Innovation Made Simple | BTalk

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Naomi Simson

(Episode 428; 12 minutes 40) Just how do you come up with those innovative ideas that will make a difference to your business? Naomi Simson is someone who knows innovation well. She left corporate life to start Red Balloon, an online gift retailer selling experiences to customers. It was a great idea that's worked well, but could Naomi return to a big company and inject the same innovative thinking?

On today's BTalk I talk to Naomi about her thoughts on where innovation comes from and how businesses need to structure themselves to help those ideas to flourish.

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• Transcript

Phil Dobbie: Well, hello again. I'm Phil Dobbie. Welcome to BTalk. Today, how do you make your company more innovative? Well, it's not as complicated as some people might make out.
Businesses need to innovate, of course. It's in their life's blood. If you don't innovate, then sooner or later you are going to die. I think everyone realises that, but a lot of companies just aren't sure how to go about it in the right way. Well, Naomi Simson, who heads up the online gift retailer Red Balloon, says that people often make it more complicated than it needs to be. Now Naomi, I think you're talking here aren't you about those expensive consultants with their big presentation packs and their huge daily fees. You know, the ones who say innovation? We've got a process for that.
Naomi Simson: Well, not just those. But also I think sometimes people see innovation as a scary word. They think oh, my goodness. Innovation! Right! That's really important. And everyone gets a bit fearful and are we doing it right or not, you know? And it's all of this sort of bad, right, wrong sort of caper that goes on. So it's not just consultants that are about innovation. We're the innovation committee, right. We best think about things now that are important to the business.

Dobbie: Now there are two words that don't sit together too well in my mind. Innovation and committee.
Simson: I think is that an oxymoron? Something like that.

Dobbie: But how do you do it then? I mean, committees are not right.
Simson: Yes.

Dobbie: Because it's very much an individual thing. So how do you within your company? Some people are more innovative than others.
Simson: Yes.

Dobbie: So you need to give them the ability to do it. But how do you do that in the structure of a corporation?
Simson: The reality is there are different components to deliver on any aspect of what would become a project. But not to say innovation as a project. It's actually a creative process. So first of all, it takes creative thought. It takes ideas. It takes spontaneity. It takes looking outside the world that we know today. And this is where a lot of organisations can get really stopped, is because they can't get a view from outside minutiae. They're so busy in their business, it's very hard to work above it and see things from different places. Which is often why people call on external resources, but there are other ways to get there. But there needs to be a culture or a way of capturing ideas. Then the second part of the whole process of course is to work out oh, are they feasible? Is it possible? Still not the how, but to have some level of understanding of is this aligned to where we are taking the business? Is this part of our vision and so forth? And then ultimately of course is to determine a process of producing. And really that's the big long tail that, you know, an idea is worth nothing unless we deliver and execute. So, you know, any great business is based on strong execution.

Dobbie: But in a smaller business it's a lot easier obviously than in a larger corporation, because it's very easy then to say, look, an idea could come from anywhere in this business. If you're junior in this business and you understand the direction you're heading and you've got an idea on how that can help us get there, then please tell us about it. In a large corporation the response is likely to be "Hey, back in your box", you know. Here's your job description. Don't tell me about anything else until you've done all this stuff for today, you know. It's an entirely different situation, isn't it?
Simson: That's exactly right. In fact, when we were, you know, just starting out I think a lot of our innovation came from the fact that we were very scarce in resources. There was not a lot of money around, so we had to think about doing things differently. The important thing, no matter the size of the organisation, is to have listening posts. Make sure that you're listening for those ideas and capturing them. And make sure that that person stays involved and feels that they are participating in part of the program. So scarcity does breed innovation. We've got no money, so how else are we going to do it? We'd better invent something.

Dobbie: But I mean, Naomi, you've worked in the corporate space as well. You've worked for some of Australia's largest businesses. I worked for Telstra for 30 years. Oh, hang on. I only worked for Telstar for a year, that's right. But it seemed like 30 years. You know, I spent at least 75 percent of that sitting in meetings. And whenever any new idea was discussed it was almost invariably knocked down because it would impact on another area of work. And somebody would say "Hey, that's not your area of responsibility. You're touching into my area of work now, so just back off". Everyone's very territorial in large businesses. How do you break that down as a large corporation to say we need that innovative culture?
Simson: I suppose if we look at some of the organisations that are very innovative, you know, like a 3M or a Xerox, they have places that are innovations centres. And they go there and think about stuff and they develop stuff. But that misses out on really a lot of the opportunity which is just in terms of innovating and process in all this. How do we do this better and more efficiently and easier? Lots of large corporations buy in innovations. They see small companies that are very agile, able to innovate. And they go oh, we'd like to have that. Fairfax, I think, has been very good for buying in small businesses and aligning them to what they're up to in the online space. And that's because they're buying innovation. So I think it goes back to the listening posts and how you capture those ideas. And some of the banks are actually getting very good at listening at branch level to what's going on with their customers. And then capturing those ideas. So I think first of all it does have to come from leadership. We want to innovate. We want to listen. And then having some hero projects and saying that oh, look --- this did happen. It did come to fruition. It has to be part of the culture.

Dobbie: You mentioned the idea of processes. And, you know, we've all seen process engineers. The people who design processes for a living, they're not always the most innovative of people that you're going to find because, you know, they're sort of paid to be anally retentive in a way. So it's hard for those people to be told: hey, design a process that's going to make us innovative. And I'm just wondering, is it process or is it more the structure of an organisation?
Simson: I think it comes really from where is the source of creativity. And creativity and ideas often come from the interaction with customers. Customers are really, really, really good at giving you ideas on how you can improve your business. Making it better. And it's each of the times that we have customer meetings and we listen for customers and we get the feedback --- that's where innovations have come from. So it's where is that customer conversation or the employee experience conversation take place? And actually those process guys are way down the track when it does need to be, you know, robust and rigorous and structured. We have a business analyst here and she's the one that documents and turns these ideas into actually what the IT guys are developing. And she's very much the glue between the customer which is, you know, that's our marketing team, or our customer care team here. And she's very much the glue between turning that idea into --- and then costing it appropriately and saying, you know, what is the impact and the cost to the business in terms of developing this? You know, there are some things that if I knew how much they were going to cost I might not have done them. But hey, that's what they call hindsight. Not innovation.

Dobbie: Yes. We could all do with some of that. Now you mentioned earlier, and I guess this is really the final point today, you mentioned the idea that, you know, that if an idea does come from somewhere or anywhere within an organisation, that person really needs to feel involved. There's nothing worse, is there, than coming up with an idea and then having someone grab it and say thanks very much? We'll see to it from now on. Back to your desk. And I guess that's a challenge, isn't it? How do you get someone involved in a project that might have been their idea at the beginning, but it's not really their job to do it.
Simson: Yes. This is about making people heroes and it's very fundamental to employee engagement to see that they make a difference every day. So what we find is that in listening to our people, in what we call personal promises but other people might call KPIs or something else, is that they've come up with an idea. The next trimester the follow-through of that project is in their personal promises, so it becomes part of their role. And somebody's far more engaged with an organisation if they feel they're really contributing. So one of my team members here, he's really passionate about making sure we have a customer face and that we're talking to our customers. He's in our customer experience team answering emails, listening to customers. We even have blogging for the organisation and he says that's all about me being to give back and share with everybody about what he's learned. And he was the one that, you know, fought for blog, I need to be able to talk to customers. It was part of his personal promises and now are continuing on. If he even has it, you need to be blogging at least, you know, three times a month or whatever it is so that. So absolutely. And that comes from leadership from. But even the acknowledgement of people knowing that they've contributed makes them really want to play and participate in fabulous projects. And saying well, I worked on that and, you know, being able to have something to write on their CV and feel great about.

Dobbie: Now the board from the Macquarie Bank comes knocking at your door, Naomi, and says look, you know, we're going to pay you far too much money to be our new CEO. Don't worry about Red Balloon anymore. Come and help us make Macquarie Bank a more innovative organisation. What would be the one thing that you'd do to try and change it?
Simson: Well, I think Macquarie Bank isn't a very good example. I think they're very good at breaking that organisation into units and business units that are very focused.

Dobbie: Oh, okay.
Simson: I think maybe a Telstra or a bigger organisation.

Dobbie: Oh, I was given that one, Telstra. But okay, Telstra's a great example. So you're going to make Telstra more innovative.
Simson: Yes. To me it's going to come from pockets of making people heroes and seeing the deliverables. It's all about, well, let's work on one particular project. And you know, Telstra supports such a large part of our community, you know. They have big government clients all the way to, you know, Mum and Dad from Orange. So they have such a broad base. So it is about relevance and as far as I'm concerned breaking things into units of scope of influence. So, you know, you want heroes in a particularly governed area, and particularly cross-functional things, you know, to break down what you were talking about. And celebrate those collaborative teams and really get them working together.

Dobbie: So think about smaller really in terms of size of units so that people have room to become a hero. They're in a small enough area where they can have influence I guess.
Simson: Exactly. And I think that's what, you know, the organisations. FlightCentre is known for that. That, you know, they are in pods of only so many people because that's the scope of what is a traditional human tribe or something like that. And it's the same sort of philosophy. So here we have cross-functional teams but they never get very big. The bigger the team the less work that's going to be done, and the less innovation that's going to be happening. So great ideas are not necessarily made even greater by the more people that are working on it.

Dobbie: So when you start talking about pods it starts to sound a bit cultish, doesn't it really?
Simson: Well.

Dobbie: But maybe businesses are cults at the end of the day. Naomi, appreciate your time today.
Simson: Oh, absolutely my pleasure. Always great to chat.

Dobbie: No worries. Now Naomi Simson there on her first week back after five or six weeks spent on holiday with the family in Italy. Oh, how the other half live.