B U S I N E S S P U L S E©

The Nicolet Bank Business Pulse© promotions and profit sharing)

has been examining Innovation in created a strong culture of innovation.
NEWi, and it found that moving
the organization into The Land of Designated Hitter
Innovation is squarely on the CEOs and Business Owners in
CEOs’ shoulders. If an organization Northeastern Wisconsin were asked
does not have a culture of in what ways their organization
innovation, then the CEO must encourages and supports innovation.
create it, foster it and orchestrate its Nearly one third (30%) say they have
development because the viability an employee who is designated to
Who do of the organization depends on it. devote part of his/her time to study
and search for innovations; 27%
When it comes to innovation within
you love? business organizations, 3M is often
provide incentives for employees
to suggest innovative ideas; 19%
cited as The Model. 3M has a strong
indicate their organization has a
CEOs turn to culture of innovation - established
early in the corporation’s history. This
budget for research and development;
19% say their company has a goal
culture was guided and nurtured by
Employees; several policies created by an early
of a designated percent of annual
revenues coming from new
CEO, William L. McKnight.
products/service each year.
Customers for Two of the key policies are: 1.) The
Except the budget for research and
15% Option in which employees
Innovation are free to spend up to 15% of their
development, there are no differences
by size of the organization. Budgets
workweek on special projects of their
for research and development are
own choosing and; 2.) The 30% Rule
somewhat more prevalent among
in which 30% of company revenue
larger organizations. Only 9% of
must come from products and
organizations with 50 or fewer
services that have been developed
employees have an R&D budget
in the last four years. These policies,
compared with 41% of those with
along with 3M support (seed money
51-500 employees, and 63% of those
and tolerance for failure), and a
with more than 500 employees.
formal reward system (career

Executive Summary Part Three:

Data Taken April/May 2007

“I’m not getting information; I'm not managing.”

John Torinus, President & CEO — Serigraph, Inc
Ear to the Ground
CEOs were also asked the
importance of various sources they
used for producing innovative
ideas. Two-of-the-top-three sources
are internal. The Number One
source is top management; 80%
say their top management is
“extremely important” in
producing innovative ideas.
Employees also fared very well with
60% of CEOs saying employees are
“extremely important.”
Customers also ranked high as
a source of innovative ideas
with 62% of CEOs say they are
“extremely important” as a
sources of new ideas.
Falling much lower in terms of
importance are business associates
from outside their business
(20% “extremely important”);
competitors (12%) and consultants
(6%). These findings indicate
that organizations in NEWi are
primarily looking to employees
and to their customers for their
sources of new ideas.
NEWi CEOs and Business Owners
spend, on average, about 14% of
their time on innovation related
activities. In addition, on average,
organizations generate about 14%
or their annual revenue for products
or services that were created in the
past two years. Orchestrating and
sustaining innovation within an
organization will continue to be
one the significant challenges for
all CEOs in the future. Even the
strong innovation of culture of 3M
has been challenges by 3M’s move
to the doctrine of Six Sigma. The
clash between innovation and Six
Sigma at 3M nearly collapsed the
innovation culture. (BusinessWeek,
June 11, 2007)
Based on their study of 765
CEOs globally, IBM offered five
considerations for CEOs to
improve their innovation strategy:
1.) Create and manage a broad mix
of innovation that emphasizes
business model change; 2.) Find
ways to substantially change how
you add value in your current
industry or in another; 3.) Use
technology as an innovation
catalyst by combining it with
business and market insights;
4.) collaborate on a massive,
geographic-defying scale to open
a world of possibilities and;
5.) push the organization to
work with outsiders more, making
it first systematic and then, part
of your culture.
The primary key to success,
however, will depend on CEOs
being able to create and foster an
organizational culture that thrives
on the creativity and collaboration
of employees.
Sources/Resources:
“Forces Shaping the Business Environment”
http://www.mckinseyquarterly.com/article_
page.aspx?ar=1754
“Reinventing Innovation at Consumer Goods
Companies”
http://www.mckinseyquarterly.com/article_
abstract.aspx?ar=1870&L2=21&L3=35
“Expanding the Innovation Horizon”
http://www900.ibm.com/cn/services/bcs/iibv/
summarypdf/Global_CEO_Study_Executive_
Summ_2006_EN.pdf
3M Corporation Case Study
http://mba.tuck.dartmouth.edu/pdf/2002-2-
0002.pdf
“3M’s Innovation Crisis”
BusinessWeek, June 11, 2007

Innovation Invitation
For six years, The Nicolet Bank Business Pulse© has been an innovative addition to nearly 600 CEOs and Business
Owners in the 10-county, Northeastern Wisconsin Business Community.
Today, The Pulse is expanding its footprint to mirror the 18-county, NewNorth marketplace. To capture the
most accurate business data in all of the new NEWi, we need input from CEOs, O&Os and GMs in these 8
counties: Waupaca, Sheboygan, Fond du lac, Green Lake, Marquette, Florence, Menominee and Waushara.
Forward this issue to any of your business owning friends and associates; PLEASE encourage them to join
The Business Pulse: It’s unique, topical business information that is not available anywhere else. Best of all,
IT’S FREE!
Enrollment Link: http://pulse.nicoletbank.com/nicoletbankpulse/business+pulse+enrollment/default.asp

How the Study is conducted

The Nicolet Bank Business Pulse© is a Quarterly Study of CEOs in NE Wisconsin (Brown, Calumet,
Door, Kewaunee, Manitowoc, Marinette, Oconto, Outagamie, Shawano, Winnebago Counties).
NOW EXPANDING TO: Waupaca, Sheboygan, Fond du lac, Green Lake, Marquette, Florence,
Menominee and Waushara. It is designed and implemented by IntellectualMarketing, LLC.
Participants include: 28% in manufacturing; 25% in services; 19% retail trade; 5% wholesale
trade; 6% finance, real estate, insurance; 5% in transportation, communications, utilities;
6% in construction; 7% in other industries. 16% have fewer than 6 employees; 33% have 6-25;
19% have 26-50; 6% 51-100; 18% 101-250; 2% 251-500; 3% 501-1,000; 2% have 1,001 or more.
Questions to Dr. David G. Wegge (920) 217-7738; david@intellectualmarketing.com