Innovation: Making Inspiration Routine

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4Select an Idea
Time to separate the good from the great

Now that we have a process for harvesting ideas, we will have to cull them. Although we will have our own pet projects, we won't let emotion override practicality. So we will set criteria based on projected revenue and profit goals, and view proposed projects collectively, as a portfolio.

We also want input from employees and, ideally, potential customers. For this, we will borrow the format of P&G project reviews. Once every quarter, project teams will create displays that lay out their ideas, sketches, market research, and other relevant material -- no more than fits on a poster board. We will place the posters on easels where staff members can view them. We will also ask employees to invite one or two kids from their social networks to take a look. As we examine the posters, we will ask their creators questions and make comments and suggestions, and urge employees to do the same.

Good leaders reward behavior they desire, so creating an incentive system for innovation is critical. At this stage in the company's growth, we will keep it simple. We will give small awards -- $100, perhaps, or dinner for two -- for ideas we like. We will make those awards at the quarterly review, to publicly celebrate the ingenuity of our staff. Later, if we proceed with any of those ideas, their creators might receive $500. For ideas we take to market, we will pay more.

5 Prototype and Test
Bring on the customers

Say we have chosen one idea to pursue: a puzzle that can be assembled into any kind of picture based on a child's imagination rather than the way pieces fit together. The goal now is to quickly get some version into children's hands. Innovative small companies excel at performing inexpensive, frequent experiments. For that reason, prototypes are our friends. We may be able to create the initial design ourselves, using simple prototype software. But we will also hire an outside company to produce physical prototypes, which can often be done for a few hundred dollars. Prototypes are enormously important. With consumer products especially, the sooner you have a visual, the sooner you can start making adjustments based on specific feedback and suggestions.

Prototypes in hand, we will invite members of employees' social networks -- which by this time have become like our own extended family -- to the office for a play party. We will include both children with special needs and those without. Why the latter group? From these children we may gain additional insights into our target market and also, potentially, ideas for innovations in new markets down the road. As always, we will observe all the children carefully. And we will bring back those teachers and nurses to tell us what they see.

Much as we value the tangible, we won't want to waste money producing prototypes in every color, shape, and texture imaginable. So we will bring to the party other products, such as clothes or chairs or dishes, that reflect those characteristics and see which the children like best. We won't show them food items or other toys, because with items of that nature, a personal preference for the thing itself might influence their decisions.

6Go to Market
Cookies versus cookie dough

After all that brainstorming and observing and prototyping and testing, we will be lucky to find two products a year worth bringing to market. That's fine: A company of our size will likely stumble if it reaches for more. And we won't necessarily worry about perfecting those products ourselves. As a small company, we may have difficulty manufacturing and distributing our products on a large scale, so we will be open to partnership with a large competitor. (Even P&G has gone this route -- for example, collaborating with a competitor like Glad.) Big companies are always scouting for innovative products they can add to their portfolios. Often they prefer not a finished product but one that is half-baked, so that their own designers and engineers can contribute to the recipe. We won't insist on offering cookies if we gain more by offering cookie dough.

7Adjust for growth
The process evolves

As our company grows, so will the resources we devote to innovation. When we get to 50 or 100 employees, we will hire four or five innovation leaders -- executives with curiosity, openness to all ideas regardless of origin, and a high tolerance for risk. We will deploy these leaders in different parts of the company so that creative energies are expended on creating innovative internal processes as well as innovative products. The person who devises a brilliant strategy for recruiting great employees is as valuable as our most talented designer.

With more staff, we will gain the luxury of a little -- just a little -- more time for all. We will use some of that to further ingrain innovation into our routine. Employees will continue to work their social networks, but we will also initiate weekly internal idea meetings. They may last no more than 30 minutes to an hour, and everyone will be invited. Three times a month, we will spend those meetings brainstorming -- spreading a fine-weave net to capture small, inchoate ideas that pop up as employees attend conferences, listen to the news, and otherwise engage in work and life. Once a month, we will discuss ideas we are already pursuing to evaluate which are progressing well and which should be put out of their misery. All ideas, even innovative ideas, are not created equal. We want to kill the weak ones before they sap too many resources from the strong.

More money and more people mean more structure, but we also want to preserve the energy and spirit that, as we said at the beginning, are among small companies' greatest strengths. So while we continue to observe customers and potential customers at play, we will also observe our employees at work. For example, we may no longer preside over all the brainstorming sessions -- in fact, we will train employees in brainstorming techniques so they can take the helm -- but we will sit in frequently. Are the social dynamics still conducive to creativity? And we will make sure our innovation leaders are developing not just creative products and processes but also creative people. Are they coaching employees on how to flesh out intriguing but amorphous ideas? Are they listening to new employees with the same attention they give to veterans?

Companies love to say innovation is in their DNA. But that means more than having a founder and employees who are naturally creative. We will give our creative employees the tools and systems they need to turn their brilliant ideas into real, profit-generating products. And we will demonstrate through our continued success that innovation routine is not an oxymoron. It is a mandate.

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