A Lesson in Innovation

6 Jun

It’s not how to innovate, it’s when…

A couple of years back I invited by friend Dr Rob Dew to come and run a lesson in innovation for a group of local business people in the Brisbane area. We had been trying to launch an innovation network and I wanted it to go beyond a series of mini lectures into something a bit more interactive. Rob designed a game that would show participants what innovation was and how it was relevant to their business. It was a while ago so I don’t recall scoring details, I’ve made some up to illustrate how it worked.

The Game

In teams of four we were issued with a stack of poker chips, some cocktail stick sized flags, six dice, and a game board (in the form of a spreadsheet). Each team would play the part of an HR department competing in the open market for new recruits, fending off attacks from poachers, and managing our operations (paying for salaries, joining bonuses, pay rises, and training). At the end of each turn we entered the number of new recruits and our operating costs into the ‘game board’ and calculated how much cash our staff had added to the bottom line that turn. The team with the most cash at the end was the winner. Here’s an example of a turn in the early stages of the game:

 Step 1: Track our operating cost and profit. We have 2 graduates and 3 experienced hires:

  • 2 grads: cost 5 chips per turn to maintain, add 4 chips in productivity per turn to the business
  • 3 experienced: cost 10 chips per turn to maintain, add 15 chips per turn in productivity

Step 2: Compete. We decide to recruit another 2 grads, and spend 3 chips each on training the existing grads (this will speed their path to experience from 5 turns to 2). We bid 6 recruitment chips and roll our 6 dice, Rob rolls his six dice and determines how many recruits we win in the open market. Some of our recruitment costs are lost. We end up with 1 new grad, and lose an experienced hire to another firm.

Lesson one: operating excellence

After a few rounds of this the room got quite heated with different teams fine tuning their strategies to optimise their profit margins. We had some poor attempts at cheating and Rob added various additional details to simulate GDP and other market factors. Most teams figured out strategies around recruiting grads and training, or just poaching experienced hires from other teams. And then someone asked:

“excuse me Rob, what has this got to do with innovation?”

Rob asked the room what strategies we had developed. He noted that everyone had settled on one of two market strategies, and there was very little innovation happening. We were all so focused on our bottom line and managing operations that no one had time to innovate. He gave us a clue:

“I have set up a market structure and setup a game. Nobody has said that you must remain an HR department or that you must compete for new hires in the open market”

What happened next

We were about to learn a lesson in innovation. After a few blank looks Rob suggested some alternative next steps:

  1. Become an executive recruitment firm. Focus on poaching, and selling on your experienced hires to others.
  2. Become a training organisation turning grads into experienced hires and then selling them on to other teams.
  3. Merge with another team and pool resources.

We were a bit slow to catch on. And then people in the room started to ‘get it’. This simulation was teaching us something vital about innovation. Innovation is more than just lateral thinking games, brainstorms and product development. First you must decide when to stop doing what you always do, and start innovating

Lesson one: Nobody will tell you when to innovate, you must decide for yourself

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