward De Bono’s Six Thinking Hats®, Open Space Technology, Talking Sticks or a World Café? These are but a few of many conversation processes that exist. How many are used in your organization?
5) “We need to find the answer to this question/problem”: By our very nature, humans look for a single solution to each problem and then move on to the next issue. But the first answer we come up with is often not the best answer. And this first one is often based upon what has worked in the past. Instead, we should always insist on the generation of three feasible answers to any problem. Coming up with three workable solutions will force us to struggle and potentially come up with something innovative. The best answer should be among the three.
6) “That’s how our industry works”: The prevailing assumptions in any industry are only held dear by the current players. The next industry that will satisfy those same customers’ needs will operate under a completely different set of assumptions. New socio-demographic trends, the launch of new technologies, new environmental legislation, etc., can all give rise to new business models, which puts those companies ”married” to the old ways at great peril. This assumption also gives support to another traditional one: “Those people don’t understand our business.” Actually, that is exactly why they can help you and need to be invited into the room.
7) “Emotion has no place in business”: Emotion is the root source of loyalty, service and gaining buy-in. It must be expressed and tapped into. A lot of business value and new business concepts are built around “the experience.” I can buy a book online or at my favourite café or bookstore. How I make my purchase will depend upon the particular psychological, emotional, temporal and/or physical experience I want to have.
Gaining buy-in to any decision is often not about the inherent wisdom of the decision. The way the decision has been taken is what actually makes the difference. The level of buy-in achieved is partially based upon whether we intellectually agree with a decision, but predominantly, it is a function of the level of emotional engagement that is obtained. Failure to gain buy-in affects productivity directly, because it generally means decisions around necessary changes are slowly implemented, if ever at all.
8) “We have to be sure before we act”: You will never be sure. A good rule of thumb is to allow a maximum of three meetings on any question. Ideally, the first meeting should be to identify information gaps that need to be filled. The second is to brainstorm on potential solutions that warrant further investigation and analysis. Come the third meeting, make a decision. It is better to make a “wrong” decision than to take no action at all. You can always change course later to rectify any unintended consequences of your decision.
9) “We need to reward successful innovation”: Yes you do. But if you do not also reward “successful efforts” (i.e., failure), you will never get to the successful ideas. It is unlikely any team that has lived in a culture of stifled innovation (sometimes for years) will suddenly turn around and become masters of innovative thinking. Becoming innovative will take time and an acceptance that failure along the way is inevitable. Ultimately, outcomes are vital, but on this path, the simple use of the “process” must be recognized and rewarded as well.
10) “We don’t have resources to invest in R&D/innovation”: An organization may not have funds to invest in R&D, but as discussed above, innovation does not come primarily out of research labs. Innovative ideas like selling books that you can open and browse while drinking coffee, or taking online courses at home after the kids have gone to bed, are not patentable and did not require any finance or time invested in a research laboratory. Most innovation originates from some sort of “mental movement” that occurs during or following an exchange of ideas with other people who view things in a different way. Through “crowd-everything” we now have potential access to unlimited resources of all types. It is how you use those resources innovatively that will determine who wins.
The nice thing about these ten propositions is that they can be used by every organization in the country, the attached price tag is low, and nobody need wait for the government to act. You can start implementing them all tomorrow, irrespective of your level in an organization.
Canada has been trying to deal with its innovation and productivity challenges for decades with very little success. Albert Einstein suggested that doing more of the same with the expectation of different results is the definition of insanity. Perhaps it is time to try the new Contrarian approach. The worst that can happen is that we will get more failure. But that risk must be taken if one is to become innovative and ultimately arrive at the desired solutions.