Tuesday, November 26, 2013

Why corporate innovation is so difficult

We innovators need to learn to be careful with our language.  Too often I hear people conflating words like innovation, invention and entrepreneurship.  The fact is that these are all intertwined but subtly different words with very different challenges.  To me, invention is the easiest.  Everyone can be, and often is, an inventor.  You may invent a new way of doing things, a new tool, a new insight or perspective.  But mere invention doesn't necessarily mean that you "scale" it so others also benefit.  No, for that you need "entrepreneurship" - the ability to take a good idea or invention and build a business around it.  That's a slightly more difficult challenge.  History is littered with good inventions or technologies that no one could build a business around, or where many tried and failed. 

The benefit that entrepreneurs have over corporate innovators is that they must support and sustain only one idea.  An entrepreneur should have one really good idea or invention and place all of his or her effort behind that idea.  A corporate innovator should similarly place all of his or her effort behind an idea, but must confront the fact that there are hundreds of other existing products and services demanding attention and investment, as well as dozens of other potential ideas or avenues to pursue.  This prioritization and resource allocation issue is one of the reasons that corporate innovation is so much more difficult that mere invention or becoming an entrepreneur.

In fact, there are at least four significant reasons why corporate innovation is so difficult:
  1. Past success
  2. Playing defense over offense
  3. Resource allocation and project prioritization
  4. Rigidity of systems and decision making
Let's look at each briefly, and then wonder how any innovation gets done in larger organizations at all.

Past Success

While it may seem strange that past success is an innovation barrier, past success creates expectations for revenues and profits into the future, and increases sensitivity to risk and failure.  As an organization has success, it "learns" and codifies what made it successful.  This locks in a way of doing business and a set of expectations about current and future success, which raises concerns about the risks of doing something new and different.  The more successful a firm has been, the more difficult innovation, especially disruptive innovation, may become.

Playing Defense

All an entrepreneur has to worry about is gaining her first customer, and then the next one.  As a new firm, every consumer is a prospect, and there's no infrastructure or product portfolio to support or defend.  Entrepreneurs are by definition acquisitive.  Larger firms, once they've achieve some sales success and have built a product portfolio, shift into defensive mode.  They want to lock in their customers and defend from poaching.  Yes, they'll talk about acquisition strategy, but that usually means upsell and cross-sell.  When push comes to shove they'll defend their existing customer base rather than innovate to offer new solutions to new customers.  The more defensive the mindset, the more the executive team wants to defend products and market share, the more difficult it will be to innovate.

Resource allocation / Project Prioritization

In both the case of the entrepreneur and the corporate innovator, there's only so much money, time and resource to go around.  The entrepreneur is going to spend 100% of everything on one idea.  Corporate innovators have to fight for exceptionally limited funds, since the vast majority of resources and dollars are going to flow first to existing products.  Once those have been fully (and usually overly) allocated, corporate innovators fight over what's left.  And executives are often left wondering how to choose between innovation projects.  Training leads them to prefer projects with a high degree of probability for return, which leads to incremental solutions getting the funds.  Unless there are clear strategic roles and a method to carefully prioritize risky projects, all resources and funding will flow to incremental innovation projects.

Decision Making and Corporate Processes

Imagine if you will the corporate innovator who has convinced the executive team that a disruptive innovation project is valuable and important, and has won funding and resources.  Imagine as well that the team, against odds and through many distractions creates interesting, valuable ideas.  Now imagine the innovation team trying to convince the development teams to build a new product, the IT teams to change software to support the new product, and training the sales and marketing teams to launch the new product.  Of course all of this is going on while the corporation is supporting hundreds of products and projects.  Corporate decision making and sustaining processes make it exceptionally hard to convert a good idea into a viable product.  After all an entrepreneur can spin up a new product in her garage or completely outsource development, and support the business with Quickbooks.  A large firm must make resource allocations, project  decisions and software investments years in advance, which can hamper rapid change and innovation.

Tip your hat

So tip your hat to the corporate innovator.  She's got to overcome a significant amount of inertia and risk, convince an executive team of the need for innovation, then fight to keep the scope of the project as large and as disruptive as possible.  She's got to overcome existing allocations and fight for resources.  She has to overcome cultural biases against risk and uncertainty.  And, once she's succeeded at creating valuable, interesting ideas, she's only really begun to fight.  With a good idea, she needs to convince the development team to make it, the IT team to support it, and the corporation to launch it. 

Having been both an entrepreneur and a corporate innovator, I can tell you there's no contest.  Corporate innovators have the toughest job.  I'll always take the role where I am 100% responsible and control 100% of the decisions and resources and get to make up the processes and decisions as I go, rather than be bound by years of culture and decision making, in a culture that is trained to be risk adverse.
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posted by Jeffrey Phillips at 6:36 AM 0 comments

Friday, November 22, 2013

Why innovators make terrible firefighters

Let me first acknowledge that this post has nothing to do with real firefighters - you know, the guys who actually risk their lives in burning buildings.  This post has to do with business "fire fighters", those mid and senior level executives who rush into "critical" situations to clean up terrible customer service or rush to fill a product gap. They are "fire fighters" in the same way that NFL players refer to themselves as "warriors".  Last time I looked, no one was shooting at an NFL quarterback, or detonating improvised explosive devices on a football field.  We could start a whole blog about the expansion and misuse of language in a business setting when we compare managers to warriors or fire fighters, but that's a blog for a different day.

The urgent over the important

Every day, executives and managers in corporations rush around, trying to keep the status quo working under optimum conditions.  Ideally, nothing, and I mean nothing, should divert the attention of the highly tuned business processes from their regular assignments.  No distractions, no diversions, just focus, focus, focus.  Except when there is a "fire".  Typically a fire in this sense is an angry customer, a competitor with a new product or service, a major product failure or quality issue.  These fires throw everything to the wind.  Once a fire has been declared, it's Katy bar the door.  The designated "fire fighter" can do almost anything, disrupt almost any process, reverse almost any decision to put out the fire.  The one time that almost anyone can subvert the existing processes with immunity is in the face of an overwhelming immediate problem that everyone agrees must be solved.

But look more closely.  Fire fighters are far more destructive than creative.  Real fire fighters kick in doors and windows, risk their lives to save people and property.  Often, in order to save a building or neighboring dwellings, they have to destroy a property in order to save others.  And, once the fire is safely extinguished, real fire fighters may assess the cause of the fire but do nothing to start reconstruction.  Business fire fighters follow the same approach.  Their focus is to fix the issue as quickly as possible, patch over problems, quickly resolve situations.  They don't stick around to rebuild and repair.  Returning operations to normal is what a business fire fighter is supposed to do.

Why fighter fighters are terrible innovators

Business fire fighting makes for terrible innovation.  This is the ultimate example of the urgent over the important.  Fire fighting is the triumph of convergence over divergence.  A pressing problem needs to be solved immediately, and the existing operating system needs to be repaired and brought back on line as quickly as possible.  In fire fighting, there's no time for research, or reflection, or idea generation.  It's get the thing back on line as quickly as possible, with as little disruption as possible.  It's perfectly fine to knock down some pre-conceived notions or limitations, just so we can return to status quo as quickly as possible.  And don't worry, we'll clean up the debris later.

Corporate fire fighters don't have the time to do any real innovation work, and frankly that's not their job.  Their job is to restore order as quickly as possible, not necessarily to improve or disrupt the process but simply to restore the process.  But as fires increase, simply patching and restoring the process takes precedence over reviewing, rethinking and dramatically improving the process.  As more and more fires erupt, there's less and less time for innovation, and more and more experience in fire fighting.  But fire fighting doesn't improve the situation - it merely restores order to a point where everyone is moderately satisfied.  All the energy expended doesn't move the organization forward, and in some cases processes and capabilities revert.  And while all that energy is expended simply restoring order, markets and customers are moving on.  They aren't waiting for you to get your act together, patiently waiting for new products and services.  They are shopping your competitors.

Innovators are terrible fire fighters

Innovation, by its very nature, is a terrible toolset to use to put out fires.  Innovation is a divergent/convergent process, which means it seeks to expand the scope of an opportunity or problem, explore the boundaries and discover new needs and expectations.  If a fire is burning, most people want to rush to put it out - they want to rush to solutions, rather than explore possibilities.  Innovators don't rush - they learn, explore, discover and then create completely new and unexpected solutions that don't patch the existing but create something more powerful and more relevant.  Innovation is proactive, seeking to cause problems that other firms must respond to, rather than waiting to respond to market actions and competitive threats.  While fire fighters rush in after a problem is identified and attempt to return to status quo, innovators predict where opportunities lie and understand the potential solutions, creating problems for competitors and frequently disrupting internal processes and decisionmaking along the way.  Innovators aren't equipped to rush, to skip steps or to restore order to the status quo.  They existing to discover, understand and bring to market solutions that may disrupt the market paradigms rather than repair existing processes or products.

Where's the expertise?

The problem resides in the fact that executives and managers have far more comfort and expertise fighting fires.  There's more glamor in the role, the results are more highly celebrated and many good executives made their careers on solving big problems and putting out fires.  The more comfortable people are in a particular setting, the more likely they are to favor that setting and reject or avoid settings that they don't understand or where they don't have skills.  And if you aren't careful, innovation activities become overwhelmed and subsumed into fire fighting, since that's where the experience and glory lies.

But at the end of a firefighting exercise what do you have?  Smoldering ruins, hopefully running at peak historical efficiency with no noticeable improvement.  A return to the status quo, with no new features or benefits, while customers are moving on, expecting and demanding more.  There are three things we need to do quickly:
  1. Divorce the concepts of "fire fighting" and innovation.  While both are about solving problems, they use very different approaches and time scales.  They are different and need to be treated differently
  2. Demand more innovation, to cause fires for other firms.  Most firms need to be far more proactive, creating problems and challenges for other firms rather than responding to market and competitive threats.
  3. Make innovation as rewarding as fighting fires.  Today, a manager who is "fighting fires" is celebrated.  Innovation, as a more explorative, time consuming and contemplative activity, doesn't seem like real work and doesn't solve immediate problems.  Until innovating is held in as high regard as firefighting, managers and executives will continue to revert to fire fighting as the chosen path.
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posted by Jeffrey Phillips at 8:18 AM 2 comments

Monday, November 18, 2013

The Five Sources of Innovation Consultants

Recently a newly minted MBA contacted me, expressing interest in work as an innovation consultant.  What I found interesting was that the individual offered up the other firms he'd contacted, and from his note to me it was clear that he didn't understand the differences between firms that offer services in the "innovation space".  What's true about this individual is often true about our prospects and clients.  They view "innovation" as a unified set of tools and procedures, while failing to realize that in reality innovation is being defined by the firms that enter the space, and many of those definitions have very different implications.

Innovators, and innovation firms, spring from a wide array of sources.  Since there is no "standard" for innovation, in the manner of AICPA for accountants, or even a framework like ASQ or others provide for Six Sigma, innovation remains an umbrella term that contains a wide array of very different providers.

The Five Sources of Innovation Consultants

In general, innovation consultants spring from one of five "domains".  Those are:
  1. Strategy.  Firms like Booz, McKinsey and other firms that offer strategy advice have noticed the growing demand for innovation.  Further they have recognized the linkages between strategy and innovation, and they want an increasing role.  That's why Monitor purchased Doblin years ago, and probably why Booz and PwC are in negotiations.  Recognize that most of the innovation advice from these firms focuses on the effects innovation should have on strategy, and vice versa.
  2. Design.  Firms like Continuum, Frog, IDEO, Doblin and a host of others come at innovation from a design perspective.  Their overriding focus is to view innovation from a lens of design.  Increasingly we're seeing a consolidation of these firms.  Many large consultancies of many different stripes are purchasing small design shops.  It will be interesting to see if the integration works, because many of the expectations and business models are different.
  3. Marketing/PR/Marcom.  Many marketing and PR agencies entered innovation because they are in the "Creative" space and have familiarity with innovation tools.  For many, their end goal is to help package, launch and market their new creations.  They are often light on knowledge transfer, as they'd prefer to provide ongoing services rather than teach clients how to innovate.
  4. Creativity and/or Training.  The fourth category are firms that approach innovation from a purely creative space - such as those springing from CPSI or firms that focus on training.  These firms often solve deep issues in innovation but don't often offer a breadth of service necessary to sustain innovation.
  5. Innovation as a process or capability.  OVO and others sit in this category.  We focus on innovation as a defined workflow or process.  Our roots are from process engineering and capability development.  We view innovation as an important but poorly defined and poorly staffed process or capability.
 As you can imagine, different innovation firms have different perspectives and different staffing and capabilities.  When a client (or a potential employee) is interested in innovation, it pays to understand the roots of the firm in question and how they view innovation, and the capabilities and skills they will focus on when serving clients.

In-Source or Out-Source

Another important factor for a company considering innovation is to assess how much of the innovation work it wants to do internally and how much it wants to outsource.  Innovation requires a range of insights and observations, idea generation and product design.  A firm can choose to do all, some or none of that work internally.  Many consultants prefer to offer what we call "outsourced" innovation.  In this model a client hires a consulting firm and describes its markets and potential product needs.  The consultant returns months later with developed prototypes and supporting evidence.  In this model the client receives reasonable solutions with very little investment of its own people or time, but is dependent on third parties for every new innovation.

We at OVO and others like us focus on "insourced" innovation, meaning we define processes and tools and train internal teams to perform a significant portion of this work.  By gaining skills, corporations can do much more of the innovation work internally and become more self-reliant.  That's not to say with the advent of "open" innovation that they'll do all the work, or all the development, but it does give the executives a choice.

Making the best decisions

When a client, potential partner or potential employee is considering innovation consulting firms, it's important to recognize they are not all created equally.  Perspective is a factor.  Understanding what the origin of the firm is, and its current perspective, will communicate how the firm is likely to view your needs.  Understanding the amount and scope of change you desire, and the amount of resource you can commit is important.  Considering the role of innovation:  is innovation an occasional, one-time event or do you want to build a consistent capability?

Understanding these and other factors will help you be more successful in your own innovation pursuits, and will help you select potential partners that can address your needs more capably.

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posted by Jeffrey Phillips at 6:34 AM 1 comments

Thursday, November 14, 2013

Complicated innovation turns prospects away

In every human endevor, there is at one point in time harmony and simplicity.  Things work the way they should.  Then, someone objects to a method, a perspective or tool, and develops a proprietary way to do what everyone has always done.  Then, another person objects to that solution and creates a completely different way, and so on ad naseum.  Look no further than the Christian church.  Once a monolithic enterprise governed by the Catholic Church, we owe a debt of gratitude or perhaps something else to Martin Luther and others who hived off from the Catholic Church to spawn the Protestant Reformation.  While attempting to "reform" the church, the reformation has in fact splintered believers into literally hundreds of different belief systems.  When you need multiple flavors of Baptist or Presbyterian churches to cover all potential interpretations or creeds, you can understand that what was once a simple belief system has become exceptionally complex.

But I digress.  This isn't a post about religion, but a post about innovation.  I'd love to believe that some time in the dark recesses of history there was a commonly agreed approach or method for innovation.  Perhaps it was personified by Edison or others like him, who were both practical inventors and commercial successes at the same time.  But over the years we can see the same phenomenon occurring in innovation that we see in the protestant church - a constantly splintering that creates more confusion than clarity.  From the concepts of TRIZ to Alex Osborne's Creative Problem Solving to more current narrow cast solutions the world of innovation is becoming more crowded with "solutions", more murky and uncertain, and losing touch with the simplicity and basic understanding of what it takes to innovate. 

When we talk with clients we are constantly bombarded with what the "experts" say.  Who, among all of us, is an "expert" in innovation, especially large corporate innovation?  There may be people with more experience and in some cases more success, but I'd be hard pressed to name an individual or firm that is the reigning expert of innovation generally.  Rather, what we have are "experts" in very narrow fields or experts in tools and techniques of their own creation.  Whether it's expertise around "jobs to be done" or TRIZ or SIT or Blue Ocean Strategy thinking, these "experts" cover only a small portion of the entirety of innovation, and more often confuse potential innovators by claiming that a specific tool will "solve" an innovation issue or need.  Perhaps the chosen tool will work in a particular setting or situation, but not all tools are valuable or even practical for every innovation requirement or condition.  Open innovation is practical in some setting and not in others.  Business model innovation or the Business Model Canvas is practical for smaller firms defining their strategy moreso than for larger firms locked into a specific strategy.  There is no innovation tool or method that addresses every situation and every need.  There are, however, opportunities to synthesize and aggregate a number of tools and methods in a toolkit in order to use the best tool for a specific situation, rather than one tool in every situation, which is what we often discover today.

More to the point, all of these different theories and philosophies have crowded the issue and made it difficult for potential innovators to decide what to do and how to do it.  There are always competing solutions and alternatives, and making a decision on one tool or approach closes the door on other tools or philosophies in many cases.  This decision making is difficult and compounded by a lack of information comparing different approaches in the same settings.  In other words, there are few standards and many case studies are comparable across organizations or industries.  In this complex environment, potential innovators need clarity about the tools, methods and frameworks that will work the best for them in most innovation settings and requirements.

The answer is simple.  Be simple.  Start with the end in mind.  Open your mind and your team's perspectives to define the scope and purpose for an innovation activity.  Identify good problems and opportunities to work on and define the kind of outcome you hope to achieve:  incremental or disruptive, product or service.  Then, remember that all good innovation starts with insight.  Gather insight about customer needs.  Be open to their needs and experiences, not your strengths or capabilities.  Once you have a good problem or challenge defined and understanding of customer needs, idea generation is simplified.  You can get ideas from your internal teams, a combination of internal and external teams or move to truly "open" innovation.  Then you'll need to develop your ideas with prototypes, testing and validating the ideas with customers to ensure you are solving important needs.  Finally, you'll need to find a way to ensure your idea is compelling enough to make it through your product or service development process and commercialization.  That's it.  A full description of innovation in one paragraph.  Note that I didn't describe any specific tools or methods.  The most important first step to successful innovation is simplicity and forethought.  If you can plan your work, and work your plan, if you can sweep through all the clutter in the market to understand that tools and methods are situational, and should be adopted as needed and when appropriate, you'll worry less about the discrete tools and more about the holistic process and the systemic nature of innovation.  Own your own innovation workflow and choose the tools, methods and experts that accelerate your work in the conditions when you need them.  Don't marry yourself to the many splinter groups focused specifically on one tool or methodology. 

If we were a religious organization, we'd say we should go back to the simple fundamentals of our faith.  Instead we've been distracted and divided by narrow, selfish interpretations of miniscule differences in belief systems, and that has caused great dissonance in our work and confusion in our congregation.  It's no wonder the converts are so few and fall away so quickly.  We innovators need to return to a more simple innovation process or understanding, recognizing that tools and techniques are valuable in some situations and not in others, and that only by bringing prospective innovators on board by teaching the simple basics will innovation spread.
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posted by Jeffrey Phillips at 7:06 AM 2 comments

Monday, November 11, 2013

Discomfort is the key to innovation

For years now we've been told that innovation is strange and unusual, but promises great possibilities and potential returns.  We've been regaled with stories about noted innovators, individuals and corporations, who demonstrate how to innovate.   Individuals like Steve Jobs, corporations like 3M and P&G. These stories are meant to reduce the fear and uncertainty associated with innovation, and demonstrate success.  Through training, exercises, cultural shifts and many other activities, we're meant to see that innovation is simple, friendly, engaging.  We've spent massive amounts of money and time trying to get people to see that innovation isn't difficult, isn't threatening.  At this rate the Teletubbies will be offering innovation training courses.  Of course, anywhere there's a "Dummies Guide" you know the content has been simplified to bring more people aboard.

I'll admit I've been guilty of advocating for simpler, more straightforward innovation.  I thought through training and cultural change we could reduce uncertainty and resistance to innovation tools and techniques.  In some cases and places, we've been successful, but there's something to be learned in the lasting resistance to innovation on the whole.  No matter how much you dress up the wolf in the sheep's clothing, no matter how the lion tamer demonstrates the lion is tamed, many people are simply not going to accept that the level of risk and uncertainty around innovation has been eliminated.  We've trained an entire generation of people to perform at levels of efficiency that are unparalleled in the history of civilization.  And in doing so we've robbed them of their ability to think, and dream up new or unusual solutions that would violate existing business as usual tenets.  No where are any group of people more likely to reject good ideas than in settings where business teams try to subvert their own existing methods and processes.  For too long we've tried to reduce fear and uncertainty around innovation.  It's time we learned something from the continued resistance.  Let's take a new tack.

Discomfort is the key

While working to reduce the fear and uncertainty associated with innovation is important, it's not enough.  Far too long we've worked to make innovation safer, more repeatable and more acceptable.  Those criteria are important, as is transparency, repeatability and continuity.  But we need to recognize a key point:
people aren't going to innovate simply because we make it easier or friendlier or less risky to do so

We can't conceive of a point where enough people will be comfortable enough with innovation to do it constantly without provocation, except in situations where the condition already exists, such as in entrepreneurial firms or the few firms we hold up as innovation stalwarts.  Rather, we have everything in reverse.

What we should be doing instead of creating more comfort about innovation is creating discomfort about the status quo.  Nothing generates more energy and enthusiasm for change and new products and services than an impending corporate strategic change, an external threat or a profound market shift.  These have the ability to create true discomfort with the status quo.  And when the status quo is uncertain, that's the time when innovation can become very appealing.  We may not be able to eliminate the complexity or fear of innovation to engage more regular innovation, but we can certainly create discomfort with the status quo to drive more opportunities for innovation.

The reason that discomfort is so important is that as humans we are creatures of comfort.  If we can repeat the same tasks and avoid threats, and avoid having to work harder to learn new methods or techniques, we are perfectly happy to remain in the same methods and processes, creating the same products and services.  This is a "comfort" zone, and it will take a lot to make us leave.  No matter how much we sugar-coat innovation and make people more aware of the tools and possibilities, innovation is more risky and requires more work for less certain outcome than returning to the status quo.

Why wait?

The problem many businesses face is that the status quo is too comfortable and too profitable to change, so the only discomfort that's important comes from external agents or activities.  Competitors introduce a new product, a new entrant siphons off customers, a government entity creates new regulations that close off a market opportunity.  Then the status quo is threatened, and innovation becomes an uncomfortable but viable option.  Innovation, however, is a far better tool when used in a proactive setting than in a reactive mode.  If all you need is to "catch up" to average market expectations set by a new product or service, you don't need innovation, and the tools and techniques aren't well structured to play catch up anyway.

But why wait?  The best innovators know they need to cannibalize themselves before someone else does.  This means good managers must create discomfort about the existing products and markets before they are disrupted by someone else.  While you need good innovation methods and training, you'll never approach a point where everyone is "comfortable" with innovation.  What you need is to create more discomfort with the status quo than there is discomfort with innovation, and then provide the leadership, tools and methods to sustain innovation.
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posted by Jeffrey Phillips at 5:58 AM 0 comments

Thursday, November 07, 2013

Why innovators are like astronauts

I'm in Washington DC today, preparing to give a talk at KM World 2013 on innovation.  I'm speaking today on innovation methods and techniques, but rather than simply list a number of innovation techniques or best practices, I'm going to review a Hollywood movie.  We're going to talk about the movie Gravity and how it relates to innovation. 

This talk is based on a workshop we provide called Thinking outside the Box.  Many of our clients want their teams to "think outside the box".  To do that, you first have to realize that a "box" exists, and think about life outside that box.  In doing that, we decided to use astronauts as people who definitely work "outside the box".  Astronauts work in locations with zero gravity, wild temperature fluctuations, and of course the issue of no oxygen or atmosphere for that matter.  In that regard, astronauts become very aware of working and thinking in a new box.

What Innovators share with Astronauts

If you think about astronauts, you might recall the famous book, later turned into a movie.  That book was The Right Stuff.  It celebrated the early astronauts, most of whom were "fly boys", test pilots.  These guys seemed to have less fear, more interest in testing the limits, and were volunteers.  These characteristics are also vital for innovation.  When you are likely to disrupt existing processes and practices, you need to have a much higher risk tolerance, and you should be a volunteer.

The Right Stuff notes that the reason we were so anxious to go into space was that the Russians were beating us to it.  When the Russians launched the first space capsules, suddenly we were behind.  The race for space became a significant issue, so important that John F. Kennedy made his famous request to send a team to the moon before the end of the decade.  When the Russians beat us into space, getting there quickly and beating the Russians became a "burning platform".  Similarly, innovation teams require a "burning platform".  Without a significant push or rationale, many innovation projects peter out quickly in the face of existing business as usual focus and time constraints.

As I noted in the previous paragraph, the race for space became a mission,  And every mission needs a chief sponsor, someone who defines the goals and places emphasis on the activity.  In the case of the space race, the sponsor was the president of the United States - not a shabby sponsor.  He staked his own presidential success on the mission.  He was clearly engaged.  Likewise, innovators need engaged, committed sponsors.  Without someone to provide resources, clear the obstacles and provide backing and leadership, innovation projects die.

What Innovators need to learn from Astronauts

Perhaps one of the most interesting things about astronauts is that they go into space to do things.  They literally work in the "new box" of space.  This means that they have to learn to work effectively in a very new and unusual box.  In space, there is far more risk to doing many types of work.  Low gravity means that many types of work must be done differently, otherwise Newton's laws will require that the astronaut shoot off into space.  Astronauts must learn to work in a weightless environment, and work in a clumsy suit.  Tools are different, processes and activities are different.

Consider now the innovator.  We ask them to "think outside the box", so they must work in a new environment where the tools and methods are different, risks are increased, processes are unfamiliar.  While they don't have quite the same level of hazard as an astronaut, to many the risks seem quite the same.  And, while astronauts prepare for years to go into space, working in near weightless conditions, using new tools, familiarizing themselves with procedure and process, innovators are rarely trained and frequently start innovation projects in the "new box" with little awareness of tools, procedures or processes.  For success, innovators need to train before they enter the "new box".

Finally, astronauts have an interesting end to their journey.  They ride a metal bucket through the atmosphere at hundreds of miles an hour, generating thousands of degrees of heat.  In many cases the re-entry is the most dangerous part of the journey.  Innovators too face difficult and uncertain re-entry, for themselves and their ideas.  Ideas that were generated "outside the box" often don't fit when they are attempted in the original box.  As we like to say, either the ideas change or the existing business as usual changes, and you can guess which one has more power.

Ralph Waldo Emerson said that once a mind is stretched by new experiences it rarely returns to its original status.  The same is true with innovators.  Once they have truly encountered and worked in a new box, they are often disappointed and dissatisfied with returning to business as usual operations.  This is why "re-entry" is difficult not only for ideas, but also for committed innovators.

Innovators need far more training and preparation to leave their existing "boxes" and work in new boxes with new methods and tools.  They need to be proficient in the tools in order to do good work.  And when they do good work, they need help with "re-entry" - bringing the ideas back to the regular, everyday work world of business as usual, which is very likely to reject their ideas.  

What can we learn from astronauts?

 Granted, few innovators will face what Sandra Bullock faces in Gravity.  They won't have to work in zero-weight, in a vacuum, in a space suit.  They won't have to traverse from space station to space station.  They won't have to endure a red-hot re-entry on a ship breaking apart.  But most of us won't face these dangers. The biggest danger many of us face is failing in a high profile task at work.  There is great risk associated with doing innovation, especially when the task calls for significant disruptive ideas.  When executives start talking about getting "outside the box", for all intents and purposes you are leaving the atmosphere, and working in a new environment with new tools and heightened risks.  Good planning, good preparation, good sponsorship and a good plan for re-entry are vital to success.

In fact, the only real difference between astronauts and innovators is the space suit.  And perhaps the view.

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posted by Jeffrey Phillips at 4:52 AM 0 comments

Monday, November 04, 2013

Birth, Innovate, Defend, Ossify, Die

When I was younger, one of my favorite songs was entitled "Birth, School, Work, Death".  Those were the days when I was influenced by English punk bands.  I was thinking about the GodFathers, who performed this song, while I was reading Megan McArdle's article about government and the Affordable Care Act.  I like McArdle's take on politics, society and business.  Unlike a lot of journalists, she's had business experience and has an outsider's take on many topics I find refreshing.  But she fell into a trap recently about innovation.

That's where Birth, School, Work, Death comes in.  The Godfathers were arguing that all of life could be summed up in four significant activities, and that the path was predestined.  It was all a bit fatalistic.  You are born, go to school, you work and you die.  Megan, in her article linked above, was applying a corollary to businesses.  A business is borne, is innovative and interesting for a short spurt, matures and ossifies, and then dies.  That's a rather fatalistic viewpoint on business, but one I must admit seems rather true.  A sort of Birth, Innovate, Defend, Ossify, Die mantra for business.

What businesses face

It's true that many businesses proceed through this cycle.  In the past, the pattern and phases were almost predictable.  A business was born, grew slowly through many years, created a number of interesting products and services, and settled into a long maturity and eventual obsolescence.  Firms would proceed through this trajectory over a course of 30-50 years or more.  That timeframe and evolutionary speed seems almost impossible today.  Currently, and certainly into the future, firms are born in a flash, scale as quickly as possible, innovate for a very brief period and try to lock into a large and stable customer base to defend for as long as possible.  There are several problems with this theory:
  1. The innovation cycle isn't discrete but continuous.  You can't innovate once and hope to succeed
  2. The idea of defending a customer base is obsolete.  There are too many competitors and too much change to allow you to defend. You must play offense.
  3. You don't own the customer.  You win the customer by having solutions that are more valuable and more appealing than your ever increasing competition
  4. The environment is constantly changing.  When the US was the dominant colossus of an economy, we could move slowly through each phase and have a long obsolescence.  Today, the economic forces won't allow that.
Today, the birth to death cycle will be measured in years, certainly not decades or half-centuries.  The demand for new products and services, and the advent of new technologies doesn't allow for a long convalescent period on the brink of doom.  Just ask any of the "big box" retailers what that long obsolescence looks like.

Where Megan (may) have gone wrong

In her article, Megan asserts that the government, like many large, older businesses, has become ossified and unwilling to change.  The government, however, doesn't have external competitors so it has less need to adjust and change.  Further, the government won't be displaced by another government, the way a company can be acquired or put out of business.  Ossification and sclerotic operations are what we may be stuck with in government.

But I digress.  The real point I wanted to make about Megan's article was that she assumes that the old Birth, Innovate, Defend, Ossify, Die methodology is going to continue to dominate business thinking.  I think that mentality has to change, and in fact is beginning to change.

While most businesses have grown quickly with the plan to dominate a market or customer segment, and in doing so have locked in so much structure that eventually becomes a prison, I think many new and emerging firms are going to be much more nimble and adaptable.  They will innovate and grow, but use innovation not just as a way to create new products, but also to create new channels, new business models and new versions of the firm.  They will become consistent innovators, which will keep their organizations from becoming defensive and resistant to change.  They'll use innovation to reach new customers and constantly adjust their operations and business models.

There is a path that many businesses follow.  Let's call it birth, innovate, defend, ossify, and die.  I think that the changes in competition, in consumer demand, in technology and in access to data will force one of two options on many companies.  One, continue on the existing path, but move through it in an accelerated fashion or two, use innovation constantly to avoid the ossification, cycling through a process of innovate and defend, then a shift to a new channel, new business model or new structure to innovate and defend again.

Birth, innovate, defend, ossify and die is a choice.  It is not predestined.  The most important activity isn't DEFEND, it is INNOVATE.  Innovation is what gives you the right to exist.  Defending is reactive and unimaginary, locked into past successes, holding on, waiting to die. Innovation is proactive and imaginary, betting on future successes, competing for the future, hoping to grow.  Traditionally, we've just placed too much emphasis on the wrong phases.  Rather than focus on defense, we need to learn to focus on innovation as a constant state.

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posted by Jeffrey Phillips at 6:35 AM 0 comments