An environment of innovation - the TWI approach

TWI Bulletin, May - June 2006

Setting the scene for free thinking demands consideration of some of the obstacles to innovation.

After obtaining his engineering degree in Germany and his doctorate at the Swiss Institute of Technology, Dr Wiesner joined TWI in 1991. Following 12 years in the Structural Integrity Technology Group, Dr Wiesner became TWI Director, Research and Technology in 2003.

Christoph Wiesner outlines experiences in managing innovation; what it takes to create the right environment and what are the obstacles arising. In this piece based on a talk he recently delivered at the annual dinner of the UK Faraday Partnerships and Knowledge Transfer Networks, he gives examples of TWI innovations and comments on innovation processes in a national and international context.

The overall framework of innovation is global nowadays, and the world economy continues to grow. Changes in the last few decades mean that routine manufacturing and mass production are moving east. For example, China makes 40% of the world's socks. Admittedly, it has 20% of the world's feet, ^[1] but of significance is that it has the resources to expand production to make all of the world's socks. This means that countries with higher labour costs have to focus on technology-intense or knowledge-rich or very, very flexible businesses. These are businesses which have responded to today's market challenges by being innovative.

Some evidence that this is already happening exists in TWI's client base. TWI is rooted in the manufacturing sector, and although this has declined in the UK, TWI's business remains 50% UK. This is because TWI serves innovation-intense businesses that obviously continue to do well. Another example is that there continues to exist a sizeable garment-making capacity in the high-cost area of Paris, France. These companies have become ultra-flexible to compete. If goods start to sell fast in a boutique in the morning, then just one phone call is needed and replacement stock is on the racks in the afternoon. ^[1] This is not something one can do if you are importing goods from the Far East.

Types of innovation

For this talk we adopt the UK DTI definition of innovation as the successful exploitation of new ideas that enable businesses to compete effectively in the global environment. Of course, new ideas influence businesses on different levels, depending on their significance. Figure 1 shows how different types of innovation may be characterised. ^[2] Incremental innovation occurs most frequently and helps companies to improve existing products, or make business processes more efficient by removing obstacles or better planning. It's what most people would describe as a well-run business where feedback is used to refine the way things are done.

Types of innovation

For this talk we adopt the UK DTI definition of innovation as the successful exploitation of new ideas that enable businesses to compete effectively in the global environment. Of course, new ideas influence businesses on different levels, depending on their significance. Figure 1 shows how different types of innovation may be characterised. [2] Incremental innovation occurs most frequently and helps companies to improve existing products, or make business processes more efficient by removing obstacles or better planning. It's what most people would describe as a well-run business where feedback is used to refine the way things are done.

More significant innovations bring about new products or new markets. These can alter the competitive position of companies and are described as radical or disruptive. Such innovations are less frequent. They tend to occur no more often than the relevant product life cycle (eg months for information technology products, but decades for businesses relating to infrastructure industries). TWI's most significant innovations over the years, such as fitness-for-purpose methods or friction stir welding, tended to fit into this category.

Finally, there are innovations which change the way a particular sector functions, such as the industrial revolution brought about by the invention of the steam engine or, more recently, the advent of cheap airlines and, more generally, information technology. These types of innovations are described as systemic.

Whatever the type of innovation, understanding how it comes about and how it can be encouraged is helped by understanding the processes underlying it, and these are described in the following.

Model for a virtuous business cycle of successful innovation

All companies claim to be innovative nowadays. Consequently, one finds many dubious claims relating to buzzwords like 'Innovation made easy', 'Speedinnovating' and 'Creativity Catalyst' when looking for innovation support. Equally breathtaking to the practitioner is some of the esoteric research on the subject. One may question how publications with titles like 'Metaphoric boundary objects as co-ordinating mechanisms in the knowledge sharing of innovation processes' will help companies improve their competitive position. It could be argued that many companies are almost obsessed with innovation now, and believe that by doing a bit of creative thinking, magic answers can be delivered.

However, real innovation is a difficult business process to get right. Quite a few things need to be in place, need to be managed, to enable innovation. TWI experience shows that, if innovation is managed successfully, one can get close to a virtuous cycle 2 of a positive culture, creative ideas generation, and successful exploitation, see Fig.2. These various stages will now be addressed in turn.

A culture for innovation

First, there needs to be the right culture and the capability in the company for invention and innovation. For this:

• A company needs knowledge and talent. People with inquisitive minds and lateral thought processes. Louis Pasteur said 'Chance favours the prepared mind', and the right talent has these prepared minds.
• Management needs to be tolerant. Whilst there needs to be accountability in all organisations, a culture of blame allocation does not foster innovation. Thomas Watson Sr. of IBM is reported to have said that the fastest way to succeed is 'to double your failure rate'. And, apparently, leaders of certain governments hand out 'forgiveness coupons' designed to encourage managers and workers to take risks. Whilst it may be questioned if such formal measures are the right thing, one should applaud the principle.
• Management also needs to be supportive to inspire inventive staff to do their creative work. Geniuses are sometimes not very good at communication and teamwork, and can be suspicious of bureaucracy.

Ideas generation and ideas capture

Then, secondly, when a good idea happens, it has to be recognised and it is has to be captured. The trigger for ideas sometimes comes from unexpected directions. As an example, Fig.3 shows a colourful Volkswagen Polo. The car is a joke. The company placed adverts on April Fools' Day showing pictures of a car looking this way, and was probably quite surprised when people wanted to buy one the following day. Nevertheless, recognising the opportunity, they went into production and a number of cars were made.

In many companies coping with daily work challenges and financial constraints, there is a real danger of good ideas being mentally shelved or dumped because of lack of energy or confidence. Ideas generation and capture need room,space for thought. In many enterprises today, it is quite difficult to balance making money, or surviving, with leaving room for creativity. As someone in the rail manufacturing industry has been reported to have said 'If we have enough money, we have not enough time, and if we have enough time, we don't have enough money'.

In addition to the need for capturing the idea, there is also the risk that the idea is given away via professional contacts or publication for personal fame and recognition, leading to the loss of intellectual property, Fig.4. Good ideas need to be protected so that the company can consider the best ways for exploitation.

Ideas generation and creative thought is much helped by social interactions, networks and meetings Fig.4. There was a group of remarkably innovative people in mid-18 ^th century Birmingham 3. It included Erasmus Darwin, a physician and Charles's grandfather, James Watt, Josiah Wedgwood, of the famous pottery, and Joseph Priestley, who isolated oxygen and became a great chemist,and many others. They called themselves the Lunar Society because they arranged to meet at each full moon.

One person's passion be it carriages, minerals or chemistry, fired up the others. There was no separation of subjects. It is reported that letters between them were a lively exchange of invention and ideas, touching on steam-engines, varnish, clocks, acids, canals, and how to abolish slavery.

What were they doing? There was a certain amount of the mutual admiration society about it because this gives confidence. But there is also the effect of group dynamics which makes people reach conclusions more extreme than they would have come to on their own. When people meet they compete and encourage each other, they show off and are applauded; and on the way they often lose sight of what they believed when the meeting began. 'Unlearning' what one believes is often a crucial step for any disruptive innovation.

The Lunar Society is an illustration of the important social angle of innovation. Humans are social creatures and are very good at learning from each other and good at transforming things heard for their own and their companies' benefits.

The DTI-sponsored Faraday Partnerships and Knowledge Transfer Networks are intended to be vehicles for such positive outcomes. They strengthen the link between R&D and applications people and facilitate the positive transfer effects described above. The very correct assumption is that, if you pay people to meet, they will. Face-to-face meetings do provide the best way of communication aimed at stimulating innovation.

Exploitation processes

After ensuring there is the right culture for innovation and an idea is had, kept and captured within the organisation, then, thirdly, the company needs a sound system for exploitation, Fig.5. Success in this step of the process often requires different talents to those needed for the inventive spark. At this stage, patents have to be drafted and successfully submitted, and reduction to practice, commercial skills and entrepreneurship are needed. The inventor will also wish to remain involved, it was his or her idea after all. But as inventors and implementers do rarely operate in an identical fashion, there is the possibility for conflict. A previous paper describes the process TWI uses in more detail ^[4] .

A further important aspect of this reduction to practice and exploitation is the need for experience. This can be illustrated by one of TWI's innovations which turned out to be of limited financial success in terms of licence income although significant contract work and membership opportunities did arise from this innovation. Barrikade ^TM is a low-cost, lightweight thermal barrier material made from readily available ingredients using a novel processing route, Fig.6. Things looked very promising. But we did not know the market of low cost commodity-type products well. To earn money through licensing from low cost products, you need to have very large volumes.

Further, for the inventive step offered by us, an outsider, to be attractive, it needed to offer improvement well beyond existing products, so that a potential investor could see the worth of introducing it despite the usual risks of change. In addition, the supply chain of these products was very dispersed. Many players in many locations were not interested in growing market share significantly. By the time we had carried out sufficient market intelligence to realise our dilemmas, TWI had spent several years trying, and much money out of the door in protection, whilst only making a proportion of this in licence fees.

Based on this experience, TWI is now more careful in carrying out market research and a little more hesitant to protect, without relevant partners, less radical innovations. Rather, if we now find something new in this kind of category, we try to find alliances with other players or different ways of exploiting the idea for our benefit. TWI's intellectual property (IP) office has much experience in this stage and is also able to support TWI members needing assistance in the exploitation of their IP. ^[5]

Obstacles to innovation

One more important issue of the innovation process is 'obstacles to innovation' see Fig.2:

• The political and economical context influences strongly the climate outside any particular organisation, and if this is not conducive, it will act as an important barrier. The leading role the DTI has taken to support innovation in the UK has to be acknowledged. The fact that everyone is talking about innovation may help companies to spot that opportunity.
• Reluctance to change also stifles much innovation potential, and we all feel intuitively that the saying 'if it ain't broke, don't fix it' is good common sense, whereas it does not always apply in modern times.
• But some resistance to innovation is also necessary, the new has to compete with and out-perform the old, and with some margins to give some reward for the risk-taking.

Interestingly, there is also often an improvement of the old to higher performance when the new threatens. An example of this is the competition between long-established conventional arc welding processes and the more recently developed power beam processes such as laser and electron beam. When these began to threaten to outperform the conventional process, there was a real step change in system development and integration of arc processes. Multi-head, multi-wire systems were developed which were able to compete well again with the higher power-density processes.

Discussion of the innovation process model

So what has been outlined is an innovation process comprising the culture of the organisation, its ability to generate and capture ideas, the iterative nature of exploitation, and obstacles to innovation, all within the governmental and societal context. Of course, this is an idealised model of successful innovation. The real thing is not a linear process, rather, it is a complex human system with many additional feedback loops and many external and internal influences.

Within the process, management and leadership play an important role. It is important that leaders use appropriate style depending on where one is in the innovation process. Too much intervention early on tends to destroy creativity, whilst too little management later means exploitation is not carried out in an organised fashion. Nevertheless, if all goes well, then one can develop new ways of doing things or novel products and services. The money earned can be re-invested into more time for creativity and ideas generation and you end up with the virtuous cycle of re-invention, as has been shown in Fig.2.

Having discussed innovation as a process, there is one final key issue. At the end, it is the outcome that is of importance, not the process itself. The stages outlined provide a conceptual framework to help managing the process,but they are just the means to an end. When things go well, and innovation works, then the impact on any organisation is brilliant. And it is not just because the bottom line is improving, it just makes everyone involved feel good.Unfortunately, if you back the wrong idea, it can also cause bankruptcy. Whatever it has cost to patent an idea, it tends to cost many times more to bring it to market.

Successful TWI examples

TWI's most successful innovation in recent times is its patented new joining process, friction stir welding, Fig.7. A non-consumable rotating tool with a protruding pin is pressed into the joint and then moved along the joint line. The frictional heat generated softens the material and the forces generated stir the soft material across the boundary creating a high quality joint.

For instance, friction stir welding makes possible the joining of certain high strength aluminium alloys which are very hard to weld conventionally without difficulty, and with much increased efficiency. Many companies are now FSW licence holders which allows them to use the process, and Fig.8 shows some of the current applications. The licence fees earn TWI modest income, but the process application makes millions for the users through improved products and processes.

Another TWI innovation example currently at an earlier stage of development is the Surfi-Sculpt ^TM process. A high intensity electron beam is scanned, at very high speeds, over surfaces to generate patterns of features and to create metallic protrusions such as those shown in Fig.9. One application of this is TWI's new joining process between metals and composites, Comeld ^TM , see Fig.10.

Summary

To summarise very succinctly the message of this piece, I'd like to use the words of a newspaper columnist 1 who said that: 'our only defence against cheap imports and the only way to justify our wage levels is to use our brains.'

TWI staff enjoy using their brains and our members can benefit from this, both through accessing TWI's innovations and, via the extension to their resources which TWI provides, through supporting their product and process developments. The beneficial effects of group dynamics described above are available for all members by using TWI experts for brainstorming sessions and product development reviews.

References:

1. H McRae, The Independent, 31 August 3005, p.29
2. G Telling, private communication, September 2005
3. J Uglow, 'the Lunar Men', Faber and Faber, 2002
4. R E Dolby, Management processes for innovation in joining technology, 7th international symposium of the Japan Welding Society, 20-22 November 2001, Kobe, Japan
5. laura.barratt@twi.co.uk