Thursday, April 30, 2009

Pulp Innovation Chapter Seven

Bill Thompson walked into the conference room. He had a presence that I've usually associated only with big city politicians and high level mob bosses. There was an aura around him that reflected the fact that he was in control. He had what a good friend calls "executive hair", every strand numbered and lying in its apportioned place. He had a newscaster's jaw and the physique of a distance runner. Every eye in the room turned to him, as if he was bringing the tablets down from the mount. Instead, he sat gracefully in the chair opposite me and said "Where are we?"

No notice or apology for keeping us waiting over 45 minutes. No notice of a rather interesting dialog that was underway. We were going to reset our discussion to his timing and expectations. Well, I thought to myself, it's good to be king.

"Bill" said Briggs "this is Sam Marlow and his associate Matt from Marlow Innovation. We were providing some background on our needs from an innovation perspective." Briggs seemed more at ease now that Thompson was in the room, as if his mere presence would somehow balance the many competing interests that we'd discussed so far.

"Mr. Marlow" started Thompson.

"Please, I'm Sam and this is Matt."

"Sam, thanks to you and Matt for coming out today. I'll assume that Fred, John and Susan have given you a sense of the goals we have for Accipter and for innovation. Your work comes highly recommended by John, and of course we've seen your recent publications. Can you tell us about Marlow Innovation and your experience?"

How do you tell someone about making the decision to become an innovation consultant? There are a thousand stories in the street, and most of them start with a dream. Mine was to see more firms get better at something I couldn't believe they weren't good at. Innovation seemed so obvious to me, the lifeblood of any company, yet firm after firm had lost the innovation gene, become comfortable and complacent. Meanwhile brash upstarts, entrants from other geographies and markets constantly blindsided the firms like Accipter. How do you describe your start in a field that seems self-evident to you?

"Matt and I started working in the innovation space over ten years ago, in the product development team of Xcelent Industries. Over time we grew convinced that we could package a suite of products and services to offer other firms that were in the same shape as Xcelent. Over that time we've worked for a number of different firms in a range of industries."

"I see. What makes Marlow Innovation different, or better, than other innovation consultants?"

"Bill, there are as many different consulting firms as there are perspectives on innovation. We compete with the big strategy houses, the integrated consulting firms, ad agencies, design firms and a host of other consulting firms. Every one of those firms will tell you that their approach is what's important. Design firms will focus on design and experience. Ad firms and marketing agencies will talk about positioning and marketing strategy. Firms that have brainstorming experience will advocate brainstorming as a solution. What makes us different from all of those firms is that we advocate a consistent, persistent methodology and innovation capability. We aren't project people. We seek to build, with your team, an innovation program that is sustainable, repeatable and focused on your strategies and goals."

"Yes, we've talked to Antelope, the design firm and Adventure, the big consultants. Adventure installed and runs our ERP system. They have some experience in innovation but so far it's not clear the value proposition they provide. Antelope does a lot of design work for some of our product teams, and they do bring a certain design sensibility to the table, but again it's not clear they can help us fulfill what I think we need."

"Which is?"

"Accipter is under significant pressure from Tyndale and other firms in our space. We've had several new product launches or introductions in the last few years that were either late to the market or missed the market completely, or that were simply ignored. We need to regain some of the original focus of our founders, to reach back to when they were in a small shop and struggling to create their first products. We've lost that edge, and we need to regain a more innovative focus within Accipter. We need to launch some very disruptive and valuable new products or our market share, and more importantly our share price, will suffer."

What could I do but nod? Change a few words here and there, recast the founders' story slightly and this same pitch could have come from any of our previous three clients. Everyone's unique, and every firm is the same in the end.

"How can we help you, Bill?"

"You'll see, Sam, that I've asked Fred and Susan and John to join us. We have a big challenge and we need to understand what to prioritize and what to focus on. Our CEO, Angus Dowdy, is talking to the Street about our new focus on innovation. We'll need to back that up with some new products and services soon. With the current market conditions, we don't have a significant budget for new development, but we can scrape something together. All of the executives you see before you are very busy, and will be available less than 30% of their time, except for Susan, who we've freed up for this initiative."

I could see where this was headed, so I reached the pass first and reined in Bill before he could set any further restrictions and scope.

"Bill, I appreciate the opportunity to talk with you about your innovation needs. However, in just the few minutes that we've been talking, you've set a rather high goal for innovation - creating some disruptive new products and services, but you've suggested that the funds and the resources are limited. We at Marlow work on a partnership model - that is, we work with you to build a team and educate them on a process so that they can successfully innovate, now and in the future. To do these things takes time, and money, and people, and won't necessarily deliver a fast result. Perhaps we should recommend to you a firm that can come in, do some quick brainstorming to generate a few new ideas that can be converted relatively quickly to new products, and that will solve your challenges."

Bill glanced at Fred, who shrugged and said "We've done that already. Last quarter we brought in a firm to do some brainstorming with one of our product teams. I can't say it was successful."

"Why do you think it was less than successful" I asked, thinking it was either poorly framed or not disruptive enough.

"Most of the ideas that were generated seemed old and rehashed, ideas that were already here. It became a way to document ideas that had already been considered and rejected, rather than new or disruptive ideas."

"Why do you think it happened that way?"

"I don't know, Mr. Marlow. What do you think?"

If there's one thing I believe in, it's reaching a quick conclusion. I'd rather have the fast "no" than the long maybe, so I plunged right in.

"Our experience, Fred, indicates that brainstorming is often difficult unless it is well framed. That is, the individuals participating understand the end goal and the scope of the effort. Secondly, if the prevailing culture of the firm has been to reward incremental ideas and reject disruptive or really new ideas, then you can count on getting the kinds of ideas that you have in the past. Additionally, our experience, and you'll see this reflected in Think Better, is that many brainstorms start with all of the ideas that have been floating around in people's heads, ideas that have been considered and rejected before. It takes real work to think up new ideas. All of these factors will contribute to a less than successful brainstorm."

"But what you are suggesting is that the corporate culture gets in the way, regardless of what we tell the teams we want" said Briggs.

I turned to him but Matt beat me to it.

"Corporate culture is the biggest roadblock to innovation, bar none. It's more important than the people you assign, it's more important than the resources you provide or the money you spend. Innovative firms have cultures that encourage, even embrace innovation, and risk, and change. Most firms don't have these features in their culture - in fact their culture specifically reinforces safety, consistency and predictability."

Briggs looked happier than I'd seen him look since we entered the room.
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posted by Jeffrey Phillips at 5:11 AM 1 comments

Wednesday, April 29, 2009

Pulp Innovation Chapter Six

John Briggs walked back into the room and sank into a chair, still wheezing slightly after choking coffee down his windpipe. He seemed to deflate just a bit, come to some internal decision and sat upright.

"I'm responsible for talent management at Accipter. I work for the VP of Human Resources. We've determined that we need to increase employee engagement, and I was asked to head up a small team focused on innovation and employee engagement. The reason we called you, Mr. Marlow, is because we read a short piece you published on innovation and employee engagement."

"So you've recognized that the cultural aspects of the organization may present challenges to innovation, and you believe by increasing employee engagement you may affect the culture and gain more innovation?"

"That's our thought - it's something we hoped to discuss with you today."

I had to admit the goal was reasonable, even if the means were a bit questionable. Most firms we'd worked with observed increases in employee engagement once innovation had been demonstrated as a successful initiative in the organization. At this point I wasn't sure which was the cart, and which was the horse, or if it mattered which was out in front.

"So" I continued, "what's the ultimate goal here. Is Accipter seeking more innovation, or more employee engagement? Which is the driver?"

"Frankly" said Susan "that's what we are trying to determine. John and I have different responsibilities but are working on projects that may overlap or intertwine. The outcomes of one of our projects may support or enable the other, or they may simply get in the way. John found your firm based on your publication, and I asked to sit in on this meeting to understand what help you could provide from an innovation perspective."

This topic was really more of Matt's bailiwick than mine, and I could see him becoming more interested and involved in the conversation. Matt should have been a human resources guru - probably was one in a previous life. He simply loved the interplay about people, compensation and motivation. He joined the conversation at this point.

"What we've found in our innovation work at Marlow" he said "is that innovative firms often have very engaged employees, and a lack of engagement is often, but not always the case at less innovative firms. Engagement stems from excitement and strong belief in the firm, its products and its direction. Innovative firms are self-reinforcing - they create products and services that energize the employees, who then contribute more ideas and more of their time and energy into the business. These are definitely cultural attitudes, but they can't be attained in a short time period. Again, our experience shows that it can take several years of innovation before the organization becomes fully engaged and you see the changes in the corporate culture that you are interested in."

I winced at that last statement, ready to duck and cover. For most firms, 90 days is an eternity, Rome was built in a day and the earth itself was fully formed in no more than a year. To talk about a two or three year transition in most firms was to be laughed out of the room. I glanced first at Phillips, who was frowning and shifting in his seat. A pure Seven Schema guy, I suspected, looking for the "quick wins". I made a note to ask him later how long his firm had been working on Seven Schema and how long it took to take root in the organization. Briggs, on the other hand, looked at peace - almost as if Matt had removed his fears. Johansen, on the other hand, simply darted glances between Phillips and Briggs, a little uncertain of the politics and power play underway.

Briggs broke the silence. "Matt, you've confirmed some of our thinking, in terms of engagement and the time my team believes it will take to adequately change the culture. Bill believes we need to step up our innovation efforts and achieve a more engaged workforce, however I'm not sure the board or the management team is on board yet for such a long implementation and deployment effort. What we're going to need.."

"Are some quick wins" I broke in, having lived this role in a hundred plays before.

"Yes" Both Briggs and Phillips said simultaneously.

Phillips continued "We know, at the management team level, that we need to increase our growth rates and create new products on a more effective basis. We are at risk of losing our position in the market, versus Tyndale and other firms. We need new products out in the next few quarters. We may want employee engagement, but we need a steady stream of new products to recapture our share and gain more visibility in the market."

So, here is was, the classic confrontation of the dissonance of innovation. A firm needs change, needs new products and services immediately, needs to overhaul its corporate culture and needs to engage its employees in a new and meaningful way. It needs to quickly regain market share, do a much better job identifying customer needs and converting those needs into new products and services, and continue to meet aggressive quarterly projections. If I could solve all of these problems simultaneously, I wouldn't be an innovation consultant with a fifth of Old Granddad in his hip pocket - I'd be King Solomon, offering to slice babies in half to resolve dilemmas.

"Ok" I said "we're still waiting for Bill to join us. I've got a good picture from Mr. Phillips, and Ms. Johansen, and from you John, about the needs from an innovation perspective. What's Bill going to tell us that we haven't already heard?"

Phillips nodded at me and said "Right. Bill's going to help us decide which of these initiatives is most important. We don't have any money budgeted for this work and few people who could quickly tackle any one of these challenges. We need to understand his priorities and the investments he's willing to make."

Both Matt and I slunk a little lower in our chairs. The work sounded promising but there was no budget associated with the requirements, and staffing was certainly going to be a challenge. I had a card up my sleeve however, a real fire starter that I had brought along for just this objection.

"Did you read the business section of the Times today?" I asked, pulling it out of my briefcase.

I pushed the newspaper down the table, and recapped the key story. Tyndale had made a takeover bid for a small but fast growing UK firm that promised to chip away even more market share from Accipter. If Tyndale was successful, several of Accipter's product lines which were already lagging would come under even further pressure.

Phillips grew fairly pale while reading the article and sat back, a man at conflict with himself. Johansen seemed energized by the article, like an athlete in the zone just before an event.

Briggs said "Bill needs to see this."

At that point, 45 minutes late, Bill Thompson entered.
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posted by Jeffrey Phillips at 4:54 AM 12 comments

Tuesday, April 28, 2009

Pulp Innovation Chapter Five

The perky Chihuahua led us through the hushed hallways of Accipter's headquarters and parked us in a conference room adjacent to Bill Thompson's office. We passed a display of Accipter products, gleaming brightly in a glass case, like specimens in a museum. Given the inertia I'd seen so far, perhaps the Accipter logo would soon be placed behind the glass as well, to collect dust for future museum visitors to review, to wonder "What ever happened to Accipter?"

"They couldn't adapt to new technologies. Like the buggy whip makers they didn't see the changes on the horizon."

We entered the conference room. It was a standard issue corporate conference room with dark paneled walls, an overlarge table topped with coffee and sliced fruit and low, high backed leather chairs. Three of the chairs were occupied when we entered.

A tall, thin, nervous looking man popped up quickly out of one of the chairs, as if he'd been caught trying out the boss's seat.

"Mr. Marlow, I'm John Briggs" he said. "You'll recall we spoke a few days ago about innovation."

"Yes, I said. Pleased to meet you Mr. Briggs". I shot a glance at Matt. This was the same Briggs who had informed me that Thompson couldn't meet with us for weeks. "This is my associate, Matt Thompson. Matt, meet John Briggs."

Briggs went into MC mode, introducing his two compatriots.

He turned first to a short, dark gentleman across the table. "This is Fred Phillips. Fred heads up all product development." I nodded at Fred, since the table was at least 10 feet wide. "And this is Susan Johansen" he said. "Susan has been selected to head up our innovation program."

"Nice to meet you Ms. Johansen" I said. She looked to be a standard issue corporate drone, tall and thin in a rather severe business suit.

"I'm looking forward to our discussions today Mr. Marlow" she said.

"Call me Sam. We tend to be fairly informal."

Briggs glanced around the table and offered us coffee and fruit. He began what I suspected was a well worn apology for Thompson. "I can't imagine what's keeping Mr. Thompson" he said. "I'll check with Carol about his calendar." As he left the room I'd swear a kilowatt of nervous energy left with him.

I turned to Susan and Fred and started to introduce Marlow Innovation.

"We, Matt and I, head up a small innovation company here in town. We're not the biggest, but we do believe we are the best, especially when firms are having trouble getting started on an innovation journey" I said. "Do you care to give us some insights on what your goals are while we wait for Bill and John?"

Susan shot a glance at Fred Phillips who gave a barely perceptible nod, almost a dispensation. Clearly Phillips had rank, but was offering to allow Johansen the opportunity to set the stage for us until Thompson joined the meeting.

"Accipter has a long history of successful product innovation and introduction" she said, working straight from the PR script. "However, over the last few years we've seen our product life cycles extend. Our new product pipeline has dried up significantly and we're being outpaced in the market by Tyndale and other competitors."

At the mention of Tyndale Phillips shifted irritably in his seat, as if sudden discovering a loose spring.

"We've had several discussions with other "innovative" firms (yes she did use the finger quotes" and also had Krishna in to speak to our board of directors. We understand that we need to be more innovative and recapture some of the founders' vision for Accipter, but we aren't sure how to do it or where to begin."

Phillips' face grew more twisted as the discussion went on, as if he was munching on a very sour lemon. It took little to see how painful the discussion was for him. It wasn't clear at this point if he was the problem or one of the solution points.

Johansen continued "Over the last few years we've implemented Lean and Seven Schema, and the programs have done wonders for our quality. Fred, John and I are all Black Belts, and the entire senior management team has received the training."

I glanced at Phillips and he beamed. "My team" he said "scored the highest on the tests and has identified over 100 type one and type two issues which we've resolved, savings the firm hundreds of thousands of dollars. We were recently written up in Seven Schema Solutions. Did you see the article?"

"No" I said "I'm afraid I don't regularly read that journal."

"I happen to have a copy with me."

"I'd be happy to review it, and congratulations on your accomplishment."

Matt shot me the "I've seen this play before" glance and made me wish I'd had more time on the phone with Thompson as John Briggs re-entered, looking more distracted and anxious than ever.

"Carol tells me that Bill is still tied up on a call with the director of one of our biggest plants. He should be finished any minute."

No surprise. We were already 30 minutes into our planned hour long meeting and had already identified a couple of significant issues - a corporate focus on Seven Schema had been too successful and reduced opportunities for risk and variance, and a successful product line had built complacency about the market just as Tyndale was coming on strong. Inertia, complacency and a focus on cost cutting and eliminating variance and waste. Nothing necessarily wrong with any of that, except that these factors were the consistent barrier to innovation in all the firms we worked with.

Johansen continued "We know we need to speed up our innovation efforts. We've done a terrific job cutting costs and improving our operational effectiveness. Our research shows we have one of the leanest, most efficient manufacturing processes in our industry. However we need to introduce more new products and services to kick start new growth and recapture some of the share we've lost to Tyndale and others. If we can combine a consistent innovative pipeline with our manufacturing and distribution capabilities, we can easily retake the leadership position in our industry from Tyndale."

"What's going to be required to change the dynamic?"

"We need some really disruptive ideas that can shake up this industry" she said. "Tyndale has been aggressive about releasing new products and in some cases has developed new business models. We can't simply create some incremental products and hope to catch Tyndale. We need disruptive ideas and we need to implement them quickly and effectively."

At this point both Phillips and Briggs were shifting in their seats, nervously eyeing the doorway. I think they were both hoping Thompson would come in, shut down this line of discussion and take us back to more safe, comfortable discussion.

"Susan, tell me about your role here at Accipter and how that maps to innovation."

She glanced at Fred, who sighed and nodded. At this point Fred seemed almost deflated, as if he were giving up something of value.

"I've been working for Accipter for almost eight years" she said "most of them in new product development. For the last two years I've worked with Fred to streamline and improve our product development pipeline. Last month Fred and Bill asked me to move into a corporate role, as director of innovation. My primary focus is on new product innovation, but we also are very interested in working on innovations for services and possibly to innovate around our business model."

At this point, Fred stood up and poured himself a cup of coffee, and walked to the picture windows at the end of the room. His abrupt movement caught Susan off-guard and she faltered slightly.

"We'll spend most of our effort focused on product innovation" he said.

Briggs glanced from Susan to Phillips and then to me. "I'll step out to check on Bill again" he said.

Matt spoke up for the first time.

"So, what we have at Accipter is a company with a long history of great product innovation and development that needs to re-kindle some of that innovative spirit. Clearly the goal is to focus on disruptive innovation for your products, and possibly for services and business models. What's the corporate culture here at Accipter, and how does that influence innovation?"

Fred turned and glanced at Susan. She in turn glanced at Briggs, who had just re-entered.

"John" she said, "would you like to tell the Marlow folks about our corporate culture and how that influences innovation?"

Briggs seemed to choke slightly on his coffee as he regained his seat.
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posted by Jeffrey Phillips at 4:46 AM 6 comments

Monday, April 27, 2009

Pulp Innovation Chapter Four

I met Matt in the lobby of the Accipter headquarters. We sat in a corner in replicas of post modernist furniture, sterile, uncomfortable benches made of steel and leather. I suppose Torquemada was the designer.

Matt glanced around and then gave me the eye. "So, what's the approach?"

I looked him over. For an early morning meeting he seemed unusually rumpled. I got the sense he was here more for the excitement of the meeting than on the basis of his expectation of any profitable work. "Nothing else better on the platter this morning?"

"You call and I deliver" he said.

"Here's the straight stuff. Accipter has gotten the new old time religion. The CEO is tired of reading about Tyndale and is putting pressure on his team to do something that will demonstrate that Accipter is innovative."

"But..." He let it hang there like a smoke ring.

"But nothing. But everything. You know the drill. CEO wants big change, right now. Other executives have other plans, other goals. It's not clear how this request fits in with the annual plan. A big innovation - that means risk and change. So, we meet with the COO to decide how committed they are to innovation."

"So, is this more like MedicalTech or ChemStarch?"

We'd been working the innovation angle so long we'd categorized our prospects and customers. Simply labeling a client ChemStarch was a death sentence to anyone at Marlow Innovation. ChemStarch had talked the good game, from the CEO on down, about the need for innovation. Yet no one was willing to lift a finger to create change. After a couple of weeks of fruitless sales meetings, we'd gotten the hint that ChemStarch was very interested in talking about innovation, but had no intention of actually doing anything. I'd made a killing in the market shorting ChemStarch after that. MedicalTech, on the other hand, had been a difficult first sale but had demonstrated a real willingness to incorporate innovation across the board. Within a few months of working with MedicalTech we'd generated several new product and service concepts and trained an internal innovation team. A year later, MedicalTech was now receiving the kind of press most firms could only pay for.

"It has the distinct possibility of being both" I said.

"Here's the way we'll play it. I'll be the sales guy - outlining what we do, our methodology and the effort and costs involved. You, your role is to provide color. Talk about our successes and experiences. MedicalTech would be a good story to tell these guys."

"Who are we meeting with? Are they the right people?"

"Bill Thompson is the COO of Accipter. He's been handed the tablets by the CEO. What we don't yet know is what's written on those tablets. Does it say 'go forth and do innovation and here's the funds' or does it say 'make some noise about innovation but don't spend any actual funds'. That's what we want to find out today. Bill will have a couple of people with him, including one guy who contacted me earlier but couldn't commit the time to meet. I told Bill we'd only come in if he - Bill that is - was in the meeting."

"I see the wise grasshopper learned from his ChemStarch experience. Wise innovation leader knows only senior executives able to make key decisions."

He grinned and me and I made a gesture usually reserved for inconsiderate drivers on the freeway. He shrugged and said, a little more meekly "It's true."

We talked about the meeting and the information we felt it was important to provide to Accipter, and ran down a list of our clients to determine which would be the best references if it came to that. Ten o'clock rolled around and ticked past.

"Mr. Marlow" a voice called out in the lobby.

"I'm Marlow" I said.

A petite brunette in a business suite strode up. She had the attitude of an angry Chihuahua but a bright smile meant to soothe the savage beast.

"Mr. Marlow, I'm Carol, Bill Thompson's assistant. He has asked me to let you know he is in a meeting that is running late. I'll take you to his office and introduce you to the innovation team."

Matt eyeballed me and mouthed "ChemStarch" under his breath. I nodded.

"Carol, any idea how long Bill will be detained?"

"Hopefully no more than 30 minutes."

"Is there anyone available we can talk to who can decide if we'll move forward today if Bill won't be available?"

"Oh, at this point I'd expect only Bill would be able to determine if we will do business with you Mr. Marlow."

At this point Matt appeared to have lost control of his eye functions. They were whirling back in an almost direct imitation of what's I'd received from Lois at my suggestion that we go away together for the weekend. In for dime, in for a dollar.

"Please show us to Bill's office" I said to Carol, and elbowed Matt in the side as she turned away.
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posted by Jeffrey Phillips at 4:59 AM 3 comments

Friday, April 24, 2009

What do the crowds know about innovation?

Last night I had a unique privilege to facilitate a discussion forum on Crowdsourcing and Wisdom of Crowds. We'd worked up quite a panel of experts, which included the head of Dell's IdeaStorm application, a member of IBM's Idea Jam team, a member of Cisco's social media team and a professor from UNC's MBA program.

Our goal was to identify the different strategies and techniques these firms were using for crowdsourcing and to understand when and where crowdsourcing was effective. I think I learned more about these tools and techniques in an hour and a half than I have in the last few years.

Each of these firms approaches crowdsourcing in very different ways. Dell uses primarily an open forum - IdeaStorm - to collect ideas from a wide array of its clients. The site has been in operation for just over two years and has collected over 11,000 ideas, of which over 300 have been implemented by Dell.

IBM's Idea Jam is a slightly different model, using an event-driven and topic-driven approach to generate ideas. IBM uses the Jams internally and offers the service to its clients as well. The Jam typically becomes more of a conversation thread than a true idea generation technique. In one Jam several years ago thousands of ideas where generated and over 36,000 comments attached to those ideas.

Cisco's method so far has been to leverage communities and discussion forums, and to assess the will of the crowd by the feedback and comments within specific communities and forums. These are somewhat smaller forums, more tightly focused around specific needs or products.

All of these approaches help gather ideas from the crowd, and also serve as a trend spotting opportunity as well.

There are several things to think about when using these techniques, however. The first is that as a general rule, as the number of participants increase in any crowdsourcing technique, the more likely it is that ideas will become more incremental in nature. That's because the group exerts unintentional pressure on the participants, and really different or radical ideas are ignored. Second, these programs can generate a LOT of ideas, and working through them to find what the panelists called the Golden Nuggets can be a manual process.

Another compelling reason for using these tools is to demonstrate to your employees, customers and business partners that you are interested in their ideas and are listening and reacting. In fact this was the original and primary goal of IdeaStorm. I think of this as a "social good" - perhaps hard to quantify but very beneficial for any firm that can establish a good crowdsourcing technique and demonstrate the follow up.

The net takeaways from the meeting were that if your firm sets the right expectations and has reasonable expectations about the results of a crowdsourcing exercise (most ideas will be incremental) and understands the value of a program will be more than just the ideas generated, your team can create a steady stream of ideas that will be beneficial and create goodwill with your customers. Just understand that these programs aren't free. If the examples discussed last night are indicative, and I think they are, you may need methods to review hundreds if not thousands of ideas.

I have a presentation that we compiled from our discussions and will share that on the blog as I get the OK from the participants. It turns out that in some cases, all of us are smarter than some of us, but not necessarily more disruptive.
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posted by Jeffrey Phillips at 5:05 AM 2 comments

Thursday, April 23, 2009

Pulp Innovation Chapter Three

The face that confronted me was weary and lined. It demonstrated evidence of rough living, little sleep and abuse somewhere in the past. The nose was bent slightly out of true, as if it had been wrenched to the side. Dark circles under the eyes gave the face a haggard, hangdog expression. It could have been a handsome face. It was a handsome face once, before I took on the life of an innovation consultant.

After the royal summons, I finished my cigarette and called my trusty sidekick, Matt Downing. Matt gave me roughly the same treatment over the phone as I had given Bill Thompson. No one likes to be woken early with a brusque summons to a meeting, ill-slept and ill-prepared. Matt and I are a two man team. Matt is what we'll call a synthesizer - he can organize ideas and facts and lay out a plan of action in no time. Fairly amazing for a guy who can't seem to match his shoes to his belt on a good day. Matt and I have teamed on a number of these engagements. I've found that four ears are better than two, and when I stumble with the quick patter, Matt's right there with an honest quip. Witty sayings and consultant speak are definitely expected by our clients, and we aim to please.

"Matt" I said, "We've got a meeting with the COO of Accipter. Yes, the same issues. His CEO needs innovation like yesterday. Put on your miracle worker hat and meet me at their offices at 9:30."

I listened to him grumble and groan for a moment, then said "We'll lay out a plan of attack when we get there" and hung up the phone. Matt has another gig later in the day, a scenario planning workshop for an aerospace firm. Hopefully, he did his prep work yesterday.

While shaving it occurred to me that I knew little about Accipter, so I made a note to check out their product line before I left the apartment. What I knew for sure was that Accipter was a conglomerate, made up of a number of firms that produced manufacturing equipment for the defense industry. I knew just enough to be dangerous, and that's the way I preferred it. I never considered myself an expert in any industry - that puts you too close to the action. An expert in an industry is one who often has difficulty recognizing the changes that are happening just around the corner, and gets locked into the rightness of his thinking and position, just as the industry is changing. No, we at Marlow Innovation believe that innovation is a consistent capability or process, something that any firm or industry can adopt. Innovation doesn't care about industries or markets. Innovation is its own process, unyielding to the existing requirements and to a certain extent amoral. It doesn't care about your investments or sacred cows - in fact it will seek them out to destroy them. Innovation is like a leading lady in a cheap detective film, alluring but full of danger and unanswered questions. Like moths to a flame we are drawn to her, yet we often recoil when we understand the costs.

My meeting prep consisted of a short investigation into Accipter Industries. It was a fine company with a long legacy of success. Probably a little too successful, a little too comfortable for the changes. In the last few years Tynder Enterprises and a few other smaller firms had chipped away at Accipter's markets and customers. Over the last six months, the analysts on Wall Street had stepped up their comments on the need for new products from Accipter, and the stock had been falling steadily for months. It was the classic situation - a former high flier that had become safe and comfortable, and now found itself the subject of a number of attacks and disruptions. The management team was made up primarily of men and women with long tenure, few of whom had worked in other industries. From the reports I could find, Accipter seemed fairly insular, promoting from within and relying primarily on its own research, rarely partnering or working with customers effectively. A closed, safe, content culture, ripe for blindsiding.

A cup of coffee and some dry toast settled my stomach and I was off. I had my briefcase, which contained some business cards and a few success stories that described the work we'd done and the results we'd accomplished in a few similar firms. The tools of my trade, at least at this point in the process, involve detective spade work, to understand the real needs and the depth of the urgency of the customer, and the ability to tell stories about the work we've done previously, and how that work might relate to the needs of my newest prospect. Industry to industry, firm to firm, many of the challenges are the same - too comfortable, too risk averse, too set in the old ways, unwilling to challenge the status quo. No matter how technically advanced or how innovative they once were, many of these firms have simply exercised themselves of the people who experiment and seek new, different methods. The high religion of operational excellence has become the mantra, and that demanding religion requires a tight adherence to consistency, limiting variance and controlling risk. These concepts are great if you want to turn out a lot of very high quality ball bearings, but these attributes are anathema to an innovative culture.

I could see that Matt and I would have our work cut out for us. Accipter is a leading Seven Schema firm, which meant tight controls and limited variance in all of the operating processes. This thinking would probably pervade the entire organization, influencing how people were evaluated and compensated. I knew we'd need to probe this with Bill in the meeting.

At the Accipter Headquarters building I turned into the parking area and spoke to the guard. "Marlow" I said "From Marlow Innovation. I'm here for a 10am appointment with Bill Thompson."

He seemed unimpressed, as if every hangdog innovation consultant were all the same, and he saw any number of them every day of the week.

"Park in spot 34. Thompson is in Building Three, just to the left of the fountain. Check in with the guard there and get a building pass."

I met Matt on the way in, and we sat in a quiet corner of the lobby. We used the few minutes before our meeting to plan our discussion with Bill.
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posted by Jeffrey Phillips at 5:27 AM 3 comments

Tuesday, April 21, 2009

Pulp Innovation Chapter Two

I was driving down Hollywood Boulevard with my arm around a great dame I’d met near the Brown Derby. Her name was Cecilia, straight off the farm from Iowa. She had plans to be an actress, just like all the other girls in this star struck town. And, like 99% of all those star struck girls, she had found gainful employment as a cocktail waitress. After her shift I picked her up. Out of the garish outfit and headdress that seemed to be de rigueur for waitresses in cheap bars along the Strip, her fresh face and long legs made her stand out from the usual crowd.

Somewhere a phone was ringing incessantly. Why doesn’t June answer the phone? The ringing was interrupting my opening patter to Cecilia. She seemed distracted by the ringing and finally said “Why don’t you answer the phone?”

“What phone” I said, motioning around the car. “I don’t have a car phone”.

The ringing continued and I started, rolling over to turn off the alarm. Finally, I came to my senses and grasped the handset.

“This had better be important” I said. Judging from the light leaking through the gap in the shade, it was still early Thursday morning.

“Mr. Marlow, I have Bill Thompson from Accipter Industries on the phone. One moment please.”

Before I could defer to another time, I heard a rustling sound and the ending of a conversation.

“Mr. Marlow, Bill Thompson. I’m the COO here at Accipter Industries. We have a need to become more innovative and were referred to you. I understand you spoke with my associate, Tom, yesterday. I’d like to assure you of our intent to become more innovative. I hope you’ll forgive me for calling you at home, but this is the only opening in my calendar today.”

“Yes, Mr. Thompson. Your assistant informed me yesterday that you were unavailable for another several weeks, which is why I ending up speaking to Tom. Has the innovation requirement become more important?”

“Our CEO is pressuring my team to bring more innovation into our business, and met with me again yesterday to understand what we are doing to make our organization more innovative. This is a top priority for me.”

In my time I’d dealt with more senior executives who had gotten the real time innovation religion than I cared to count. Like new converts at a tent revival meeting, their fervency usually faded as soon as the reverend left town. I sat up in the bed.

“One question Bill” I said as I light a Camel and tried to wipe the sleep from my eyes.

“Yes, Mr. Marlow?”

“Who wins if innovation is successful in your firm? Who is measured on its success failure?”

This was my favorite line. If innovation was so all fired important, certainly it would be closely measured and someone would be measured on its success. If Bill Thompson felt innovation was urgent, was he also measured on its success?

The connection was poor and I was more focused on watching the smoke from my Camel float up to the ceiling, so I heard the mutterings and stammerings of a conversation on the other end, but I chose to ignore it. I was waiting for the definitive, which I knew wasn’t coming.

“Mr. Thompson” I said in my most sincere voice at 7:30 on a Thursday morning “As I told Tom, with all due respect, until your team decides that innovation is important enough to commit resources and those resources will be held accountable for outcomes, please don’t call me at home. I’ll be happy to work with your team to build the appropriate teams with adequate compensation and to align the team to your strategic goals, but that work doesn’t come cheap.”

When you’ve got nothing, you’ve got nothing to lose, especially sitting in your underwear, smoking a Camel talking to a completely unprepared prospect at 7:30, interrupting a dream that had much more appeal.

This response seemed to strike a chord – to make my employment by his firm even more important.

“Mr. Marlow – we need a man with your skills to help us become more innovative. Can you come down to our offices today?”

“Why the sudden rush, Mr. Thompson?”

“Call me Bill. Our CEO and the executive team just had Krishna, the management consultant, in for a presentation. He impressed upon us the need for innovation. We paid over $10,000 for a two hour presentation, and now we need to get moving to build out an innovation capability.”

“Krishna, huh?”

“Yes, he has that new book that’s so well received about innovation.”

“Have you or your team read it? Did you follow the recommendations?” I knew the probability of anyone at Accipter reading it was slimmer than my chances for another hour or two of shut-eye this morning.

“Well, no, but his presentation was very compelling and we need to act to catch up with Tynder Enterprises.”

Here’s the real nub. Tynder released a range of new products and had introduced a completely new business model over the last year, leaving many of its competitors slackjawed with its innovation and speed. The CEO of Tynder had been on the cover of many of the major business weeklies advocating innovation as the driver of his company’s success. Accipter would want to duplicate what Tyner had done over a period of two or three years in a very short timeframe, setting anyone who worked for them up for failure.

“What’s the expectation for the delivery of new products from your innovation program at Accipter?”

“Well, we’ve been tasked to get a new product to market through an innovation process in six months. It’s aggressive but we believe it is possible.”

“Really” I drawled. “Last I heard your product development process alone was nine months to a year. Do you have a good stock of ideas at hand?”

“No, but rather than deconstruct this problem now, can you meet with us today, say 10am?”

“On one condition” I said. “Only if you are in the meeting. I don’t have the time or patience to meet with associates or subordinates who can’t or won’t make critical decisions. I need to know there is commitment from the most senior levels.”

More muttering, more paper shifting. The temperature in that office was rising faster than hemlines in Paris.

“10am Mr. Marlow.”

“Call me Sam”.

I dropped the receiver back on the base and watched the morning sun etch rays on the far wall. Once again, asked the impossible by the unprepared. Saddle up, Sancho Panza, we’re tilting at 10am.
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posted by Jeffrey Phillips at 5:06 AM 4 comments

Monday, April 20, 2009

Co-Creating cell phones with LG

The product development team at LG, a leading cell phone developer, is conducting a crowd sourcing event to design the next iteration of mobile communication. You should get involved with this ASAP.

LG, in combination with crowdSPRING, is running a crowdsourcing event which will allow you, me and anyone who is interested the opportunity to submit ideas about the future of mobile communications - ultimately leading to new cell phones and communication devices. If you meet the requirements, you can submit your ideas about devices you'd like to see developed.

You can read more about the event at the crowdSPRING site set up especially for this event. Be sure to review the material on the site, and understand that LG is looking for the next iteration of cell phones, and has specific guidelines about what should be submitted and how the idea should be documented. Also, note that like any public submission, if LG decides that your idea is a great one, they own it. There are a number of prizes available, however, for the best submissions.

This crowdsourcing event is yet another example of a corporation asking its customers for ideas about future products and services. Akin to Dell's Ideastorm or MyStarbucksIdea, it provides a means for the average consumer to influence innovation and product direction.

I'm going to participate in LG's program, and I hope you'll consider doing so as well.
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posted by Jeffrey Phillips at 5:10 AM 7 comments

Friday, April 17, 2009

Pulp Innovation

Bill, the COO of a large conglomerate, woke that day with a start. The smell of stale cigarettes and cheap perfume wafted through the air. His breakfast - Cheerios and a banana to help watch his cholesterol - was interrupted by breaking news on CNN. His major competitor was on the air, announcing record profits and new products, attributing the success to innovation.

"I've got to get me some of that" he thought.

The phone rang in the reception area. The girl in front took the call and patched it through to me. "Marlow" I said.

"Mr. Marlow, this is Jan, Bill's assistant. He wants to meet with you as soon as possible. We've fallen behind our competitors and we need innovation now. When can you come?"

"Well doll, I'm busy with some brainstorming and scenario planning for another firm this week, but I can meet with Bill on Tuesday, say 9am."

"Oh, I'm sorry, but Bill is booked and can't possibly meet with you for two months. What does June look like for you?"

"I thought you said this was important" I said, clenching an unlit Cuban in my teeth, the taste of Old Granddad still coursing down my throat.

"It is - it's just that Bill has many other priorities. Perhaps we can schedule a meeting with one of his direct reports. I'll have Tom call you to set an initial meeting."

"Swell."

I'm Marlow, and I help firms get out of difficult situations. Not with a gun or a badge, but with innovation tools - brainstorming, idea generation, training and the like. Yes, it's a difficult, solitary existence, but one I like. Always the difficult, dirty work for me, turning around one firm after another after they've fallen off the innovation wagon, gotten too complacent and lost their way. Just like a damsel in distress, running out of options, looking for the quick return to grace.

Tom called and scheduled a meeting later that week.

"We need to get some new, radical ideas that can help us create new products and services" said John, looking slightly shaken after reviewing the stock ticker. "We've lost our edge, and we need help. What will it take to get some disruptive innovation in here fast?"

"No problem. I'll need a few of your best people who can break away from their work for a few months to examine the best opportunities, identify some unmet customer needs and work on scenarios. My team will investigate some trends and together we'll identify the best possible opportunities. How do you feel about cannibalizing your own products, or radically disrupting your market?"

"Mr. Marlowe, surely you are joking. That kind of investment in manpower is reserved only for major crises, and we'd need to be very careful about dramatic change. Can't we run a brainstorm or two and generate an interesting idea quickly? Do we have to make this a big commitment? Can we keep this under wraps from our employees?"

The fear hung off him like a two dollar suit. Cold flop sweat was already breaking out on his brow. I could see it would be the same as before, a joe who needed my help but wasn't ready to face the costs, in time, in dollars or in lives. I lit a Camel and blew the smoke in his face.

"Look buster, don't waste my time. Bill needs the big fix, and he needs it fast. That means people, and risk, and money. You don't get the big ideas by standing on the sidelines. You've got to be in the game, working the ideas. No big risk, no big reward. Are you in or are you out?"

John looked at me, more pale than a waning moon in an L.A. evening. I could see him totting up the costs in his head, balancing the risks and the rewards. I knew what was coming next.

"What if we gave you one or two people, for a week or so, for a few hours a day. Could you come up with something interesting, even radical, but safe and within our current business model? We want the big payoff, but the risk and the change to our business models are too difficult."

"Risk" I said. "You're already at risk. You competitor is stealing your market share like a smiling politician, out in the open. He's pocketing your cash and dating your daughter. Get a grip man. The way to disruptive innovation lies through the dark valley of big change, big investment and risk. You need a guide, a shamus to guide you through. It won't be easy or pretty, but we can get you to the other side."

I could see the doubt in his eyes. Asking a company man, a man used to soft work behind a desk, who never risked anything other than a lunch appointment, to take the news to his boss, well, that might have been too much for any mid level flunky. But the truth's the truth, spoken by a two bit innovation consultant or from the working end of a PowerPoint presentation.

"We'll get back to you, Marlowe. I can see that your approach will require a significant investment and force us to think differently. We'd prefer to use our existing methods and investments. We have our investors to think of, and a profile in our marketplace. Our customers and investors expect certain things from us.

"How's that working for you so far" I asked, already aware that their stock had fallen another 15%.

"It's not a question of how well our processes and models are working, it's a question of changing the culture to face the risk of change." By now the meeting was over. He had a hangdog sort of look, like a man who's been to the gates, peered into the mansion, but will never get to enter. A man who consoles himself living just outside the gates, knowing what it could be like on the other side but never daring to push through. Haunted by what could be, but not brash enough to demand it.

"Tom" I said. "Look at it this way. In a year or two, if you don't change, it won't matter. Your competitors will continue to innovate and your firm will be forced to leave this market or will be bought for cheap. Either way, you'll change. It will just be a question of change that you create or change that's forced on you. Call me when you decide that you want to lead that change".

I walked out of the office, past the gray cubicles where people who were already dead were talking in hushed tones gathered in the hallways. They watched me walk past, their eyes full of longing. They wanted the change, they wanted the risk, but at the end of the day only a few step out into that blind alley, guns drawn and looking for action. Most of the rest go back to their safe homes and comfortable offices, waiting for guys like Marlow to do the dirty work of innovation.

I left and entered the first cheap speakeasy I could find. The look of panic and the smell of fear of change clung to me like mud on my shoes. A stiff drink and a glance at Christensen brought me back to my senses. Building a safe innovation program, I said to myself, the definition of an oxymoron.
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posted by Jeffrey Phillips at 5:00 AM 42 comments

Wednesday, April 15, 2009

Innovation 2009 - the BCG Yearly Survey

Each year James Andrew and his team at BCG publish an insightful survey on the state of innovation. This year, as always, they've created an insightful report on innovation in larger organizations across the globe. They have the usual statistics - 64% of CEOs still rank innovation as a top three priority, and so forth. The BCG authors rightly point out that innovation being de-emphasized or refocused in some firms due to the state of the economy. All in all this is a good snapshot of the state of innovation. I suggest you seek out the report.

What I wanted to drill down into was a chart on page 11 of the report, entitled "What are the biggest obstacles you face when it comes to generating a return on your investments in innovation?" The usual suspects are here - risk averse culture, lengthy development times, a lack of good ideas. Since this is a survey, these factors are necessarily discrete and somewhat overlapping. What I'd like to do is combine or aggregate these factors in a way that makes sense to me, and hopefuly for you.

First, recognize that most of the people who responded to this survey are "C" level officers who think about innovation from a strategic standpoint and who see only the most significant issues or challenges, so to them these may appear as distinct issues which are not connected or integrated. With that in mind, let's consolidate the list of challenges:

  • Cultural issues - "Risk averse culture", "lack of coordination", "insufficient support from leadership"
  • Communication issues - "Lack of coordination", "ineffective marketing and communications", "insufficient support from leadership"
  • Compensation issues - "compensation not tied to innovation results"
We like to think of these concepts as the foundational building blocks for innovation. If the management team is not actively engaged and squarely behind innovation efforts, constantly communicating the importance of the activity and aligning compensation to the innovation activities and goals, it won't matter how good your ideas are, or how strong your execution capability is. Innovation won't happen often and won't produce the results you expect.

  • Leadership issues - "difficulty selecting the right ideas to commercialize"
This issue we split out separately, because successful innovation requires the team to work on what is important to the organization. To do so, the organization needs to understand the strategic goals, direction and intent of the organization. If the innovation teams don't understand the strategic goals or strategic intent, or that is intentionally vague or poorly communicated, then any idea appears to be a good idea, and prioritization and selection are exceptionally difficult.

  • Inputs - "not enough customer insight", "not enough great ideas"
If innovation is a process, then customer insights or understanding of customer needs and the generation of new ideas are the inputs. Again, having a good understanding of the strategic direction and intent is very helpful. Most companies don't have good customer insight, since they lack the ability or capability to perform scenario planning, voice of the customer or ethnography. None of this work is difficult, it's just very soft and qualitative and not aligned to existing cultures.

  • Execution - "lengthy development times", "inability to adequately measure performance"
This is a little like the boy who killed his parents crying because he is an orphan. To blame difficulties in innovation on the inability to design and build a new product or service is a bit disingenuous. After years of operational excellence, one would hope that at least the product or service design and development capabilities are optimized!

What the BCG research points out is that the groundwork for successful innovation - including active, involved leadership, cultural attitudes and compensation aligned to innovation activities - hasn't happened in many firms. Without these environmental conditions, innovation will struggle to succeed.
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posted by Jeffrey Phillips at 9:38 AM 1 comments