Thursday, August 30, 2012

Signals for innovation speed and frequency

How often / how fast should we innovate?  This is a question our clients ask us quite frequently.  What I like about the question is the realization that the firm must innovate more than once.  What I dislike about the question is the often (implied) whining that suggests that repeated innovation is difficult, time consuming and distracting.  So herewith, a short rubric for how "fast" or how often you should innovate.

Driver shifts

The first analysis should contemplate what I call the driver shift.  That's simply a way to describe the factors in your industry that are changing most rapidly.  In many industries the driver is technology.  For example, if your business has anything to do with technology, especially semiconductors, you'll be aware of Moore's Law.  Moore's law basically states that the power of computing will double every two years.  Of course, given the nature of competition, you'll need to be innovating on a far more frequent basis in that industry.

Other firms may face slower "driver" shifts.  For example, many regulated firms may not see regulations change as quickly as technology firms see technologies change.  But when regulations change, they often change in very dramatic ways, so the ability to respond as the regulations change, and repurpose or restructure an organization to respond to rapid, disruptive regulation change is also important.

Business Models, Channels

A look at NetFlix should tell you something about the nature of innovation and the required frequency and speed.  Netflix was busy disrupting Blockbuster with its movies by mail offering.  Suddenly the leader in the space, it was immediately threatened by streaming movies delivered on a variety of platforms.  Netflix stumbled in its business model transition from mail to streaming, but did not allow itself to become complacent as the channels changed.  Note that the end result - consuming movie content - did not change.  What changed are the distribution channels.

Business models and channels, which once seemed relatively fixed, will undergo tremendous change due to the pervasive internet.  We are on the cusp of a completely new delivery mechanism for a wide variety of products and services.  You'll need to innovate as rapidly as the internet introduces new business models, channels and customer interactions.  And that will be fast - the rise, and rapid fall - of Facebook should attest to that.

Replacements, Substitutes

Yes, this is a classic Porter "Five Forces" assessment.  Why?  Because it works well.  Even in industries that don't see significant driver shifts, that are immune to technology advancements or rapid changes in business models or channels, innovation is happening.  It's happening from new entrants or disrupters who offer excellent services or features that replace or substitute for the existing offering.  Banks will be displaced by many smaller offerings and features from firms like Paypal, Mint, peer to peer lending and virtual wallets.  Being isolated from change doesn't inoculate your firm from innovation, it simply creates blinders to innovation right under your nose.

Further, disruption never happens from within an industry - the key players have too much at stake to disrupt their own businesses.  Every major industry acts like an oligopoly.  Incremental innovation is all that should be expected internally.  Disruption will occur when a new entrant forces the entrenched participants to change.  Thus, a slow, incremental innovation program within the industry will be overthrown by rapid, disruptive innovation from an external actor, a new entrant or someone offering a substitute.  If you are resting quietly in your safe cocoon, isolated from the disruptions and speed of innovation that is prevalent in many industries, don't get lulled to sleep.  Innovation, and the accompanying disruption and speed will spill over into your little niche.

Customer Expectations

Let's say you are lucky enough to be isolated from rapid technology shifts, there are no new business models or channels and few new entrants or substitutes.  You'll be congratulating yourself about the minimum level of innovation and the slow place of change required in your space.  And you'll be whistling past the graveyard.  While you may like to assume you are isolated from the need for innovation speed, your customers have higher expectations because they are aware of what's going on in other industries or markets.  Just as the citizens of the Soviet Union weren't fooled by Potemkin villages and wanted the benefits of advancement that western citizens had, customers in your market or industry are aware of rapid change and innovation in other markets and will demand it in your industry as well. 

Which is the driver?

The question isn't "how fast or how frequently should we innovate" but "which of these drivers has the most impact to our business, and how do we align our innovation speed and frequency to that factor"?  You'll need to innovate at least as rapidly as the major driver in your business, and if your business is impacted by several of these factors (and few aren't), these factors have a multiplier effect when they are imposed simultaneously. 

Stop thinking about how frequently or how rapidly you should innovate.  Your internal signals and decisions are too risk averse to give you good advice.  There are plenty of external signals you can learn to read and interpret.  You know this already, it's just the information available is hard to believe.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 5:40 AM 3 comments

Wednesday, August 29, 2012

Innovation is always and everywhere a cultural phenomenon

Yes, I'm stealing an idea from Milton Friedman, one of the most influential economists of our time.  Friedman stated that inflation is "always and everywhere a monetary phenomenon" meaning that the money supply dictates inflation far more so than rises in prices.  This was counter to prevailing theories of price inflation, which was thought to be solved by governmental fiscal policies.  His ideas, controversial in the 1960s, have come to be viewed as the prevailing theory.

What's this got to do with innovation?  I'll make a parallel claim:  Innovation is always and everywhere a cultural phenomenon.  In our current business thinking we tend to celebrate what I'll call the "big man" theory of innovation, that innovation is driven by powerful visionaries.  While that story is easily told by journalists and is palatable to business people, it is flawed.  While some executives may lead their companies to innovation gains, basing innovation success on one visionary leader is uncertain at best.  Executives rarely stay long in any position or remain long in any firm.  As they gain success they increasingly lose touch with customers and markets.  While Steve Jobs is the constant refrain of those who advocate the great man theory of innovation, he is the exception that proves the rule.  For every Steve Jobs, the recognized visionary innovation leader, there are dozens of firms that are innovating successfully, over long periods of time, with no visionary leader.

What do firms like P&G, 3M and W.L. Gore have to tell us about innovation culture?  Everything.  While CEOs have come and gone, these firms have demonstrated decades of innovation.  That success is based on the corporate culture.  And consider Microsoft, which over the last decade has lost market share and its ability to innovate.  What was once a hungry innovator has become a firm focused on vicious infighting and protecting older technologies.  Microsoft's culture has been shaped in some degree by Steve Ballmer, whose reign at Microsoft was covered in great detail by Vanity Fair in an article titled Microsoft's Lost Decade.

Or, look at the issue through a size and experience lens.  Most entrepreneurial firms are innovators, trying to create a new market or disrupt an existing market or service.  Yet, as they grow, their cultures and focus change.  Larger firms are far more concerned with defending their markets and delivering consistent results than they are with innovation.  The focus changes, and in many cases that shift in focus changes the attitudes and perspectives of the culture.  This does not mean that only small firms can innovate, and large firms are left to squeeze out efficiencies.  It simply means that what the culture rewards and reinforces is what become the primary purpose and intent of the firm.  Innovation is a result of the focus, attitude and intent of the firm, its executives and its culture.  But since the average tenure of a senior executive is often less than five years, culture has more resiliency and staying power than the ideas of intent of a leader.  An executive can influence an efficient firm to become even more efficient, but rarely can he or she influence an efficient firm to become more innovative.  Often the culture will simply wait out his or her tenure, and return to the safety and security of known processes.

We often say that culture eats strategy for breakfast, but we need to think seriously about how powerful culture can be.  In many instances, no matter how much an executive team may want innovation, cultural attitudes and behaviors can overcome the short term demands.  The inertia, resistance to change and fear of risk and uncertainty is simply too great.  Therefore, any firm that is a successful innovator has a culture that supports and sustains innovation.

The question then becomes - if culture is so important, and so difficult to change, can we change it and is it worth the effort?  I think the answer is yes, it can be changed, slowly and surely, and yes, you must change your corporate culture to embrace more innovation, for one simple reason.  The era of the long product cycle is done.  Finished.  Kaput.  Your organization must move faster, with less information and greater uncertainty to create new products and services in less time, and do so more frequently.  If you culture resists this notion, you will simply not be able to compete.  This is not an option, or a method to steal a march on your competitors, it is the minimum you'll need to do to stay afloat.

Will you allow an intangible force to block the ongoing success of your business, or will you harness that force to make your organization a font of new innovation?
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 6:22 AM 0 comments

Thursday, August 23, 2012

Lock in perspective defeating innovation

I'm just back from two weeks in Shanghai, leading innovation workshops for several firms.  My first trip to China and I hope to return.  There is clearly a lot of innovation underway in China, as businesses grow and expand, and begin to innovate not just for western markets, but also for the local market.

But I experienced in one workshop something that I have begun to call the "lock in" mentality, and this experience is not isolated to China, or to a specific business industry or function.  What happened is this:  when asked to imagine a disruptive innovation, people respond by talking about cutting costs 10% as opposed to 5%.  When asked again to stretch their thinking, participants talk about growing revenue from existing products by 5%.  After a range of creativity exercises, divergent thinking approaches and some disruptive tools and techniques, the ideas aren't stretched any further.  While everyone in the room will admit that new ideas that stretch the market, or disrupt an adjacent market are critical, every idea is incremental at best.  There's a huge gap between the need for interesting, disruptive new products and services and the willingness to generate even ideas about disruptive products.

I've called this the "lock-in" effect.  Unintentionally, many teams have simply not allowed themselves to think creatively or expansively.  Every idea starts from a very cramped view of what is "possible" within existing decision making, funding and resourcing.  Even these cramped, incremental ideas get watered down as time pressures, competing initiatives and other factors chip away at marginally interesting ideas.  The "lock-in" effect is deadly, because it is so insidious and so difficult to overcome.  Rarely has training felt more useless than to introduce a disruptive thinking technique and a methodology for accelerating interesting ideas to teams that simply cannot comprehend anything more than simple incremental innovation.

Need incremental and disruptive

This phenomenon is not based on an inability to create interesting ideas.  When pushed, most teams can create interesting ideas.  There is inherent creativity in every individual and in every team.  What stymies the thinking is the incredible pressure to perform, to deliver, on an every decreasing timeframe and cost basis.  While people may be willing to consider interesting, even radical ideas for a short period, they immediately revert to what is "possible" in their minds.  This is one side of the gap between what executives want and what businesses deliver.  Executives want both steady earnings and profit growth which comes from incremental innovation AND differentiation and market disruption that comes from disruptive innovation.  Any firm that is not constantly innovating is watching its margins and market share erode.  Yet the demand for disruptive innovation that drives new revenues, new profits and new market share is often heard and dismissed, because of the overwhelming pressure to deliver in the short run.

Locked in

The majority of people in any business are locked in to a way of thinking, a set of perspectives.  Even if they want to innovate, even if they believe innovation is possible, and even if they believe their ideas are valid, they wait for approval, they focus on the short term and they trust in what is possible.  Increasingly, the lack of risk taking, the absence of experimentation, the reduction in headcount is paying dividends in the way people think and respond.  We've managed to train an entire generation of managers to worry only about costs, and many are slowly starving their businesses of any innovative ideas.  They are so locked in on the quarterly result, on eliminating waste and inefficiency, on Lean, on right sizing, on making the numbers that they've lost sight of what will sustain and grow a business over the long term.

Their perspectives are so cramped that many cannot think about next year, let alone a 3 or 5 year window.  But what they fail to realize is that the pace of change in the outside world is far faster, and is accelerating.  While lock-in may work internally, it competes with an ever-accelerating external market.  Strangely, while product lifecycles are growing shorter due to increased competition and market expectations, internal product development timeframes are unchanged, or getting longer.

Locking the market to your ideas

Businesses don't control the market, and our timeframes, perspectives and priorities don't matter to the market.  Rather than define a drumbeat that means we are constantly playing catchup to the market, rather than lock in attitudes and perspectives focused on short time frames and risk reduction, we should try to work ahead of the pace of the market.  For too long many businesses have attempted to react to the market, and that game is about up.  Increasingly, it's time to shift your thinking and perspectives to become far more innovative and expansive.  You simply cannot react fast enough to shifting market conditions to remain relevant - you have to anticipate or even create the new market conditions.  This is what Apple actually does best of all - constantly forcing firms that are slow to react to have to shift to a completely different competitive landscape before they've caught up with the last new platform.  Rather than lock into the market, force the market to lock into your ideas.


Oh, but that's risky you say.  Trying to influence the market with our ideas and new products is risky.  Well, so is your current operation of slow, incremental innovation which appears less risky in the short run but leaves your team with nothing new to provide to the market in the medium and long term, and leaves your team sprinting to react to any new shift in the market or new market entrant.  There's another risk of lock in as well - you begin to believe you understand the market and can react to it.  This is perhaps the biggest risk of all.  Rather than constantly understand the market, you believe your perspective of the market is accurate and that they market thinks like you do.  The market is nothing if not unpredictable, and global economies and market conditions should tell you that more shifts are coming, more rapidly and in different directions than you can possibly understand, predict or react to.  While your locked in strategy is working in the short run, it is increasingly lulling you into an exceptionally false sense of security.  Soon you'll be innovating, but out of a sense of panic, rather than a sense of insight or opportunity.

Eliminating Lock in

How can we eliminate lock in?  Lock in is caused by cramped viewpoints, overconfidence in existing strategies, a focus on cost reduction and risk reduction rather than new product creation and a false sense of the stability and predictability of the market.  Lock in is a cultural phenomenon, linked to how people are rewarded, the amount of risk that is tolerated, the long term vision of the company.  This means lock in has to be changed by executives who create a new storyline for the company, one based on growth and differentiation, rather than survival and 90 day increments.  Executives have to demand innovation, yes, but constantly review results and reward successes.  They must define more expansive goals - perhaps measuring revenue from products less than 3 years old as an example.  They must encourage more risk taking and more expansive thinking.  They must promote people who take risks and drive new innovations.  Innovation is not an activity but a cultural phenomenon and a belief system.  Only when these kinds of actions and beliefs are reinforced will you be able to overcome the locked in resistance to interesting innovation.

AddThis Social Bookmark Button
posted by Jeffrey Phillips at 5:23 AM 3 comments

Friday, August 10, 2012

Understanding your customers, or failing to

What constantly surprises me is how little large companies invest in understanding their customers, and how often large companies are shocked to discover that their customers are unhappy or angry about new products or new shifts in strategy.  I write today about JC Penney, once an icon and anchor for many shopping malls, and now a retailer adrift in the "in betweens".

JC Penney is struggling.  Like Sears, another broad range retailer, Penney has seen its market share erode, due to a wide range of factors.  Some of those factors include shopping patterns (fewer people going to malls), shifts in fashion and foot traffic, the length and depth of the recession, online versus retail shopping, and many more.  Sears and Penney's, along with some other venerated retailers who in many ways founded the way Americans shop, seem increasingly out of touch and irrelevant.

What is most telling is that Penneys has, or should have, a wealth of data about their loyal customers, but they've managed to anger them by eliminating coupons and promotions.  The new CEO's strategy is to shift to everyday low prices, but that has confused and angered the existing Penney's shopper.  Here's how Forbes puts it:  Johnson admitted he misjudged how customers would react to the change. “We failed at that,” he says.  What?  Your most important strategic decision and you "failed" at helping customers understand the change, or understanding if and when the decision was necessary?

Penney's management either decided that existing customers weren't valuable, or decided that they wanted new customers who weren't shopping at Penneys.  The problem with their strategy is that they shut off the spigit of current cash flow from existing customers, who are confused by the lack of promotions and coupons, but haven't ramped up a new segment of customers who want everyday low prices.  Or, do these second customers exist?  It's not clear that Penney's understand their existing customers needs and wants, or what their potential customers needs and wants are.

This scenario is what blocks innovation in many organizations.  Management is terrified that a new innovation will kill the golden goose of current earnings, without attracting enough new business to create new earning streams.  The worst possible outcome is to confuse or distract existing customers and simultaneously fail to win significant numbers of profitable new customers. 

I wasn't present at the conception of the one low price strategy at Penney's, but I have to believe it was driven from the top down, and the inside out.  New products, services and business models are successful when they meet real needs, whether those needs are clearly identified or still unarticulated.  I think the Penney's executive team believes people want one low price, but it's clear that they failed to investigate what their existing customers want and need, and whether they believed that the promotions were more work than otherwise.  Also, its not clear that Penney's has identified prospective customers and their wants and needs.  So existing customers are angry and confused, and potential customers are uncertain what Penney's offer.  A Twofer!

There's a lesson here for innovators.  You may love your idea.  You may think it offers better value, better benefits for your customers than what exists.  Your opinion does not matter.  You need to solve a need that customers have, a need that is relevant and valuable to them.  And, you need to understand how wedded they are to current solutions, benefits and characteristics.  Change is difficult and inertia is strong.  Yes, Jobs argued that customers didn't know what they wanted, but he often gave them things that didn't exist.  When comparable alternatives exist, and customers have longevity with usage, understanding their needs, the relevancy and urgency of their needs matters.  It's inexcusable that Penney's doesn't understand that and "failed" to do so.  The same is true with any innovator who assumes his or her solution meets the needs or offers important value to customers.

Get out of your office.  Meet your potential customers.  Find out how valuable the existing solution is, what's wrong with it and how valuable new solutions would be.  As Woody Allen once said, 80% of success is just showing up.  In innovation, much of success is in finding a valuable and important need and filling it.  Just show up where your customers are, listen with an open mind. Don't impose a solution.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 8:28 AM 3 comments

Tuesday, August 07, 2012

Innovation: The optimistic science

We need a new way of thinking about business.  This occurred to me when I was thinking about many of the leading management philosophies - outsourcing, right sizing, lean, Six Sigma.  All of these management philosophies are reductive.  That is, they lead to an ever increasing focus on reducing and eliminating.  They frame business as a zero sum game, within constraints.  To continually focus on these tools one rapidly reaching diminishing marginal returns.  There is really only so much waste, fat and duplication to squeeze out of any business.  At least one hopes that to be the case.  For years we've been told that economics is the dismal science.  Perhaps that's true.  What we really need is a new vision or new perspective about abundance and opportunity.

Innovation is the only management mantra or philosophy that focuses on growth and differentiation.  It is also the only inexhaustible and potentially unbounded management philosophy, in that innovation often leads to more innovation, rather than diminishing returns.  We can squeeze more and more ideas out of a more and more engaged workforce, or base of customers, as we demonstrate the ability to incorporate ideas and listen.  Innovation can experience a network effect, becoming more valuable and more effective as more and more nodes are added. 

Why, then, does dominant management philosophy and action focus so predominantly on the negative, reductive, zero sum aspects of business, which has decreasing marginal returns, rather than the possibilities of endless insights and ideas for growth?  I suspect there are several reasons:

Training and History

We are born into a "dog eat dog" world where Malthus and others hold tremendous sway.  We are led to believe in an economy of shortages, not an economy or market of potential possibilities.  In many regions of the world, shortages are real but unnecessary, and in other regions shortages or limits exist because we allow them to exist.  In every critical shortage, mankind has created new ideas to replace exhausted capabilities or create new ones.  Familiar with Julian Simon's wager on commodities?
Yet every manager has a Malthusian view of the world rather than a sense of what's possible - limitless innovation. I place some of the blame on shared history, education and training.


I linked in a tweet yesterday to some interesting research, which points out a great irony.  The more challenging the situation, the more we need innovation, yet the more uncertainty that exists, the more we distrust innovation.  See the research here.  Uncertainty is an innovation killer, and through our training (see above) we've been taught to wait for or search for certainty.  Once something is certain it is rarely innovative anymore. We must become far more comfortable with uncertainty.

Timelines and Results

Further, we are impatient, and want results now.  While innovation has demonstrated an ability to deliver outsized results, it often takes years or even decades to be proven.  The Simon-Erlich wager linked above took place over a decade after all.  Managers and executives may suspect that innovation offers boundless opportunities, but they know reduction in costs delivers profits now.  The market has trained and disciplined many executives to focus on short term outcomes and to demonstrate consistent results.

New Thinking

So we need a new school of thought, balancing historical precedent, uncertainty and short timeframes with the power and possibility of innovation.  Our executives are so busy squeezing the last juice from small lemons that they fail to see new oceans of possibility right at their doorstep.  They have become blinkered to opportunities and distrustful of the potential, inured over decades to risk and uncertainty, lured by promises of rewards in the short term.

Innovators must learn to communicate the possibilities and potential of innovation as a force for change, for profit and for growth and differentiation.  As good innovators demonstrate, a sustained innovation program overcomes many small issues and challenges, and people enjoy working to a big vision rather than an ever shrinking scope.  As cost cutting and efficiency marginal returns grow ever smaller, innovation is the doorway to growth and differentiation, but also to an entirely different focus and purpose.

If economics is the dismal science, then innovation must become the optimistic science.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 8:37 AM 0 comments

Monday, August 06, 2012

How to assess an innovation training program has kindly published our latest white paper, entitled How to assess an innovation training program.  I wrote this with some of my colleagues here at OVO because the number and range of innovation training programs is exploding.  The fact that the number of training programs is rapidly growing isn't, by itself, a bad thing, but the lack of agreed standards, the breadth and depth of innovation skills and attributes mean that everyone is simply defining an innovation training program according to their own personal beliefs.  This means a "certification" from one program (say, for example, my MBA alma mater, the University of Texas, or Georgia State's Program) looks nothing like an innovation certification from a different program. Each program focuses on what it does well, but provides little focus or insight into other capabilities or needs where innovation is concerned.  This is not to say that any program is "bad" or "good", just that each program is defining innovation according to its purposes.  There is no standard accreditation body or panel of experts approving innovation training or defining the body of knowledge necessary for "certification".

Innovation needs to move from its "wild west" phase into a more purposeful, more reasoned approach.  To do that, we need agreed standards or at least a consolidated body of knowledge.  If such standards existed, we could agree on what skills and knowledge nascent innovators needed and structure programs based on those common needs.  After all, a university doesn't grant a bachelor's in math or biology to people who simply create a course of study out of the whole cloth, or people who neglect vital areas of basic knowledge in the degree area.  If innovation is important, we should hold firms that offer innovation training, and especially firms that offer "certification", to high expectations.  We should ask firms that offer innovation training certification what standards they are building from, what defined set of skills they believe are necessary for innovation success, and what body of knowledge they are drawing from.

In the white paper I've tried to identify some characteristics you should investigate when looking at an innovation training program.  Clearly, the definitions are important.  Both the breadth of innovation (innovation in all processes and functions of the business and life cycle) and depth (beyond product innovation to encompass business model, customer experience and other forms of innovation) are important.  Further, you should consider the instructors.  Look for people who have led actual innovation programs in companies, who have real world experience.  Leading innovation work creates lessons learned that only practitioners can share.  Finally, examine the body of knowledge or sources that the training firm draws from.  There is a rich body of knowledge about innovation - don't allow your firm to ignore the material that's available.

Finally, be very careful about certification.  While everyone wants a nice certificate or diploma to hang on their wall, there's little agreement about what constitutes an innovation "certification".
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 6:06 AM 0 comments

Friday, August 03, 2012

Innovation - not the middle of the road

I love it when a twitter concept becomes a blog post.  I read an article today that has something to say about innovation, even though the article is really about branding.  The article claims that brands have to serve something.  As Dylan said, you can serve the devil, or you can serve the Lord, but you're gonna serve somebody.  New products and services, if truly innovative, are going to serve somebody.  And, likely, anger some other people.  We have to adjust our thinking as innovators to stop trying to please everyone, and build products and services that service something.

Doctors have a mantra - first do no harm.  Innovators have a mantra - what can we disrupt?  Note the concept of disruption.  To disrupt something, it's likely that someone or something loses.  The status quo is changed, altered or eliminated.  That means the incumbents lost, the existing situation changed.  Sorry if that seems like a zero sum game, but innovation isn't about playing nice.  It's about creating something new that has distinct value over what exists.  That means it introduces change.  Do you think Jobs stayed up nights worrying about the impact iTunes had on Tower Records?

Innovators ask questions like:  is this really new?  Does it really matter?  Will customers care?  Is it better, faster, cheaper than status quo?  What they don't ask is: will everybody be happy?  If everybody is happy, then you don't have an innovation, you have an impossible dream.  I'm relatively certain that there are people, somewhere on the earth, who would object to world peace.  If we can't all agree on a common good for mankind, certainly any new product or service that's innovative will have supporters and detractors.  If we can't satisfy everyone, then we need to create products and services that electrify our most important customers and prospects.

In a tweet today I wrote (tongue in cheek) that innovation isn't about being in the "middle of the road".  The saying in Texas is that the only thing in the middle of the road is yellow lines and roadkill.  Everything else hugs the edges.  Well, perhaps you'll find drunk drivers in the middle, but it's no place I want to be.  Innovation is that way too - you don't get noticed for creating "me too" products that everyone likes. "Me too" products don't garner attention, and every product or service has detractors.  Innovation, by its very nature, thrusts aside existing concepts, products and even perspectives and worldviews.  Why do you think it can be so difficult to do?

Don't fret  - embrace the fact that your ideas won't make everyone happy.  Yes, you may piss off some of your existing customers with your new innovation.  But you may gain more new ones, and your existing customers aren't yours by divine right.  They may choose to leave anyway.  You are entitled to them.  Trying to be safe means you have to become boring.  Embrace the difference.  Embrace the edge.  Your ideas are going to serve somebody - not everybody. 

Or, you can create an interesting idea, and constantly reduce it, remove the rough edges, water it down, shape and mold it, until everyone is happy and no one finds fault.  You'll be left with less than nothing, and everyone will tell you how inconsequential your idea is. My advice - embrace those who matter, expect detractors, understand why people will love, and hate, your idea.  Get a thick skin and stay true to your concepts.  Any truly new idea will attract complainers and critics, just like any truly new technology is indistinguishable from magic

Don't aim for the middle of the road.  Create something really interesting at the edges.  It's not necessarily more safe, but a lot more interesting.  The people who want to pull you to the middle want to simplify your ideas and restrain them.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 8:17 AM 1 comments

Wednesday, August 01, 2012

Performing innovation before the norming and storming

There's nothing quite as confounding and as thrilling as sitting in on an innovation kickoff meeting.  That's because all of the issues that have been overlooked, all of the constraints that have been applied, all of the issues that have been ignored rise to the surface when an executive demands that his or her company become more innovative.  It's a rare kickoff I attend that we actually talk about innovation.  Instead, we talk about all the things that block innovation, and are the reasons innovation is so difficult to do.

It's interesting because many times I am a "fly on the wall" in these meetings, called in to talk about how to start an innovation initiative, which is almost always sidetracked by people who I believe are earnest in their desire for innovation but equally as earnest in surfacing issues, constraints, complaints and other factors that aren't central to innovation, but which must be addressed before innovation can begin.  I often refer to these meetings as the forming and norming portion of innovation.  Unfortunately, many executives expect their teams to begin performing immediately, and don't plan for or account for the time and energy necessary to process the forming and norming portions.  And we all know that no matter how urgent the performing is, many people cannot perform until they've said their piece, and "cleared the air" about decisions that haven't been made, personnel issues that have been overlooked, etc.

In fact, I'd argue that perhaps the easiest way to get people to surface issues within an organization is to kick off an innovation program.  Many commentators wonder why firms don't start innovation programs.  I don't wonder, because starting an innovation program and overcoming the issues and inertia is probably the most difficult activity in a company.  Further, if innovation isn't considered a long term capability, the work to get started and overcome inertia and submerged issues is far greater than the potential reward.  There's a reason good innovators have been at it for a long time - they've overcome the inertia, issues and cynicism that probably existed at the beginning of their efforts.

What many executives fail to realize is that innovation is change, and change is risky.  Many senior managers and executives decide that if change is going to be thrust upon them, then now is the time to get all of the issues that have been constraining them, whether or not they have to do with innovation, on the table for discussion.  So in a meeting ostensibly about an innovation kickoff, one manager will want to discuss a problematic employee whose actions or poor performance has been overlooked.  Another will want to discuss cross-silo cooperation, which has been difficult in the past.  Another will want to surface issues with compensation or reward structures.   All of these are issues that could block or stymie innovation, but which should have been addressed before the kickoff of the innovation program.  That signals that the organization skipped the forming and norming, and moved immediately to the storming portion of innovation, hoping quickly to move to the performing portion.

I've been in many meetings like this where senior managers and executives are clearly frustrated because they hoped to lay out and engage an innovation action plan, but did not anticipate the long-submerged issues and resistance, the simmering personnel and compensation issues, the consistently ignored policies or procedures that have created dissonance.  Before the team is ready to make a big commitment towards innovation, they want the management team to clean up issues, communicate its goals and set a consistent infrastructure in place.  And this meeting, often the first face to face as we proceed to kickoff an innovation effort, is the first and perhaps last chance managers get to raise these issues before we lay on another key initiative, which rests uneasily on top of a number of other poorly defined, poorly supported projects and initiatives.

If you are a senior executive, or your senior executive wants to kick off an innovation program, please take note.  In any organization there are a number of recognized issues and subordinated challenges that many executives are aware of but have chosen to overlook or ignore.  Asking for commitment to a large innovation initiative, which imposes change and uncertainty, when many issues remain unaddressed simply creates far too much corporate dissonance.  Start talking with your executives and managers early about what the key issues that must be addressed before innovation gets started, and start the forming and norming activities early, so when your team is ready the storming and performing can begin in earnest.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 10:47 AM 0 comments