Printable Version

“Just as energy is the basis of life itself, and ideas the source of innovation,
so is innovation the vital spark of all human change, improvement and progress.”
- Theodore Levitt

Innovation. “A game of guts”.

Special Report: London Leadership Forum

Proudly sponsored by

It has been said many times that recovery from the economic crisis depends on innovation in the private sector. Innovation is a word which is used in a variety of contexts and by a variety of people - but what does it mean for business? Is it through new products? Or is it a state of mind?

This was the key question discussed at a leadership forum for hospitality and leisure executives this week. Matt Kingdon, Chairman and Chief Enthusiast of ?Whatif! Innovation joined the group as guest speaker, and he spoke about the challenges of developing creative potential within organisations. He raised a number of arguments which sought to identify the true core of innovation within organisations, which centred around the themes of incremental change and a need for leadership teams to be brave to explore the unknown;

“Innovation is about balancing the idea of throwing the rule book away versus structure and predictability; eg .madness and measure”!

Matt’s thoughts and anecdotes generated a great deal of discussion, notably around the question of how truly innovative the hospitality and leisure industry has been. There were a number of interesting comments made by the group on this point.

Matt’s Kingdon – Chief Enthusiast ?WhatIf! Innovation:

“Innovation is a blend of economics, psychology, bravery and analysis.”

People are often scared of innovation; it feels like a big thing and like a product development thing, but it should be everyone, every day. Incremental, small innovation generally gives more than the ‘i-Pod concept’ of massive leaps of innovation.

One example…
A start up company had acquired a large number of DVDs cheaply from another supplier for sale, and were required to remove the old branding beforehand. This proved more troubling than expected and as a relatively small growing business the management was at a loss as to how to achieve this without spending vast sums of money.

A junior person within the organisation mentioned the problem at home to his wife, who suggested that her facial steam sauna might work? They tried this and the label just peeled away. By the end of the next day the company had acquired large numbers of facial steamers and all staff were instructed to drop everything to ‘de-sticker’ millions of DVDs. It was a great example of a junior person coming up with a great idea and a company eager to listen and take action without lengthy sign off procedures and meddling from ‘above’.

Do not put innovation on a pedestal – it’s a little bit every day from everybody.

Matt argued that there were four key principles for encouraging innovation within a business culture:

1. The balance between ambition and ego:
- Ensuring that ego does not outweigh ambition

“It’s important to have ambition, but not to be frightened of acknowledging what you do not know.”

Teenage Role Play?...
A group of board directors was asked to engage in a role play activity to demonstrate their understanding of their consumer base. Acting as teenage girls, they were asked questions about lifestyle, likes and dislikes. All felt they had done well until, at the end of the exercise the real girls were brought into the boardroom and asked the same questions - with vastly different responses!

It was an exercise in humility for the group of people leading the business.

If you can’t be straight about who knows what, and who has a good gut instinct, then the loud ones dominate and the quiet ones drop away.

2. Asking ‘am I the problem’?
- Remaining open minded and connected to your people and customers
- Role model the behaviours you want to see in your people

It’s very rare that consumers or the market is the problem, it’s usually internal.

We don’t do things that way…
Whilst working with a large retail organisation to increase sales in one are of their store, there were many layers of resistance from “we don’t do things that way”, to “that’s illegal/not possible”, to “we can’t leave you in the store because you might steal things”!

Pushing the retailer to let the team run with some small changes to see what happened they turned the retail space around and ultimately sales increased by seven per cent across the entire estate. The problem was improved almost overnight despite the immediate reaction of ‘we don’t do things like that’.

3. Are you asking the right people?
- Some of the best incremental innovation comes from grass roots level

Tapping into the operational level of a business is very important. Most people like things to work better, and it is important to ask for input.

Ask the people who do the job…
A major airline wanted to reduce the time that it took to turn planes around on the ground yet despite expensive consultants had been unable to achieve any time savings. As is often the case, the business had not fully engaged with employees involved in the process. It was a complex labour operation involving many different groups, languages and trade unions however, by asking those people who do the job every day what they would change, they identified upwards of 20 ‘little things’ that amounted to almost halving the turn around time. By encouraging the people to work as one team a simple solution was identified and the goal achieved.

4. How hard wired are you?
- Constantly see fresh experiences and inspiration from both inside and outside of your own category then ‘steal with glee’

Unfortunately the discussion did not get onto point 4 – perhaps this can be filed for further events!

The forum’s discussion:

Innovation in hospitality and leisure

  • The question was raised as to whether hospitality and leisure organisations have been as innovative as other sectors. The following summarises the various responses within the group:

“The sector tends to have very complex, busy operations, and I do not think it has been as hugely innovative as other sectors.”

“Often people want a sense of realness – how can we make a prototype that looks very close to the real thing to get courage up?”

“Hotels have not been very innovative and it probably hasn’t changed much since Dick Turpin’s day. Yes, marketing and reservations systems have moved on, but the actual offer doesn’t really change. I think there is a nervousness – people like to follow someone else.”

“Budget hotels have actually bought a new dimension to the market. And this has been taken a stage further by brands like Yotel.”

“I agree, budget hotels have taught people to expect absolute reliability.”

“I think there have been huge innovations in hospitality and the industry does do the small, incremental changes every day.”

“Yes, but whether you are hotel or a restaurant or a caterer, the idea is quite set. However, the needs they currently serve may be delivered in a very different way in the future.”

“I wonder if it is because hospitality means you have as such a direct link with the customer you get an immediate feel for what works and what doesn’t work. Maybe we do not feel that there is a need for innovation in the same way?”

“People are not always willing to stick their necks out as they are scared of getting things wrong, despite the fact that you want their input. So we tend to water it down.”

As Matt summarised:

“Yes, it is a game of guts. It doesn’t take a lot to solve problems if you listen to customers. But people can put barriers up.”

…the role of small operators – the “innovative arm” of the industry

  • In a development within the group’s discussion, attention turned to the role of small operators in sparking creativity within the sector as a base for sector innovation.
  • Is this the area where the industry seeks its real innovation?
  • Matt noted that large companies like Proctor and Gamble endeavour to foster entrepreneurs and encourage open innovation.

As one delegated noted;

“There are low barriers to entry in hospitality. Many of the innovative ideas come from individuals with a new idea and this is the largest part of the industry. Larger companies then buy the smaller ones, it is a cycle.”

“Small operators are the innovative arm and large operators are the financial arm.”

“Big companies do not know how to innovate, they quash it before it starts.”

“I disagree. Take a company like McDonalds; they drove huge changes in eating out – employment, great value, always clean and they are always full and often the first eating out experience for many people. They invest a huge amount in continuing to understand their customer base and encourage their leadership team to spend time on the shop floor.”

“I think that large companies can come up with ideas but by the time of implementation they have bastardised the DNA of the new idea.”

“It’s about company structure – are the people at the top of the tree too far from customers?”

“Is there an element to this debate which is about risk? You might know your market, but change can be a risk.”

Employee engagement and service innovation

  • Ensuring that an organisation’s employees are fully bought into innovation is essential and Matt argued that this was more important than anything.
  • One of the challenges is to overcome the fear of a new idea not working and recovering well enough to carry on.
  • Another element proposed was around innovation in the delivery of service rather than in product development

“Innovation is often around product, but we are a service sector. We rely on people and focussing on our staff – who they are and the way we treat them is a real opportunity for innovation.”

“Innovation around our people may well be more important than anything.”

“It’s getting people who understand what’s right in terms of approach; not necessarily getting a task spot on but understanding the principles. I know of a company that asks all its interviewees to serve a cup of coffee – they don’t have to get it right but they need to approach it in the right way.”

All pictures Susannah Fields, Flashfields Photography

Click here to subscribe to EP Magazine