Back to basics: Why are we doing this, really?

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Behind, they have left the familiar territory of ‘quality’, that delivered almost guaranteed (yet limited) improvements. Ahead, ‘innovation’ offers an exciting journey, where you can’t see the end from the beginning. But this demands a leap of faith. And, as we know, matters requiring faith tend to stay at the door of the boardroom.

Back in the 60s, when the quality movement emerged in corporate practice, the promise was very pragmatic: You embed quality as part of the process– as a competence – and get back cost reduction, happier clients and higher sales and profit. All very tangible and glowing outcomes, so any cultural blockages were rapidly cleared. Quality became a basic competitive requirement.

Thirty years later, a new fad invaded the boardroom. It was the time for innovation.

The idea let loose some frothy corporate enzymes, but it also met resistance from hard-line executives. Still, many Fortune 500 (faced with decreasing sales and margins, more demanding customers and relentless competition – sometimes from other industries) were determined to take that leap of faith. They found that innovation delivered not only new business opportunities and white spaces but also process improvements and (surprise, surprise!) new culture and behaviours.

A blissful promise
Nokia is a great example from back in 1996. The company went from a confusing industrial conglomerate to be the leading and most innovative mobile phone manufacturer. Whirlpool is another inspiring story. Nancy Tennant Snyder and Deborah L. Duarte reveal in their book Unleashing Innovation: How Whirlpool Transformed an Industry, ‘We did not have to invent a discontinuous series of innovations to change the dynamics of an industry; rather, innovating around articulated and unarticulated customer needs at the core of the business would have a significant impact on our success’.

Innovation became a must-have in organisations. This trend was reinforced by companies born with innovation already embedded in the way they worked. The usual culprits are Google and Apple, among others leading the list. Companies like Cemex and W. L. Gore also offer extraordinary case studies.

Innovation practitioners rapidly developed their own toolkit: skills, metrics, processes, technology and organisational structures to help any company absorb innovation culture with the goal of, well, creating an innovation culture!

2. Back to basics: What is your purpose?
3. Back to basics: Define appropriate goals

Pedro do Carmo Costa, Exago’s director and co-founder

How would it work out for you?

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Again, our equation – Results = Engagement * Purpose – is the product of many years of practice, spanning four continents and building on expertise in several industries. It’s been perfected to achieve tangible outcomes efficiently and sustainably.

There is no one-size-fits-all solution, but the formula works by unleashing people’s hidden potential to deliver tangible outcomes. There is nothing magical about it. It is born out of learning, experimentation, practise and sustained effort – as most problem solving is.

The results differ according to the quantity of each ingredient, which have to be portioned out in line with the objectives set. No more, no less. In your case, what would these quantities be?

Let us be clear. We don’t seek to oversimplify a very complex problem, but a bit of maths and strategic thinking helps us to understand how to establish relevant goals and make innovation happen.

We hope this also gives you a blueprint with which to start realigning your idea management expectations to achieve results today. And again tomorrow.

Feel free to contact us if you want to find out what our commitment to your goals would be like. Join us if you’d also like to perfect the formula.

Pedro da Cunha, Exago’s CEO and co-founder

FROM THE START: It Works! The Results Equation

Innovation executives, unite!

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We know that innovation is the cornerstone of any corporate growth imperative. But the innovation industry apparently needs a return to sanity: we need results. It’s time to discard obsolete models. This is where our ‘intervention’ steps in.

At Exago, our services and software teams have joined efforts to create a structured model that makes sure innovation works and you, as an innovation executive, regain control of your mission. We have thus developed an idea management formula that produces results. Always.

This equation is the product of many years of practice, spanning four continents and building on expertise in several industries. It’s been perfected to achieve tangible outcomes efficiently and sustainably.

R = E * P

This formula reveals that compelling results (R) are achieved when you succeed in engaging your people (E) and multiply that engagement by a strong shared purpose (P).

To make it clearer:

Results are a function of ‘engagement’ with ‘purpose’.

E = I * C * T * G
Engagement, in turn, is a function of incentives (I), communication (C), transparency (T) and gamification (G).

P = B * F
Purpose is a function of business relevance (B) and focus (F).

Client organisations of all sizes and trades, as well as diverse languages and cultures, have productively adopted this formula. The secret lies in using just the right amount of each ingredient. What do they consist of exactly?

a) Results
By results, we mean a measurable dimension that adds value to your business. This is typically bottom-line results, but it can also be a means to an end. Each organisation has its own challenges: from reducing costs and promoting a culture of innovation to engaging customers and embedding a capability.

Different business priorities and stages of organisational maturity should lead to different programme results and, hence, different metrics and objectives. But the rule of thumb is this: results with more impact increase with programme longevity.

The Fleury Group – a leader in clinical analysis in Latin America – has experienced these benefits. In 2011, the group introduced Exago’s idea management solution to its employees. Within a year, the most ambitious targets had been overtaken in both idea generation and participation levels. In 15 months, more than 70% of employees had joined the process. In just over two years, more than 900 ideas had been implemented, generating millions of reais in value.

b) Engagement
By harnessing employees’ collective intelligence, your organisation can find the answers to many of its current challenges. But you can’t force people to contribute.

Engagement is an emotional commitment made to a company and its objectives. And it only comes when the people that make up an organisation believe they have an impact on its ability to provide value and a stake in the value produced.

So, for engagement to work, you need:

  • Incentives: You must build a productive and appealing incentives model to ensure employees are engaged and aligned with your leadership agenda. The incentives can address different motivations: from simple shopping vouchers and charity donations to opportunities to training in specific areas.
  • Communication: Active and clear communication is the key to maximising participation. It also assures community awareness, guaranteeing your initiative’s success. The more individuals see the success of projects to which they have contributed, the more likely they are to continue to be mobilised.
  • Transparency: Your people need to trust the process, get constant feedback and understand the journey ahead. So, we have adopted a sophisticated model of prediction markets that generates, screens and selects ideas – in the most efficient and transparent way possible.
  • Gamification: Game-like interactions and prediction markets develop more loyalty in participants (whether they are customers, employees or others). They make it fun to participate and promote more use, creating the desire to come back and ensuring the continuity of the programme.

For instance, at Portugal Telecom, innovation had long been a part of the company’s DNA, but innovation hadn’t always been perceived as a transparent and collaborative process. In 2009, this company adopted Exago’s platform to gather, assess and evaluate the scattered ideas of employees in an appealing, transparent and efficient way.

Six months later, more than 7,000 employees had enrolled – over 60% of the company’s workforce. By late 2012, fully 9,000 participants had joined in, and thousands of ideas had been registered. Provided with a way to voice their creativity, employees’ satisfaction increased steadily.

c) Purpose
Innovation without a purpose is useless. The initiatives developed must be in line with your corporate strategy and senior management’s mandate.

You must also make sure your team is with you, sharing common goals. To engage them fully, find a purpose bigger than just a simple project, with a set of tools and processes. Show that the outcomes of the effort will not only benefit the company but also each participant – even the world we live in.

Take a look at these examples. Nike’s goal is ‘to bring inspiration and innovation to every athlete in the world’. Barnes & Noble bookstores’ mission statement is ‘to operate the best specialty retail business in America, regardless of the product we sell’. And Starbuck’s motto is ‘to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time’.

When developing innovation initiatives, bear this in mind:

  • Business relevance: For a (good) start, don’t solve problems you don’t have. Pick the right fights aligned with your strategic leadership agenda. Key business challenges make the most relevant innovation challenges.
  • Focus: Channel awareness toward the need to solve an explicit problem, concentrating your company’s collective intelligence on what really matters. Explain pressing needs and priorities but also the low-hanging fruit and other demands that can, in their own time, become equally important.

The challenges launched vary according to moment and context. However, they must project into the future. For Endesa, the largest electric utility company in Spain, this means investing in discovering new ways to act and respond to both environmental and mature market issues.

To do so, the group has involved almost 22,000 employees spread across Spain, Brazil, Chile, Peru, Argentina and Colombia in challenges that will likely determine the industry’s leaders of tomorrow. The initiatives focus on cost cutting, safety in the workplace, low-cost high-impact solutions within the company’s environment and enhanced efficiency through applying organisational and technological measures to work processes.

But how would it work for you?

Pedro da Cunha, Exago’s CEO and co-founder

READ MORE: It Works! The Results Equation

How would it work out for you?

It Works! The ‘Results Equation’

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We are moved by goals. The resolve to reach the finish line pushes us forward: at work, in life. Why then do we keep idea management initiatives alive when it’s not clear what results they deliver (if any)? And how often have we yearned for a formula that definitely makes it all happen?

In most aspects of life, what we do aims at some goal. Think of how this determines choices about our house moves, career options, travel destinations and children’s education.

Also at work, when hiring, reporting, managing projects, expanding locations and activities – pretty much for any business-related action – we set targets. To achieve them, we quickly adapt, change procedures, deploy strategies and redirect efforts. From time to time, we move mountains.

The managers’ conundrum
Why have we then limited our ambitions in innovation efforts? How is it that managers have found themselves stuck in traditional idea management programmes, which prove ineffective when faced with organisations’ current business challenges?

Many factors contribute to the present state of affairs:

  • Ducking failure: Once you get going and gain visibility, it’s hard to stop as typically these programmes touch the whole organisation. Plus, executives tend to shiver at the thought of losing face. Failure is often misunderstood.
  • Gathering the spoils: Managers also look for so-called innovations in other areas of the organisation, holding them up as champion ideas. These shared successes empower managers to perpetuate the existence of ‘little results’ in innovation initiatives which they own.
  • Lack of alternatives: Also due to the visibility gained, executives are reluctant to switch off whatever programmes might be in place. That would mean implementing substitute programmes to collect ideas and doing something useful with them. Participants cannot be left hanging without alternatives.
  • No metrics defined: There is no distinct image of what success looks like. Metrics tend not to be effective. And, when it comes to certain types of innovation, the reality is that it just takes time to get there.
  • Lack of mandates: Time and again, the executive who launched the innovation initiative is no longer around to manage it. Innovation leadership all too often becomes the hot seat – executives are either promoted or side-lined.

Rolling in a void
As a result, innovation is rarely managed as a process. Only a handful of companies worldwide systematically develop innovative products. (By the way, they don’t call it innovation. It’s business as usual.)

Attempts to replicate these few companies’ successful innovation management projects fall into the above-described inertia: it’s Newton’s first law of motion in action. Initiatives don’t work, yet they’re difficult to change or shut down.

So, the dice just keep rolling in a void. As innovation outcomes become irrelevant, so does the entire innovation initiative.

Pedro da Cunha, Exago’s CEO and co-founder

READ MORE: Innovation executives, unite!

How would it work out for you?

Ready to play the innovation game?

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More than ever, companies need to engage their employees to assure long-term viability. Yet, overwhelmed with information, people’s attention spans have become shorter and shorter. Their willingness to contribute to lateral activities has shrunk, particularly if these are boring or create anxiety. And innovation is often no fun…or can it be?

There’s nothing wrong with fun. Since the dawn of civilisation, generations have learned through games. From learning basic numbers and letters to eating and caring for others, games help transform boring activities.

In fact, you may not even notice it, but gamification is already altering daily routines. Think of how fitness and health apps, cooking apps, baby apps, music apps, have changed your life. How they tap into your motivation. They’re productivity tools, using game elements and techniques to make those activities more appealing and keep you going back.

Don’t just roll the dice
In the corporate realm, this is no time to leave it all to luck. Worldwide, businesses and organisations realise they may be doomed to compete in a ‘red ocean’ where prices and margins sink downward. To prevent this downward spiral, new ideas and outside the box thinking are essential – to create differentiated business models, products and services, as well as competitive cost structures.

You need to gather your people’s collective intelligence to find new answers. And gamification has proved to engage employees’ and stakeholders’ attention around your key business challenges.

Gartner has, in fact, predicted that by next year 40% of Global 1000 organizations will be using gamification as the primary mechanism to transform business operations. To be ahead of the game, you have to be ready to play the game.

Understand the rules
In our paper, “Gamifying Innovation: How to engage your people in key business challenges”, we start by taking you through gamification’s definition and its main elements:

  • Points
  • Quests
  • Avatars
  • Social graphs (interaction)
  • Levels
  • Progression
  • Badges

We next share a handful of gamification characteristics that make the process fun and attractive. They are thought out to involve as many players as possible.

If World of Warcraft players have a common interest – enjoying the game –, the same does not always happen for employees of Company X. Therefore, game designers must first ascertain player’s different profile to effectively reach target participants. According to the Bartle Test of Gamer Psychology, you can have:

  • Achievers
  • Explorers
  • Socialisers
  • Killers

We help you understand how this framework works and to identify the engines that will guide players. These mechanics relate to the desire for status, achievement and competition. All are essential to reinforcing the engagement potential of gamified processes, so that people feel fulfilled by their activities.

Boosting your innovation initiatives
The benefits collected from appropriately outlining gamified processes are varied and very significant: Gamification develops more loyalty in participants (whether they are customers, employees or others) and more use. It can make a process go viral, radically increasing the number of participants, and it creates a sense of identification with the brand, activity, product or other elements of the process.

These benefits are of extreme value within innovation initiatives, as any innovation manager well knows. In other words, gamification can play a leading role in motivating people and compelling them to participate and bring value to these initiatives – as leaders in innovation and management, such as Stefan Lindegaard, Paul Sloane, Matthew May and Michael Allen, have consistently pointed out.

But how can you exactly gamify the innovation process to make it more inclusive, attractive, efficient, transparent and sustainable, delivering real results? If you´re interested in learning more, just request our paper or feel free to contact us.

Pedro da Cunha, Exago’s CEO and co-founder

Francisco Rhodes Sérgio, VP Inbound and Sales Latin America