Thursday, September 29, 2011

Everything you learned in kindergarten is wrong for innovation

I had the opportunity to participate in the Business Innovation Factory's always wonderful BIF #7 last week, and like many people who attended I'm still mulling over many of the presentations, ideas and relationships.  One short tweet by Saul Kaplan, perhaps a throw-away line, struck me as really important.  Saul said he had trouble staying in his "lane".  In fact he wasn't sure if he had a "lane" at all.  BIF and other innovation conferences should be about valuable, unplanned and somewhat random collisions.

What's interesting about this idea of random collisions is that everything in life prepares us for the opposite.  From our earliest educational experiences we learn how to take turns, stand in line and progress in an orderly fashion.  We learn to color within the lines, answer questions with the expected answers.  That's because as a society we prefer orderliness, predictability, efficiency.  While the stories we tell about heroes are usually those who overcame great burdens or achieved great successes through risk taking, most of our day to day lives are about staying in a lane, avoiding collisions and coloring within the lines.  This is perhaps reflected in one of my favorite comparisons, the one about the difference between the Army and the Marines.

It's said that the Army has a mantra that what isn't expressly permitted is forbidden, and that the Marines have a mantra that what isn't expressly forbidden is permitted.  The former concept is restrictive - if you haven't been told you "can" do it then you can't.  The latter is interpretive - unless you've been specifically told you can't, then perhaps you can.  Innovators work this way, and to an even greater extent.  They interpret the rules, and often re-invent the rules to suit their needs and their markets.

Now, society can't exist if we all interpret the "rules".  In fact for an orderly, productive society we need to establish rules for health, safety and continuity.  But we can't allow the rules to dictate how we think, and we must be open to reconsidering the rules when appropriate.  What becomes a barrier is how few people are willing to reconsider the rules.  David Keirsey, interpreting information from the Myers-Briggs personality tests, asserts that over 50% of the population are Guardians, who prefer order and stability.  Only 3% of the population are likely to be engaged Inventors, who are willing to think differently and shake things up.

Is this a nature or nurture outcome?  Are people naturally predisposed to prefer predictability and order, or is this something we instill early on in life, by insisting on neat lines, orderly turns and coloring in the lines?  That will take more of a psychologist than I am.  But between any predisposition and the education and expectations of our culture, most of us are very attuned to protecting the status quo, prefer predictability and dislike change. 

So we can't simply ask people to practice "random" collisions if they aren't attuned to that.  While many innovators (Saul, as an example) revel in interesting, random collisions and are good at combining seemingly different concepts into completely new insights, many people find the idea of staying in their lanes, coloring in the lines reassuring, and the alternative off-putting.  That's OK - we need people who are experts at running the existing stuff really well.  If they have discomfort in the randomness and unpredictability of innovation, allow them to work and thrive where their passions and comforts are located.  But don't let these individuals establish the entirety of the organizational culture.

Another favorite quote of mine is from Thomas Jefferson, who wrote that the roots of the tree of liberty must be refreshed occasionally with the blood of patriots and tyrants.  I think he meant for that to be read in two contexts - at the time he was writing, he meant it in all seriousness.  There was, after all, a war going on.  But I also think he meant it metaphorically, as a reminder that we can't get too comfortable with our government, or for that matter with the "State of Affairs".  Every firm, every culture needs a regular rethinking and refreshing.  The Guardians won't be happy with this - they'll want your organization to stay in its lanes, color in the lines.  The Innovators will desire renewal, but their numbers are so small that they can't make a big impact unless they are supported.  Too often the refreshing or renewal happens under duress, while under attack by a disrupter or market transition, rather than a carefully conceived rethinking of the business.

We innovators love random collisions, connecting ideas, people and experiences that seem unrelated, and creating something new from that experience.  What we often fail to realize is that what is interesting, valuable and joyful for us is terrifying, random and not valuable for many others.  That's why innovators get so much energy from meeting other innovators, especially outside the organization, and non-innovators get so much energy from people who share their view of stability and order.  When you lock your innovators down, cut out travel to conferences, neglect customer insights and experiences, you risk the same outcomes as when you take a flower and neglect to water it or offer it sunlight.  We innovators need our collisions, our experiences and the ability to swerve outside the lanes.  That's the only way most organizations are going to get the ideas they need to sustain growth.

So, here's a question.  How many times, how many opportunities do the few innovators in your organization get to "color" outside the lines?  If/when they do, what's the reaction from the rest of the organization?  Rather than putting up barriers to this activity, you should encourage and welcome it, perhaps even provide opportunities for it to occur, inside and outside your organization.  Otherwise the dominant Guardian roles, rules and structure will take over, and change and innovation will be increasingly difficult.
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posted by Jeffrey Phillips at 7:06 AM 1 comments

Wednesday, September 28, 2011

Innovation is the opposite of insanity

Today, a light hearted post in which I get to quote two of my favorite philosophers - Jimmy Buffet and Albert Einstein.  Buffet write in Changes in Latitudes that if we can't laugh we'll all go insane.  Einstein said that insanity was doing the same things over and over again and expecting different results.

If Buffet and Einstein, both highly respected philosophers, are correct, then most large organizations are insanity factories - not just mired in insanity but actually producing insanity.  Here's why.

First, creativity is enabled by a lot of factors.  These can range from artistic inspiration, to dire need, to innate skill or insight.  But creativity is most often enabled by freedom of thought, a chance to do something a bit different, and a little humor.  Why do you think all good idea generation sessions start with a joke or an ice breaker?  Why do many good meetings seem more effective when even an old groaner is used to open up the dialog?  Why is everyone more interested, involved and engaged when good humor is introduced?  Because it demonstrates a different attitude, one that recognizes the opportunities and limitation of an organization and encourages, ever so slightly, the ability to step outside one's perspective and poke fun at the existing way of doing business.  Humor lightens the moment and allows people to reach for an entirely different part of their thinking and their brain.  Humor is also one of the least used tools or techniques for management.  How many times do you see people laughing at work?  Usually, it's when someone pops a Dilbert cartoon in a presentation to make a point.  Ouch.  While work may not always be "fun", no one said it had to be drudgery.  And if you want innovation and creativity, you'll need to introduce humor into the mix.

Second, most firms are experts at insanity, at least in the way Einstein described it.  Most large firms are experts at doing the same things, with the same people, and the same techniques, over and over again.  Our business models are the ultimate examples of doing the same things over and over again.  We've honed the models for ultimate efficiency and predictability.  We've turned Six Sigma into a dogma rather than a tool.  And along the way our businesses have become, by definition, insane.  We think that innovation and creativity are risky, yet we constantly repeat and reinforce existing business models in the face of ever increasing change.  Einstein suggested that doing the same things over and over again and expecting different results was the definition of insanity.  That definition sounds a lot like our business culture today.

So, while many firms look askance at innovation, creativity and humor, we need these more than ever.  We're on a path to insanity, repeating tired business models, methods and processes, locked into dogmas about predictability and continuity when the real path to growth and differentiation is to break free from the same old tools and techniques and introduce what today seems risky, strange and uncertain - innovation, creativity and humor.  Strange to think that what seems like insanity from the inside of a corporation may ultimately be its life preserver.  Too many executives think innovation and creativity are dangerous.  From the inside of a prison it can be hard to tell who is behind the bars - the visitors or the inmates.  It all depends on your perspective.  Innovation isn't insanity - according to our two esteemed philosophers, it's the cure.
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posted by Jeffrey Phillips at 5:20 AM 0 comments

Tuesday, September 27, 2011

How much longer will countries outsource idea generation to the US?

I was thinking recently about the challenges and possibilities of outsourcing.  It's interesting if you think carefully about it, since what we call outsourcing is to some extent simple economics.  Comparative advantage was first conceived by David Ricardo, who argued that each participant in a transaction should spend its efforts doing what it did best and acquiring goods and services from other participants doing what they do best.  To the extent that free trade is possible, Ricardo argued that every country or participant benefits when each focuses on its comparative advantage.

For years we in the West have exercised this philosophy, outsourcing work that we can't do effectively to locations where labor or other costs are cheaper.  Textiles present an excellent example.  In the 1700s England dominated much of the textile industry, until low labor costs and suitable locations in the Northeast of the US demonstrated that textile production could be accomplished at lower costs.  Over time, textiles migrated to the Southeastern US and were a centerpiece of manufacturing in many small southern towns.  In the last twenty years a significant portion of that textile production has moved overseas, to locations that can produce cloth more inexpensively.  While we may decry this outsourcing of good jobs, it should not be unexpected if we argue for free trade.  The alternative is to place high tariffs on imports, to prop up the price of cloth produced in the US, which raises prices for clothing and artificially inflates prices and costs for consumers.  Sort of what we do for sugar, as an example, but I digress.

What's interesting from an innovation perspective about this is that we in the US have no problem allowing others to "outsource" their idea production to us.  What I mean by that is that we have staked out the position that we are at a comparative advantage where ideas are concerned - we produce and create ideas more rapidly and more effectively than other locations, so many countries have made an implicit swap - they'll produce the goods that we conceive.  This implicit agreement has paid dividends for us and for many other countries over time.  Strangely, no one seems concerned about other countries outsourcing their idea generation and intellectual property development to us, while they seem very concerned about the US outsourcing production jobs to other countries.  While the dichotomy about who produces what is interesting, note one other issue:  comparative advantage suggests that each country should do what it does best within a free trade scheme, and it will be difficult for any country to compete head to head with the US in idea and intellectual property production, but we don't live in a frictionless, free trade world.

Increasingly, rapidly developing countries (India, China, Brazil) aren't going to "settle" for merely manufacturing products or packaging content that we imagine and create.  There's a market premium for innovation, and their countries and their firms are going to want that premium, and will place increasing emphasis on original IP and innovation.  In other words, they'll be less interested in outsourcing the idea generation and intellectual property development to us, and will attempt to do more and more of that at home.  While the US is in a leadership position today in terms of higher education, deep research and intellectual property generation, rapidly growing economies are increasingly placing more and more emphasis on developing their own capabilities.  When the Indian Institute of Technology graduates more engineers that all of the US engineering schools, and when doctoral and PhD candidates from other countries return home to create new companies and pursue their research, warning lights should go off across the US.

Our compelling national comparative advantage is creativity, innovation, spotting and recognizing new ideas, new market opportunities and creating compelling products and services faster than any other country or region.  When we slow or shackle that capability, or neglect it, or, more worrying, become comfortable outsourcing it, we lose what had made the US an engine of capitalism and job creation.  Will anyone worry if our firms "outsource" creativity, design and innovation to other countries in the same way they worry when we outsource manufacturing jobs?  It will be interesting to watch.

In the mean time, we need to ensure our comparative advantage in innovation remains.  This means we need to focus on our capabilities at a country level, through political policies and tax policies.  We need to focus on our capabilities in educational settings, teaching and reinforcing creativity and innovation in all aspects of educational life. Our businesses need to determine how important innovation and creativity are for their competitive advantages and reinforce internal skills.  It could be very easy to allow others to innovate for us, to allow others to dream and take on the risks of creation, but that would be to subvert the very nature of our economy.  We need political leaders, business leaders and social leaders who realize the importance of creativity and innovation, and their vital place in our national lives.
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posted by Jeffrey Phillips at 6:05 AM 1 comments

Tuesday, September 20, 2011

BIF-7 Day One Recap

For those of you waiting a recap of BIF-7 with eager anticipation and jealous longing, I can confirm that once again the folks at BIF have pulled together another excellent conference.  Herewith, a few ideas, random thoughts, and synopsis of the first day.

First, a brief aside.  I somehow missed the email (Tweet, document?) that circulated that demands that every speaker present a serio-comedic picture of himself or herself taken in the late 50s or early 60s.  Did that memo go out?  Because I think even the young mountain climber who could barely be out of middle school opened with a picture of himself in black and white taken on a Brownie in the early 60s.  Just kidding Matt.

BIF, for those of you unindoctrinated, is the Business Innovation Factory, and each year BIF hosts a conference that is part TED talk, part innovation conference, with a significant portion of meeting interesting people involved in a wide range of innovation efforts.  So the topics are interesting, the people are interested and the conversations are relatively deep and always enlightening.

We had talks today from a wide array of speakers, including college professors, mountain climbers, the lead innovator at WD-40 and a gentleman who is the innovation lead at Willow Creek.  Yes, BIF folks cast their nets wide and brought in quite a haul of innovators from a range of industries and focuses (foci?).

There were a couple of statements that I thought resonated nicely.  For example, a photographer who spoke complained that many people wanted to know what camera she used.  Her response - it's not the camera, it's the photographer and the vision.  That resonates with me because far too often corporations trust innovation tools rather than the people, their ideas and their vision.

A community leader from Houston picked at an issue that resonates with me.  Her argument is that we often look at downtrodden communities and talk about what's "wrong" rather than what's working.  Her statement "you can build on broken" - you build on what works.  Rather than sit around and talk about why ideas won't work, build on the people and capabilities that will work, and do work. 

Angus Davis, who is a successful serial entrepreneur, left us with this phrase that sits just beside the door as people exit his office - "Let's make better mistakes tomorrow".  The connotation that innovation, and advancement in general for that matter, requires learning, which will result in failures and successes.  Hopefully we are all learning and making better mistakes each day.

John Hagel from Deloitte's Center for the Edge suggested that in corporations we've lost our risk-taking and exploratory mindset.  Entrepreneurs and innovators have this by definition, but as firms grow larger they grow more risk adverse and more comfortable, defending markets and position rather than exploring new ones.

Perhaps the most provocative talk was from Dale Stephens who is a Thiel Fellow.  Dale dropped out of college when he realized that academia is increasingly not a place to exchange ideas as it is to memorize and regurgitate information.  I paraphrased his speech as "they pretend to teach us and we pretend to learn".  While I don't agree with all of Dale's arguments about the value of a college education, or lack thereof, his voice is one of many that argue that academia needs innovation desperately.

Why are these folks chosen as speakers at an innovation conference?  Because they create and sustain meaningful ideas that challenge what is comfortable and routine for many of us and encourage us to think differently.  I look forward to seeing what is presented on Wednesday.
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posted by Jeffrey Phillips at 7:04 PM 1 comments

Thursday, September 15, 2011

The knowing-doing gap in innovation

A recent survey of midwestern manufacturers reinforces a fairly serious issue where innovation is concerned.  In the survey, the vast majority of executives recognize that innovation must start with the executive team.  That's a good thing.  There are some issues of concern in the survey as well - the fact that only about a quarter of the firms survey set aside funds for innovation, and the fact that the same percentage have a defined innovation process.  But another survey from the National Science Foundation shoots a bullet right through the heart.  According to that survey, only 20% of manufacturing firms reported creating a new innovation in the years 2006 to 2008, and, even worse, only 8% of services firms reported creating an innovation.

Clearly, everyone "knows" that innovation is important, and one could argue even vital, to the success of our businesses and economy.  But just as clearly, few firms are implementing the mechanisms for innovation success (see the Plante Moran survey) if only a quarter of the firms report that they set aside funds for innovation or that they have a defined innovation process.  What's perhaps even worse is that since there are few "standards" or agreed innovation methods or principles, what these firms are reporting as innovation processes or budgets could be optimistic or just plain wrong. 

What accounts for the knowing - doing gap in innovation?  This is the pink elephant, the emperor with no clothes in the innovation room.  We all know that a few firms claim the vast majority of innovation success, while most firms attempt innovation occasionally only to abandon it when needs or interests change.  If we are honest with ourselves, we can admit that "everyone" believes that innovation is important, but that few firms do it well, and most do it poorly, if at all.  I doubt there's another business function with such a large knowing - doing gap.  Is this simply the nature of innovation, or is there something more at work?

I'm going out on a limb here, but that's my normal perch.  I'm going to offer up that innovation is actually fairly simple in practice, but rarely defined, reinforced and sustained.  If we boil it all down, innovation is about three or four key capabilities or activities:
  • Spotting opportunities and trends in the marketplace before others do
  • Understanding customer needs before they are aware of them
  • Generating interesting ideas that set the company apart from its competition
  • Successfully commercializing and launching the new product or service
Yes, there is more to innovation than these four points, but you get the drift.  Whether your firm uses "open innovation" to get the ideas from external parties, or practices business model innovation to transform not just products but your business model, you still ultimately end up with the same basic activities.  So if the basic activities aren't that hard, what's creating the knowing - doing gap?  Three things.

First, it is easier, less risky and less uncertain to cut costs than to create something new and drive increased revenue.  Cutting costs is a certainty.  If I cut three people, the costs drop out of the bottom line.  Those costs are predictable and have immediate impact.  If I create a new product, the costs impact now and the benefits don't accrue for quarters or years, and even then aren't guaranteed.  In a short term focused world, skipping innovation for the sake of cost cutting is like skipping your green vegetables.  Dinner tastes a lot better tonight, but the body might not be as healthy in the long run.

Second, while innovation isn't "rocket science" it does require some new skills, process definition, new relationships and funding.  This at a time when core staff are working like mad to keep their products above water.  Most firms can't afford to take on new ideas.  They can barely handle the maintenance and sustenance of the products and services they've got.  No slack in the system, no extra bandwidth and increasing demands mean that all focus is given to existing products at the expense of innovation.

Third, we've lost a bit of the cowboy culture in our executives.  Jobs and a few others are willing to create some new stuff and see what happens.  I think those leaders are smart enough to know that what looks risky to a lot of us is actually a lot more predictable than we believe.  In most businesses, once a firm grows to a certain size it loses all, or most, of its entrepreneurial spirit.  Instead of sticking it to the man, these firms prefer to lock in certain advantages and lock out disrupters or new entrants.  And they slowly sink into the comfortable position of a large player, rather than a disrupter.  That's why firms like Apple and Virgin, and people like Jobs and Branson are so interesting.  They are large, but retain a bit of the cowboy.  Most of our firms could use a bit more cowboy and a bit less of the accountant and lawyer.  If the executives don't want to stick their necks out for new stuff, why would the middle managers and staff do so?

It's not as though innovation is a mystery.  There are hundreds of books, and more on the way (hint) that describe how to do innovation in large firms, design firms, military operations, services firms, health care, academic settings and so forth.  OVO and plenty of other firms offer innovation training.  There are plenty of models and success stories to follow.  The knowing - doing gap is a gap of choice, then, rather than a gap defined by a lack of knowledge or information.

The real question, then, is whether innovation can be accomplished by firms that are hesitant, cautious and resource constrained, or whether they'll simply need to outsource innovation for any measure of success.  I find this dichotomy a bit strange.  We know that any firm, pushed to its limits, can do amazing things.  Innovation is often amazing, but is based on basic principles that any firm can do well.  The question is - what will it take to push many of these organizations to the point where innovation becomes a capability that they adopt whole-heartedly internally, and will there be enough time for innovation to pull them out of the hole they created for themselves?  The knowing - doing gap is self-inflicted, and while it causes only moderate pain at first will ultimately hollow out an organization.
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posted by Jeffrey Phillips at 6:19 AM 2 comments

Tuesday, September 13, 2011

Innovation - a capability not an activity

I get this fairly regularly, a senior executive who is in somewhat dire straits.  Their firms, once leaders in their industries, neglected R&D, postponed interesting new products and services and failed to innovate consistently.  Now, they are no longer the lead dog, and are unhappy with the view from behind.

To begin to remedy three to five years of focusing on efficiency, cost-cutting, right-sizing and ignoring innovation,they often want to conduct a week-long workshop to generate disruptive new ideas.  You can almost imagine where this is going....

My first question when I get this request is:  OK, once the idea generation event is over, what next?  Since I know most organizations don't have an organized innovation process or workflow, or a deep bench of people and resources to throw at such a significant problem, I know the likely outcome is a few people assigned part-time to evaluate and select an idea to develop.  They'll lack training and skills, since little or no innovation has been done recently.  They'll lack frameworks for evaluating and selecting ideas, because no one has established what the long term strategies are and what should be emphasized.  They'll be pulled back into their day jobs constantly, since the fiscal quarter is far more important than achievement in a year or more.  And, ultimately, without a lot of commitment, time, resources and effort, they'll likely generate at best an incremental idea that management half-heartedly accepts and which fizzles in the marketplace.

Is this an "innovation" failure?  No, because innovation wasn't implemented.  It is a strategic failure, a failure of focus, a failure of resources and a failure of expectations.  Innovation isn't a parlor trick or a time machine.  It is not going to make up in one week for three or four years of neglected innovation, and can't overcome a lack of skills or training, a lack of resources and a lack of focus.  If it were as simple as a one week exercise to create a compelling new product or service, then we'd see lots of them.  What people forget about even good innovators like Jobs at Apple is that it took four or five years for Apple to create the iPod.  None of their innovations were developed overnight, but over a long time, based on a consistent vision, with lots of resources.  Apple intentionally cut a lot of other products to clear the decks for the iPod and other "i" products, rather than force the nascent products to compete with existing products which had their own demands.

Innovation is not a short-term activity, but a long term capability.  Farming may provide an excellent analogy.  I come from farming stock, and I can assure you that no farmer would wait until July to plant crops, hoping to harvest them in a week or two.  No, he or she would tend the land, working year round to till the soil, break up the ground, plant the seed when the time is right, weeding, fertilizing and caring for the tender young plants.  When adversity in the face of cold, fire, hail, insects arise, the farmer confronts the issues immediately.  He works, understanding the commitment and timeframes of his plants and the vicissitudes of nature - rain, snow, clouds, sun, drought, wind.  He harvests when the plants are ready, on the agricultural time scales, not perhaps what he wants, but what nature gives.  You cannot toss seeds in an unprepared field and expect to harvest valuable crops from that same neglected field a week or even a month later. Likewise, you can't extract good ideas from an unprepared organization, and even if you could, the skills, capabilities, methods and processes aren't established, and the ideas face tremendous headwinds but have few protectors and even fewer accelerators.

Let me say it again.  Innovation is a capability developed and nurtured over time, not a once and done activity.  If you want a rabbit from a hat, buy a magician's kit.  If you want real, powerful innovation to drive new ideas that create value and differentiation, be prepared to get your hands dirty, till the soil, pull the weeds and spend the time necessary to harvest the crop of ideas.  There are no easy innovation fixes to long neglected strategic problems.
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posted by Jeffrey Phillips at 2:15 PM 1 comments

Monday, September 12, 2011

Do you have an innovation "edge"?

One of my favorite quotes is by George Bernard Shaw.  The quote concerns itself with progress. 
The reasonable man adapts himself to the conditions that surround him... The unreasonable man adapts surrounding conditions to himself, therefore, all progress depends on the unreasonable man.
The problem with this formulation is that few people enjoy being unreasonable, and many of those that we know who are unreasonable aren't being unreasonable to advance knowledge or innovation.  Many of the unreasonable people in your life are simply cranks.

But let's not miss out on the concept of unreasonableness, or, as the title of the post suggests, edginess.  Innovation relies on the edge, and on edginess, for survival.  Here's why.

People who are comfortable with the status quo tend to resist change and the introduction of "new" things.  Most corporate cultures are far more comfortable sustaining existing products and services, which are predictable and well-known, over the introduction of new, risky and uncertain products and services.  In that regard, only people who are willing to create and sustain change, who are comfortable in the face of uncertainty and are willing to push against the corporate culture will sustain innovation.  And these people often seem a bit "edgy" to the rest of the organization.  They zig when others zag.  They have different perspectives, ones that many people try to tamp down.  Yet if everyone in the organization had the same perspectives and same comfort level with existing products, what new thing would get done?  Perhaps we should say that, paraphrasing Shaw, that "all innovation depends on the unreasonable man (or woman)."

OK, if innovation relies on an edgy, unreasonable person with the organization, but most organizations are staffed primarily with people who are comfortable sustaining the "status quo" products and services, where does the edgy person get their inspiration?  Usually, from external sources.  This means that for an "edgy" or unreasonable innovator to thrive in most organizations, they must be closer to the "Edge" of the business than the center, for two reasons.  First, the closer to the "core" of the business an idea or person is, the more difficult it is to change anything.  Whatever is at the "heart" of a business, right or wrong, is harder to change than issues, values or products that are more peripheral.  Second, information, trends and signals only penetrate a corporate culture so far.  Corporate culture acts like a barrier to external signals, filtering and weakening messages from the outside.  The closer one is to the center of the business, the less interesting information penetrates, and the more it is garbled when it arrives.  To get the best, most untainted information, the innovator must have access to the "edge" of the business - that is, have ready, unfiltered access to information that preferably he or she gathered and analyzed themselves.

Finally, innovation relies on edges of corporations and even industries, because many disruptive innovations happen not at the core of a business or industry, but at the edge where two businesses or industries intersect.  It is on these extreme peripheries where two or more capabilities or needs intersect that really interesting and disruptive innovation happens - again, at the edge.  Yet, more and more many firms are restricting travel, limiting interaction with partners and third parties.  We know that interesting innovation happens at the intersection of technologies, markets and geographies, but increasingly these intersections happen by accident.  There's no one on the "edge" of the business, and even fewer people who explore the "edge" of the industry or technology.

Further, edgy people aren't appreciated, and the more important a person is, the more likely we are to find them at the center of the business, insulated from external signals and rarely engaged at the edge of the business, much less at the edge of the industry or technology.

Corporate structures and cultures have it all wrong.  Increasingly, your best people need to be on the periphery, identifying the best ideas and creating linkages and intersections with other industries and technologies.  Your best people need to exist on the edge of your business, rather than in the center of your business.
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posted by Jeffrey Phillips at 9:03 AM 0 comments

Wednesday, September 07, 2011

Book Review: The Progress Principle

I wrote recently that Maslow’s hierarchy of needs is as pertinent to the world of work as it is to the rest of an individual’s life. Organizations that want more innovation from their employees need to understand that innovation is more likely to happen when many of the “lower order” functions of Maslow’s hierarchy are fulfilled for an employee or a team.  This means that simple needs like safety, security and basic needs are fulfilled completely and are not at risk.  Only then can issues like esteem and creativity be fully engaged.  Since far too many employees in far too many businesses are worried about the basics of their job – security, safety, continuity – they don’t have the investment or time to engage in higher order activities.

Teresa Amabile and Steven Kramer have conducted extensive research into issues of employee engagement, productivity and creativity.  In a far-reaching survey of over 12,000 diary entries created by hundreds of employees across a number of firms, Amabile and Kramer identified factors that lead to satisfying what they call “inner work life”, which consists of emotions, motivations and perception of employees’ organization, work and colleagues.    Amabile and Kramer have now documented the research and discussed their findings and the implications of their analysis in a new book entitled The Progress Principle.  In the book they introduce inner work life and its components, and identify factors that support and sustain a positive inner work life.  Most interestingly, they identify “progress” as perhaps most important to a positive inner work life.  What they mean by this is progress of a project or initiative toward a goal – even small, incremental steps.  Progress was so important to a positive inner work life that they included “progress” in the title of the book.

The authors stipulate there are three components of inner work life:  perceptions (how we make sense about work and what we do), emotions (reactions to events) and motivation (desire to do the work).  These seem fairly obvious on their face, yet few managers are attuned to assess this concept of inner work life, and few know instinctively how to create an environment where inner work life is developed and sustained.  The authors attempted to assess how employees felt about their inner work life through surveys that asked the employees to report on four significant criteria:  creativity, productivity, commitment and collegiality.  Based on this feedback, they confirmed what many other management thinkers and researchers have already discovered – intrinsic motivation is more important than extrinsic motivation, especially where higher order activities like creativity are concerned.  This aligns to work by Daniel Pink in his book Drive.

Once the authors have defined the inner work life, they turn their attention to progress.  On page 68 they define the benefit of progress as “Real progress triggers positive emotions like satisfaction, gladness, even joy.  It leads to a sense of accomplishment and self-worth as well as positive views of the work and, sometimes, the organization.”  The authors argue that making progress on an initiative or project, even small, incremental steps, leads to an enhanced inner work life, which creates engagement and can lead to greater creativity and productivity.  However, progress is just one of three factors that influence inner work life.  The other two factors are catalysts, which are actions that directly support work on the project, and nourishment factors, which are interpersonal triggers like praise, respect and encouragement.    As every action has an equal and opposite reaction, progress is opposed by setbacks, catalysts by inhibitors and nourishment by toxins.

The book includes a list of catalysts that should be relevant to any manager:  clear goals, autonomy, adequate resources, adequate time to work on an initiative, providing assistance, learning and allowing ideas to flow.  These catalysts engage and accelerate efforts and promote progress, which reinforces inner work life.  Clearly, inhibitors work in opposition to catalysts.  Inhibitors are uncertain goals, lack of autonomy, limited resources, limited time, lack of assistance and a restricted view of ideas.  These inhibitors limit how people work, stymie their progress and impact inner work life, leading to frustration and a lack of engagement.

Similarly, nourishment adds to a positive inner work life through respect, encouragement, emotional support and affiliation.  These factors encourage a very positive working environment and improve perceptions, emotion and motivation.  Toxins, on the other hand, block this nourishment and poison the atmosphere, again leading to a poor inner work life and lack of engagement.

So far, so good.  The research is exhaustive, the insights are compelling, but the implications aren’t quite so clear.  Amabile and Kramer have done an excellent job peeling back a layer of management obfuscation to remind us that people need to be engaged in what they do, and as work becomes a bigger part of everyone’s life, inner work life must be effectively understood and managed.  This means that every corporation must consider its corporate culture and make adjustments to ensure the appropriate catalysts and nourishments are in place.  Executives and managers must examine their management style to understand how they impact progress and inner work life.  The authors devote an entire chapter to “Tending your own inner work life”, yet at the end of the book I am left asking the question:  who is this book for?  Is it a prescription to radically change corporate cultures for greater engagement and creativity?  If so, it should be directed at senior leadership.  Is it a book about recruiting, hiring and training the best managers to sustain inner work life?  If so, then it should be targeted at middle managers and talent management.  Is it a “self-help” book targeted to individual contributors?  It’s simply not clear who should hear this message and how they should respond.

Further, the benefits of a radically improved inner work life aren’t described adequately.  If an organization can dramatically improve inner work life, what are the potential outcomes?  Drastically improved employee engagement?  Improved creativity and innovation?  A reduction in unplanned employee turnover?  The book doesn’t make a lot of claims about what the outcomes will be in what will be a relatively significant investment in training and management coaching.   The authors spent a significant amount of time building their case for progress and for the other factors, but they neglected to spend enough time describing the outcomes and benefits of improving inner work life.  One could argue that the benefits are obvious – happier, more engaged people who feel encouraged and respected at work.  But those psychological benefits have to be converted into meaningful, quantifiable outcomes that shareholders will care about – higher revenues, lower costs, higher growth.  I’m sure that many firms on the end of bankruptcy demonstrate many inhibitors and toxins, and conversely many fast growing firms demonstrate catalysts and nourishers.  Yet we need a bridge between qualitative “good” outcomes and quantitative results if we are to ask executives and managers to embrace what will be significant cultural change, and I’m not sure the authors have provided that bridge.
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posted by Jeffrey Phillips at 11:48 AM 1 comments

Tuesday, September 06, 2011

Earning respect for innovation

Like Rodney Dangerfield's character, innovators often get very little respect.  Even noted innovation consultants, like yours truly, have learned to weather a questioning glance when we admit that we work to promote innovation.  Usually, that's followed up with a question that can best be paraphrased as: "That's a real job?"

Yes, Dorothy, innovation is a real job, an often thankless, lonely and neglected job, until someone in the organization really, really needs new products or new revenue.  And for that brief, shining moment, innovation moves to the fore.  The real question we need to ask ourselves is:  why isn't innovation a respected skill?  Why do Chief Financial Officers or Chief Marketing Officers seem to feel no reason to justify their existence or validity, while anyone who wants to create innovative new ideas must first admit that, yes, innovation is not a real "role" or "job", but will be tolerated in a pinch?  Why is a financial or accounting role deemed important, necessary, even critical to a corporation, while innovation is considered frivolous, or at best a temporary position?

There are several reasons that innovators don't receive the respect they deserve.  The first is based on experience, the second on expectation and the third is based on results.  Let's break down why innovators, and innovation, doesn't get any respect, and look at the options for creating the environment for respect.

In the first instance, innovation doesn't get any respect because many people have no experience with true innovation work.  Since we are typically suspicious of any topic or body of knowledge that we have little experience with, innovation is held in contempt until it can prove its value.  Unfortunately, many people attempt to "innovate" half-heartedly or with little preparation and no previous experience, so innovation doesn't produce the usually outsized goals the team has.  Strange to think that a tool, attempted once, with little preparation and no previous experience, doesn't produce the iPod of your industry, but that's the way it often works.  Most of us, for example, wouldn't agree to close the books on a quarter, swapping jobs with the CFO, or wouldn't agree to lead a significant new marketing campaign, swapping jobs with the lead marketing person, yet many agree to jump right in and lead an innovation effort with no experience, no training and few trusted guides.  Isn't leading an innovation effort to create valuable new products and services at least as important as getting the (backward looking) financials correct?  In the end, most teams don't have experience, and don't respect the work or body of knowledge that supports innovation.

The second reason that innovation doesn't get any respect is because of the expectations of failure.  In any other function in the business, failure is tantamount to abdication of duties.  If the quarterly closings don't "tic and tie" to the penny and within a penny a share of the projected revenues and profits, the CFO has "failed".  There are real penalties for getting it wrong.  Where innovation is concerned, your team will definitely fail.  After all, noted innovation financiers, also known as venture capitalists, are hopeful of betting correctly on one or two of ten investments, knowing that the majority of their investments will return nothing.  Further, since many teams attempt innovation without prior knowledge, training or experience (see paragraph above), the expectations of many teams are that innovation won't succeed in developing an excellent idea, or that even if a great idea is generated, it won't be accepted or implemented by the company.  This is almost learned helplessness in action!

The third reason innovation lacks respect is in the results of the effort.  As mentioned previously, even strong ideas must cross the chasm from concept to new product or service, and that's a very large chasm to cross internally.  Development teams have more work than they can handle with existing products and services, never mind new and potentially risky products.  Even if the idea can be translated into a new product or service, it may not succeed in the marketplace.  The opportunity window is open only briefly, and time and competitors, or market conditions, may shift.

We innovators need to demonstrate that innovation isn't frivolous, isn't doomed to failure and isn't a last-gasp attempt at differentiation.  Rather, innovation should be a consistent, important capability that generates and commercializes new products and services that drive new revenue, and is supported by internal disciplines and people trained to the work.  Rather than hang our heads and smile sheepishly when people suggest that innovation is a side-show, we need to demonstrate that innovation is as vital to an organization as any "relevant" or trusted capability, like finance or engineering. 

Respect must be earned, and innovation will earn its respect when it demonstrates its importance and relevance to an organization's growth and success.  As long as innovation is used to respond to desperate situations by teams who are unwilling and unprepared, the results will not emphasize the value or importance of innovation.  We innovators must demonstrate that innovation is CENTRAL to the success of a firm, and gain as much credence within a firm as the finance or accounting teams.  Then, and only then, will we have the respect that we need, and that we are due. Respect will be paid on the day that the CFO's job is to count all the profits and revenue that innovation creates, and the CMO's job will be to create more press and awareness about your firm's innovation efforts.
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posted by Jeffrey Phillips at 6:03 AM 1 comments