Monday, February 28, 2011

Middle School Innovation with Lego Mindstorms

Just a brief, proud parent moment today.

My son competes in the First Lego League competition with his middle school, building and programming robots to conduct specific tasks. In the 2010-2011 competition, the robots were supposed to do tasks associated with drug delivery and medical tasks.

The team competed in the North Carolina FLL championships and placed first overall. Here's some footage of their team.

Now the team and their ideas (nano-magnetic drug delivery) is competing for the FLL Global Innovation award, sponsored by the X Prize folks.

Check out the Magellan Wharf Rats page here and read about their idea and design.

Read their detailed submission and vote for their idea here

The First Lego League is a great opportunity for any kid to learn more about robotics and programming. Find out if there are programs near you, and if not, consider starting one.
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posted by Jeffrey Phillips at 7:25 AM 2 comments

Friday, February 25, 2011

Ambidexterity - the innovation skill we need now

There's an old joke about a not-too-swift basketball player describing his skills.  He told a reporter "I can shoot with my left hand, I can shoot with my right hand.  I'm amphibious."  Well, perhaps he is both amphibious and ambidextrous.  But what we need now in order for innovation to flourish are managers and workers who are ambidextrous.

By ambidextrous I mean that they can work on two different tasks or capabilities relatively simultaneously, that require very different skills and perspectives.  Over the last decade managers and front line workers have been singularly focused on efficiency and effectiveness.  It has been paramount to chase out variability and waste, to outsource and down-size, and implement Six Sigma and Lean practices.  As firms faced tough markets, the mantra of "doing more with less" wasn't a one time event, but a continuous chorus.  Thus, we now have managers who are very, very good at rooting out extraneous costs and implementing efficiency and effectiveness, just when the demands and markets will shift and place a far greater emphasis on innovation.  Rather than ambidextrous managers and employees, we have the equivalent of the fiddler crab, which has one massive claw and one very small, weak claw.  And now, after years of focusing on effectiveness and efficiency, building strength in the one hand at the expense of building skills and capabilities for innovation, we are left with a managerial class who have one predominant perspective, one predominant set of skills and virtually no aptitude or appetite for what's going to be important next:  innovation.

What to do?  If your organization has a lot of "fiddler crabs" - that is, people with skills overweighted toward efficiency and effectiveness, you need to focus on the three "Rs" - recruiting, retraining and rewarding.

Recruiting

Most managers identify and recruit people with similar skills, background and temperaments.  That means that your "fiddler crabs", people who have a deep focus in efficiency and effectiveness, are recruiting other people with very similar skills.  This is doubling down at a time when we need to balance the skills in the organization.  Most businesses need to recruit more people based on their insights, creativity and passion, to begin to bring more innovation aptitude and skill into the organization.  Start hiring people who have a slightly different perspective, who can bring new ideas and new techniques into the organization.  Think more about user design and experience.

Retraining

Most organizations I work with have more black belts than a karate dojo on a busy night.  These black belts have excellent skill employing Six Sigma, Lean, Statistical Control and a number of other efficiency and effectiveness programs.  They understand how to spot waste and variability and eliminate it.  What they lack are the skills to innovate.  Few if any understand and regularly capture trends or build scenario plans.  Most have never participated in customer interactions meant to spot new needs.  And let's not even start with idea generation, the famous whipping boy "brainstorming", or a host of other techniques.  Could your organization provide even a tenth of the funding it provides for Six Sigma and Lean to innovation?  Could we create a few innovation "black belts" among the staff?

Rewarding

I read on Twitter that Jack Welch now says that the only thing that will save US businesses is innovation.  Funny, he never seemed that interested as CEO.  What I do recall Jack Welch saying that is pertinent here is "show me a salesman's timecard and I'll tell you how he is compensated".  What Welch meant is that compensation dictates focus.  We naturally do what we are best compensated to do.  Most organizations today don't evaluate their managers and workers on innovation, and therefore these folks aren't compensated for those efforts.  However, everyone is compensated on reducing costs and gaining efficiency.  We need to refocus compensation, and it's close cousin evaluation, on innovation.

What will be very important in the near future are managers and line workers who are good at two important but very different skills:  helping the organization work efficiently and effectively while simultaneously developing and implementing new ideas that drive differentiation and growth.  It's no longer enough to have an "either/or" mentality, since that leads to strength on one hand and weakness on the other.  No, we need balance - ambidexterity in our workers, capable of achieving short term quarterly financial objectives and developing important long range ideas.
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posted by Jeffrey Phillips at 5:40 AM 3 comments

Wednesday, February 23, 2011

We don't need another hero

James Gardner, an innovator, blogger and author whom I respect, has a new post out today that talks about the need for a "new kind of hero".  He's referencing innovation heroes like Steve Jobs.  As you may believe, some Apple supporters and investors are in a bit of a tizzy, wondering if Apple can continue it's great streak of successful product and service innovations if Jobs is absent from the company.

James notes that most firms that rely on innovation heroes are usually successful in the short run, but don't create the capabilities to innovate sustainably over time.  After a few successes, the heroes, battered and bruised from the immense effort required to innovate in an environment that often isn't very supportive, burn out.  Frankly, most heroes, whether they are innovation heroes or imaginary superheroes or even just random people on the street who do heroic things will tell you not to follow in their footsteps.  The burdens are too high.

However, many firms hope that a hero will arise in their midst - an innovation hero.  That hero, when he or she comes, will overcome years of efficiency and effectiveness training and methods and processes tuned to achieving quarterly goals. The hero will accomplish the development of new products and services by rising above the day to day fray, working with little support and few resources to identify really important new needs and to commercialize products in less time than the firm does today.  This thinking, which belongs in a comic book, is more pervasive than you might imagine.  Too often external consulting firms, even the one I represent, offer our services as an external super-hero, one you can simply alert with the Bat Sign over Gotham, and we'll respond.  Even well-regarded and capable innovation consultants from the outside can't work miracles if the material they have to work with is the same material that blocks your internal teams.

James toys with the answer to the heroes problem but doesn't delve deeply into the answer.  We believe heroes arise when people have become complacent and cynical, when there don't seem to be any easy answers and everyone is locked into a common perspective.  It's not easy to solve these problems, and heroes are one possibility.  But there is another possibility, and James points at it - creating an environment and culture that welcomes and encourages innovation, and processes and methods that people understand that simplify the work.  Superheroes are only necessary when there's "no other way" and when only the abilities of a superhero can overcome the existing barriers.  What if the executives, whose participation and support are necessary, rework the culture and eliminate the barriers to innovation?  What if the common expectation within the organization is:  we will be innovative?  After all, isn't that why Schmidt is stepping aside at Google, to allow the wonder boys to rework the culture to encourage even more innovation?

In a culture that encourages innovation and provides the tools, methods and processes, anyone can innovate, so there's far less need for a hero.  Or, perhaps, everyone can be an innovation hero if they choose to be.
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posted by Jeffrey Phillips at 5:36 AM 2 comments

Monday, February 21, 2011

The importance of discovery to innovation

Last week I wrote about becoming a "fast discoverer", which was primarily about using experimentation to find new ideas.  What struck me as I contemplated the need for more experimentation is how frequently many businesses will ask for new ideas and accept them because "experts" said they were correct. As innovators, you need to experience these needs and participate in the discovery first hand.  Here's why.

One question I like to ask my clients is "what new insight have you learned and how did you learn it".  We can't create interesting new products and services without learning something new about customers or prospects.  If you don't learn something new, all you have to offer are the same products and services to meet the same needs.  Alternatively, you can decide that actually understanding needs is less important than creating and then solving a new need that you create.  This is why marketing is far more important that product development.  Rather than ask clients what they need and fulfill those needs, many firms prefer inside-out innovation, in which the firm creates new features and attributes and communicates the value of these new features to customers.  If you don't learn something new, you have to stick with what you know, or create your own reality and hope to lead customers to that reality.  So you can see why learning something new is important to innovation.

Next, if you did take the time to try to learn something new, how did you acquire the information?  In our very busy world, most product development and innovation teams outsource discovery to someone else.  These innovation teams work on internal issues while third parties, industry analysts and survey attendants conduct interactions with customers to discover new insights.  Then, a meeting is held to discuss what was discovered and why it is important and relevant.  Since the innovation team didn't participate in the discovery, it has to receive at face value the needs and wants that are reported to it.  This purely passive role means that the innovation team has no investment in the needs, nor have any of them witnessed the discovery of the needs.  Therefore they are at best neutral on the needs and their importance, and can find it easy to 1) reject needs that are real but don't fit their world view or 2) accept needs that don't actually reflect what the customers and prospects said. 

There's another problem when a team outsources discovery:  it has no emotional connection to the information presented.  If a team meets a customer in his or her home or business and sees the challenges and struggles with their own eyes, then the problem takes root and has meaning for the innovation team.  There's more to the idea than its existence, the team can assign importance and relevance to the problem or opportunity.  When handed the description of the problem in a PowerPoint deck, it is exceptionally difficult to generate any empathy for the customer or the need.

Innovators frequently talk about "passion" for an idea.  There are so many barriers that will block or delay the development of an idea that it's difficult to commercialize an idea that everyone believes in.  Opportunities or problems that weren't viewed or experienced by the team directly are easy to discount.  If you haven't "walked a mile" in the customer's shoes, you can't discover their problems and the importance and relevance of that problem or opportunity. 

Yes, innovation is messy, time consuming and difficult.  It requires skills and competencies that you don't regularly practice in your working life, but no skills or capabilities that you don't already possess or can't acquire quickly.  Innovation requires your full attention and deep immersion into the lives of your customers.  Discovery and validation of needs and wants is important - perhaps one of the most important acts in the process of creating a new product or service.  Yet most teams spend very little time in this step, and outsource a great deal of the discovery.  You'll never have much passion or investment in an idea until you've experienced the need that created it up-close and personal.  No third party can adequately describe a need, and if you outsource the discovery and insight work you'll never have the depth of understanding, empathy or passion for an idea, and that just makes innovation all that much more difficult.  You must do this work yourself if you hope to succeed at innovation.
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posted by Jeffrey Phillips at 6:08 AM 3 comments

Friday, February 18, 2011

Forget fast follower, become a fast discoverer with experimentation

One data point is interesting, two points define a line and three points are a trend.  Today in my Twitter feed were several articles and stories about the interrelationship between innovation and experiments.  When you see a trend, especially one that makes sense, it's important to call it out, discuss it and unpack it.

In MIT's Management Review, Michael Schrage is interviewed, primarily about his thinking on innovation and information technology, yet he ends up talking a lot about experimentation.  Schrage points out that the cost of experimenting has fallen dramatically, yet few firms use rapid, low cost experimentation effectively, and lays the blame for that fact at the feet of our educational system, which cranks out MBAs who demand deep quantitative analysis.  Schrage makes some other good points, especially about the cost of discovery.  At one time it was expensive for P&G to film how consumers used Tide in their laundry.  Now, they can simply ask moms and dads to send in video clips of their laundry practices.  The consumers can, and will, do the work for the company.  Here's a low cost experiment.  Send 50 consumers a video camera and a new product.  Ask them in exchange for the use of the new product to record their use and experiences with the new product.  Ethnography for free!

But I digress, since this was intended to be a post about experimentation.  In the Financial Times there's a blog post entitled Why don't we experiment.  In the post the article quotes Dan Ariely as noting there are two significant barriers for experimentation:  short term costs for long term gains, which for some reason seems a difficult trade-off, and the value we place on the insight and expertise of experts over our own experimentation and testing.  Far too frequently we choose to purchase answers from "experts" rather than simply trying and discovering ourselves.

Third, Michael Schrage (him again) interviews the head of Caesar's casino about the importance of experimentation and how it should be conducted.  At Caesar's they expect any new idea to be incorporated as part of an experiment, but a rigorous experiment including a control group. 

Experimentation is very intertwined with innovation.  Both require a hypothesis - if we do X, then we will get benefit Y.  Both require a lot of work for uncertain outcomes.  Both require rigor and careful planning.  And both are consistently avoided by turning to "experts" who provide an answer, which takes less time and exposes the executive to less risk.  After all, if the idea fails and the expert supported it, it can't be the executive's fault!

Good innovators are good experimenters.  The converse is also true. Firms that don't innovate don't experiment.  They wait for others to create a market and exercise a "fast follower" mentality.  Which would be a fine strategy, except that the vast majority of firms fashion themselves as fast followers, and few really are.

Why not reposition your firm as a "fast discoverer" using rapid, low cost experimentation.  Then, you won't have to pay experts, you will be the expert.
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posted by Jeffrey Phillips at 7:24 AM 5 comments

Thursday, February 17, 2011

Book Review: Brainsteering

As the number of books about idea generation and innovation grows, it becomes more and more difficult to differentiate the books and their messages.  Many, at first, paid homage to Alex Osborn and the other people who laid the foundations for business creativity and innovation.  Lately, it has become more popular to point out all of the shortcomings of the creative problem solving approach as described by Osborne, and especially lay all the problems of innovation at the feet of that favorite whipping boy, the ubiquitous brainstorm.

It should come as no surprise to anyone, anywhere, that a frequently used technique like brainstorming is often poorly applied or misused.  Even less surprising in today's environment is the discovery that some executives use brainstorming as a means to their own agendas, or that teams don't spend enough time preparing to generate ideas.  If these "revelations" are news to you, you've missed quite a bit of the commentary on innovation.

So, what are we to say about "Brainsteering", the new book from Kevin and Shawn Coyne?  The subtitle promises "A Better Approach To Breakthrough Ideas".  The Coyne brothers present Brainsteering - their title for their approach to idea generation - as if it were wholly new and completely different.  But the approach they describe is what most innovation practitioners would recognize as simply good idea generation methodology.

The Coyne brothers, like others who have written about idea generation recently, take great pains to identify all that's wrong with a traditional brainstorm.  They recognize that executives may have unstated agendas, and that different power levels in a brainstorm may result in pre-conceived ideas.  They point out that some people are more likely to dominate a discussion, while others for various reasons don't voice their ideas, or don't intend to share ideas at all.  Further, they point out that many idea generation sessions are poorly planned, and many participants don't understand the goals of the idea generation session they've been invited to.  So far this is fairly normal.

The Coyne brothers go further to state that much of Osborn's thinking and methods are incorrect. For example they point to research that shows that people are more creative individually than in a group.  The Coyne brothers spend some time "debunking" what they claim are the general brainstorming approaches advocated by the general innovation community, most of which pull from Osborn's methods.  However, the paper tiger they build would be unrecognizable to most innovation practitioners and many executives in Fortune 500 firms.  While some firms run poorly organized, poorly planned brainstorms that are driven at the whim of the executives or the most boisterous participants, those sessions represent a small minority of the brainstorming sessions that occur every day.  Further, there are strong rationales for group ideation, including the fact that most of the very creative people in an organization aren't always in tune with the needs and practical realities of bringing a product to market, and even if one person has a great idea, it takes many people to make an idea a reality as a product or service.  The brothers don't comment on these facts, and seem to miss entirely the growing emphasis on "open" innovation, which isn't mentioned as a way to generate and capture ideas.  In fact the book doesn't mention several of the emerging trends in innovation and creativity, open innovation being just the most important.  In fact the brothers don't define innovation, and don't adequately distinguish between concepts like "incremental" and "disruptive" ideas.  Further the brothers ignore other idea generation techniques, such as brainwriting, SCAMPER, analogies and so forth, that downplay the "dominance" issue.  It's as if experts in a field didn't pay proper homage to the existing craft, and try to repackage good practice as a new vision.

The "big idea" in Brainsteering is the idea that a session should be effectively scoped and framed with Right Questions (their capitalization, not mine).  These Right Questions are meant to ensure the team is focused on an important, relevant goal and the scope is well defined.  The brothers go on to demonstrate the use of logic diagrams to show how the scope and planning should be MECE (mutually exclusive completely exhaustive).  In other words, explore all the opportunities, especially the ones that aren't being explored by competition.

What's amazing is that the book presents this thinking as if it were new.  The brothers don't reference any leading thinkers from the innovation or creativity space, other than to debunk Osborn.  If they did any reading in the space, it doesn't show.  Individuals like Tim Hurson, who wrote Think Better, or Keith Sawyer who wrote Group Genius, have both covered the points the Coyne brothers make in great detail.  Of course Roger von Oech and other writers who focus on creativity have addressed many of these same issues.  A quick glance at Slideshare lists hundreds of PowerPoint presentations on good idea generation practice which will look very familiar to what the Coyne Brothers propose.  Here's a PowerPoint deck I placed on Slideshare in 2008, which points out the importance of pre-work, "framing" the idea generation session and excellent facilitation.  There's really very little that's new in this book.

The book is eminently readable and should appeal to a wide audience of innovation practitioners and people who are new to innovation.  The approach it lays out is a well-proven approach to help individuals or teams generate ideas and gain better ideas.  What is unfortunate is that the book doesn't acknowledge the fact that little in the book is new or different.  The book basically recaps good idea generation practices as if these practices didn't exist or weren't recognized, and completely fails to acknowledge much of the good work underway in existing innovation firms, and for that matter in many Fortune 500 firms.  I suppose that the reason the book ignores much of what is happening in the innovation and creativity space and claims to introduce a completely new and different method is that will distinguish the book from others on the innovation shelves. 

So overall a very readable book that claims to present some radically new thinking but in reality documents what most of us in the innovation and creativity space will recognize as best practices for running an idea generation session, which manages to completely ignore several rapidly growing trends in idea generation and management, the most important of which is "open innovation".  At the minimum it would have been great for the authors to acknowledge much of what is being done well, every day in many firms where idea generation is concerned, or to have tipped their hats to all of the great work and research that has gone before them, that their work directly or indirectly is based on. I think Think Better (by Hurson) offers a better model for facilitation and Group Genius (by Sawyer) is better at group creativity.
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posted by Jeffrey Phillips at 6:58 AM 4 comments

Wednesday, February 16, 2011

Innovate like a newspaper article

When I was coming along in school, back in the dark ages when we still used the wide tablets and the short, fat pencils, we were taught a fair bit about writing.  Unfortunately, little of that learning gets reflected here.  One of the items we were taught was how to write a great introductory newspaper article.  As I recall, the first article had to include all the major "Ws" - Who, What, Why, Where, When, and of course How.  I can't tell you how frequently we use this same thinking when working with a client to define an innovation effort.  Or how often those same clients gloss over or forget what they learned in elementary school.

The Five W One H way of thinking is old school, but it is an exceptionally useful device.  You may have seen it used as an idea generation technique, which it can be, but that's not what I'm presenting it for today.  Rather, I'd like to use it as a way to frame an innovation effort.  Far too often teams make assumptions or think that someone else has thought through these items.  The innovation teams are so eager to start with what seems to be the "real work" of innovation - generating ideas - that they neglect all of the strategic framing.  And as any good Confucian scholar can tell you, everything important happens at the beginning.

So let's take these in order and understand what we should know before we start.

What:  What are we trying to accomplish with the innovation effort?  What are the goals and measures we'll use?  What risks are we willing to face?  What sacred cows should we avoid?

Why:  Why are are innovating?  Why not keep doing what we are doing?  Why does an innovation effort make sense?  Why innovate around this particular issue or opportunity?

When:  When do you want results?  When can we have the people and budgets we need?  When can we get started? 

Where:  Where should we focus our efforts?  Where in the future is our target?  Where are the prospects and customers we should consider?

Who:  Who is the financial sponsor?  Who will adopt or commercialize the ideas?  Who is the ultimate customer of our ideas?  Who is the final arbiter in case of disagreements?  Who will staff this project?

How:  How should we work?  How will the existing tools and techniques be helpful?  How can we use new techniques?  How do we deploy innovation in our business?

What really happens

If we were good at remembering elementary school English class and applying the techniques, we'd ask these questions and wait to get good answers before we start an innovation effort.  In my experience, having witnessed good projects and not so great projects, many projects that struggle fail to ask and understand some of these questions.  Either they assume someone else has the answer, or the team is in too much of a rush to get started, or they doubt that anyone has the answer, so why waste time.

What will happen if your team hasn't asked these questions and gotten answers, or failing that made up your own answers, is that someone in authority will question why the work is being done, or who authorized it, or how you are using tools or techniques.  Without a good answer, your entire project is delayed or placed at risk.  Innovation is a very easy project to derail, because it's different and risky, so entering a project with unknowns is simply asking to be derailed.

Document everything

Ask, often and repeatedly, for good answers to the Five Ws and one H at the beginning of the project, and confirm them occasionally during the project.  This ensures you have a firm grasp of the scope and commitments necessary for the project to be successful and can defend your team from the inevitable attack by someone or something that is threatened by the innovation effort.  You will be questioned, and your ability to respond quickly and precisely, with evidence, is important.  Even if you can't get good answers, answer the questions yourself as best as you can and seek validation.  Some definition, even if your team develops the answers, is better than none.

While this may seem like a lot of work up front, it will dramatically simplify your efforts downstream by framing the problem effectively and providing the means to answer those individuals, or systems, or policies that will seek to derail or distract down the road.  Further, having these answers will help the team when it comes time to decide which ideas are valuable and how to evaluate them.

The tools you need

As the famous saying goes - All I needed to know I learned in kindergarten.  For innovation, that may not be quite right.  You may need some tools from fifth or sixth grade English class.  Don't be bamboozled by all the tools and techniques available for innovation, and don't be shy about asking these important questions before you start.  The tools are simpler than you've been led to believe, and the questions you ask up front will save you significantly down the road.
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posted by Jeffrey Phillips at 6:04 AM 5 comments

Tuesday, February 15, 2011

Innovation: The last people-centric process

It's really astonishing to realize how little most firms understand about innovation, especially the fact that people are paramount to innovation success.  In the title I've made a fairly definitive statement.  Innovation is the last people-centric process, and yet we starve innovation efforts of our best people and chip away at the time dedicated to innovation even of the people who want to participate.

I'll claim innovation is the last people-centric process because most firms don't have a well-defined innovation process.  If you think carefully about how most businesses work, they are organized around well-defined business processes, some of which are named.  The procurement to payment process manages how a business acquires products and services and how it pays for them.  The order to invoice process manages how a business receives customer orders for goods and services and how it collects payment for those products and services.  These are well-defined, well-understood processes that have been optimized.  People who "belong" to these processes understand their roles and responsibilities, and a software solution, usually an ERP or financial system, supports and enables the process using workflow.  These processes are the lifeblood of the company, they are well-documented and carefully preserved.  People in these processes are there to ensure the process works as designed, to manage exceptions and to defend and protect the processes from disruption.

So, what's the most important activity in a business that isn't defined as a process?  Innovation.  Most innovation, if it happens at all, happens in an R&D lab or as part of new product development.  While most product development teams have well-defined "stage gate" programs to help develop and commercialize a product, they don't have well-defined and organized idea generation and development methodologies and processes.  But the lack of a defined process isn't the only reason that innovation is a highly people centric process.  There are several other reasons.

First, people generate ideas.  For the foreseeable future, people will be much better at generating ideas and spotting opportunities than machines.  While we may use automatic ordering to place a new purchase order or use automated triggers to pay invoices, people are required to generate ideas.  There's no automation and no regularity to creativity and the ability to spot ideas.

Second, people place ideas into context.  We need to understand the future needs of our markets and the unmet or unarticulated needs of our customers.  No machine, no automated process can do that work.  Only people, well-trained and highly engaged, can do that investigation and synthesis.  Good ideas that don't solve important problems are useless.  Customer needs that go unresolved by new products are missed opportunities.  Nothing about this can be automated - well-trained people who understand their roles and responsibilities are critical.

Third, people are necessary to evaluate, judge and develop ideas.  While we may seek to develop a set of criteria and have a "system" to evaluate and select the best ideas for development, there are too many subtle factors and too many unknowns for a system or process to do this without the intervention of people who exercise their judgment and their "gut".  We may long for a systematic, computerized method for idea ranking, evaluation and selection, but evidence shows innovation is far from that probably unreasonable goal. 

The fact is that people play a disproportionate role in innovation when compared to any other important function.  That's because, unlike many other processes, the work can't be divided into simple tasks that can be automated by a computer or accelerated by inanimate processes.  So here's the important question:  if people play such a vital role in innovation, why do we starve innovation of the best people in the organization?  If people are so vital to innovation, why do we intentionally limit the amount of time we allow for innovators to work?

Further, recognizing that people are the most important input to an innovation process, why don't we provide the necessary tools, training and leadership for those teams to be successful?  Why don't we define a consistent methodology that they can follow to improve their chances of success?

Over the last twenty years, through business process re-engineering and the implementation of Enterprise Resource Planning and management systems most businesses have optimized most of the major processes in the business.  That work has led to greater efficiencies and lower costs.  However, most businesses are still confronted with the facts that 1) innovation is important and 2) it is a very people-centric process while 3) people cost too much and innovation is too risky.  So many businesses pretend to innovate by placing people who are available but not the "best" on a short-lived innovation effort.  This contradicts everything we know about innovation success.  Why don't most businesses place at least some of the same emphasis on improving the innovation process (and people involved) the way they did on optimizing the other important processes?
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posted by Jeffrey Phillips at 6:59 AM 4 comments

Monday, February 14, 2011

Innovation and the curse of knowledge

Perhaps one of the most significant barriers to innovation is what we think we know, or "facts" that we are confident are correct.  As several cognitive experts have demonstrated, the more you know about a topic, the more difficult it becomes to imagine not knowing what you know.  In other words, the very knowledge and expertise that you have in a field often makes it difficult to create something radically new and different. 

Think about this for a minute and the evidence is all around you.  When we gather to generate ideas, typically there are a number of experienced people in the room, usually with a lot of experience in the topic you are interested in.  Yet many of these sessions end in rather incremental, ho-hum ideas, and little that's really radical or unique.  Often that's because the people in the room are so accustomed to their perspectives and share so much knowledge that they literally limit their thinking to what comprises their knowledge.  They are hemmed in by what they know, and further limited by what they are willing to admit or suggest in front of other experts.

It's been recommended that you should incorporate people with different skills, experiences and knowledge in an idea generation session, but if some subset of that group is seen as the "experts" their implied knowledge damps down idea creation, as everyone seeks the experts acknowledgment and approval.  Only a group with very strong personalities unafraid to challenge the orthodoxy can regularly generate disruptive ideas.  This is why so many "disruptive" ideas come from firms or individuals who aren't "in" a particular market - they aren't cursed with the knowledge of the market.

When your firm seeks help with innovation, don't ask a consultant if they have deep expertise in your industry or technology, because if they do they are likely to share the same curse of knowledge as your internal teams.  If you want help stretching your team, introduce third parties and consultants who have little or no knowledge of the "facts" of your problem or industry, and who are broad thinkers willing to generate ideas that may seem a bit heretical to your internal teams.  No competitor is going to steal your market by copying what you do exactly.  Disruption happens when a competitor spots an opportunity or offering that the firms in the industry are blinded to due to their "knowledge".  To innovate successfully, you've got to get outside your frame of reference and your knowledge.  Otherwise you simply tinker with the existing models, rather than create new offerings. 
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posted by Jeffrey Phillips at 5:34 AM 8 comments

Thursday, February 10, 2011

The hazards of binary thinking and poor scope definition

I was talking recently with a client, who was describing a problem in their business.  Due to new regulations, the client wasn't going to be able to charge fees on certain transactions, or the fees were going to be far lower.  In response to this, a team was formed to consider how to respond.  The inevitable response was - let's create new fees for other services.  My client had called me to ask:  how do we get the team to think differently - beyond fees?  That's not to say that fees aren't valuable, just that all the team was doing was switching one set of fees for another.

There are two thinking issues here that impact innovation:  the scope of the problem you define, and the range of thinking you allow.  In this case, the team defined the scope of the problem as "replacing lost fees".  That was the only scope, so the ideas were naturally focused around ways to generate new fees.  The "range" of thinking and the potential options were limited by the scope, and by the very nature of the problem.  This limited approach creates very little new thinking or interesting ideas.

My client and I pondered for a while, before one simple idea became crystal clear.  The scope of the solution was so narrow that the only logical response that was "in scope" was "create new fees".  What if, I said, we were to suggest to them that they try again, only this time change the scope of the problem.  The only thing "out of scope" in the new brainstorm would be - wait for it - "create new fees".  That would force the team to think differently and get out of its "paradigm".  It would also remove the barrier of binary thinking, which looks like this:  legislation reduced fees in one area of my business, so my response must be to increase fees in another area.

Far too frequently we find that our clients struggle to generate new ideas because their problem scope or problem definition is too narrow or too rigid.  The scope then keeps the team cycling through the same issues and same ideas, and doesn't allow any new thinking or ideas.  This is because there's often a knee-jerk reaction to replace like with like - remove a fee somewhere and I'll add one somewhere else.  Instead, conduct several very rapid brainstorms where you shift the problem statement.  Perhaps your first brainstorm should be in the context that you'd normally follow.  Then, your next brainstorm should radically change the problem statement or expected outcome - what if "create new fees" was out of scope entirely?  Perhaps a third problem statement or scope could be "if we could start from scratch, what would we do?" 

Getting locked into one perspective and one way of thinking, one binary "This for That" approach is dangerous, since it appears we have exhausted a lot of options, when in reality we've only investigated a very few possibilities.  This is why innovators talk about divergent and convergent thinking.  It's a rare team that expands the scope and does the divergent thinking.  Most simply leap to the convergent thinking as quickly as possible.  And that's another reason so many ideas seem so humdrum.
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posted by Jeffrey Phillips at 8:31 AM 3 comments

Wednesday, February 09, 2011

Absolution for Innovation Sins

One of the reasons I've grown to love Twitter is that I get a broad sweep of opinion about innovation in a very short period of time.  One quick scan of Twitter lists give me updates on what people I like and respect are writing and connecting to about innovation.  One of the links today led me to Helen Walters article entitled
Ryan Jacoby: The Seven Deadly Sins of Innovation.  For those of you who know me, I had no choice but to respond to what Jacoby says, at least as documented by Walters.  There are two reasons for the response.  First, "sins", myths and other obfuscations that innovators suggest only cloud the innovation picture, making it more difficult, not less difficult, for people to innovate.  Second, while Jacoby's points are correct, they really only address a very small perspective of innovation, not the entire picture.

Jacoby's identified "sins" about innovation have to do with the fact that innovation is not an internal, tightly organized and self-evident process, but an experience that requires exploration, learning and engagement with customers.  I think to that extent he is exactly correct.  Most firms that attempt innovation usually start with what they know, and they rarely if ever seek out new information or new context.  So far, so good.

Jacoby goes on to make the following points:

  1. Thinking the answer is "in here rather than out there" - a complaint that suggests, correctly, that too many firms have an inward focus when an outward investigation is needed.
  2. Talking about it rather than building it - keeping innovation abstract rather than plunging in and creating rapid prototypes that create a representation of the idea, which sparks new learning
  3. Executing rather than exploring - doing "stuff" rather than learning and discovering stuff.
  4. Being smart - the curse of knowledge and the fear of failure.  Being afraid to ask questions.
  5. Being impatient for the wrong things - not understanding that innovation works to its own drumbeat, not the quarterly or annual plan timeframes that executives may wish for
  6. Confusing cross-functional with diversity - the point here is that if everyone on the team is from your company, you may have a cross-functional team but you probably don't have diversity of thought or perspective
  7. Believeing the process will save you - relying on a process rather than on good strategy, clear thinking

OK, I buy all of this, but nothing in this analysis suggests that innovation thrives without a process.  If you do engage with your customers, and do rapid prototyping and explore rather than executing and so forth, you are still doing a set of activities or steps and you need people to understand what to do and how to think.  Sorry, but that's a methodology or, god forbid, a "process".  It's just that Jacoby has introduced some external thinking and new concepts into the process.  Why decry a process when you ultimately reintroduce a methodology?  Let's not confuse poorly executed innovation efforts that were internally focused and poorly managed with failure of an innovation "process".

Jacoby is again half correct - a process won't save you, but it certainly won't HINDER you and may speed you on your way, if it is developed and supported correctly, and people understand their roles.  Jacoby assumes that people in organizations understand HOW to innovate and the tools and techniques, and that innovation process simply constrains them.  In our experience, consultants often understand how to innovate but corporate personnel need paths or methodologies to follow.  They may follow inadequate ones (which is really what Jacoby is suggesting) or processes and methodologies that create value.  We at OVO believe we deliver the latter - processes that include scenario planning, customer engagement and observation, rapid prototyping, but also include training people on workflow and helping them understand how to evaluate and select ideas.

Jacoby has created an inadequate "straw man" of poorly defined and constructed "process" and has ripped it to shreds, which probably wasn't too difficult.  Any firm that attempts to innovate without engaging customers, exploring possibilities, rapidly testing ideas and so on is likely to fail.  But these factors don't preclude a good, consistent innovation method or process which helps clarify the work, direct the flow of the project and ensure people understand the tasks they need to undertake.
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posted by Jeffrey Phillips at 5:41 AM 3 comments

Monday, February 07, 2011

Why disruption is the preferred innovation outcome

I've given some thought lately to the idea that there are three types of outcomes that any innovation can create.  These three "outcomes" are cannibalization, disruption or market creation.  In this blog post I'd like to explore each of these and discuss why none of them seem all that attractive, but any one seems better than the others.

Regardless of your idea, it will have one of these three outcomes - cannibalization, disruption or market creation.  Cannibalization is simply replacing an existing product with a product or service that's far better than what you produce today.  Disruption, however, is the typical goal of many innovation efforts.  That is the attempt to create a product or service that disrupts another market or customer segment rather than your own.  Finally, market creation, the "holy grail" of innovation, introduced to us by Blue Ocean Strategy, seeks to create an entirely new "blue ocean" of customers.  Since these customers aren't being served, there is no cannibalization or disruption.

From the viewpoint of any senior executive, innovation goals are focused on what we can do to grow revenues and create distinctive products and services in the marketplace.  That viewpoint is constrained by the value of existing products and services and the consistent revenue they generate.  In this regard, senior executives generally expect innovation to impact another firm or another industry, not the existing set of products and services.  Cannibalization is frowned on, since it disrupts an internal product offering that is generating revenue and profits now.  While the mantra of "cannibalize your own products or someone else will" may make sense to us innovators, it is hard to sell to executives.  Cannibalization is probably the easiest innovation to do, because we already understand the issues, needs and challenges, and already participate in those markets, but is the hardest to accomplish, because of the internal constraints and pressures.

Since the focus is on disrupting some other firm's products or services, the "disruption" approach is the most typical.  That approach walls off the firms own product offerings and seeks to disrupt someone else's products or services.  However, this is a difficult reach for many firms, to create a new product or service that solves a problem for a group of customers or a market 1) already served by another firm that 2) the disrupter may not fully understand.  While disruption seems obvious on the surface, it can be hard to do since the firm doesn't have nearly as much expertise about the market it seeks to disrupt as does its competitors.  While disruptive innovation is the most common goal, it is also the most often dissatisfying.  A disrupter reaching into another market has many external barriers that can trip up a new offering, from clear understanding of customer needs to appropriate marketing channels. 

The "holy grail" of innovation is establishing a "blue ocean" of customers who were unserved previously.  This typically doesn't cannibalize existing products since the customers weren't served by the firm, and often doesn't disrupt competitors who weren't aware of the market or its needs.  The firm that identifies and serves the market first can establish itself as a dominant player, but eventually other firms will enter the space and innovation will take one of the former types (cannibalization or disruption) in that market from that time forward.  While the concept of identifying and serving a new segment sounds enticing, it too is exceptionally difficult.  Most "blue ocean" examples are firms that intentionally designed business offerings in opposition to the established norms and whose business models are quite different from their competitors.  That means that many firms that open a "blue ocean" often have little stake in the existing markets and can resist market pressures to conform to standard industry practices. 

Frankly, all of these outcomes are valuable, but none are easy.  The easiest, cannibalization, is often the least palatable internally, as it impacts existing revenue and reduces the power and control of other executives.  Disruption, the most palatable, asks the firm to innovate (create new products) in a market or space that's already competitive and where the firm often has little experience.  This means the firm enters a new space, in new markets, with new products where competitors are already active.  These "new" factors compound the likelihood for failure, or at least for ho-hum products.  Creating a new "blue ocean" is very attractive, but exceptionally difficult, since it means having a great insight into customers that an industry or firm have overlooked, and offering products and services with a business model that's different from the established norms.  Those factors are exceptionally difficult for larger, established firms.

So, most executives will resolve not to cannibalize their own products.  While the easiest innovation outcome, it has the most near term negative financial impact, not to mention the political and turf implications.  Most executives, while they pine for "blue oceans" aren't willing to change their business models and offer radically different products to untested markets that haven't been validated.  So, the predominant outcome sought by innovators remains disruption of another firm's or industry's products or markets.  Disrupting another market offers the least best outcome of the three but the one with the least risk and uncertainty.  By disrupting someone else's market we believe we protect our own, and we don't place new products and services into untested and unvalidated new markets.

Cannibalization is ruled out because it distracts from current revenue and creates anger and dissension in the executive ranks.  Creating new markets is ruled out because the "blue oceans", while attractive, are unproven and require different offerings and business models.  This leaves disrupting another existing market or segment as the only outcome many firms will choose to pursue.
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posted by Jeffrey Phillips at 6:13 AM 5 comments

Wednesday, February 02, 2011

Who do you need on your side to innovate?

I was glancing through my Twitter feeds looking at all the good ideas that flow through the many people I follow.  One in particular caught my eye, which was about How to Lead a Business Revolution.  Having grown up a fan of Thomas Jefferson and many of the other "founding fathers" who had the vision, and the guts, to challenge the status quo, I'm always interested in what helps a revolution succeed.  And make no mistake, innovation in many firms is a revolution.

Thomas Stewart, in the article linked above, notes that a senior GE executive told him that you need three constituents on your side to lead an effective revolution:  the broadcast stations, the schools and the police.  In less radical terms more suited for innovation, we can create analogies for these groups.  For innovation to succeed, you need excellent communication, new and extensive education and to win the hearts and minds of the people who reinforce the "rules" that exist.  How innovation differs from revolution in many firms is that we are trying to shift the dominant thinking to a new way of thinking, rather than deposing a head of state.  In fact, innovation can be a revolutionary act imposed by a senior executive.

Let's consider these three factors in slightly more detail.  For innovation to succeed, you need good command of the communication messages and channels.  Today, most people will argue that they receive far too much communication in various forms, but the communication has little meaning.  Too many firms stuff all available channels with mass quantities of "messaging" that say very little.  Innovation requires changing mindsets and attitudes, and ensuring people we are seriously committed to change.  That means the goals and purpose must be effectively, and consistently, communicated.  That's difficult in an era where people believe there is too much communication.  I think the best way to provide innovation communication is by whatever means causes the most "commotion" in your organization.  Perhaps your CEO is notoriously reticent.  Have him or her film a video and distribute it on your intranet site.  What's important is a consistent, continuous and clearly articulated messaging campaign about the importance of innovation, and its permanence as a strategy.

Second, consider education.  We have trained people how to think about their businesses and the tools and techniques to apply.  Now we seek to encourage them to also incorporate innovation in their daily lives.  While we've given great focus to education and training around their business functions, communication, leadership, teamwork and a host of tools and techniques, many innovation efforts assume that people have the requisite knowledge and skills to start and sustain an innovation project.  Few people are innately good corporate innovators, able to do all of the important tasks associated with innovation.  If you want more innovation, teach people the tools and have them apply them in real settings.  Revolutionaries who don't understand the philosophies are just anarchists.  Innovators who don't understand the tools and techniques will simply frustrate everyone.

Finally, win over the "hearts and minds" of the people who control the processes and the rules.  In any revolution, as is now evident in Egypt, who controls the police and the army wins.  In a business, we don't have police or armies, but we do have powerful constituents who must come aboard for innovation to be successful.  Those constituents are the people who control the funds and the people who control the processes.  If you can't bring these people onboard and change the way they think, and especially the way they plan, then innovation won't be successful.  More likely, they need to 1) hear and understand the communications and 2) receive training in new tools and techniques to 3) apply the funds and the processes to innovation goals.

Messaging, education, hearts and minds.  A recipe for cultural change, revolution or successful innovation.  And all three are necessary.  Communication without education is fruitless.  Education without changing hearts and minds results in frustrated people who "know" better but can't deliver.
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posted by Jeffrey Phillips at 6:25 AM 3 comments